Mass Collaboration is Driving Specialisation
It has been 235 years since Adam Smith identified the importance of specialisation, now mass collaboration is taking the potential for innovation to a new level.
The things we are best at, we enjoy doing.
The converse is true things we don’t do well we rarely enjoy.
Most small businesses are built around the passion and expertise of the founder. But there are many tasks that must be done if a small business is to prosper. Do you have to do it all? Should you do it all?
Back in 2004 Acumentum employed a techo to manage our network. We didn’t want our staff wasting time maintaining PCs. Soon he wanted a more challenging position. We wished him well, advertised and appointed a replacement but a week later he resigned because he got a better offer. Right at that frustrating moment The Grid came to us with a better offer too!
Rather than costing me $50,000 salary their $22,000 per year proposal covered every working day of the year! No payroll tax and critically they don’t call in sick and we learnt they did a better job.
Earlier this year I began coaching David Markus MD of Combo. Combo (www.combo.com.au) provide outsourced technical support for computer networks. They have refining their specialty, learnt to do things more effectively, more reliably and ultimately at a lower price for their customers.
Increased specialisation is driving innovation which is creating real value.
This is not a new idea. Adam Smith wrote in 1776, six years after Captain Cook sailed into Botany Bay that productivity gains are achieved by breaking the work into its specialised parts.
Over the 235 years since Adam Smith identified the importance of specialisation, economic success has clearly demonstrated the value in freeing up workers to focus on what they do best, creating efficiencies through learning better ways of accomplishing the specialised tasks, improving the process by breaking the tasks into simpler tasks and getting the specialists to innovate to invent better ways of achieving the outcome.
This has produced outsourced businesses that save time, improve quality and lower costs. Phil Ruthven, Australia’s best known futurologist, has been forecasting the outsourcing of cooking, cleaning and education from our homes for more than 20 years. Think about the last time you went to a good butcher. Not only do they dice the beef they will add the marinade so that all you need to do is cook.
As the NBN is rolled out it will be possible to divide up tasks further and new and more innovative businesses will emerge.
Small business owners are self reliant, action oriented, results focussed.
Will the characteristics of small business owners hinder them taking advantage of the emerging outsourcing businesses?
In 1937 Ronald Coarse argued as long as it is cheaper to perform a transaction inside your firm keep it there, but if it cheaper to go to the marketplace do not do it internally. Today the many suppliers of an ever increasing range of tasks makes the cost of carrying out most things externally cheaper than continuing to do them in-house.
Smart businesses use their business planning process to review every task performed in their business to compare what they do to decide if someone else can do it better and or cheaper. They focus on what they do best. But even then “…Someone outside your organisation today knows how to answer your specific question, solve your specific problem, or take advantage of your current opportunity better than you do. You need to find them, and find a way to work with them collaboratively and productively with them.” (Wikinomics).
This blog was first published at www.russellyardley.com on 23 September 2009.
Russell Yardley is a pioneer in the multimedia and internet industries. Has a science degree and studied law at the University of Melbourne. IBM gave him a sound knowledge of computer technology, management and marketing. In 1985 Russell launched his own company Decision Engineers Pty Ltd. Since then he has invested in and led ASI Decision Engineers (1986), Applied Learning Australasia (floated ASX 1993), Acumen People & Productivity (1991), Acumen Multimedia (1995) renamed Acumentum (2002). A member of the Australian eGovernment Mission to the UK (2001) and the Australian European High Tech Tour (2002), Victorian Premier’s Task Force on Communications and Multimedia (1994-1999), Victorian Government Technology Round Tables (2000-2002), Ministerial Advisory Group for ICT (2003-2006). For more information see www.russellyardley.com
