Core Business / Core Competence
Judging the management abilities of executives might be very controversial, but what makes a good manager ?
When companies are in trouble, management likes to turn the focus to the core business by outsourcing half of the operations. Stressing the core competence is then a regular way of explaining this kind of action.
But what exactly is the core business ?
Just have a look at your local barber. What he is doing is his core business. And don’t take me wrong, he does more jobs than simply shaving. But, thanks god, he is not doing the dental work anymore like a century ago.
I thought, that managing all aspects of an operation is part of executives competence. It is quite obvious that a plumber should never perform brain surgery. But what type of manager is it, who believes that someone else is more competent to manage parts of the companies staff – more efficient in any way ?
Are we good managers if we don’t know how to manage, lets say the office cleaning department ? Or is it a disgrace to organise and monitor the trivial tasks as good as the core business ?
To put this straight:
If your company spends more that 100 Million Dollar or more than 1 Billion Dollar a year on IT, then you’d better make IT to a competence of yours. If you have 50,000 to 100,000 people or even more working for you, then the management of human resources is one very important issue, you do not leave to others, you need the competence to perform this task on the highest level of quality.
And if you truly believe, that someone can do some job much better that you, then you should hire this person and secure this knowledge for your shareholders instead of surrendering essential parts of your business through outsourcing !
coming up: The Effect of Outsourcing on Your Financial Assets
