Focus on your core competencies and be willing to outsource everything else. Biotech companies continue to face cost pressures,
and along the way, they explore outsourcing. However, we are not yet realizing all the benefits of a robust outsourcing strategy
because we forget to tell our people how to operate in a new way. I hear two comments from biotech managers that reveal this
One: "I don't like using contingent workers or consultants because at the end of the day all of the expertise walks right
out the door."
Two: "It's better to do the work with full-time staff, because the quality is always better."
Both of these statements show a lack of understanding of outsourcing. Companies that have learned the secrets of making stuff
know that the object is to find the combination of in-house resources and outsourcing that yields the lowest cost and highest
quality as fast as possible. So the question isn't whether outsourcing can do that for you. The question is whether you can
do that with outsourcing. The answer depends on your ability to execute. When I am helping clients with outsourcing strategies,
someone will always say to me, "But sometimes outsourcing ends up costing more." I always acknowledge that there is no magic
in it. "You can screw this up just like anything else," I reply. "It's about execution." When companies focus on what they
can do with outsourcing, they get a different result. Instead of managers standing around and hoping everything goes well
or talking in the lunch line about how they wish they had more full-time staff to work with, they go out and get better at
working with contingents. When a manager is good at working with contingents, she recognizes that she needs to manage the
outsourcing company behind the workers too. The manager needs to be clear with expectations and feedback for the service provider.
This seems simple but it's not getting done. Instead, client companies sit back and assume that the company that employs the
contingent will handle everything.
Focus on managers and provide training in how to manage contingents. Then, hold the managers accountable for hitting the budget
target. When contingents are used just like full-time staff, waste ensues. The contingents spend time in unnecessary meetings
and blend into the local pace of work. Then, when you do the math on the hourly rate you end up seeing that it costs more.
The point is, companies need to clarify their expectations for managers and hold them accountable for running the business.
There is a learning curve involved. To get good at making stuff, a company must move through that learning curve and drop
its reluctance to outsource aggressively.
IT'S NOT JUST ABOUT SCIENCE; YOU MUST COMPETE TO WIN
This one seems obvious, which is why it doesn't get the attention it deserves. The best operational companies are full of
team members that know what it means to work in a competitive business. Here's a quick example. If you're in a company that
has multiple manufacturing locations or outsourced manufacturing sites, consider how transparent your company is about comparing
one site to the others. The best companies get to the point where they don't try to tell their team members that the objective
is to have one big, non-competitive family. Instead, they make it clear that in a competitive business environment, you are
either aggressively competing or you are waiting to be defeated. That applies at the company level and it applies at the intra-company
site level too.
Some companies are good at discussing competition when it's about their product versus someone else's. But they resist encouraging
internal competition. The argument is that they don't want to lose sight of the big picture, which is about "all of us" winning.
The truth is, we can't compete with other companies if we're not comfortable competing internally. There is a first violin
chair in an orchestra and all of the violinists would like to sit there. Along the way, they play their part to the best of
their ability. But make no mistake: They want the first chair. Acknowledging the need to compete drives behavior change.
The primary behavior change comes from understanding that you have to improve to survive. You simply can't stay the same and
be around in a couple of years. When managers understand this and hold their teams accountable for behaving this way, performance
improves. Instead of complaining about how uncertain everything is and longing for the imagined days before cost pressure,
people get to work and find a way to improve. Or, they go work somewhere else, and that's okay too. The companies best at
making stuff understand that their objective isn't to retain all staff; it's to retain the right staff. By helping everyone
understand that they must continue to improve to remain competitive, a company focuses energy in the right place and drops
the waste involved in any other perspective.