It’s All Virtual

By Peter Lyle DeHaan , PhD

Author Peter Lyle DeHaan

As I contemplated my publishing business, I was struck with the realization that I had structured it as a virtual company. This wasn’t intentional; it just worked out that way. Not only am I the only one working in the “corporate office,” there are no local vendors either. Indeed everyone who takes part in the production of our magazine is from out of state – different states!

Dave, our layout genius and designer extraordinaire is in Pennsylvania. His work gets sent over the Internet to our printer in Ohio. There they work up the proofs and put them on an FTP site for Dave and me to review and then approve. The mailing list is maintained by myself in Michigan. For each issue, I output the file and email it to our list processor. They massage the data and sort the list, in turn forwarding it to our printer. The printer merges the mailing list with the magazines and delivers them to the post office. An army of postal carriers deliver the finished package to your home or office.

The newest member of the team is Valerie, our media rep., in New York; she handles the display advertising sales. As editor, I plan, solicit, collect, and edit the articles and press releases. Finally, our websites are hosted by a in Arizona, but I update the content remotely from Michigan.

I have never met any of these fine people in person. We conduct business via telephone and make frequent use of email. Each issue is produced without any face-to-face interaction. For our first issue, this was somewhat disarming and disconcerting, but I am convinced that the result is better than if we all worked together in the same office. True, we miss out on some synergy, incidental communication, and camaraderie, but we are also each free to do what he or she does best and to do so with minimal outside distraction and interruption. As Bill Murray said in the movie “Stripes,” “We’re a lean, mean, fighting machine!”

I theorize that most organizations could similarly be configured as a virtual operation. Over the years I have run into more and more situations where aspects of a business are outsourced, including billing, accounts payable, and general ledger. They hire a computer support firm to maintain equipment, an ad agency to do marketing, and an independent sales agent (in the spirit of a “manufacturers” rep) to generate sales. Not that any single company outsources all of these functions, but many companies outsource some.

It is important to note that “outsource” does not necessarily imply another country. Indeed, despite media attention to the contrary, the majority of outsourcing occurs to business within the same country.

Conventional wisdom says that you don’t outsource your “core competencies.” However, there are those who advocate that you can indeed, farm out your core competencies as well. What if someone else can do it even better – or cheaper? What if your labor market has near zero percent unemployment or if you’re just plain tired of the HR aspect of the business? All of these are prime reasons to consider outsourcing your operations. In fact, I am aware of several companies which have done or are doing so. Outsourcing the operations aspect for a start-up can solve many problems and conserve cash flow while a base of clients is being amassed; then it is all moved in-house. Others have opted to form permanent outsourcing arrangements either out of necessity or preference. The end result is that there are no staff working in their office!

There are essentially six areas of focus and effort for most organizations: operations, customer service, sales and marketing, technical, accounting, and management. I have yet to see one company do all six with aplomb and excellence, yet any viable concern excels in at least one area. Even the strong players master only two or three. In fact, some of the most profitable companies are, at best, average at five of the six, but because of a strong, visionary, and capable management, they consistently generate outstanding profits.

Since no one can master everything, it is pragmatic and even wise to consider outsourcing the weak areas of your company. Then you can focus on what you do best and your company will be better as a result. After that you can consider taking it to the next level and outsource the rest. Ultimately, you too, could become a virtual company; a company of one!

As you begin looking for outsourcing partners, you must be careful in your selection. A bad choice can be costly or even crippling, but it can also be quickly corrected by merely finding a new firm to handle that aspect of your business. (Those who have outsourced their operations did not put “all of their eggs in one basket,” but have divided the work between multiple vendors. No more than 50% of your business should go to any one place; this gives you greater flexibility and minimizes risk.)

You should scrutinize an outsourcing partner just like you would any other vendor. “Look before you leap.” Referrals are valuable; check references. When outsourcing operations, unless they come highly recommended, visit them in person. What does their facility look like? Are they big enough to handle your work? Are they small enough to care about your account? Do you have a good rapport with and respect for the key people in their company? Is there the potential for a long-term business relationship? Lastly, find out who will be your primary contact on a day-to-day basis. How well do you mesh with that individual? What is their anticipated future tenure with the company? Should this contact leave, will your satisfaction with the outsourcer’s service disappear as well, or will someone else be capable and able to take over without impacting your organization?

Certainly, no outsourcing agreement should be entered into lightly or without due diligence, but when it is properly executed and for the right reasons, the results can be both liberating and profitable.

This is not to advocate that everyone needs to look into outsourcing, but it does offer some intriguing opportunities and is certainly another option to consider as you look to the future and consider how to make your company better – and more profitable.

Peter Lyle DeHaan, PhD, is a published author and commercial freelance writer who provides content marketing services.

What I Learned on My Summer Vacation

By Peter Lyle DeHaan , PhD

Author Peter Lyle DeHaan

This fall, the thoughts of school age children everywhere are focused on returning to school. Some approach the new school year with dread and trepidation, a few with excitement and high expectation, and others with inevitable acquiescence and acceptance. Regardless of their personal perspective, many will be faced with the traditional writing assignment, “What I Did on My Summer Vacation.”

What I did, or more precisely, what my family did on our summer vacation is not noteworthy or unique as far as family vacations go. True, the time together as a family was special and the memories will last forever. The time of bonding, through both the high points and the not so high points, fostered a deepened understanding of each other and a renewed respect for our individuality and divergent personalities. My daughter summed it up succinctly, “Ya know, this is kinda like a once-in-a-lifetime thing!”

Family issues aside, it was also a vacation for me. It is one thing to take a vacation from the office; it is another to take a vacation from work. Taking a vacation from the office means you aren’t there physically, but you’re still there mentally. Taking a vacation from work, means leaving work behind completely. That was my goal; one that I accomplished with a considerable degree of success. Nevertheless, our vacation experience did bring to mind some workplace lessons.

Our vacation was a pull-out-all-the-stops, eight-day adventure at Disney World. The Disney experience and their unique vision for achieving high “customer satisfaction” is legendary and has been the focus of many a discourse. While true and correct, customer satisfaction was not the central theme of the three insights I gained.

Change is not only inevitable, it is also necessary and must be ongoing: At each of the parks we visited, we would see signs of change. At Epcot Center, one whole attraction was being demolished; at MGM, shows present just a few months prior were nowhere to be seen, replaced with newer, fresher alternatives. The Magic Kingdom had one area boarded up with the simple explanation, “New attraction under development.” Some rides were shut down for “maintenance,” other areas were being expanded, and new developments were being squeezed in where space permitted.

Even Disney, with its reputation as the premier family entertainment company in the world, is continually reinventing itself. If this is necessary for them, then it is all the more true for us.

If you’re not making an ongoing effort to keep your business fresh and moving forward, then the rest of the industry is going to pass you by; don’t get left behind. The moment you assume that you have everything in place could signal the beginning of the end for your organization.

Nothing lasts forever – no matter how good the idea: Several standard fixtures of the Magic Kingdom had been impacted by the march of time. The ride 20,000 Leagues Under the Sea was no more; the lagoon still exists, but the attraction has disappeared. The Tiki-Hut was “Under New Management,” and “It’s a Small World” was, well, smaller – the portion of the ride outside of the building had been eliminated.

Even Disney, which has been thus far successful in re-releasing its animated movies every seven years for a new batch of kids, knows that no attraction will draw visitors and hold their interest perpetually. The same is true for all organizations.

No innovation will last forever, no paradigm is without end, and no idea cannot be bettered. Today’s revolutionary, earth-shattering development is nothing more than tomorrow’s status quo.

Staffing is key: Despite all of the technology, all of the marketing, and all of the organization and structure, the key to Disney World’s ongoing success resides with its people. As I watched Disney employees in action, their performances (remember, all Disney employees are “cast members”) were on a higher level than any other organization I’ve encountered. Certainly they outshone everyone at the airline, which brought us to Orlando, as well as the employees of the shuttle bus company, which took us from airport to hotel, but they also outpaced those at other theme parks. How? Quite simply, they acted as though they enjoyed their work. They appeared to be saying, “I have a choice on how I do my job. I can do what’s minimally required to get by or with little more than an attitude change, I can make my job really enjoyable – for both myself and those around me.” I assume their training played a big part in this, but I also saw many of them switch jobs frequently and conclude that variety and variation played a key role as well.

These are lessons we can apply directly to our businesses. Yes, we all advocate training, but do we really practice what we preach? Do we provide ongoing training, as well as coaching, mentoring, and career-path development? All are required if we are to have employees who outshine the competition. In short, do we merely give our staff enough training and support to get by or do we give them enough training so they can excel?

Conclusion: It is highly unlikely that your organization will ever achieve the status or prominence of Disney. However, we can all aspire to improve our business and take it to the next level. Rather than be overwhelmed by the formative challenge that the Disney example sets and the enormity of the task before us, we are well advised to start small and put things in proper perspective by recalling the humble words of Walt Disney himself when he stated, “Remember, it all started with a mouse.”


Key Lessons

  • Change is Inevitable and Necessary: Make an ongoing effort to keep your business fresh and moving forward.
  • Nothing Lasts Forever: The edge your business enjoys today will not sustain it tomorrow.
  • Your Staff is the Key: Give your employees the training needed to excel.

Peter Lyle DeHaan, PhD, is a published author and commercial freelance writer who provides content marketing services.