The Leadership Impact of Outsourcing

Outsourcing to free agents is common for creative firms, and more and more authors are encouraging it. Similar methods, which tend to be less expensive but carry more risk of intellectual property loss, include peering, sharing, and using ideagoras. Companies that can effectively collaborate outside their firm gain a huge advantage: they increase the creative talent available to them at little cost. It's tempting to reach out and take advantage of the huge talent pool that exists in the world.

But while creative talent can be gained this way, there's a cost in terms of leadership talent. The cost is felt in the long run, but your short-term actions can put you on a path toward that cost, a path from which you might not have an escape.

The problem here is that somewhere along the line, you need to be developing the future leaders for your firm. While you may feel comfortable in a leadership position today, someday you're going to want to advance, retire, or go work at Starbucks, and someone should be ready to step in. If you outsource the majority of your work then no one is left within your firm to build up experience and observe how your firm functions, key ingredients to a successful future leader.

Now, you might say "I'm not going to worry about developing leaders internally -- when I need future leaders I'll hire them, rather than selecting from my own pool of in-house Creatives." Fine. But if, as some authors are cheerleading and advocating, the wave the of future is external collaboration, then where exactly will those leaders be coming from? If no one is developing internally, if the emphasis is on free agent work and peer-to-peer collaboration, then who's going to be grooming future leaders? Obviously, not all business will be done this way, but as more and more of it is, the pool of effective leaders will shrink in the future and to find someone you'll have to pay through the nose to get them.

You're also hurting yourself in the near-term if you shift to an external collaboration business model. You benefit from having people who understand your corporate history, who know where you came from, how you've evolved, and what's worked in the past as well as what hasn't. You're not going to get that by reaching too much outside. External collaborators simply don't have the necessary knowledge of your unique history. Hiring people by the job is useful for that job but can hurt you when it comes to integrating different aspects of your work into a moneymaking whole.

How do you get the benefits of external collaboration without hurting your leadership? Consider keeping a core group of employees. Think of them as your regular team while outsiders serve as "reservists," called up only as needed. Develop that core group, not only with training in their creative field but also in terms of leadership. Give them incentives to stay with you if their performance is strong, and replace them if it isn't.

Also consider developing regular relationships with particularly strong outsiders, whether free agents or unpaid collaborators. Help them develop a better understanding of your firm. Not only can they provide some of that necessary foundation from the outside, they might also be a good pool of potential leaders, who have the benefit of already knowing a lot about your company.

New business models, such as those emphasizing collaboration with outsiders, can be very effective if you use them right, but can drive you out of business if you go overboard with them. You need to look at your industry, your competitors, your customers, and your own company's goals to understand how far to go when looking for outside talent. Moderation, as in many aspects of life, may be the best idea. Make sure that in your quest for Creatives you don't ignore your very real leadership needs.