The best “Make or Buy?” answer in the service sector: Neither
The classic “make-or-buy” decision often neglects one important aspect: what the end-user wants.
That became clear to me as my team and I started analyzing the first waves of feedback on Pathfinder, an online portal which helps veterans find appropriate services through user reviews. While the findings come from the non-profit world, I see strong parallels in how companies in the for-profit sector should best decide on whether to build up a competency in house, outsource that work, or build alliances with partners.
Let’s look at one specific example. In the veteran organization sector, even only in my city, I can name 10 organizations and government services available for mental health. But these resources differ in both target audience and approaches. Some are only for younger generations, some only for veterans with honorable military discharge, and some will work with spouses. Some offer alternative therapies, such as equine therapy, meditation, or fitness, while others specialize in a particular mode of treatment.
In talking to veterans and reading their reviews of services, I am starting to notice a trend in the sector: users are more inclined to have a favorable review of those organizations which confine their focus to a particular area, while partnering with other service providers via referrals or other access. One mental health non-profit conducts some fitness activities, but to do so they partner with the local organizational group which specializes in veteran fitness. But the mental health group only offers treatment for recent combat veterans, so they also maintain a list of other local resources where a non-combat or older veteran can find help. They prefer to partner as often as possible to ensure more services are available, even if their potential clients end up getting treatment elsewhere.
Reviews on www.pathfinder.vet are overwhelmingly positive for this organization.
Let’s compare that organization to a large, well-known organization which also conducts some fitness activities, but does not partner. Reviews often criticize them for trying to do too much and having lost focus. One particularly frequent critique notes the amount they spend trying to maintain all of these extra services, which a veteran may readily find elsewhere. Many members are no longer even aware of the original intent of the organization.
What implications can findings like these have for companies in the for-profit sector? I see a handful:
Depth trumps breadth: From an internal perspective, diversification looks like a reliable strategy for meeting growth targets, keeping employees engaged, and refreshing skills, and building new talent. But how does diversification affect the customer experience? Giving customers access to more services under your roof is not the same as enhancing the customer’s experience
Make your customers your cause … and stick to it: This is another idea which for-profits can draw on from non-profits, who normally have a much greater focus on their end “customers”. They must stay lean, focused, and on course. I work quite a bit in the non-profit world, from volunteer to project coordinator to staff to board member. I happen to be a firm believer in the therapeutic effects of volunteerism and working for the greater good of a community, as I have seen many of these effects first-hand in myself and fellow military veterans. While for-profit work is not volunteering, the idea of customer service is still built on the word “serve”. And the best way to do that is to focus on the ways you can best serve them and allow others to do what they do best, and as partners.
Build a network: It is challenging to be everything to everyone, and it can be expensive as well. Having a set of partners which can provide additional services, when your customers need them, allows you to match partners to customers rather than forcing them to use only what you offer. This also makes you more flexible financially, because you do not lock in a commitment to an in-house team and other fixed resources
To elaborate on that last point: I see quite a bit of overlap, or overpopulation, in the services sector. The more work I do, the more I cannot help but translate it to the business world. There are over 46,000 veteran-focused resources, with many more if you count local and government services. With so many options, organizations often feel as though they are in tight competition with others for members and donor dollars, much the same way businesses see those with similar offerings to be aggressive competitors.
There are many, many more businesses than there are veteran organizations, and thus much more overlap. You already know most of them, by name, in your own industry. You also know, therefore, what sets you apart from the others, and you have likely analyzed what sets them apart from each other and you.
With so many options with sometimes at best subtle differences between them, it raises the question in both the non and for-profit worlds: why are we not forming more alliances? With so much noise in the market, shouldn’t your obligation include steering your best customers toward excellence when your own service is me-too, or worse? If the initial findings from Pathfinder feedback are any indication, success comes to those who partner, who find areas in which they excel and find a suitable partner to combine efforts.
What does it mean for you? Find your partners. Don’t limit yourself to companies; you can also look to contractors, consultants, or freelancers who have a significant comparative advantage. This is the model we follow at Present Tense, on both sides of the business. We provide content in all forms – blogs, books, brand messages, case studies and white papers – to a variety of companies at a fraction of their cost of hiring a writer. When our own core team needs additional expertise – be it design, video, or specialized marketing support – we help them find a partner who can provide those services. We save our clients valuable money while providing experts, even if that expert is one of our partners. There is a lot to learn from each other, whether we make it, buy it, or partner to find it. Elana Duffy is co-founder and COO of Present Tense LLC, a communications company dedicated to helping people express their ideas through better business storytelling. Working with everyone from authors to Fortune 500 companies, we provide a range of writing, editing, and training services. Lana is also a veteran of the US Army, a masters of engineering graduate, and a freelance writer in NYC, along with being the CEO and co-founder of Pathfinder, a "Yelp for veteran resources". She is the co-author of the first in the Present Tense “singles” short ebook series, 10/10, for sale on Amazon and other major retailers.