Why Companies Fail To Outsource Effectively

I have extensive experience helping companies outsource various parts of their marketing. Before EditorNinja, I ran a company called Credo, which helped companies find the right marketing agency (and helped marketing agencies get more clients). In my nine years of running that business, we generated over $250,000,000 in leads and sent agencies over $40,000,000 in new business.

At EditorNinja, we’ve edited almost 9,000,000 words for our customers, with 75% of that in the last 16 months (as of the writing of this article in early July 2024). We’re still one of the smaller players in the editing space, but we’re starting to find our groove.

But we, like many service providers (agencies, freelancers, productized services like EditorNinja), experience customer churn. A comment we hear fairly often is, “We didn’t save the time we thought we would with outsourcing, so we’re pausing.”

There can be many reasons for this, but there’s one that I keep seeing repeatedly that I don’t see others talking about.

The person outsourcing work to us doesn’t have a clear vision of or plan for what they’ll do with their freed-up time.

Why Outsourcing Fails – It Shows Skill Gaps

Let’s use editing as an example to keep things simple here.

Imagine a scenario where a content manager is editing all the content they produce for a client.

The content manager decides they need editing off their plate because it’s taking a lot of time, which they think they can use for something else. So they pitch this idea to their boss, who pitches it to their boss, and eventually, they get a sign-off for a test.

They find a provider (let’s call this provider “EditorNinja”), get set up and onboarded, and start giving content to their editor.

What does the content manager do now? Their entire job, after all, is to manage content production. It’s literally in the name.

However, the agency has not given them more clients to manage content for, and their clients have not increased production volume.

So, what does the content manager do?

They keep doing what they’ve been doing, and eventually, they say, “This isn’t saving me time,” and say the test project was a failure.

They’re not wrong – the test project was a failure. FOR THEM, because they didn’t change anything about their actions.

It sounds crazy when I write it out, but I see this happen ALL THE TIME.

There has to be a better way. So let’s talk about that.

A Better Way

There is a better way.

My mentor, Dan Martell, wrote a great book called Buy Back Your Time. In it, he provides this quadrant:

I was in Dan’s SaaS Academy for a few years, so I saw him workshop and iterate on the ideas that ended up in the book. In fact, his take that “80% done by someone else is 100% awesome” was first said to me, I believe, on a group coaching call.

Suffice it to say, Dan’s frameworks around hiring have shaped how I think about hiring within my own businesses, and they help me identify why people are failing to hire effectively.

After you’ve eliminated tasks that aren’t necessary, you have four things you can do with tasks. To quickly outline the four quadrants above:

  1. Delegation – these are low-value but necessary tasks that you hate. Delegate them to someone else.
  2. Replacement – these are high-value tasks that drain your energy. They’re important to the business, so you should hire someone who LOVES doing these tasks.
  3. Investment – these bring you joy, but they don’t make the business a ton of money. Keep doing these yourself, but make sure you’re doing plenty of other tasks that make the business more money. You may also consider hiring someone else to do these tasks consistently while you zoom into them occasionally when you need inspiration.
  4. Production – these tasks bring you joy AND make the business a lot of money. These are your zones of genius and are where you should aim to spend as much time as possible.

The goal of hiring someone else to do a task is simple – to allow you to spend more time first in the Replacement quadrant (if needed) and eventually in the Production and Investment quadrants.

Too many companies hire without a clear plan for how their already-existing team will move into these new quadrants.

New Quadrants are Hard (and Require New Skills)

People fail to outsource and scale their businesses effectively because they hire themselves out of one role (maybe something they love doing, even) and then dislike the new role that they’ve decided to fill moving forward.

Take the content manager at the agency in the example given at the start of this article. They want to get editing off their plate, so they hire an editing service or a freelance editor. This means they’re now moving into a new role that requires them to:

  • Manage others, not just content.
  • Build processes that scale for more clients.
  • Manage more projects than before.
  • Work on strategy, not just production and creation.

They’re doing more content managing and less content creation. If they’re in a creation role but “managing” in title only, they likely don’t have much experience outsourcing and managing others.

These are new skills they’ll need to learn, and it will be hard. They’ll be unsure of what to do, what to say, how to act, and what to do with their time now.

Some will step into this role well. They’ll make mistakes along the way, but they’ll learn and start to succeed. Some of these will also love doing it, while others will say that it’s not really what they want to do. They prefer creating.

That’s ok and good to know, but this would have been great to know beforehand.

This brings me to our final point and takeaway.

The Solution: Plan and Start Doing New Tasks Before Hiring for Old Tasks

Instead of doing things backward and hiring to then move into something else, something that you haven’t done before and may actually not enjoy, let’s flip the process.

In our original example above, the content manager wanted to move into doing more strategy and managing more content for more clients.

People are expensive. Agencies often operate with minuscule margins, so having someone not fully utilized drains profit. Thus, hiring someone out of a role and THEN trying to backfill them with other more valuable tasks or to provide them with more clients is a risky move.

Instead, do this:

  • Decide that you want to move the content manager into a more strategic role, where they manage more outsourced providers across more clients.
  • Start dialing up the lead generation and signing more clients for that person. Their time will begin to get squeezed.
  • Audit their time and find where they’re spending it. Identify the things they’re doing that aren’t necessary and eliminate them. Then, identify the low-value tasks they’re doing that have to be done (like uploading content to client sites) and delegate those by hiring for those (maybe a virtual assistant could do this?). Next, identify the things they don’t like but are valuable (like editing, which keeps clients around) and hire a replacement for those tasks.
  • As each new person is hired, the content manager should be working on more and more valuable tasks. This means that, even though you are adding expenses in the form of people or services, the agency is still making more and more money because the content manager is working on more valuable things that actually make the agency more money.

THIS is how you succeed with outsourcing.

Hiring to increase your capacity to do more or different work is a fool’s errand. It’s expensive and risky, and you’ll likely return to how things were before.

Hiring to replace yourself and buy back your time so you can keep working on more valuable things is the way to go.

Too Busy and Need Editing or Writing Help?

By now, hopefully, your brain is spinning, and you’ve had a realization or two about how you can improve things. I wish you luck with that.

If you’re a content marketer (agency owner, in-house, or agency-side) already following this framework, and you’re ready to delegate work and replace yourself in your editing and/or writing tasks, let’s chat. We’d love to help you be more effective in your work so you can make more money from content. We’ve helped hundreds of companies and agencies, from small to enterprises, and we’d love to help you, too.

Schedule an Intro Call today →