Core Business Confusion

March 21, 2007

I had a meeting at work today with a few chief officers and the chairman of the board that was supposed to be about space planning. My development team has been located offsite since the end of October and is scheduled to move back to headquarters at the end of April. We outsourced the fulfillment department which cleared a sizable space that would comfortably accomodate my team of eight programmers. However, when talking about space restrictions, the conversation always leads to growth, which inevitably leads to discussions about core business and competencies.

I’m always amazed how successful business owners become so distanced from their very own company that they feel the core business is still what it was 20-30 years ago

For some background, the company I work for sells a membership product through wholesale channels. We have a customer support call center. The company prides itself on customer service, even though they really don’t want people to call and utilize the product. Aside from that, it is a sales-driven organization and a wannabe marketer. Needless to say, an IT department makes it all possible.

So when the conversation shifted to growth, it was all agreed that the majority of growth would happen in the customer support department, which is most ripe for outsourcing. However, customer support doesn’t drive our business and as I thought about it, your core competency should be the business driver. For instance, in my world, great software drives new business, not the technical support. I’m not saying customer service is not important, it just shouldn’t be considered a core competency, and believe me it’s not the case here, but the owner seems to think so.

The argument I made was simple. Customer support is a reactive discipline. It comes after the sale, which comes after the marketing. In the case of our wholesale business, this is not a product you’d research for customer service like a cell phone carrier or car dealership. Therefore if your business grows by selling more product, how—or why is the better question—would you want your core competency to be something that doesn’t directly impact the growth of your business?

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