I'm a Carly Simon fan. I'm also a Geoffrey Moore fan. What do they have in common? They both talk about being the best at what you do. In 1977, Carly Simon recorded a song called "Nobody Does It Better." (Remember, "Makes me feel sad for the rest"?) Geoffrey Moore, whose first major impact on the business world was the technology adoption life cycle explained in his book Crossing the Chasm (HarperBusiness, 1991), recently authored another book that will undoubtedly have a powerful effect on business. Living on the Fault Line (HarperBusiness, 2000). gives organizations a formula for "doing it better" and has several significant messages. One is that stock price, or rather market capitalization, has become the new (and most important) measure for business success in a highly competitive environment. Certainly, recent events in the stock markets would underscore this message. Another theme is that in the new economy, businesses with a distinct competitive advantage will heavily leverage strategies for outsourcing.
Outsourcing replaces what Moore calls a scarce resource, management attention, with a plentiful one service providers. He postulates that every conceivable process that is not determined to be a company's core capability (that which differentiates the company's offerings in the market) is an excellent candidate for outsourcing. Businesses should insource core competencies and outsource noncore ones. It may be difficult for a company to identify which processes are core and which are not. However, those companies who do and who can let service providers do what they do best enabling the company to do what it does best will win by having stock price growth and market capitalization that attracts investors, which is what a company needs to survive and thrive.
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