{"id":2665,"date":"2013-12-19T21:16:51","date_gmt":"2013-12-19T21:16:51","guid":{"rendered":"http:\/\/positech.co.uk\/cliffsblog\/?p=2665"},"modified":"2013-12-19T21:16:51","modified_gmt":"2013-12-19T21:16:51","slug":"delegating-and-outsourcing-as-a-study-in-comparative-advantage","status":"publish","type":"post","link":"https:\/\/www.positech.co.uk\/cliffsblog\/2013\/12\/19\/delegating-and-outsourcing-as-a-study-in-comparative-advantage\/","title":{"rendered":"Delegating and outsourcing as a study in comparative advantage"},"content":{"rendered":"<p>Delegating is hard. Getting someone else to do something instead of doing it yourself&#8230; there are a whole bunch of psychological, practical, economic and other issues to navigate when doing that sort of thing. There is definitely a point where you have to either accept that your company will never grow, or start delegating. I&#8217;m definitely there right now. If I wasn&#8217;t a workaholic, I&#8217;d have reached it 2 years ago.<\/p>\n<p>So right now I&#8217;m in the situation where when I see something that I can possibly delegate, I jump at it. I guess when I say delegate, I mean outsource. Ideally, I&#8217;d have full time employees, but I don&#8217;t need an artist, or a web developer, or game designer or ad-manager or PR person. I need a little bit of all of them. Thats hard to find. As a result I end up employing a ton of people on short term piece-work contracts. Right now 3 people are working for me, a designer, a web developer and an artist. Oh and a trailer-producer, so that&#8217;s 4. The trouble is, it *always* involves some admin and management (I insist on a countersigned contract even if its $100 of work), and also it&#8217;s never 100% like you doing it yourself.<\/p>\n<p>But I did recently come to a bit of a revelation. The fact that I could get the results I wanted quicker with me doing it, is irrelevant. It becomes a question of RELATIVE efficiency and not absolute. This is a bit of a mental trick, and it&#8217;s probably the one thing I recall from my economics degree, but check this out: (from <a href=\"http:\/\/en.wikipedia.org\/wiki\/Comparative_advantage\">wikipedia<\/a>)<\/p>\n<p id=\"firstHeading\" lang=\"en\"><span style=\"text-decoration: underline;\"><strong>Comparative advantage<\/strong><\/span><\/p>\n<p><em>In <a title=\"Economics\" href=\"http:\/\/en.wikipedia.org\/wiki\/Economics\">economics<\/a>, <b>comparative advantage<\/b> refers to the ability of a party to produce a particular good or service at a lower <a title=\"Marginal cost\" href=\"http:\/\/en.wikipedia.org\/wiki\/Marginal_cost\">marginal<\/a> and <a title=\"Opportunity cost\" href=\"http:\/\/en.wikipedia.org\/wiki\/Opportunity_cost\">opportunity cost<\/a> over another. Even if one country is more efficient in the production of all goods (<a title=\"Absolute advantage\" href=\"http:\/\/en.wikipedia.org\/wiki\/Absolute_advantage\">absolute advantage<\/a> in all goods) than the other, both countries will still gain by trading with each other, as long as they have different relative efficiencies.<\/em><\/p>\n<p>On the surface it sounds like nonsense. If I can make bananas cheaper than you, and tractors cheaper than you too, why on earth would I trade bananas and tractors with you? Read the article if it isn&#8217;t obvious, it&#8217;s kinda magical.<\/p>\n<p>There is a difference between reading that and really internalizing it. What it comes down to is this: If you can&#8217;t find an artist as efficient as you, or can&#8217;t find a designer as quick as you&#8230; it really doesn&#8217;t matter. It probably STILL makes sense for you to outsource. You aren&#8217;t paying someone to do a job more efficiently than you (of course that would be awesome) you are paying someone to do a job *so you can do something else*. Clearly, the solution is to make the *something else* the stuff that can never be outsourced.<\/p>\n<p>I bet I&#8217;m explaining it badly, but I know what I mean! It&#8217;s a revelation to me. I suspect it also acts as a barrier to expansion for some small companies.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Delegating is hard. Getting someone else to do something instead of doing it yourself&#8230; there are a whole bunch of psychological, practical, economic and other issues to navigate when doing that sort of thing. There is definitely a point where you have to either accept that your company will never grow, or start delegating. I&#8217;m<\/p>\n<p class=\"text-right\"><span class=\"screen-reader-text\">Continue Reading&#8230; Delegating and outsourcing as a study in comparative advantage<\/span><a class=\"btn btn-secondary continue-reading\" href=\"https:\/\/www.positech.co.uk\/cliffsblog\/2013\/12\/19\/delegating-and-outsourcing-as-a-study-in-comparative-advantage\/\">Continue Reading&#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2665","post","type-post","status-publish","format-standard","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/www.positech.co.uk\/cliffsblog\/wp-json\/wp\/v2\/posts\/2665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.positech.co.uk\/cliffsblog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.positech.co.uk\/cliffsblog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.positech.co.uk\/cliffsblog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.positech.co.uk\/cliffsblog\/wp-json\/wp\/v2\/comments?post=2665"}],"version-history":[{"count":1,"href":"https:\/\/www.positech.co.uk\/cliffsblog\/wp-json\/wp\/v2\/posts\/2665\/revisions"}],"predecessor-version":[{"id":2666,"href":"https:\/\/www.positech.co.uk\/cliffsblog\/wp-json\/wp\/v2\/posts\/2665\/revisions\/2666"}],"wp:attachment":[{"href":"https:\/\/www.positech.co.uk\/cliffsblog\/wp-json\/wp\/v2\/media?parent=2665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.positech.co.uk\/cliffsblog\/wp-json\/wp\/v2\/categories?post=2665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.positech.co.uk\/cliffsblog\/wp-json\/wp\/v2\/tags?post=2665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}