Are you an HR expert? If not, how much money are you losing trying to act like one?
And for that matter, are you a marketing expert? A finance expert? An accounting guru? An IT specialist?
How many different functions are you trying to manage just to keep your business running?
And how well are those functions actually performing?
Now here's a much bigger question.
What are your customers actually paying you for?
They're paying for your product or service. Whatever it is that your business exists to deliver.
And the activities involved in creating and delivering that product or service make up your Customer Value Stream. That's the economic heart of your business.
Everything else—HR, marketing, accounting, finance, administration, and other supporting functions—exists outside that Customer Value Stream.
Some of those functions are absolutely essential. Some may create substantial value for your organization.
But valuable to your business does not necessarily mean value-added to your customer.
Your customer isn't buying your HR department. They're not buying your accounting capabilities. And they're not paying you to become a marketing expert.
They're buying widgets. Or whatever product or service you actually sell.
Imagine two businesses selling identical widgets.
Same quality. Same service. Same customer experience.
But one company has to charge $20 because of its expensive operating structure, while the other can profitably sell the same widget for $10.
Which company would you buy from?
The customer doesn't care that the $20 company has an expensive HR department or spends a fortune on marketing.
Those expenses don't make the widget more valuable to them. They simply make the widget more expensive. And that's why understanding your Customer Value Stream is so important.
Because supporting functions can quietly undermine your profitability in more ways than you might realize.
First, there's the direct expense. The employees, systems, technology, services, and resources required to perform those functions.
Second, there's the opportunity cost. Every hour, dollar, and ounce of energy consumed outside your Customer Value Stream is a resource that could potentially have been invested in improving it.
But there's a third problem that can make both of those substantially worse.
Many businesses aren't particularly good at performing these supporting functions in the first place.
Not because they don't care. But because they lack the specialized knowledge, experience, systems, and dedicated resources required to perform them effectively.
They're figuring things out as they go. Dealing with problems as they arise. Spending hours researching things that specialists already know. Trying to manage responsibilities that aren't their strengths. And often doing just enough to keep everything functioning.
Now think about the economics of that.
You're spending money operating functions that may be underperforming.
You're spending additional time and energy compensating for the lack of expertise and effective systems.
And those same resources are being pulled away from the activities that actually create the value your customers are paying for.
You're potentially underperforming in your supporting functions while simultaneously undermining the performance of your Customer Value Stream.
That's a double hit to your business. And the friction compounds the problem.
The interruptions. The frustration. The uncertainty. The constant switching between responsibilities. All of it consumes attention and makes operating the business harder.
And here's something worth considering: The harder your business is to operate, the harder it becomes to maximize its economic potential.
Think about the business you already have. Your employees. Your equipment. Your facilities. Your customers.
How much more value could those same resources create if you eliminated unnecessary complexity and concentrated more effort on your Customer Value Stream?
Most business owners think about growth by adding more. More employees. More equipment. More locations.
But what about maximizing what you already have? What if you could improve profitability without expanding? What if you could spend more time improving your product, your processes, your quality, and your customer experience? What if your best people could concentrate more of their efforts on the things they're actually best at?
And what if, at the same time, you could improve the performance of those supporting functions that have been consuming so much of your attention?
That's where the opportunity becomes particularly interesting.
You don't necessarily have to choose between improving your core business and improving everything that supports it. There's another approach.
We call it Clientizing.
Instead of trying to operate every supporting function with limited internal expertise, you develop relationships with specialized partners. And here's the powerful part.
You become the customer of another business's Value Stream.
Think about that.
HR might be a supporting function for your business. But for an HR specialist, HR is the very product its customers are paying for. Accounting is a supporting function for your business. But for an accounting specialist, accounting is the product.
Your partners have built businesses around the very capabilities you've been struggling to develop and operate. They have specialized people. Established processes.
Technology. Experience. And an economic incentive to continually improve what their customers pay them to deliver.
Instead of trying to recreate all of that yourself, you can leverage those capabilities.
You become the client.
You can establish expectations, evaluate performance, and benefit from the specialization, systems, and scale your partners have developed.
And instead of struggling to maintain several supporting functions with limited expertise, you can concentrate more of your own resources on improving your Customer Value Stream. You focus on maximizing the Value Stream your customers pay for, while your partners focus on maximizing the Value Streams you're paying them for.
That's Partner Leverage. And that's the power of Clientizing.
It's not simply outsourcing tasks or finding the cheapest way to get something done. It's about engineering an organization where necessary functions are performed through the most valuable arrangements available. Where people are working within their strengths. Where processes are easier and more reliable. Where unnecessary complexity is reduced. And where more time, energy, focus, and resources can be directed toward what your customers actually pay you for.
Now let's return to HR.
How much time are you spending dealing with payroll questions, benefits, employee issues, compliance-related responsibilities, and administrative problems? How confident are you that your current HR capabilities are delivering the best value for your business and employees? And how much is the effort of operating HR taking away from everything else you're trying to accomplish?
What if you could become the client of a specialized HR partner instead?
What if that relationship gave you access to a broader team of HR expertise, established systems, payroll and administrative support, and potentially better employee-benefit options? What if you could improve HR performance while reducing the time, frustration, and attention it demands? What if your employees received better support?
And what if the total economics of the arrangement were better than what you have today?
Not every partnership will produce those results. It depends on the business, the partner, and how the relationship is structured. But the potential is worth evaluating.
Because the objective isn't to become an expert at HR, marketing, accounting, finance, and everything else.
It's to become exceptional at what your customers actually pay you for—while leveraging specialized partners to perform the supporting functions your business needs.
And the real opportunity isn't merely reducing the cost of those functions. It's improving their performance while freeing up the resources that can make your Customer Value Stream more valuable and profitable.
Before you invest more money expanding your business, consider how much value you could unlock by improving the organization you already have.
And perhaps start with a simple question:
Why keep struggling to manage HR when you could become the customer of a business that specializes in it?
If this way of thinking resonates with you or you're curious what a better HR partnership might mean for your business, I'd welcome the conversation.