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Hire for Talent, Rent for Experience

By: Dave Berkus

 

Hire for Talent Rent for Experience

Want the best way to create your core competency quickly and inexpensively? Think like a startup, with little resources, a limited window of time, and few dollars to spend on expensive experts.

This insight comes from a fellow CEO who explains that he leverages his financial resources for growth by dividing his hiring decision into these two boxes. He interviews for adaptability, creativity, intelligence, drive, and a cultural fit. He believes that he or his managers can teach processes, taking advantage of the new hire’s fresh look and open mind. He believes that the core of his company is the creative process, and therefore that must be his focus.

Then he turns to contracted outsourcing for his routine processes, those that require no creativity and are repetitive in nature.

He cites the example of computer programmers. He hires for creative ability, people who can be the architects as opposed to the simple coders of routines. If properly supervised and quality controlled, he finds that it is easier and cheaper to parcel out projects to programmers or programming groups to perform the actual coding of projects pre–defined by his insiders. He divides the tasks so that no subcontractor has all of the core knowledge in house as a protection against theft of intellectual property.

And he concentrates on the management of creativity, the core of his business.

There are obvious advantages to this. Costs are variable and can be curtailed easily in tough times. Management time is focused upon the creative aspects of the business. On the other hand, depending upon the length of a project, an inside employee may be cheaper in the long run, and quality control easier to manage.

Business management is a series of tradeoffs. Here is one to consider carefully as you leverage resources including cash to grow the business.

Published: August 4, 2016
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Source: Berkonomics

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Dave Berkus

Dave Berkus is a noted speaker, author and early stage private equity investor. He is acknowledged as one of the most active angel investors in the country, having made and actively participated in over 87 technology investments during the past decade. He currently manages two angel VC funds (Berkus Technology Ventures, LLC and Kodiak Ventures, L.P.) Dave is past Chairman of the Tech Coast Angels, one of the largest angel networks in the United States. Dave is author of “Basic Berkonomics,” “Berkonomics,” “Advanced Berkonomics,” “Extending the Runway,” and the Small Business Success Collection. Find out more at Berkus.com or contact Dave at dberkus@berkus.com

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