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One-Stop Snowballing in the Business World (Sorry... Shop Talk)

Craig Henry of Lead and Gold mentions a business-world concern that's been on my mind lately:

Ad Age (6-16-03) reports on a recent survey of big advertisers. One key finding is that on 43% of the clients think it is "very important" that "a single agency offer fully integrated services." This presents a problem for big agencies which have spent the last couple of decades acquiring a variety of firms in order to become a "one-stop shop" for big clients. Those agencies paid a premium to develop capabilities that most of their clients do not see as valuable.

"One stop shopping" is a convenience, and convenient channels are valuable only when the underlying good or service is unimportant or similar across outlets. Coke is Coke, so it makes sense to buy it where you shop for groceries or gas instead of making another stop. Has anyone every chosen a college solely because the campus was closer to the airport? "Gee, Oberlin is a great school, but Ohio State is much easier to get to. Guess I'll go there instead."

In most things, I'm a doityourselfer — for reasons both financial and having to do with interest (as well as an inordinate reaction to John Ruskin's suggestion in The Stones of Venice that artists and artisans ought to be able to put together a finished product on their own). However, when I do employ outside services, I make a point of separating aspects of a process, and it's for almost the opposite reason of wanting "specialists." To pick an example with which many of you might sympathize, if I found out that my high-speed Internet provider offered Web hosting, I would not seek to consolidate those bills.

A more on-point example: a friend of mine is in the process of self-publishing her first book. I copyedited the book and offered to put up a Web page for her. She had the cover designed by a small business in Newport, which turned out to be a member of some sort of coalition of small businesses that, all together, can essentially run your business for you. The cover designers sold my friend on their Web design services and then handed her off to a local "coalition" member for Web hosting.

Here's where the value of diversification comes in: almost by accident, I learned of my friend's arrangements — and that she was most of the way to a Web hosting agreement with undisclosed rates and services in an area in which cost of living and office space tends to make local hosts expensive. After a quick lesson about how the whole "Internet thing" works, my friend has decided to be her own Web master with some heavy assistance from me.

The moral is that a "one-stop shop" can get away with more unless the client happens to possess a high degree of knowledge about every step in the "stop." However, using different businesses for each step in a process will gain the client much more in overlapping expertise than it relinquishes in overlapping expenses. What I mean by this is that, even if I didn't offer, say, layout/production services for books, as a professional/freelance editor, I'd likely have some knowledge about that stage of the publishing process. It might not be much, but it'd be enough to know when things seem fishy. On the other end of the production company, a printer might pick-up the overlap where my knowledge ends. And if I did (as I do) production work myself, the client would have at least two points of reference to gauge prices and services, and I would have a reason other than actual friendship to raise "friendly" questions.

Craig is speaking at a much higher tier of the corporate world than I am, and I'll concede that it's likely that my point fades in significance as the breadth of the client company expands. Whatever the case, and whatever the reason for picking and choosing among companies, I think Craig has a brilliant idea:

Blogs, it seems to me, should be an integral part of that effort. They are superior to email or meetings for keeping a whole team up to speed and for thrashing out differences.

Now and then for my day job, I edit documents having to do with the third-party outsourcing of services (when a client hires a company that then hires another company to fulfill part of the contract). In the world of high-tech and information technology, these contracts can become intricate, making it difficult to discern who is in charge of the overall project. From the vendor/provider point of view, this becomes the all-important question of who "owns" the contract — which company is the irreplaceable hub? It seems to me that taking the initiative to set up a blog, while raising the risk of leakage of intellectual/talent leverage, would place that company immediately at the center of the project.

The way I'm envisioning it, such a procedure might be of very limited application. But for something as fluid as the publishing process, for example, a cross-stage blog would certainly move the process along — as well as give each person in the process extra involvement through which to spot strange goings on.

Posted by Justin Katz @ 11:21 PM EST