Get Rid of Non-Core Activities in Your Tax and Licensing Department
Years ago, Jack Welch was among the most revered corporate leaders in the world as he grew GE into the international juggernaut that we see everywhere today. His advice to all of his business unit presidents was to figure out what their business was terrific at and focus on that. And nothing else. Period. He pushed his business leaders to “get rid of any business that isn’t at the core of your focus,” instructing his team to find business partners that would “make your back office their front office.” Mr. Welch was lauded as the most influential business leader since GM’s late Alfred Sloan. I find it interesting that they had one thing clearly in common – they outsourced activities that weren’t core to their businesses.
So why do so many of today’s corporate giants hang onto things that they are not remotely good at? In our world of business licensing, virtually every large business is out of compliance and doesn’t even know it until a door is chained shut or an embarrassing article comes out in a local newspaper. But they continue to handle the task ineffectively with employees who don’t like doing it, building up risk that eventually becomes material. Why? I suppose it’s a matter of control. I translate this as “we prefer to do things incorrectly and ineffectively rather than relinquish control of this business license compliance function.” Is that a Tax or Legal mantra that companies must adhere to and chant daily?
Look at it this way – it takes more specialization to do business licensing than it does to do janitorial or landscaping work. There are more codes and rules for business license renewals than for keeping the lunch room clean. Heck, a ten year old kid gets taught to clean up after fixing their lunch and sometimes will even do it if pressed. By the time he turns 15, he’s driving a lawnmower through the yard and keeping the bushes trimmed. Do you think he can quote you the rules for licensing a leased MRI machine in Stamford, CT? But we count on a resource like that to do business license compliance, research, and remediation while we outsource the maintenance work to Jolly Janitor and the landscaping to Lucky Lawns. It just doesn’t make sense.
Why not look at outsourcing rote business activities that are already someone else’s “front office?” Get rid of business license research and license/permit renewals so someone with true expertise and skin in the game can get it done right. Find a partner who knows his/her stuff and specializes in making your mundane activity look good for you. Admit it…you hate doing the business license compliance. Truth be told, you’d rather have the landscaping job outdoors in the sun than this licensing stuff that leaves you locked in a windowless cube all day. But I love this licensing activity and show up at Business Licenses, LLC every day, excited to do it. Put me in coach!
Here’s a novel idea – let the guy who loves the work, and does it cheaper, have the gig. Then start working on getting a core activity in your sites…or that sweet landscaping contract!