Only recently, the term "outsourcing" became hip. It got coined in the 80's, but finally elevated into the national consciousness in the last decade.
Outsourcing is when you subcontract a service to someone you deem to be better at it than you are. With that definition, the practice of outsourcing is not new. Not at all. The question is what do you define as "inhouse." For example, is our trust of politicians to protect our freedoms inhousing or outsourcing? Is it outsourcing when I rely on my wife, who is much better at calendar than I ever will be, to aid me with my schedule and important dates? Or is that "inhousing?"
For the purpose of this post, I'm going to define the separation between "outsourcing" and "inhousing" along the lines of responsibility. Outsourcing, according to Brett, is when I give not only the task but the accountability and responsibility for the accomplishment of the task to someone else.
To borrow a phrase, I'm inhousing when the buck stops here. I'm outsourcing when I blame others for mismanagement of the task.
Now, here's what will likely be perceived as a crazy statement.
I'm 44 years old and I have no money whatsoever in the stock market. None. No 401K, no mutual fund, no investment portfolio at all. The reason is that I have more faith in an investment in myself, than trusting the wizards of smart on Wall Street. Is that a wise move? Nearly anyone you ask would say that I'm stupid. And perhaps I am - time will tell.
Today, I read of Harvard's financial debacle:
Harvard University's failed bet that interest rates would rise cost the world's richest school at least $500 million in payments to escape derivatives that backfired.The article at the link is an interesting read. They gambled with money they need to pay the bills.
"Substantial losses" in Harvard's General Operating Account, a pool of cash from which bills are paid, further put pressure on the school, the report said.
Increasingly, people trust these wizards of smart - these Harvard MBA's and the like - to pull off slick money maneuvers to achieve profit. In my opinion, it's all just high stakes gambling over which the investors have no control.
Same thing with public pensions. Just read the front page of Pension Watch and you'll see what I mean.
Millions of people have trusted suave money managers to expertly guide their money into a profitable retirement later.
Smart? And if it goes south, will they approach their chosen money managers as an inhoused solution and turn their disappointment inward, or will they be angry and approach the failure to produce to expectations as outsourcing?
If my personal investment of thousands of hours and my own money into my business pursuits goes south, I have only myself to blame. At least in the way I look at it, that seems a smarter road. Or certainly one in which I have much more control over the direction and outcome of my investment.