Page 25 - Retaining Top Employees

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“Employee What?!” 13

Dump or Outsource
MegaOffex,an office equipment manufacturer,might con-
clude that its core competencies are in designing,manufac-
turing,and marketing office equipment and not in manufacturing and
selling office supplies. It would either dump its supplies business,thus
freeing up its resources and people to concentrate on core competen-
cies,or sell it to another organization for which manufacturing and
selling office supplies is the core activity ... or to a competitor that
does not follow the core competency model.
Later,MegaOffex might decide that providing catering facilities for
its 23,000 employees is also not a core competency and thus decide
to outsource that activity to a catering company.

lished several years later, Competing for the Future (Harvard
Business School Press, 1994), has become a best seller.
The essence of the core competency model—that organiza-
tions should either dump non-core activities entirely or out-
source them to other organizations (for which the activities are
core)—began to make an impact on the workplace from about
1997 on.
The realization that organizations should limit their business
areas had a profound impact on the development of employee
retention strategy for medium-sized and larger organizations
during the late ’90s. In essence, it allowed them in certain cir-
cumstances to remove employee turnover as a management
concern altogether.
The argument around the board table (or inside the CEO’s
head) goes something like this:
Question: We’re experiencing excessive employee turnover in our
plastics division. Turnover everywhere else in our company
seems relatively OK. We’re good employers. Why should this be?

Response: Manufacturing plastics isn’t our core activity—we
make and sell ballpoint pens. The only reason we have a plas-
tics division is to supply the raw materials for our pens. It’s no
wonder the employees are unhappy and leaving. We don’t know
how to run a plastics manufacturing operation. Our core skills