Incentives Don’t Make Up For Lack of Skills (And Tracking Doesn’t Solve The Core Problem)

I lost 2 years of business growth because I thought unskilled freelancers could negotiate and innovate with Chinese manufacturers.

 

1. I interviewed and hired ~6 freelancers.

2. I gave them template emails and instructions documents.

3. I ‘delegated’ products for them to source from Chinese factories.

4. I tracked milestones on a big spreadsheet.

5. I hired a manager to ensure they were sending templates every day.

6. I added incentives for hitting milestones, in addition to the hourly rate.

7. I paid unexpected bonuses I hoped they would appreciate.

 

It took me about 18 months to realize that only 1-2 new products had been sourced, and most ‘completed’ milestones were dead-ends because key information had been missed along the way. (Like, forgetting to confirm the per-unit price will be reasonable before buying a product sample.)

 

Embarrassed and angry about the lost time, I took the products back and sourced all 20+ products in about 45 days.

 

Looking at my spreadsheet, I tried to figure out what went wrong…

 

1. Was my ‘sourcing system’ flawed?

   1. No, I used it myself.

2. Were the incentives misaligned?

   1. No, bonuses were in addition to their normal rate.

3. Was I not paying enough hours/week?

   1. No, each product took me, in total, ~5 hours spread across a few weeks.

4. Was the manager not checking in enough?

   1. No, she checked in 2x per week.

5. Was my milestone-tracking inaccurate?

   1. No, it was easy to track if I’d paid for a sample or not.

6. Were the freelancers lazy or unmotivated or over-billing hours?

   1. No, they did send those templates.

7. Were my deadlines impossibly short?

   1. No, 2 years was more than enough time.

8. Did I not hire enough people to find someone who fit?

   1. No, 6 people is enough.

 

After 18 months, seeing my name next to almost every sourced product, I realized the problem was simpler than any of these tactics.

 

Simply, I was asking people who had no product sourcing experience to source products from Chinese manufacturers.

 

I knew my products, I knew my system, and I’d done it many times before, so I was able to get the results.

 

Consider A Software Development Example

 

I would not be able to write a simple software program even if you incentivized me with a $10,000 bonus for completing each milestone, tracked my daily progress, and put me under a kind and understanding manager. I am simply not prepared to get that result.

 

Incentives, tracking and management won’t close the skills gap.

 

Motivation, No

 

Perhaps intrinsic motivation helps, but I’ve found that motivation can be highly stressful in the wrong environment, because someone who pours their all into a task you haven’t prepared them for will burn through their energy like gasoline poured on the sidewalk. (Then they’ll quit and hate you for hindering them from reaching their potential.)

 

Tracking, No

 

I should have taken action as soon as 3 months without results had passed, but even then, tracking only alerts me to a problem without providing a solution, and pseudo-complete milestones, where early mistakes only surface months later, make tracking less clear-cut than it originally seems.

 

The Solution: If You Won’t Delegate Well, Do It Yourself

 

I didn’t delegate responsibility, I abdicated it.

 

I threw the work at 6 inexperienced freelancers, focused somewhere else, and lost 2 years of business growth. Big mistake.

 

In an ideal world, I would have delegated well. But because I delegated poorly in this case, it would have been better if I had just continued sourcing myself.

 

I abdicated responsibility irresponsibly, and this means my business is ¼ the size it should be today, with an additional 20, 40, or 80+ product lines pushing up the top-line.