My hero Geoffrey Moore often pushes businesspeople to think about their business in terms of core and context.
The core activity is everything you do that makes you strategically different (that is, better) than your competitors. Core is where you create value. Everything else that you do (activities that don’t make you better) is context. You want to put as many dollars as possible into core processes, because you expect to make those dollars back in spades.
And you want to get as much of the context as possible for free. For example, if you sell a database system to universities, you’re willing to pay web developers a lot of your money to make your database even better than it already is. But you won’t pay those same web devopers to build you a proprietary internal email system if you can avoid it, because that would cost you money without differentiating you in any positive way from your competitors.
It sounds easy to push your resources into core activities. The challenge is what Geoffrey Moore refers to as “mission critical context.” This is the stuff that doesn’t give you value, but if it fails, the failure could be catastrophic. Middle managers like to tie up a lot of resources in this area under the label “mission critical.” The only way I know to fight this problem is to (1) be aware of the tendency of organizations to lose their competitive advantages by slowly adding resources to (non) mission-critical context activities, and (2) evaluate all context thoroughly before committing resources to them. If something is truly mission-critical, by all means, you have a responsibility to protect that area. But if you are spending money on an activity that creates zero value and there is no good reason for doing so, stop doing it.