Sourcing 1.0 (Sourcing As Name Generation) Has Begun To Show Its Cracks

Sourcing 1.0 (Sourcing as Name Generation) has begun to show its cracks . . . much like the notion of CRM ("the right message to the right customer at the right time") did in the early 2000s. Frankly, most organizations we speak with that are using a Sourcing 1.0 process are just not seeing desired results. Yeah, they may be a very marginal improvement in COH numbers, but there is a coinciding cost as well. Because of the process shift, the number of fallouts has increased and overall staff accountability has simply gone down. (You know the picture - a candidate falls out and the Sourcer points a finger at the Recruiter, who points a finger at the Appt Setting Rec Admin, who points a finger at the Hiring Manager . . . and on and on we go as we've made it easy to skirt responsibility). In addition, I've even personally seen Finance Departments getting involved in offering financial analysis training to Recruiting Leaders that continue to attempt to justify sustained funding in light of only marginal results at best.

Sure, Recruiting Departments have plenty more names with the current Sourcing 1.0 model . . . but what that has resulted in is an overload of unqualified candidates and a near worthless data warehouse. A good analogy is the early-stage tech company that is sales-driven instead of being segment-driven. Sure, you wind up with some sales here and there . . . but Word of Mouth (WOM) never expands and resonates within a beachhead niche that you leverage to penetrate the next niche. Instead of "putting their eggs in one basket" (the right basket is the real challenge here) and working dilligently to acquire 10 customers within the same beachhead niche . . . the typical firm focus on sales-for-sales-sake, winding up with 10 customers in 10 different niches. The result? Well, it's simple - the 10 customers never meet and don't know one another, so there is no opportunity for WOM to spread virally. There is also little room for customized improvements specific to that niche . . . as such, VOC ("Voice of the Customer") feedback/research falls by the wayside.

Here's another real-world analogy: Let's say a telecom company (we'll call this fictitious company "Nprint-Sextel") begins a heavy marketing push aimed simply at increasing overall sales. They wind up with 10 new customers . . . the first 2 are highly profitable, the next 3 are moderately profitable, the next 3 are break-even propositions, and the final two are 'demon customer segments' that cost more to serve than the revenue we see in return. Sure, the marketing campaign 'worked' - it resulted in 10 new customers. The simple marketing mind would look at the overall result and see positive overall ROI (if you know anything about ROI, it's utterly deceptive since it doesn't account for the cost of capital). As such, it would be easy to conclude that due to the marginal return, the campaign worked, right?

The question is whether the acquired customers were the right customers. Were they angel customers? (Correlary: . . . Were they 5-star QOHs at our company???) This is a big reason a decision science emerged within the Marketing Function. ROI isn't enough and frankly, is too simplistic a notion.

There is more than one application to the analogy here - I'm sure you know a few if you're in the current Sourcing game. I'm not the only one pushing for a decision science in our space; so is John Boudreau, Research Director at the USC Marshall Center for Effective Organizations. Look him up and check him out - his contributions are more valuable than any I've ever seen in our industry.

Joshua Letourneau
Mg Director, SSF (Strategic Sourcing Framework) Implementation
LG & Associates Search / Talent Strategy

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