When I’m meeting with founders and other executives, I am often asked for my thoughts on outsourcing various aspects of a growth company. I always start by asking what is fueling the interest in outsourcing. If the answer is predicated on the theory that outsourcing saves money, then I let them know it’s probably not the right choice.
Why? Because I believe outsourcing must focus on value creation versus cost savings. It’s fundamentally about finding strategic partners with specialized skills and knowledge that align with your goals and ethos. You might outsource a corporate function such as legal or accounting, or a portion of your business operations like delivery or customer service.
Think about painting a room in your house. You could do it yourself, but that will take time away from other things you might do better, and it may or may not result in the highest quality work. You could also outsource to a professional painter. If your primary criterion for choosing a painter is cost…well, you know the saying, you get what you pay for. If you choose a painting company based on expertise, reviews, and prior work, the experience will likely be better, and you’ll create more long-term value for your home.
Kate Vitasek, a well-known authority on supply chain management and outsourcing introduced the concept of “vested outsourcing” to describe the theory that outsourcing should focus on creating mutual value rather than merely cutting costs. She teaches and writes about The Vested Way which shifts outsourcing relationships to a “What’s in it for we?” approach. What a fantastic mantra!
In my years as Founder and CEO of Unidine and Compass Community Living, I regularly had conversations with potential clients who were considering outsourcing aspects of their business that had been managed in-house. During these meetings, I always made it clear that we would not cut corners to save money or compromise our standards and emphasized our commitment to creating long-term value. This approach sometimes required me to flex my willpower and walk away from business opportunities that were not consistent with our brand, operating standards, and culture.
To be successful, founders must look at outsourcing as a strategic tool that can enhance operational efficiency, provide access to specialized expertise, and drive innovation.
Think about companies like Coca-Cola that outsource bottling operations or Amazon outsourcing third-party logistics for deliveries and fulfillment. These are core functions that drive the business and yet they are outsourcing and creating value for the customer, their shareholders, and the outsourced providers as well.
If you’re a founder considering areas of your company that may make sense to outsource, I suggest the following process:
Conduct a needs assessment by listing all functions and performing a SWOT analysis on in-house and outsourced options.
Evaluate potential outsourcing partners based on expertise, client retention rates, and alignment with your culture and values. Consider each outsource service’s ability to access talent, their speed-to-market capabilities, commitment to innovation in their business area, and quality ratings.
Establish clear service level agreements with measurable goals that are focused on desired outcomes versus processes.
Be sure real-time feedback mechanisms are in place to maintain alignment and address issues promptly.
Test, review and adapt based on performance and feedback. Commit to continuous improvement.
Let’s think beyond the balance sheet and recognize outsourcing for what it is – a strategic advantage that can drive growth, innovation, and superior service delivery. To truly harness the power of outsourcing, it is essential to establish a strong, strategic relationship with culturally aligned partners. At Phoenix3, we are committed to helping our portfolio companies achieve their goals through smart, effective outsourcing solutions.
https://phx3.com/wp-content/uploads/2024/06/OutsourceHandshake.jpg7441410Phoenix3 Collectivehttps://phx3.com/wp-content/uploads/2025/09/PHX3_Collective_ForWeb-10-300x138.pngPhoenix3 Collective2024-06-01 16:48:002024-06-25 17:20:04Outsourcing: A Strategic Advantage to Drive Success
What makes an entrepreneur successful? The multi million dollar question. In a marketplace where so many businesses fail, what traits drive success? And why do companies with solo founders do so much better – surviving longer, and generating more revenue, than their counterparts? Underneath the simple answers – vision, ambition, perseverance – lies the nuance that articulates how success is truly born.
“It’s a personality trait. It’s either there or not. It is a combination of work ethic and self motivation.”
Richard Schenkel
There are four key traits that make an entrepreneur – four essential pieces to entrepreneurial DNA and spirit.
Perseverance
The first is perseverance – they keep going when others give up. In every success story, there’s a moment when the founder could have quit. They could have said, this is too hard, or too complex, and walked away. Every business runs into snags, into situations you didn’t necessarily plan for.
Entrepreneurs are compelled to solve those tough problems. They’re 100% committed because it’s not just a job to them, it’s a mission. When you have that conviction, it drives you to persevere.
Gut Instinct
The second key trait is relying on gut instinct. It is imperative that entrepreneurs are not easily swayed by other people’s negativity. Because when you’re doing something no one has done before, disrupting a market or designing something new, you’re going to have naysayers. People who say “That can’t be done, because no one has ever done it.”
Risk Tolerant
Entrepreneurs have to be able to tolerate risk. If you’re a risk averse person, entrepreneurship is not the right fit for you. Nothing is going to be easy. You’re investing everything you have into your business, especially your first business.
If that makes you too nervous, you’re not going to be able to keep up with the ups and downs that make or break a company’s success.
Ready to Ride the Rollercoaster
Which brings me to the last point – you’re prepared to ride the roller coaster. Success in business is never a straight line. It just isn’t linear. In reality, you’re going to have gaps. You’re going to have challenges that come up that you didn’t anticipate, or never could have fully planned for.
Entrepreneurs thrive on the roller coaster – they are in the moment, responding to the needs of the company. It’s an exciting and rewarding process.
Q&A with Richard on Vision: “Seeing the White Space”
Like a lot of natural entrepreneurs, you started pretty young. What was your first business like?
I sold business cards and printing door to door. It was a pretty humbling experience, and I learned a lot.
We had a printing press, typesetting, and all, in my home where I lived with my parents
when I was younger.
At that time I might have been 12 to 14 years old. I learned how you’re paying for the goods before you even have an order and that teaches you about financials – you have to have some dollars potentially to start a company, otherwise it’s pretty rocky.
What is your advice for someone starting out on their first venture – what do they need to focus on to overcome those first hurdles?
I think as an entrepreneur, when you’re starting organizations and funding them initially by yourself and potentially then looking to raise capital, you have to have tenacity, perseverance, and resilience. You never know who will say yes and who will say no.
You may meet with a hundred people, financing organizations, private equity, venture capital, etc – and all it takes is the right one. I think you just have to have that in your DNA. If you are an individual who can’t deal with rejection, it is a real tough thing as an entrepreneur to raise capital when you’re not used to anybody saying no.
How do you approach knowing when to pivot? When do you know you should keep pushing as an entrepreneur and when is it time to try something new?
You have to set certain expectations of where you’ll be as an organization or anything you do as an entrepreneur. Then constantly look at those and see are we making and hitting those expectations or goals? Are we off? Why are we off?
An example – let’s assume we were going to launch a business-to-business type of organization and we needed companies, clients, and we were going to put resources into business development, sales, marketing.
So we do all those things and we have people calling on prospects, but we don’t have anybody ever really making any buying decisions. It’s not moving forward. In that case, you either have to figure out where you’re off in the market, and why and retool. Or are you in a business model that in your opinion, is really a wonderful opportunity, but nobody wants it?
There’s no guarantee that even a competitive business out there will hit the mark. If it was that easy, you’d have hundreds of competitors in every business scaling. It really takes a lot of grit to say, “Hey, this may have been the best concept in the world, but after three years of tying up cash, people, and capital, is it time to let it go?”
The other thing is I always say, you better go into opportunities that have what I call white space. White space is nothing more than a space that hasn’t been 100% developed at this point. You look at those niches out there that can allow you to succeed.
What was the white space when you built Unidine into one of the fastest growing companies in the country?
Client intimacy. That was one of the success opportunities that Unidine provided, through a strong leadership team that was in touch with clients and very hands-on. When an organization gets very large, they can lose touch with the majority of their clients, that’s just the reality. As an insurgent force in the dining services industry, we were ambitious in our approach to client intimacy and service excellence.
When calls came in on the weekend, we answered them. Our first Thanksgiving with a new client, I got a call that the sewers had backed up into the kitchen. We had people out there with mop buckets making sure we could get out the meal. Sometimes you’re faced with an unpredictable situation, and you just better figure it out.
I think you can be an insurgent in a lot of different industries because frankly, there is a lot of mediocrity out there in larger organizations and they take success for granted. But when you have a founder-based culture, an agile team aligned to that vision, firing on all
eight cylinders, you respond much more quickly and efficiently. Clients know they’re going to get that high-touch service experience. And employees know they’re a part of something game-changing, redefining the business model.
An Inspiring Entrepreneur: John Willard Marriott Sr.
Richard began his early career at Marriott Corporation. This experience shaped his future success. In particular, when asked about any entrepreneurs that inspired him without hesitation, he mentioned JW Marriottt. Sr and his son.
John Willard Marriott Sr.
Here is their story:
Marriott Corp. began as a nine-seat root beer stand. JW Marriott started the stand in Washington DC after getting a taste of the hot, muggy weather – perfect for selling cold drinks to thirsty travelers. To be profitable year round, he added food services. And then a drive-in service. And then airline catering.
By the early 1950’s, he was operating 56 restaurants. He easily could have stopped there, but he saw a new opportunity with the expansion of air travel – the “white space” in hospitality at the time.
America was traveling more and more, and it needed a place to stay while on the road. In 1953, he opened his first hotel, Twin Bridges Motor Hotel in Arlington, Virginia. By 1969, he’s opening his 11th hotel, now in Mexico. In 1970’s, he’s building hotels in Europe. And he never stops. Today, Marriott International operates on over 8,000 properties worldwide and is the world’s largest hotel chain.
JW Marriott is a classic entrepreneurial success story, and in his story you can see the four traits of the entrepreneur. He was willing to trust his instincts, to take risks, and respond to a constantly changing market. He persevered through challenges and turned obstacles into opportunities.
Importantly, he understood the value of company culture, telling his managers, “Take care of associates and they’ll take care of your customers.”
Richard learned a lot during his time at Marriott and was impressed by JW Marriott Sr. and his son. He admired his tenacity and the company that he built. Marriott had a strong work ethic and even in his later years he was very involved in the company. He was hands-on even after his son took over. He lived and breathed that company, and that’s what it’s like as a founder to build something from the ground up.
Next Time: Company Culture
In the next newsletter we’ll deep dive into company culture – the importance of hiring and mentoring the right people, and what successful company culture looks like when it comes to scalability.
https://phx3.com/wp-content/uploads/2023/11/Entrepreneurship-Is-DNA.jpg407800Phoenix3 Collectivehttps://phx3.com/wp-content/uploads/2025/09/PHX3_Collective_ForWeb-10-300x138.pngPhoenix3 Collective2023-09-17 09:32:332023-11-27 13:59:58Entrepreneurship Is DNA
I have been fortunate in assembling a team of top in class executives and experts with a wide range of skill sets. I plan to introduce you to each of our team members and talk more about our portfolio in the coming weeks here in the Founder’s Mindset. Our first introduction this week is a big one…
It brings me great pleasure to announce Joe Cuticelli as Partner and Chief Operating Officer of Phoenix3 Holdings. Joe is an incisive decision-maker with rich leadership experience from helming one of the world’s largest employers through multiple phases of rapid growth.
Joe’s skillset is broad and his knowledge pool is incredibly deep. He is as committed and passionate as I am to building successful businesses that operate with integrity and that transform the lives of individuals and the communities they serve.
“We met as rivals and competitors years ago – he’ll tell you a little more about that in his own words below – and today, I’m gratified to have him join us as a leader at Phoenix3 Holdings.”
Joe Cuticelli, Partner and Chief Operating Officer
Officer
Joe Cuticelli is a highly accomplished executive, with a dynamic history of leadership at Sodexo North America where he held progressively demanding leadership roles, ultimately serving as its CEO of senior living. He is a navigator of complex organizational structures and global markets with an incisive intuition for how to scale strategically and successfully.
During his tenure at Sodexo, Joe exceeded sales and financial targets at every level, developing a wide-ranging and sharp skill set across business development, sales, and operations management. After stepping down from Sodexo, Joe founded Marleon Capital, leveraging his deep industry knowledge to provide invaluable business expertise to companies within the insurance restoration industries.
Joe is intensely passionate about making a positive impact in people’s lives. Aside from his advisory role in the corporate world, he also serves as the Board Chairman for Generations United, an organization that enhances the lives of children, youth, and elders through intergenerational collaboration and public policy.
Q&A: Get to Know Joe
How did you and Richard meet?
We were competitors. In the span of my career, Unidine and later CCL was always a competitor. What’s interesting is I didn’t know much about Richard, but I had a great admiration for Unidine, the way they presented themselves along with the platform and values that they put forward in the marketplace.
As a competitor, they were successful, and they were growing fast. It was a startup that was taking a segment of the market that we were all interested in, but they seemed to do it with a lot more rigor and discipline than we were.
I remember going to a sales meeting and we presented first. Afterwards we thought, “We did a great job.” Then we walked outside and there’s a giant box truck parked against the building – and out comes Unidine, off-loading their sales presentation. We were shoving our stuff in cars. We were nowhere near what they were doing to present their business case, and I thought to myself, they always seem one step ahead.
Later on in my career when I became CEO, Richard and I would collaborate with each other at different industry events. And while we were competitors, we were very respectful of one another and always found time to speak with one another. Doing so we developed a mutual recognition and admiration for the other’s skills.
How did you approach your role as a CEO and leader managing expansion at a global company with such a huge array of service offerings?
I had to approach it with an open-mind that I was going to learn a lot. At one point we would tell people we had 100 different services that we could provide. We had some core things that we did – food, facilities, management – but within that, we were doing transportation, energy, infrastructure management, to name a few. As a large company, we thought we could do it all.
There were times when my team came to me and said, “Can we do this?”, and while it might have been in the scope of services that we provided, I knew we couldn’t do it well, and we had to be very disciplined about the delivery of our services – we want to be the best at the things that we can do.
Ultimately, we may not be able to do all things because we don’t have the resources, or it may be geographically challenged. One of the things about being a good leader is also knowing when to say no.
As a leader I needed to assess how quickly I could learn about those things that I didn’t know about within the business, measure the risks in how we deployed our services, and decide if it was appropriate for the business at that time.
What excites you about partnering at Phoenix3 Holdings?
I think there’s an opportunity to help companies grow in a space that we understand very well, whether that’s pure hospitality, senior living, healthcare, or corporate.
We understand this space really well and are looking for businesses that have a lot of white space and can scale very quickly. With Phoenix3 as a partner they can do that using the multiple years of expertise that we have in managing businesses.
It’s exciting to help others, to be successful and grow their business. I’m excited about the lives that we can impact by our mentorship, our knowledge and our association with these types of businesses. I think it’s a great opportunity.
https://phx3.com/wp-content/uploads/2023/11/Introducing-the-Phoenix3-Holdings-Team-citation.jpg407800Phoenix3 Collectivehttps://phx3.com/wp-content/uploads/2025/09/PHX3_Collective_ForWeb-10-300x138.pngPhoenix3 Collective2023-08-17 09:14:352023-11-27 13:59:44Introducing the Phoenix3 Holdings Team
I’ve always believed the way a company empowers people to make decisions that lead to success is to make company culture the number one priority. That’s easier said than done, of course.
As a founder and CEO, especially when your company is experiencing rapid growth, you’re constantly refining your strategy for bringing culture to every level. You need each person, from the C-suite executives to hourly employees out in the field, to be aligned to the same mission.
I’ve found the following truths to be invaluable in guiding my leadership when it comes to company culture.
Culture is a daily practice
Culture isn’t a one and done deal. It’s there every day and never goes away. An example from my prior life was something we called a daily lineup, where everyone, across the nation, got together twice a day. Every day, 356 days a year, we were talking about vision, mission, values, team member commitment, and something we called the 15 basics.
We had weekly marketing materials, and we would go through 26 aspects of culture every six months. Every week would be a different one, but everyone across the country was receiving the same messaging. We scaled engagement for a strong culture, at a large company spanning different states and numerous branches.
“Together we have the power to create more value than we ever could separately.”
Culture is recognizable and recognized
Culture should be such an integral part of your organization that everyone can speak on it and everyone can recognize it when they see it happening. Another example from my past is the tradition of recognition. At executive leadership meetings, it was part of every meeting kickoff. No matter what type of meeting, there would be one person who would have responsibility to talk about the culture of the week. They would talk about what it was and what it meant to them. Then, they would call out and recognize different people in the company who were living the culture.
On the other hand, when people are not living the culture, when they’re deviating strongly from the values you put out there – there have to be consequences. Up to and including no longer being a part of the organization. Without that consistency, it’s impossible to have a strong culture that can truly be seen at every level of a company.
Culture starts at the top down
It’s crucial that the CEO and leadership team are living those values. If they aren’t, it’s null and void. You can’t have a strong company culture if the people at the top are not leading by example. At our headquarters, it was a part of the design in the environment. So everywhere you went you would see the mission, vision and values we were living by.
When you’re hiring, it’s important to hire people who can live the culture, speak to the culture, and truly understand it. Not just in the obvious roles, but every person in leadership should be driven by that sense of mission and purpose around culture.
Q&A With Richard on Talent and Hiring for Culture
What are your guiding principles when it comes to human capital?
When I look at human capital, I look for people who have something special. What I’ve seen is, at the end of the day, it’s not about the goods that you buy. It’s about the people who take those goods and make them into something.
I’ve always said the smartest people hire smarter people than themselves.
And they’re not intimidated by that. That is what makes a great leader; someone who is not afraid to have the best around them.
What I would always tell somebody is: never be satisfied with mediocrity of people, you want the best individuals out there, the exceptional individuals. That’s just been my mantra.
What strategy can you use as a founder to bring in the best of the best?
I’ll tell you what I always did do, and I think everybody thought I was crazy: from certain levels up in the organization, not just my direct reports, but anybody coming in an executive level leadership role, I interviewed them personally.
I just felt that I had the best handle of the DNA of the company. In hiring, there were people that would be passed on to me to be selected as just a rubber stamp.
I would never just rubber stamp people. I would spend the time – whether it’s 10 minutes or a half hour or 45 – really figuring out what drives them.
In those interviews, how do you identify those exceptional people? The ones with a fire in their belly?
I’ll give you an example. When somebody would say to me, “I really want to work for you and finish up my career at your company.” That’s not a good enough reason for me. It doesn’t speak to mission, and culture is all about mission, and alignment.
I want you to be with us because you really believe in what we do and really want to take the journey. That’s the key. That’s what you want to look for, when you’re putting people in place around you to guide the day-to-day decision-making at your company.
Inspiration on Culture: Fixing Broken Culture at Lego
From the brink of bankruptcy to being named the world’s most powerful brand, Legos’ turnaround under the leadership of Jørgen Vig Knudstorp is the stuff of legend.
In 2003, Lego was failing. Frightened leadership had been trying to compete with the slew of electronic toys in the 90’s and badly overextended the brand. Lego had action figures, theme parks, even a fashion line that no one seemed to want – and the company was in debt to the tune of $800 million.
Enter Jørgen Vig Knudstorp, a former McKinsey consultant, who came in with a plan and ambition – to turn the brand into “the Apple of toys”. He sold off the theme parks, cut 1000 jobs, and went back to the basics.
Knudstorp instructed his research team to start asking for honest feedback from their target audience – an audience indeed known for their honesty and sometimes bluntness – children. Knudstorp knew that the only way to create a thriving culture is to remove bureaucracy and fear, aligning employees around clear-cut strategy while at the same time giving them freedom to fail and course-correct as a team. He has famously said, “The blame is not for failure. It is failing to help or ask for help.”
His approach to culture emphasizes communication, alignment and agility. He met monthly with a group of senior vice presidents, instead of managing via committee. “It’s cumbersome to bring 25 people together in a room or at a video conference, but if you really manage the material and the process really well, you achieve huge speed advantages.”
That’s the power of understanding culture, and an example of the success you have when you focus on the things that matter.
https://phx3.com/wp-content/uploads/2023/11/richard-feature.jpg469800Phoenix3 Collectivehttps://phx3.com/wp-content/uploads/2025/09/PHX3_Collective_ForWeb-10-300x138.pngPhoenix3 Collective2023-06-07 17:25:442023-11-27 13:59:03Making Company Culture the DNA of Your Organization – A Founder’s Insight on Practical, Proven Strategies
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