Top Management Story

Writen by Ron Finklestein

In January 2003 The Cleveland Plain Dealer ran this headline – "Ohio lost 200,000 manufacturing jobs". They blamed competition from India and China.

In a recent article, Business Week discussed how Call Centers are being sent off shore, sending 10s of thousands of jobs overseas. Dell, Citigroup, Microsoft, General Electric and others major corporations now have oversea call centers.

Microsoft and GE have one of the world's most productive research and development centers in India

Companies such are Ford, GM and Mercedes have built or off-shored entire plants to China.

Tata India has one of the world's largest and highly trained programming staffs.

Accountants are next to feel the heat from off shore competition. A clerk in the accountant's office can scan a company's financial data to an Internet server. An accountant in India will access this information over a secure link and process the financials overnight. The results are waiting at the accountant desk when he comes in the next morning.

How do you fight this?

Outsourcing and off-shoring are here to stay.

Outsourcing is defined as taking a specific task and having another company perform this service and then reintegrating the results back into the original company.

Off-shoring is taking an entire plant and moving it to another country.

In the following example Boeing is building a new plane. Boeing has Russian designers designing the wings. Boeing also outsourced the electronics of this plane to a Japanese company. This Japanese company out sourced certain electronic components to the same company in Russia that Boeing is outsourcing the wing design to.

Boeing can employ five engineers in Russia for the price of one engineer in the United States.

Are you untouchable?

Let me define untouchable. Being untouchable is the ongoing learning process that a person must go through to move to the next level of professional and personal development.

For example, in his book the World is Flat by Thomas Friedman, he discusses the outsourcing impact on his friend Bill Greer.

Bill is 48 years old and he has 26 years experience as a free lance artist and graphics designer. His clients include such notable names as New York Times and McDonalds.

In the past a client requests a finished piece of art. Greer would sketch it, color it, mount it on illustration board, cover it with tissue, package it, and have it delivered. The process I just describes is known as the creation of camera ready art

In the new process Greer's client would requests a design, Greer would create the product using digital software and email the product back to the client.

Programs like Quark Express turned graphic design into a commodity. Software gives everyone the same tools and allowed almost anyone the ability to create acceptable art work. I use a program call GIMP and it is free.

Greer pushed himself up the knowledge ladder and retooled his skill sets. He became the idea man. He would create the idea, draw it out and email it to his clients and they would finish it. For Greer, the old process was eight steps. The new process is three steps.

This concept of creating ideas moved him into a whole new business. No longer just another friggin artist, his clients now buy his ideas.

Bill Greer is an untouchable. He is adaptable. He continues to retool his skills. He creates new forms of value for his clients.

What are you doing to be an untouchable?

We have been though this before. It happened when we moved from the agricultural age to the industrial age to the electronic age. On the farm you could get by with a third grade education and no one cared. During the industrial age you needed a high school diploma. Hundreds of thousands of people migrated from farms to cities during the industrial revolution and retooled their skills to find work.

In the 1950's, in Akron Ohio, rubber companies would rent buses and send them into the mountains of Pennsylvania and West Virginia to bring worker to Akron to work in the Rubber factories. That's how I came to live in Akron. My father left the coal mines of Pennsylvania to find a better life here. Little did he know that working in the rubber factory was no different that working in a coal mine.

People who left the farms adapted, learned new skills and became untouchable in their generation. Men who left the mountains and came to Akron to find employment learned new skills as well.

In both of these cases education played a key role in this transformation.

In the technology age America is being pushed by two very motivated competitors: India and China. After years of repression they now see that they can have what Americans have enjoyed for so many years.

Our grandparents came from the old country to create a better life.

Our parents learned new skills and found ways to compete in their generation.

Technology allows India and China to do the same thing; all without leaving home.

What is America doing to compete? More importantly – what are you doing to do to compete – to become an untouchable? As I see it there are three things we must do:

1. Stop being complacent and waiting for the government to do something. Government is about boundaries: political, commercial and geographical. They don't understand that with technology the world is flat and traditional boundaries cease to exist. Politicians are lawyers not engineers. They don't understand technology.
2. Take responsibility for your job situation. Treat your job as your business. You can't change something unless you assume responsibility for the results. Our parent and grandparents took responsibility when they left the farm or migrated to a new country.
3. Finally, never stop learning. When you stop learning is when you die. Your death my not physical but it is an emotional and intellectual death all the same.

As Satchel Page once said - don't look back they might be gaining on you.

The untouchables never look back – they are always looking for the next way to provide greater value. If you are always providing value there is no need to look back.

The best way to describe how to we should respond to outsourcing and off shoring is though this African Proverb:

Every Morning in Africa, a gazelle wakes up
It knows that is must out run the fastest lion or it will be killed
Every morning the lion wakes up
It knows it must out run the slowest gazelle or it will starve to death
It does not matter if you are the lion or the gazelle,
When the sun comes up
You better start running

By Ron Finklestein
Small Business Success Expert
330-990-0788
info@yourbusinesscoach.net