Seismic Shift

There’s nothing like a good quote. Except sometimes a good headline.

No matter how busy I get, I enjoy reading the thoughts and quotations of leaders and visionaries – past and present. It is such a powerful distillation of human intellectual capital and experience – encouragement and caution. To read the muses of generations past is to put in context a great deal of what we see happening today.

So here’s one by Friedrich von Schiller that I came across a short while ago that struck me as profound and timely:

“Stern is the on-look of necessity,
Not without shudder may a human hand
Grasp the mysterious urn of destiny.”

This came to mind as I read the headlines this last day or two – those that describe the fallout of the retail sector and the uniquely different outlook of Wal-Mart. The latter stood alone in experiencing success. Its model is profoundly smart (whether you like it or not) and their execution is legendary. So you might say that the other quote of the day was the headline in the WSJ:

“Wal-Mart Flourishes As Economy Turns Sour”

 What struck me is how inevitable a return to basics is. It is a stern necessity. It is truly the way forward.

As we survey the decaying landscape of Wall Street and the frothy “clever” days of leverage, now we have to decide “what next” if we are to achieve a passing grade in our economic and socio-economic destiny. Over the course of the next few weeks and months, I think we will see the grave face of necessity driving us all to a new normality and altered expectations.

If one of the things we discovered in this chaos is that you can’t hide your mistakes around the world and that sooner or later it’s all interconnected – then we must conclude that growth and competition for growth is going to become much more gritty and practical – and yes, competitive. Less money to go around, more competition for what opportunity there is. 

Which brings me to the outsourcing sector.

I see change ahead. Big change.

For so long, I have heard people say that “cost is not a differentiator”. Those same people are quick to point our how instead it’s a quality issue or an expertise issue. Maybe in a good market. In a climate as unsettled as this, let’s see how true that holds and how ready some clients will be to flip that premise around. The quality and expertise becomes the given – the price becomes the battle field. And let’s see just how much more interested clients are going to become in macro-level cost reduction – not just a nibble around the edges.

To achieve our destiny as an outsourcing industry, we may all have to dig deeper than any of us have done to date. 

David Kinnear

New York

by

David Kinnear

CEO, Lisnagol Ventures, LLC

As I headed for the subway exit at Times Square this morning, I was quietly thinking through my day. Out of the blue, all I saw was a flying coat and I was part-deafened by a lady who hurled herself down the uptown stairs screaming “Hold That Train”. She was late. It didn’t look like she was going to make it  - and the odds were against her that anyone was going to hold the doors on a greer Monday morning.

There is a certain point where momentum and inevitability come into play and you’re either in the right place at the right time – or not. There are consequences either way.

This is a lot like Global Sourcing. This is a train that is getting ready to leave the station. Screaming at the train will do little to change the outcome – but urgent action and expeditious steps just might.

On both a government and commercial enterprise level, there is much we need to do (and must do) to prepare ourselves and future generations for what Global Sourcing means – such that we’re on the train, we’re in the game, we’re getting where we want to go etc.

Most importantly, we really must ensure we don’t miss the train.

Contrary to some popular opinion, there is vast opportunity for all in Global Sourcing. That is not to say that there are not challenges  - but the challenges are dwarfed by the opportunities if we approach this chapter in history with the right mindset and a focus on investment in forward-thinking development and enabling technology, education.

I hope that lady made her train. It’s not fun being late.  Just think what you can miss by being late.

David Kinnear

New York

by

David T. Kinnear

My daughter’s goldfish died overnight. It wasn’t the first time something like this has happened – but we had had time to ‘fix’ the situation before. This time we didn’t have time to ‘replace’ the fish before breakfast. The tank sits on the breakfast counter in full view. Unavoidable visibility and conspicuous absence. You get the scene.

As a parent, I anguished about the implications of this and how to explain ‘fish heaven’ to a 3 year old. Perhaps I need have worried less. Shortly after observing the fish in the trash can and establishing that he was happy, my daughter asked if we should get a replacement. My daughter is the most caring person in the world – but she immediately cut to the practicalities of sourcing a replacement fish.

There’s a lesson lurking in here about Global Sourcing – and the “new normal” for business and employment practices around the world.

Global Sourcing is a practical recognition that every product and service has a price and that the world is open for business. The flatter the world, the greater the opportunity for competition. The less the focus on the service and the service provider – and the greater the focus on outcome. The more options there are, the greater the emphasis on cost and truly differentiating qualities.

The world is increasingly intra-visible and there are increasingly few barriers to trade in business services. The advances of technology have knocked down countless walls and opened up new swathes of opportunity. This is exciting. This is social history in the making. But this also means we must, repeat must, understand what global sourcing means in terms of our competitive readiness and willingness.

To compete globally, one must embrace global with all that means – including the potential for enormous downward pressure on domestic pricing, labor opportunities and income expectations. This is the hardest part. Global sourcing means global competition. You win. You lose. There are no guarantees. The only way is forward, boldly.

This is where it becomes so essential to find new economic and labor opportunities in home markets that feed renewed growth and fresh prosperity. Sectors such as alternative energy and technology research come to mind as priorities.  The role of education is critical. If we spend too much time mulling over what was or trying to hold onto what is already gone – instead of figuring out what is and what is to come – we will be left behind. The forces of change and capitalism itself will pass us by. 

As a dear friend once told me: “Life is. Period”. There is no qualifier. The world is. It moves on regardless. And so must we. Global Sourcing is here. The world is open for business and this has significant implications. We ignore this at our peril.

David Kinnear

New York

By

David T Kinnear

President & CEO, Lisnagol Ventures & Co-Founder of The Global Sourcing Council

Good intentions notwithstanding, this “rescue plan” has been built on some really shaky foundations and a very false premise. And what is that? It is the false premise of “getting things back to normal”.

People, “normal” has gone. ”Normal” was last seen disappearing over the equator during the last decade.

The world may be flat – but it is also very competitive, very independent – yet strangely interdependent. These are fascinating, exciting – and yet also combustible elements. We’re now in an era of doing experiments in the lab with these elements and noone really knows what the outcome could – or should – be.

Years ago, bad news took a long time to travel from distant lands. Equally, bad mistakes could be ‘lost’ in distant places and markets. Not so now. Sooner or later we find out that the world is only so big – and that our mistakes will haunt us. Maybe that story they used to tell about the butterfly fluttering its wings in Tokyo wasn’t so fanciful after all?

The dawn of global sourcing is now upon us. This is not just trite talk and terminology. It is very real and very timely. It has massive economic and socio-economic implications – all of which defy the idea of just getting things back to normal. We would be better served understanding and preparing for the new normal. This is the global economy in which we will compete, survive and flourish – or fail.

This is not a partisan issue. It is way bigger than party politics and it’s bigger than just the temporary inequity of the recent bailout measures that protect a relative few – and cost the majority dearly. The stakes are really much higher for all of us and the following generations we seek to foster and protect.

The true cost will be that we bear for generations to come – if we do not engage the new reality, the new normal – and invest the time and resources to equip our people and following generations for this environment.

Global Sourcing is here. We ignore this shift at our peril.

David Kinnear

New York

By

David T Kinnear

President & CEO, Lisnagol Ventures & Co-Founder of The Global Sourcing Council

I have been a strong advocate of global sourcing for some time – long before it became topical and popular to be so – for both fiscal and socio-economic reasons. I like the truly opportunistic and forward-thinking economy that this creates – with a focus on innovation, hard work, value and tangible results. I envisage the earthy fragrance of a real marketplace where goods were bought and sold of yore – and how this actually has so much relevance now.

Traditional work structures and office environments seem to do little to promote focus and efficiency for many businesses. In fact, it’s quite the opposite.  This inefficiency has worked – to a point – in a less than global environment. But now, we can see, things are changing and the consequences of inefficiency and corporate bloat are laid bare. 

As such, I believe there are enormous consequences for all businesses of the shift underway in global sourcing toward global virtual sourcing – and that the tools of virtual sourcing will create new and tremendously important economic and socio-economic opportunities for individuals – at home and abroad. And for businesses and governments also – at home and abroad. 

Change is ultimately a good thing for all. The fear of change is what we have to address. If we believe in our abilities and we believe in our fundamental ability to compete and win business globally, then we must enter the frey and compete. And in a global economy, that means communities small, large, urban and rural – individuals and small businesses – entering a virtual marketplace – just as surely as walking into the market squares of olden times to sell one’s wares.

And that means governments have a fabulous opportunity to engage, support and equip all their constituents – not just those that work in big businesses in large cities. There is something here for everyone.

Too much time has been spent in archaic debate and manoevring to delay or prevent the change that is inevitable – the social change that outsourcing brings. But this is also to delay and undermine the opportunity for advancement that it also represents. We go nowhere by standing still. New tools and toolsets must be used to move us forward competitively. And that means finding ways to bring our entire community to the table – to use technology to create a level, global playing field that is market-driven and competitive. 

The requirement to live in a big city or work in a big building to do certain jobs is silly in the age we now live in from a technology perspective. And this archaic premise denies many the opportunity to compete and develop further on a global stage.

David Kinnear

New York