Survival Is Not A Given In A Global Economy

As an intrepid law student and subsequently a Barrister in England, I recall how one man’s name always reverberated more than any other in the field of law. That of Lord Denning.  The other day I was reminded of a now infamous quote by Lord Denning who was one of the foremost thought-leaders and member of the British Judiciary. He was known for being very direct and equally succinct. As he put it:

“Learning is not compulsory… neither is survival.”

Makes you think, doesn’t it? 

We live in interesting times. Very interesting indeed. 

We are on the brink of yet another chapter in the never-ending Bailout Saga – and one can only wonder which segment of industry will next make its way to Washington D.C. to make its case for money. The latest chapter balances the very real issue of mass job losses in the car industry with the painful realities of an industry sector routinely oblivious to what its clients and economics dictate. It’s not pretty. 

I suspect there will be tens or even hundreds of thousands of companies and small businesses that will not be taking a private jet to request funding in the course of the coming weeks. Instead, they will focus closer to home, tighten their belts and do everything in their power to stay afloat – to survive the extraordinary downblast in the economy. It takes guts. Real guts. And the outcome is not certain.

I’m on the side of the little guy. 

But I think we ALL have to take a lesson in survival. Rule #1 – understand it’s about survival and think accordingly. Forget that – and you don’t survive. It’s not a shades of grey thing. It’s the real deal. Rule #1 dictates everything else in a survival context.

I think we need to be thinking in Survival terms. 

If only to be around for the Recovery.

If business is to emerge from this chaos stronger, fitter and more competitive than before – more ready and capable to compete effectively in a global economy – then we need to embrace the tools and techniques of the century we’re in – not the one we just left behind. If you accept the economic theory of the world being flat, then there are surely some consequences we cannot ignore.

Global Sourcing has created a direct, alternative workforce for an increasing percentage of everyday jobs. This is an opportunity – not a threat if we approach it sensibly and with an eye to the future, not the past. 

Rule #1 tells us that now is not the time to be looking back. It is the time to be looking forward and investing forward. Getting operations into shape, getting lean for the climb. Drawing on efficiencies and cost savings where they are found. Digging deep to invest in the next generations of science and technology innovations.

We learn from History that society must move on and that clinging to the past is a precursor to failure. Empires rise – and fall. Our future lies in the future – not behind us. This we know.

As Denning says: ”Learning is not compulsory… neither is survival.”

 

 

David Kinnear

New York

 

Global Sourcing Will Impact You. Ready?

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

 

“The Goldfish Effect” – The Practical Side of Global Sourcing

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

 

A Bailout Made of Sand – And The Dawn of Global Sourcing Economics (with apologies to Jimmy Hendrix etc)

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

 

The Legacy of Global Sourcing – What is (Y)our Legacy?

By

David T Kinnear

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

‘This takes the Outsourcing employment debate beyond job elimination to an urgent focus on innovation and job creation. Not job insurance or unrealistic job protectionism – but bold exploration into new untapped areas of job generation, applying new creativities and new technologies that advance all   participants and assist those that are most at risk of being left behind.’

The issue of Legacy has been on my mind for some time – and it is on the minds of many just now. Regardless of party persuasion, an older generation gravitates with sadness to the many lives lost in world conflicts and with frustration to the economic immediacy of rocketing energy prices; younger generations move quickly with new forms of social community and communication – and they have been hugely instrumental in bringing world climate change to mainstream dialog. Young and old meet around global change and the drivers behind it.

These are just one or two of many major issues that (like it or not) impact us all – all being everyone in the world – regardless of race, religion, color, gender or orientation. Our legacy will be shaped by our response to these issues. Our many feelings of vulnerability and uncertainty now lead us to ask what lies ahead for our children and grandchildren. We don’t doubt their ingenuity and survival skills – but we wonder what it will be like for them – if this is what it is like now. And we wonder what they will think about what we did.

So it is with legacy. It is about consequences. And learning to deal with consequences is that really hard part of growing up. Legacy is about what we did – or did not do – with the opportunities and resources we had. Who we learned to work with – and what we learned to do. Legacy is like a shadow – there, regardless, and unshakeable. Legacy is not the total measure of a person but it is an important measure of what we did with the particular opportunities and talents afforded us. Our future generations will reflect on this period in history and they will make judgments on our legacy – whether this is flattering or not.

Andrew Carnegie was a very successful businessman – even if, in his day, some thought he was a little ‘nouveau riche’ and not their cup of tea. He was not always Society’s favorite chap. He experienced personal adversity and the scary side of business risk – and overcame all to be a truly successful merchant with no need of funny accounting to turn a profit. He was, as they say, the real deal. And he could have remained this – a happy, successful and prosperous man who owed nothing to anyone – and perhaps none of us would have been the wiser today. But he elected to take what he had created and use this to much greater effect. To be sure, this is why we know who he was and why we reflect so positively on his legacy.

It was the unflinching, authentic, granite-like story of Andrew Carnegie – and what he did with what he had – that inspired the creation of The Global Sourcing Council just over a year ago – together with the message it delivers on the legacy of the global sourcing sector.

If you are reading this article, you are part of the legacy of the global sourcing sector that is evolving as we speak.

The outsourcing industry is not, let’s face it, the most popular – for a whole variety of reasons some more valid than others. It might be easier to be part of the media and entertainment sector. Sorry to say, whether you agree with Lou Dobbs or not, some of the negativity around this industry and some of the questions on the part of investors about the growth and value prospects of this sector stem (I think) from our own actions and complacencies. We stay largely in the shadows; we are known to cut but not as creators. We are seen to take but not to give. We invest in ourselves but do not reinvest. And this is why many journalists and politicians have a field day with the sector. And why shouldn’t they?

One could argue that we are paying the price of failing to lead. If we continue on this path, the sector will pay a far higher price – just as other industry sectors have stumbled in the past. But the greatest price will be paid by those who do not have a voice, who do not have economic leverage and those who can be most productively helped by the actions of this industry if we find our voice.

As an industry, we already have a financial colossus and momentum that is capable (even now) of far more than it has demonstrated to date. That is, beyond the white papers and presentations on process efficiency and cost savings, lies a now critical role in driving socio-economic change at local, national and international level. In prompting and spearheading technology investment and innovation – developing the tools that will create new, future-centric jobs for existing and future generations. Turning an industry that tends to follow – into an industry that leads from the front.

If we stand still, we fall behind. If we do not invest, innovate and reinvest in both our client and domestic communities, we fail. We have missed a compelling opportunity that is ours for the taking.

As outsourcing industry stakeholders, we could do nothing and achieve modest financial success (and be largely forgotten over time). Or we can achieve memorable levels of accomplishment – by doing more with what we have than we do now. We can be leaders and drivers of change and investment in people and technology – taking the initiative to invest wisely in future generations, not just for immediate returns but also for longer-term returns and the knowledge that we have invested in our fellow global citizens.

As we consider the implications of global warming and the inter-dependencies of economies around the world, we must surely realize that there is an epic historical change underway and – ironically – the outsourcing sector is right in the middle of it. This industry is as global as it gets. This industry is all about human capital – the extraordinary, wonderful and invaluable asset common to all countries, people.

It is all about people just like you and me – who typically aspire to work to feed themselves, their families and their communities. Who fear many of the same things but who perhaps speak different languages and will never actually meet.

This industry is all about people connected by technology and change WILL impact us all. If we stand still, we will fall behind. Technology will make many redundant all around the world and the issues we face of how to train and redeploy people will be widespread. We must plot a forward course that engages in dialog and concerted investment in enabling technologies that create new and far-reaching employment opportunities.

This takes the employment debate beyond job elimination to an urgent focus on innovation and job creation. Not job insurance or unrealistic job protectionism – but bold exploration into new untapped areas of job generation, applying new creativities and new technologies that advance all participants and assist those that are most at risk of being left behind.

OK, what does that mean? It means we should be looking at ways to eliminate process-heavy, manual tasks – but while also investing in technology, education and training in new products, services that can provide a forward-stable working environment for MORE people, not less. It means that there are new opportunities all around us – even in our global warming crisis there are design, consulting, engineering, manufacturing, mining and construction work opportunities – that also help us save energy and reduce the impact of our economy on future generations.

Work brings a sense of purpose and hope to people. It is an extraordinary source of pride and grounding for many. Without it, many find basic survival becomes reality – very painfully. And it is a shortcut to many deep social problems.

Our industry stands at a crossroads – and we can elect a passive, self-centric path that benefits some but offers little to broader numbers of people. Or we can take the path less trodden – a distinct and bold alternative. On this path, we acknowledge what we can do – just by doing it. Just by trying.

This is surely good news. It takes some thinking about – and it takes some doing. But the alternative is forever to be regarded as the industry that ‘takes but doesn’t give’ – the bad guys who take jobs and propose few if any solutions for future growth. The people that talked, the folks that ran analysis – but that was all.

The sector has saved – and generated – a lot of money for a lot of people. It has extraordinary growth potential ahead. But its history of reinvestment is shorter than this article. Herein lies the issue.

Any industry has to learn to give back – and the sooner the better. This is different from creating jobs to carry out the work. This is the over-and-above reinvestment in social advancement that sets good business apart – and reflects well on clients and providers alike. That puts legs on thoughts and ideas. That gives life and substance to thought-leadership. That generates fresh water in wells and healthcare for developing communities where a little goes a very long way. And, my personal favorite, provides education for the next generations and desperately needed investment in technology that will create new and vital opportunities for generations to come. We have such a compelling education opportunity here. The next Einstein could be sitting just about anywhere in the world and this industry might be the connector we all need to releasing that genius for everyone’s benefit.

If we do not invest in our communities and if we do not reinvest in our socio-economic infrastructures, we have failed one of the critical tests of our time. Quarterly results, white papers and all the good intentions in the world will mean little or nothing if we do not take the opportunity which is ours (now) to be a catalyst for long-term change.

Tomorrow’s building blocks lie at our feet. We have a legacy to build and the time is now. Beyond the talk, there is the walk.

Our legacy is still ours to make. Or it will be written for us.

What’s (y)ours?