November 2012


Image

I read a most interesting article about some movement in the return of manufacturing jobs to the US (Forbes Magazine – “Is the Re-shoring of Manufacturing a Trend or a Trickle?” ).   It brought up some interesting points like effect on dollar valuation, smaller customer orders and shortened product life as reasons that were compelling manufacturers to return to the home turf.  Maybe I am constantly in skeptic mode and I couldn’t help but feel that thinks like transportation and quality were simply overlooked.  We hear a small undertone about customer dissatisfaction and how its impacting their decisions on both providers and the consideration for returning home.  Yet no mention is made about the real reason… the why?  We have observed time and time again that the reason lies in a lack of a balanced engagement relationship.  Old tired single point mentalities try to dive the relationship when it has to be cooperative (simply because of cultures).  So regardless of why work is being considered or is coming home has little to do with the value its the general failings that we have had to engage productive outcomes.   Furthermore nothing much was even mentioned about how these so called companies were going to bring their products back online domestically.  Many got rid of manufacturing assets when they made the jump so I can only guess that it will be to acquire products (or services from elsewhere within the US).

(It is sort of like when I wrote this entry I had a bit of a technological glitch, I completed it and posted it but for some reason I only got a small portion of the piece.  This has now lead me to go back and re-complete what I had already started.  Now before any of you experts tell me what I should have done, rest assured I did auto and manual save on this but for whatever reason the God’s behind the scene were not cooperating.   In any case let me not digress further.)

What I found is that in similar situations that the return of manufacturing never quite happened.  Some for the reasons that I mention but also the loss of both employees and skills for those employees.  Going home, as some would say, never seems quite the same as before… no matter how wishful that we might want it to be.

Since we have a bit of a glimpse as to the outgoing tide effect in the West will it be the same in the East?  Having worked and lived in Asia most of my adult life I would have to say no.  First and foremost assets are seldom disposed of in a wholesale trade sort of way, they get redeployed and realigned but never disposed of.  It has allot to do with how much effort went into getting them that they simply aren’t given up.  Even when totally worn out and ready for a scrap heap they are kept alive and producing and producing.  Secondly, Eastern companies (and workforce) is resourceful… having learned how to live on minimums they are able to quickly able to return to those levels to sustain an existence.   This is not to say that they don’t prize achievement, simply they know how to overcome most obstacles that in the West can’t even be imagined.  Finally, they are deal makers.  From early times as merchants they knew how to build, market and sell their wares.  Its in their roots and thus deals are constantly being made in and around the West.  If anything the downturn has made them more keenly aware that depending on one market is not a sound business decision.   The outgoing tide in the East is apt to produce some new and unforeseen treasures.  Whereas the West chose to take a divesting approach.  Not that there is anything wrong with this, but if you don’t abate the problem to which a solution is taken then the problem will reoccur.  This is where I feel we have to be quite careful today because those original reasons for shifting work offshore have not been resolved.  Thus they will continue to plague businesses and their profitability.

Just about every student of business has heard of Abraham Maslow and his theory on human motivation (Maslow’s Hierarchy of Needs).  But I wonder whether there is a similar parallel that can be correlated to business.   After all we have heard mention how businesses are living and breathing institutions, that these have human characteristics that are reflected by the leadership and the employees that make them up.

Maslow’s Hierarchy is made up of 5 levels each of which can only be attained through sufficient stability in the earlier level.

Image

Allow me to draw the correlation with the hope that you can evaluate where your company stands, where it should be and what work needs to be undertaken in order to achieve further achievement.

Biological/Psychological Needs:   Businesses need core elements to achieve a level of fundamental operation.  Capitalization, human resources, product/service offering, and leadership.  Without them the company may exist but the question will remain for how long (and at what level of existence).

Security Needs:  This is often reflected in policies, practices, methods that fall under the umbrella of tactical elements but help to support a strategy as to where we wish to get.  It gives us certainty, provides efficiency through standardization, yet provides a climate for entrepreneurship and innovation.   Even for companies are the sole source in a sector, they need to have measures by which they can compare their efforts against the impact they are having on their client population or society.   All too often companies focus heavily on the financial aspects but overlook that it is of little value unless they are embraced as a part of global society.

Social Needs:  The advent of social networks has transformed many companies from a faceless institution to one in which it has personality, feelings, heart and even a bit of real time creativity.  At the same time while the desire may be there a tugging reluctance to let free exists.  Companies are afraid of what people say, how they react and the sometimes brutal way in which it is done.  In many respects they are doing themselves a greater disservice, hindering the growth of the company, by staying out of the social game.  Sure you can sponsor events, and underwrite benevolent efforts but in someways the ring of insincerity resonates.   It truly is a damned if you do and your damned if you don’t issue.  Companies who have stepped up the social game, allow the critics and cynics in the door have been able to show their true colors through their responses.  It’s okay to say I don’t know, I wasn’t aware or this is a wrong characterization as long as you show respect (against sometime challenging moments) , deliver the fact, restrain the emotions and make commitments that will be acted upon.

Ego Needs:  Yes we all have egos and so do companies.  You can see this in awards and acclaims they are bestowed with.  The trophies, plaques and number of awards across a variety of disciplines are a testimony to the accomplishments of the organization.  Just remember that if you get here without biological/psychological (foundation), security and social needs covered, or at least somewhat stable, it then becomes a question of value to the ego elements.  Make sure the ego elements are earned and supportable and not just another token achieved through a smartly crafted marketed award campaign.

Self-Actualization Needs:  Finally we reach self-actualization but what does it mean.  Achieving what you have set out to do and are proud of the journey is probably the best definition I have heard.   As I think about companies that “might” fit into this category I really struggled to come up with specific examples.  There are some really great companies who have done all of the pre-cursors for self-actualization but have fallen short because their operate in an imbalanced way.   Maybe its too much focus on the numbers, or quickly distracted by market potential, elements of the business seem to be autonomous and lacks overall cohesion (except legal on paper) or simply the leadership seems to be adrift in constant flux.

In summary, there is a Maslow’s Hierarchy in business.  Its alive but unfortunately misunderstood and not sufficiently visited.  Maybe its a case of chaos, confusion or impartiality.  Or maybe its because the decision makers haven’t taken the chance to look back as to what the business is and can become.

Image

To see the excitement and sparkle in a child’s eye on Christmas morning is a wonderful blessing.  The questions that lead up to Christmas, the excitement of envisioning what is in store for them and the message that if you are good you will be rewarded is what Christmas is all about.  I remember the days of when my older children, now 26 and 34, were steeped with Christmas eve preparations, early to bed so excited that they would be on the verge of getting sick, and how they would drop off into a sleep so deep that an volcanic eruption would not have shaken them.  Now with children in grammar school, high school and college the pre-holiday discussion continue as they did with their much older siblings.  Even today we discuss how Santa made so many toys, gives so many gifts and how he can travel the globe in the matter of one evening.  It brought a smile when our youngest, age 9, asked if he outsourced some of the work to others.  I thought for a moment but it gave rise to that it would be highly possible.  What is most interesting is that Santa does do it to save money (known as Labor Arbitrage) he does it because of the need for added production capacity.  He also, using a team of providers from around the globe created one of the most complex but highly efficient logistic network anywhere on the globe.  In essence, he keeps his customers, the good boys and girls, happy come that day on Christmas morn.  But he went even further he did so without effecting the elves, putting the reindeer out of work and even managed to keep Mrs. Santa Claus happy.  We all know he isn’t getting any younger so he was able to reduce his travel, save on precious fuel and even managed to make the legions of helpers more empowered and actively involved.

There is always ranging debate about Christmas and gift giving.  As many of us know its not about the gift its about giving, its about being good and doing right things and its also about keeping dreams alive.  Its a time when we can put our suposition aside and stop worrying about whether Santa is real or not.   Simply its about building traditions, rewarding continued good behavior, giving of oneself, and for a brief moment soften our heart and stop playing Scrooge.   Seeing our children saving their bits of money to give to others without expectation just because it is the right thing to do and in doing so it makes you feel good too.  There is nothing wrong with feeling a bit of self-good from your actions.

Image

While the world continues in turmoil the sparkle in a child’s eye remains not just for what they can get but will last and be shared with generations to come. Santa will continue, he will constantly shape and reshape his enterprise whether though self-production or with the necessary offshore support for others.  The other day, while I was discussing our kid’s conduct, he said that he was opposed at first to outsourcing for fear that the elves would feel unwanted.  But when he discussed his concerns and pressures with them one of the elves exclaimed that it might “give them a bit of relief from the pressures and might even give them a chance to innovate new ways for the enterprise to move forward”.   While not every elf shared in this enthusiasm the smallest of the elves said that he knew he had worth and that it would never be thrown away, but more important than that he felt that it was helping others around the globe.   He said, “by giving others jobs they won’t be hungry, and when people aren’t hungry they can start to enjoy their life… and their children can really have a Merry Christmas even if they celebrate some other holiday”.

So as we enter the holiday season, regardless of your religious beliefs or where you live or what challenges your world has…. remember the sparkle in the eye of the child, the fascination to do good and a future of leaders who will keep a loving heart at the center of tradition.  Santa is real and a God send to the world, for children to have dreams, for adults to renew their youth, for us to soften our heart and to show each other that the trials and tribulations of daily life will not be solved without love for one another.

Some people try to relate their talents, abilities and interests based on drawing a parallel between themselves and people of notoriety.   Being it Steve Jobs, Barack Obama, Gandhi,  or Albeit Einstein but I found in a little hairy rodent (‘The Rat’) a great lesson to be learned.   As I sat in a well known coffee shop in a Metro Manila suburb having a business discussion with my colleagues we happened to notice this rat.  He sat in the corner minding no one and apparently not particularly disturbed with the activities that were taking place around in.  No one else seemed to pay him much mind either and I suspect he enjoyed this bit of solace to either a busy night of foraging for food or some other activity that is a part of a rat’s normal nightly routine.

Sir Rat, because a degree of respect should be given to all things big and small, was quite unassuming and non-aggressive.  I’m sure some of you are thinking about how they are a filthy and disease ridden scourge but his unassuming present gave little concern to us as we continued our discussion.   After some time he decided to venture out and see what the world about him had to offer.  At first he moved towards us, we made a fleeting bit of eye contact to which he returned to his corner.  Obviously discontent at the lack of scenery he started looking all about in a very purposely way.  Captivated at the movement from the coffee shop and the seeming unending flow of treats being taken by customers he decided to want a piece of the action.  He jumped from the floor, onto the chair and finally onto the table.  All the while he keep an eye on the happenings that were taking place inside the coffee shop.  To my amazement he decided that the temptation was too much and decided to take that leap of faith and make his entry into the shop.  Unfortunately for him he overlooked that there was glass between him and the inside world.  As he floated through the air with the grade of a flying squirrel he made full contact with the glass and plummeted to the ground.  A bit shaken as he tossed his head side to side to shake out the cobwebs he  came to the realization that what within your grasp is not always attainable by the most direct route.   As minutes passed, the security guard and maintenance personnel saw the rat and chased him to the other end of the mall.  Moments later he returned to the sanctuary of his corner.   Once again they chased him off but he didn’t flee with wild and reckless fear, he took his time and sauntered off at his own pace.

I found aside from the comedy of the whole episode a certain degree of admiration for the rat.   The rat was,

  • Unassuming,
  • Feared/loathed by most but based on stereotyping and not necessarily based on who he was,
  • Observant,
  • Willing to take risk,
  • Unfortunately overlooked barriers but at least he tried,
  • Knew when to leave and never gave up when it mean being at peace in his place of comfort, and
  • He worked on his terms regardless of who or what was trying to make him move in a particular direction or at a particular pace.

So while some of us try to relate and be like an person, often because of the acclaim or achievements, I found inner meaning from the Rat.  Thanks Mr. Rat (I am assuming the gender) for making my day yesterday…. you made me laugh,  you gave me inspiration to share your story and it gave me rise in looking for the inner virtues.

Anyone who believes that connecting with and engaging in fruitful discussions with global businesses is easy either hasn’t attempted to do so or is confusing their erratic luck with finding the Holy Grail.   There are a number of channels which can lay a smoke screen around connections,

  • presence and connections via social networks,
  • contacts with insiders (who are often not the strategic players you need to be in favor with),
  • relying on your name presence as a success calling card, and
  • putting too much emphasis on what you have to offer.

While each of these may have ‘some’ value the reality is that unless the company has come to realize, on its own, that a particular value opportunity exists you are unlikely to make much headway in achieving your connective goals.  Each time I am presented with this challenge I try and not only place myself inside the  mindset of the company but also at the level of professional that I need to interact with in order to generate the business that I have in mind.   As is often the case, as you move up the ladder to to where you need stop and consider stepping one or two levels.  Why?   Simply the real decision makers are prone to consider the factors of internal recommendations as having value (since the person is putting their reputations behind it) and secondly they wish to confer they are dealing with someone/some institution that is of their stature.  The issue of stature is not by title, but is often in terms of understanding of their business… in other words you have done your homework. 

Image

I recently had the opportunity to deal with a European supplier of software products.   Even though it was an arranged meeting through our local company representative I investigated in detail the company, the principal and the services which had been provided.   As it turned out my representative was delayed, but the client was not.  To their surprise I was not only able to greet him and his wife but could engage a friendly discussion about how his background helped to shape his business and how the business emerged from humble beginnings to now being a formidable mid-size enterprise (for some pretty high end clients).   Making business personal, without having it be a tactic, requires genuine interest.  I really found it interesting how he worked his way through the ranks, the personal experiences he had and how he looked to the future.  Never once did I think about making a sale, pushing my agenda or having it be a rehearse exercise… it was all about getting to know each other.  If anything it allowed him, to ask lots of questions about us and respectfully we provided those key modest details (you know, the stuff that is in your ‘elevator speech’).  Thus we didn’t provide mountains of smartly crafted marketing literature and pamphlets we engaged in a dialog.  The upshot is that first and foremost we have an interchange on an equal level, and this permits us to trust each other and to see the power together as opposed to a relationship of a supplier to a buyer.

The big question that remains is how can this be done in the big companies, whether on the Forbes or Fortune list.  I believe that it has everything to do with the network that you entered and how you did so.  As with my example, this new colleague will share the experience with other colleagues and they in turn will do likewise…. its organic, efficient and often times envied.  Secondly, while the business basics still need to go on we must work hard to put the relationship first and not the sales pursuit.  This is not cheap but the durability of the event will be long lasting.  Finally, the type of involvement that you are seeking will dramatically effect how  you go about doing these things.  If you are selling a commodity it is a bit more direct than if you are selling foreign investment opportunities.  These take time, sometimes they can be leveraged through others whether these be venture capital institutions, governmental trade and mission organizations or key industrial leadership.  Take the time to understand what you are up against, understand the system that you must address, formulate a strategy and get independent opinions on its potential success…. then go do it!  Breach the iron curtain and make success for you and your partner company! 

As a business person you might not give a care about the events in the Middle East unless of course you happen to have some personal connection.  Whether it might be family, ancestors or even a business office the question is whether we should give a care.   I’m not really certain why but for some reason the happening in the last couple of weeks in Gaza have had an effect on me.  Being reminded that we have friends who are living in Jordan but have relatives in Gaza at least gives me reason for concern.  I guess the day to day exposure of watching, listening, following, tracking and using the constant flow of information has sensitized me to the terrible effect of anger.  Whether anger is manifested in the form of war or whether its simply hurtful words the end result is that someone gets hurt, and for what?   Does it make you feel better, did it bring about change, and was the world made a better place or were we simply lulled into believing that we had reached a stage of finality in which we could move on from.  Nothing every is the same, and the hurt will remain for generations to come.  Even the slightest provocation will generate a resurgence of past deeds, good and bad, self-righteous and ill mannered.  Yet in the end we still must face on sobering reality, we are the makers of the world we live in.  Compromise is not a sign of weakness but a sign of strong compassion, stiff neck behavior is its counter force and a reflection on ignorant non-caring.

Image

Whether your business is the area of conflict it will have an effect on your.  Do not believe for one moment that it doesn’t.  Whether it effects your supply chain partners (who may be doing business in the region), customers who have operations there or no connection what so ever in any direct sense events in the Middle East (and elsewhere) have direct effects.  These encompass both personal, commercial, social and the future direction of the world.  Even if you are buying from a company in Malaysia, have an operation in Vietnam or a friend in Kenya the effects of the Middle East will have an effect.   The same can also be said for events that occur in your home country.  Just look at all of the speculation, posturing, pontificating and bantering that took place surrounding such events as the U.S. Presidential elections, Moody’s downgrading of Frances AAA bond rating, banking collapses in Space, the insolvency of Greece or the upsurge in the Southeast Asian economy.  Events are intertwined with everything we do.  A strike 8,000 miles away effects you, sometimes instantaneously and other times with a generous lag (which we often overlook until it becomes our immediate reality).   You don’t think that the bankruptcy of Hostess Bakeries had global implications and although the U.S. consumer is effected it also had direct impact on global sales, distribution and even raw material purchases (although admitted to a lesser extent than most consumer products).  

So as business people how can we keep our eye on the ball?  It could be argued that simply knowing about these matters is good enough.  This assumes however that we understand the full extent of our business and how it plays in the total global scheme.  If we are feeling a bit tentative about this, have spent any real hard time looking at it then its never too late to examine this and to form a means by which these matters can be monitored.   Sophisticated, usually larger companies, carry this out through an international operations section.  It has however been our experience that this group only touches upon those direct connections and overlooks all of the rest (usually because of time and funding).  So give that there hides in the closet a short coming we have examined ways that your company can stay on top of their game.

  1. Utilizing the tracking done on direct connections establish how these interplay with other global operations and regions.   This is a straight forward but important task to undertake.  The dividends will be through higher sensitivity to changing global conditions.  If there was ever a term more befitting it would be in this case, and the term would be ‘global business intelligence’.
  2. Employ news and advisory sources.   The word of caution is to use this information in conjunction with other information sources, but don’t rely in just a single source.  This becomes the fuel that feeds the global intelligence engine.
  3. If short on resources or where there is no allocation to undertake this ongoing vigilant monitoring task consider the use of Knowledge Process Outsourcing (KPO) companies.  Be attune that not every KPO is in fact such and that even if they specialize in knowledge based analytics they simply may not be equipped or experienced enough to undertake global status/state monitoring.

With each new day there is a dawn.  The turmoils of yesterday may be the hope for tomorrow.  Our businesses do not exist purely on good fortune, luck and coincidence…. real sustainable success is vested in the infrastructure necessary to make a difference and remain afloat in a sea of every changing uncertainty.

Sakichi Toyoda (Toyota) is credited with the introduction of root cause analysis (RCA).  Included in his many works he also is know for principals associated with lean manufacturing, the development of weaving devices and not the least of which RCA.  For  years I have used, adopted and applied RCA to which another famous Japanese, Kaoru Ishikawa gave use the tools (aka Fish Bone or Ishikawa diagramming) to help us trace back the series of events leading up to a particular incident and event.

Let me assure you, this is not going to be a discussion about how to perform RCA or utilize this effective diagramming technique.  This is about thinking even further beyond the systemic root causes that has precipitated an important event.  While these events are often of a catastrophic nature they do not have to be.  It can be about any situation that has departed from what we had expected and that commands immediate, diligent attention. For companies, and the advisers that they may use, the journey of event to root cause is often quite straight forward and solutions can become abundant.   But the question that I wish to explore is whether these solutions are durable and whether they actually address a much deeper and broader problem that exists prior to the root cause.

Today a friend of mine posted a piece, albeit of a lighthearted and amusing nature, about the interaction between a young person and an old woman.  The young person was quick to blame the old person for everything that was wrong in the world from issues ranging from ecology to technology.  The excerpt is as follows,

Being Green
Checking out at the store, the young cashier suggested to the older woman, that she should bring her own grocery bags because plastic bags weren’t 

good for the environment.
The woman apologized and explained, “We didn’t have this green thing back in my earlier days.”
The young clerk responded, “That’s our problem today. Your generation did not care enough to save our environment f or future generations.”   She was right — our generation didn’t have the green thing in its day.  Back then, we returned milk bottles, soda bottles and beer bottles to the store. The store sent them back to the plant to be washed and sterilized and refilled, so it could use the same bottles over and over. So they really were truly recycled.  But we didn’t have the green thing back in our day.  Grocery stores bagged our groceries in brown paper bags, that we reused for numerous things, most memorable besides household garbage bags, was the use of brown paper bags as book covers for our schoolbooks. This was to ensure that public property, (the books provided for our use by the school) was not defaced by our scribblings.  Then we were able to personalize our books on the brown paper bags.  But too bad we didn’t do the green thing back then.
We walked up stairs, because we didn’t have an escalator in every store and office building. We walked to the grocery store and didn’t climb into a 300-horsepower machine every time we had to go two blocks.  But she was right. We didn’t have the green thing in our day.  Back then, we washed the baby’s diapers because we didn’t have the throwaway kind. We dried clothes on a line, not in an energy-gobbling machine burning up 220 volts — wind and solar power really did dry our clothes back in our early days. Kids got hand-me-down clothes from their brothers or sisters, not always brand-new clothing.  But that young lady is right; we didn’t have the green thing back in our day.  Back then, we had one TV, or radio, in the house — not a TV in every room. And the TV had a small screen the size of a handkerchief (remember them?), not a screen the size of the state of Montana. In the kitchen, we blended and stirred by hand because we didn’t have electric machines to do everything for us. When we packaged a fragile item to send in the mail, we used wadded up old newspapers to cushion it, not Styrofoam or plastic bubble wrap. Back then, we didn’t fire up an engine and burn gasoline just to cut the lawn. We used a push mower that ran on human power. We exercised by working so we didn’t need to go to a health club to run on treadmills that operate on electricity.  But she’s right; we didn’t have the green thing back then.  We drank from a fountain when we were thirsty instead of using a cup or a plastic bottle every time we had a drink of water. We refilled writing pens with ink instead of buying a new pen, and we replaced the razor blades in a razor instead of throwing away the whole razor just because the blade got dull.  But we didn’t have the green thing back then.
Back then, people took the streetcar or a bus and kids rode their bikes to school or walked instead of turning their moms into a 24-hour taxi service. We had one electrical outlet in a room, not an entire bank of sockets to power a dozen appliances. And we didn’t need a computerized gadget to receive a signal beamed from satellites 23,000 miles out in space in order to find the nearest burger joint.  But isn’t it sad the current generation laments how wasteful we old folks were just because we didn’t have the green thing back then?
This gave rise to an expansion on the concept of RCA that even before the root cause there are conditions that exist that have far more reaching long term risk potential.  Every action that we take will have consequences and while we may operate safely, achieve goals and build a business enterprise there is lurking in the shadows real and formidable risk.  There is not one failure, fault or event that has taken place that doesn’t have these pre-root cause conditions in play.  The trouble is that we may,
  1. be ignoring them because we believe that we can take on and accept the risk or that the likelihood is such that it won’t happen within our time of control,
  2. not have the capability to think beyond the elements of present business or current practices.  It really requires us to dig deep into all of the things that can go wrong, what players are contributors to a change in our organization, and
  3. to a large extent reflecting on the level of innovation that is in play which may or may not be the subject of potential leadership advantage.

Innovation in most every case, whether in terms of product or of service, is a market differentiation point.  It is cannot be taught and must be conceived through some pretty unorthodox means, some by chance, other by solutioning and all the while advancing the business into the unknown.   I say I am the son of Sakichi Toyoda, not because I am but because I have taken his ground breaking ideas (no longer theory but applied practice) and gone the next step and looked at where it all begins.   It all begins not just with the engineering that lead up to the problem under RCA review.  It starts with the foundations of why we are in business and how it will have an impact on society and the world.  We might find ourselves in a place of paralysis and decide to only follow the safe route, and this is not what I’m advocating.  I’m advocating to walk boldly, proudly and decisively forward but with knowledge on your side and not blind ignorance or reckless abandonment.   You can make a difference if you command a business in total control of its existence and not be centered on only the day to day matters.

Next Page »