Monthly Archives: January 2012

Re-Thinking Learning and Development. Part 1: Thinking about the Numerator


Because of our place as a provider of education products, we interact with many clients on the design and delivery of corporate learning programs.  Based on our experience, it is time to think differently about how we think about corporate learning.

Everyone in the Learning and Development field is trying to determine how to measure Return on Educational Investment.   ROEI = (derived benefits from training and development) / (education and training cost.)  As you can see from this 15-year-old article from Jack Phillips, we’ve been at this for some time.

Or, you can check out the ASTD Handbook for Measuring and Evaluating Training, which also attempts to address the issue.

As another alternative, here is a brief video from a training expert (Lynn Johnson).  See if she makes a convincing business case from your perspective.  (I surely didn’t think so).

How to measure the benefit to the organization of its learning and development effort IS the right question, but most would agree that measuring the benefits is difficult at best.

I have three degrees in engineering and science, and consider myself to be pretty strong analytically.  I believe I can develop a way to measure learning benefits. I can suggest ways to produce data spreadsheets and metrics.   But, if I am completely honest, while I can produce a report measuring such benefits, I’m not sure even I would believe that report.

As the CEO of my own business, I can tell you we spent a lot of money on training that I didn’t think had any measurable impact on our bottom line.   So, as CEO I tolerated it, largely because I didn’t want to be seen as being opposed to learning (that’s like being against puppies and clean air).   However, I allowed money to be spent without a high expectation about the outcomes.   I don’t think I am alone among C-suite inhabitants.

To combat this feeling that training just isn’t “worth it,” in many companies the L&D people are under increasing pressure to manage the DENOMINATOR of that ROEI equation – something we at least have control of.   With this approach you end up offering classes for more people, in 3 days instead of 5, on-line vs. live etc.

However, and in spite of the incumbent problems in measuring educational benefits, it is way too soon to give up on ways of increasing the NUMERATOR.

I am surprised by how often we encounter L&D professionals who ask us to teach a topic, and when we ask “Why do you want to teach this?” or “What is it that you want your employees to think, feel or do differently as a consequence of the training?”  they often have no good answer.

So we may get asked to teach a class on, say Meyers Briggs.   It is perhaps a 1.5 – 2 hr module.  The participants fill out their MBTI survey and then in class we can explain the various dimensions and how to interpret their results.    Now you may be pretty confident you have a facilitator who can teach this and receive very high student evaluation scores.   BUT . . . I would challenge you to survey the participants 2 months after the module, and ask 4 questions:

1)      Can you recall your MB Type indicator classification (like INTJ)?

2)      Can you explain what the dimensions mean (what is I, or E, or T?)

3)      Can you GUESS the MB type of your closest co-workers, based on your observations of their behavior?, and

4)      Given a particular scenario, can you describe how your human interaction strategy could be tailored to match their MBTI classification?

When I did such an evaluation in my own company, we found that only about 30 % could answer question one successfully, and the success rates dropped from there on.   0% (out of 25 participants) could answer all 4 questions.  Hopefully your results would be better than these, (but I would be surprised).

So, if you permit me the luxury of cynicism for a moment, if that is the measure of success for this workshop…  why do it at all?

Here is another way you could approach it.

If we wanted to teach MBTI in an impactful way, this might be a possible approach:

  • For admission to the class the employee first must have a co-worker or 2 with whom they had difficulty interacting – or who challenges them interpersonally.  They should be asked to write a description of the kind of situations that are problematic.   Their REASON, then, to come to the class is to gain some new ideas about how to interact better with that person.
  • Then, in the first 2-3 hr module, we ask participants to describe their problem scenarios, and challenge the class to discuss why these interactions are problematic.  We ask the group how to approach such individuals differently – and see what the group can come up with on their own.
  • Then, in the next 2-3 hr module, we administer the MBTI survey and explain the concepts behind it.
  • In the next 2-3 hr module we invite the class to consider what MBTI profile their personal antagonist has, and then invite them to reconsider the scenarios discussed in session 1 to arrive at a better way to handle interpersonal communications.
  • In between module 3 and 4, we challenge participants to  go back and experiment with their new skills with their problem co-worker
  • In the final 2-3 hr session, participants report back on what they tried, and what happened.  Their fellow participants and the facilitator can offer coaching suggestions as needed.

The problem, of course, is that this approach is 12 hours, rather than 2, and therefore costs 6X as much to deliver. . . In an era of budget constraints, who is looking for a 6X budget increase?   So this latter approach is most likely to be rejected.

But perhaps we should change the structure of training overall to do Fewer trainings… while Going Deeper. Our next post covers just that.

What about you? What’s the most impactful training you’ve ever experienced–and why?

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Eight Ways To Ensure You Never Leave Footprints


Does the idea of being a thought leader make you cringe?   Well, you’re in luck. If you would like to keep going through your career in obscurity, here are some tips on how to remain in the shadows.   They come from a slide presentation I saw from Craig Baddings, who has a new book out called Brand Stand: Seven Steps to Thought Leadership.

1)     Don’t Say Anything New.   Never have an opinion, and repeat mainly what you hear others say.  It is always safer – if people disagree with you, you can ascribe your comments to someone else.  Oh, and if you DO have a new idea, make sure to keep it to yourself. It is much safer.

2)     Don’t Let Yourself be Inquisitive.  When you see things that are problems or that are interesting, be sure you don’t ask more questions that could produce more work or lead you into areas that challenge established thinking.  Someone will likely be made uncomfortable or even get upset with you.   If you are speaking with a customer, and someone makes an interesting comment, never follow-up with another question . . . the conversation could run on and on.

3)     Never Share What You Know.  Knowledge is power.  Isn’t that what they say? So keep what you know to yourself. If you tell others about your insights, maybe they won’t need you any longer.   The pyramid gets narrower at the top, so don’t let co-workers gain any advantage over you.  If you get good at withholding, sometimes it can cause your co-workers to falter.  How amusing is that?   (See Schadenfreude)

4)     Put Away Your Thoughts About Research.   Research is a process of asking questions, and then seeking answers.  The only problem is, that often your answers only raise more unanswered questions.  (This is a corollary to item 2 above.)  Learning can become a vicious circle . . . a slippery slope!

5)     Don’t Ever Scan Your Competitors.   It is safer to keep your focus internal, so you can convince yourself that you are great and things couldn’t be better.  If you learn things from suppliers or others outside your industry, it is always better to dismiss them because they don’t have to deal with the things unique to your industry.   If they are better than you, then their example cannot be relevant.   If it was a good idea, you would have already thought about it. Wouldn’t you?

6)     Never Dive Deep.  When you are solving problems, pick the first possible answer you can – otherwise you can get bogged down in endless searching for root causes that will only lead you across departmental boundaries where you can’t count on their help anyway.    The more doors you open, the more problems you are likely to uncover.   No one else will likely help you with any of it.  Better to leave well enough alone.  Sure the problem may re-emerge – but you can deal with that then.

7)     Keep a Low Social Media Profile.  As Betty White once said when hosting Saturday Night Live of Facebook:  “It sounds like a huge waste of time.  . . If I want to communicate with old friends, I need a Ouija Board.”  The less you communicate with those who Betty calls “losers”, the better.   If you never make a comment, your comments will never be shared in ways you don’t approve. Who needs to connect with more old high school buddies anyway?

8)     Use Your 15 Minutes Wisely.  Andy Warhol once said that everyone sooner or later gets their 15 minutes of fame.  You never know when that will happen for you, maybe in a meeting when the boss goes around the room and ultimately asks you what you think.  Be sure to speak in a way that’s. . . oh, just watch this video on How to Give a Speech Without Saying Anything.

So . . . that’s it – a starting guide on how to go through life invisibly, without leaving any footprints, or making a difference.

It’s easier to do than you may think! But… Why would anyone want to?

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It’s Not The job, It’s How You Do It That Counts


Over the holiday break my family was in Florida, making the perhaps-poor decision to visit Universals’ Islands of Adventure Theme Park in Orlando between Christmas and New Year’s.  As it turns out, this is the busiest week in the year and on the day we went, the park was so crowded that they stopped selling tickets at about noon.

The shortest wait time was about 70 min for any attraction (except the Hulk coaster which only attracted a few hardy souls who love 4G’s upside down – no, not the cell phone kind).  As you might imagine, there were a lot of unhappy and cranky visitors that day.

One of the memorable experiences had to do with a visit to the ladies’ room by my wife and our daughter in law.  Ladies, you can imagine the mob scene, with lines out the door, and more chaos than anyone should have to endure to address a bodily function.   In this particular restroom, Mary and Lisa encountered a Universal employee named Tina.  She was the attendant in that rest room.  (Here is what I think her job description was, from the Universal Studios web site.)  What amazed them was how she performed her work.  She was boundless in her energy and enthusiasm.   She was directing ladies to the next available stall, telling people that she would hold their bags, and even watch their kids while they went inside.   With eagle-like attentiveness, she scanned the scene, provided direction, told jokes, and provided a refreshing level of service to masses of tired park-goers.   She did this with pride, energy, and caring.

Tina was a blond-haired woman in her late 40’s or early 50’s.   I have no idea what Tina’s pay grade was at Universal, but I can’t imagine many people aspiring to be where she was at that stage in her life.  But if she had any misgivings, you surely couldn’t see them.  You saw a sparkle in her eyes, a bright smile, and a sincerity in her voice that my family talked about a lot that evening over dinner.  Tina had left an impression.

This episode also reminded me of my grandfather, who in his late 60’s took a job as janitor in the High School I was attending.   I think he was just looking for something that allowed him to stay active.   Back in Poland when he was younger, he was a school teacher himself, and I think he liked being around young people.  Since he was old, and didn’t speak English well, he was a source of amusement for my then-classmates.  The kids would sometimes make messes deliberately – just to see him come around with his mop, bucket and waste bin.     Even while being taunted or made fun of, he just held his head high, as he continued to sweep or to mop.

I sort of felt embarrassed about this situation at the time, and one day I asked him about his job, and if he knew that the kids were making fun of him.  I wanted to understand how he felt about the job and why he did it.  When I thought about how Tina had made such an impression on my wife and daughter, I remembered what my grandfather told me during that awkward conversation.  When I asked him why he took a job that was beneath him . . . he thought for a moment and then looked at me with his piercing green eyes, as he replied . . . “I believe” he said, “that there is honor in any job if you do it to the best of your ability.  The honor”, he continued, “does not come from the job, it comes from here” (as he pointed to his chest).

For most of us, jobs matter.   I think it is fair to say that for many of us our job IS our complete identity as an adult.  If someone asks us who we are or what we do, we mostly describe our job title and who we work for.     Job titles seem to matter.  They define our status, our measure of our contribution to society, and seemingly define our worth as people.   These are notions that I think are well worth challenging.

Sometimes we can be disappointed that we didn’t get a promotion, or a raise, or a bonus.   It can let the air out of us a little.   But these have little to do with honor or value . . . and shouldn’t have much to do with how we choose to do our jobs.

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Harbaugh’s Leadership – Keys to Victory


Great examples of strong leadership can come from anywhere.  For those football fans out there who were glued to their video screens this past weekend, you could not have asked for a more exciting playoff game than the one between the San Francisco 49ers and the New Orleans Saints. It is hard to imagine a more stunning 36-32 victory over the supercharged Saints. The game featured four lead changes in the final four minutes, and five turnovers forced by the 49ers’ defense and special teams.  Yikes!

There was an interesting piece I saw on the Fox Sports web site called Harbaugh’s bond pushing 49ers sky high

It made some interesting points.

So what led to the victory?  Obviously, there were many talented players who turned in impressive performances, but I am drawn also to the impressive leadership of 49er coach Jim Harbaugh.

Here are some of the points I find noteworthy about Harbaugh’s leadership:

1)      He Inspires confidence – by his own example.

We all expect our leaders to have a competence about them. We want to believe they know what they are doing, and the more we observe their competent behavior, the more our respect and faith builds in them.   In Harbaugh’s case, he has been there, having served as a successful quarterback in the NFL for 15 seasons.  Imagine seeing him in 1996, when he was quarterback for the Indianapolis Colts.  Harbaugh had a broken nose, a severely sprained wrist, turf toe, tendonitis in his ankle and a bruised heel. Of course he was still playing.  By his stoic example, he showed that he was a tough and worthy competitor to be admired and emulated.    We get the immediate sense that he asks nothing of his players that he did not first demand of himself during his own career.  What’s more, they all know it.

2)      He Creates a Positive Culture. 

Harbaugh’s relationship with his players creates a certain spirit.   Tight end Vernon Davis described after the game “[It is] such a great group of guys, coaches and players.  I think we love coming to work every day; I know I do. And we’ll get one more week at least.  I’m loving it.”

I suggest that creating a place where people WANT to come to work does not happen by chance.  It is the by-product of deliberate actions.    Harbaugh, from his experiences, knows what it is to win, and to lose.   He seems to have a fanatical belief in success that follows in his wake.

Tackle Joe Staley says it this way, We have confidence in this locker room. It might be surprising to the outside, but part of the culture that Harbaugh is instilling, we don’t care what anybody says on the outside, if they respect us [or not], if they like the way we play, if they don’t like the way we play. It’s all about the guys in this locker room.”  Read more about how Harbaugh’s infectious attitude affects his team:  Jim Harbaugh’s Impact on the Culture of the San Francisco 49ers.

Or, watch this 2 min You-Tube clip where you see classic Harbaugh giving a post game talk to his team in the locker room after their recent October victory over the Detroit Lions.

3)       His relationship with players is built on trust and respect. 

This weekend’s success required that first-year head coach Jim Harbaugh and the 2005 No. 1 overall draft pick who’d gone bust, Alex Smith, have uncompromised faith in each other.

No problem. “He’s authentic,” Smith said. “He’s an honest coach, and he coaches everybody the same way, no matter who you are.”

Their bond and its foundation of trust quickly spread throughout the roster, and team leaders such as tight end Vernon Davis, running back Frank Gore, left tackle Joe Staley, linebacker Patrick Willis and defensive tackle Justin Smith got right in line to inspire others. The confidence mushroomed, remarkable success followed and now, the unimaginable stands before them.

4)       He is humble. 

In the midst of all the media hype and in response to compliments he was getting from some of his players. Harbaugh immediately tossed the admiration right back to his players on Saturday, and nothing about his praise seemed disingenuous.  It was raw and it was sincere, just like the man explaining how much more meaningful a playoff win is to him as a coach rather than as a player.

Yeah, I would say it does. It means more. It means that these guys are my heroes, these players,” Harbaugh said on Saturday, almost breathlessly. “I grew up dreaming of being an athlete. Those guys that were athletes were my heroes.  [I] pretty much burnt up my childhood days thinking about that. That time’s passed me by now, but my heroes are still these athletes. Our guys and the way they play. I’m just really proud of them.”

Watch also this post-game locker room talk by Harbaugh after his team defeated the NY Giants back on November 13, 2011.  Watch his passion, and his comment about “humble hearts.”

http://www.youtube.com/watch?v=gwgTvEtJIsw

We do not know what will happen in the next playoff game, but we do know that Jim Harbaugh and his 49er ball club will go into their next game against the NY Giants with a belief in themselves that perhaps has no rival.  I guess we have to say that this will not guarantee success, but I think it increases the odds.

And so, too, will these four behaviors help your team, not matter what your business is.

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Simple Acts of Strength and Courage


I don’t know if you have seen the recent History Channel documentary called Pearl Harbor: 24 Hours After, but it contains some powerful lessons. (You can also read the NY Times Review)

It provided, for me at least, a riveting account of the first murky 24 hours after the infamous attack on America’s sleeping naval base in Hawaii, culminating a day later with the amazing 6 minute, 37 second address by President Franklin Roosevelt before a joint session of Congress wherein he absolutely galvanized Americans in a resolute commitment to defend itself, and indeed the world.

America at the time was not a military power (our army was about the size of Sweden’s when the first torpedo slid into the shallow waters of Pearl Harbor).  We had only one division that was combat ready (as compared with over 200 that Germany had at that time, and 100 more prepared by Japan . . . that’s right 300:1 odds).   By the time the President received his first accounts of the attack, the Pacific fleet was largely incapacitated.  The Japanese were free to act as they chose (attacking several British outposts on December 7th and the Americans again in the Philippines on December 8th.)

It is almost funny to watch the accounting of minute by minute events, which occurred without CNN-like instant TV coverage, Tweets, or smart phone videos.  It took 4 hours for Roosevelt to learn how bad it was.  The accounts were relayed over unsecure telephone lines to the War Department.

While FDR’s speechwriting staff was gone that weekend, he crafted alone what was arguably the speech of his lifetime.    It had to be a vibrant call to arms. It had to quell the isolationist movement (that had tied FDR’s hands to the chagrin of our ally Winston Churchill), and do all of that without terrifying the American people, who were ignorant about how ill-prepared our nation was for war.  What many people forget is that the courage and resolve Roosevelt showed during that first 24 hours was far more personal than what we saw on newsreel footage  (see clip below) of him as he told American’s that “Yesterday, December 7th 1941, a date which will live in infamy . . . “

What most people did not appreciate was that the President, stricken by polio at age 39, was a complete invalid – unable to walk.  Imagine the picture of the “leader of the free world” who had to be lifted by his son James from his wheelchair to be placed into bed each night.   Getting dressed in the morning was a one-hour ordeal.   FDR’s aide had to lay him flat on his back in bed, and then strap on metal braces that ran from is upper thigh to the bottom of his feet.  They needed to be attached tightly so as to lock his dead legs into a stiff position.  Next he put on the socks and shoes.   Then the pants went up over the shoes . . . slowly, as the aide rolled the dead weight of his President from side to side while sliding them finally up to his waist.  Imagine the humiliation.

The President went to great lengths to conceal the full nature of his disease from the American people and from foreign leaders.  He asked the press to never photograph him in his wheel chair.   When in public, he walked with the aid of a cane and by holding tightly to his son James’s arm.  Well he didn’t really “walk”,  he couldn’t.   With great effort, he had to grip his son’s right arm, and with his upper body strength, rotate and thrust forward his left leg. Then with his right hand and cane, propel his right leg forward.  Over and over.   Grip… thrust… cane…thrust… grip, thrust, cane, thrust.  Observers have said that it was done so meticulously, it simulated the act of walking.

Now imagine the President – standing at the entrance to the House Chamber in the capitol, looking before him at the long walk down that aisle to the side of the speaker’s rostrum, where he needed to reach the top and the podium we see on TV. Grip, thrust, cane, thrust.   After the famous speech when asked what his dad was thinking and talking about as he entered the House chamber on that auspicious December 8th, James said “ only one thing . . . that he mustn’t fall.

For you and me, making that walk knowing what was at stake would have been hard enough.  Imagine Franklin Roosevelt.   If he had faltered or, God forbid, actually fallen, imagine the impact!  American’s needed a strong leader to guide them and stand up against all that lay ahead as somewhere between 50-70 million unsuspecting souls world-wide were about to become fatalities.   If he projected his infirmity instead of his resolve, how would America (and the world) have responded?  While he may have been frail, he HAD to carry the nation on his shoulders into the conflagration.

Sometimes courage is not about charging headlong into an enemy or facing a hail of bullets.  Sometimes it is about simple things like deciding to take a walk . . . and not falling.

Whether the act of courage concerns a big or “small” thing, they can both be markedly inspiring and impressive.  Today, we remember only the man behind the podium, and not about how he got there.  I imagine it is as FDR would have wanted it.

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Be a Better Leader Today: Some Easy Things to do That Don’t Cost a Thing


In our Dimensions of Leadership program, we like to expose people to video examples from other companies like Google, Zappos, IDEO, Mayo Clinic, Dominos, and Quicken – to mention a few.  Google, of course is an amazing example from Fortune Magazine’s list of Best Places to Work.  It’s no wonder they have achieved this status with their campus environment, empowering management style and lavish perks like free gourmet food and company massages.

A common reaction to this by participants is to say that their company could never be like that because (and you can fill in the blank____________).  Usually, it centers on the notion that it must cost a lot of money to treat employees the way Google or these other companies do.   They go on to comment about their being budget-constrained, having been through cut backs, or on a hiring freeze.

I think some people feel that such company behaviors are simply so far outside of their current corporate culture, we can’t imagine being more Google- or Zappos-like.   (I imagine most mid-level managers would be afraid to bring up this conversation for fear of being chastised or laughed at.)

I remember listening to a talk by Quicken Loans CEO Bill Emerson.  He presented their approach to this topic, and during the Q&A session one of the CEOs in the room said to him — “you can afford to do all these things for your employees because you are an internet company and have healthy profit margins. . . most of us here are in markets where our margins are being squeezed every day.  We just can’t afford to be like you.”

Emerson thought for a moment, and then replied “Sir. . . I certainly don’t pretend to understand your business or market . . . but from where I sit, I just don’t see how you can afford NOT to do things more like we do.”    In Emerson’s view it is a matter of FAITH, and going to great lengths to show employees that you value and appreciate them is the key to unleashing unparalleled loyalty, which will lead to better engagement, more productivity, and more innovation – thus improving business performance.

(Note, I certainly know some smart executives who do not think the companies I mentioned have a solution that would work for them, and I do respect that.)

However, it seems to me that a lot of what drives success has little to do with lavish perks.  In fact, here are a number of tips that cost nothing.   All they require is a mind-set on your part that they are important.   (See also a related article by Amy Levin-Epstein, “Become a Better Manager: 14 Simple Tips to Try Today”.)

Say Thank You.  When someone goes the extra mile, or simply does something you think embodies what you feel your culture and values should reflect, you should say something.   Our people pay attention to what we seem to reward and celebrate.

Lavish Praise Often.  US World Cup winning soccer coach Tony DiCicco put it this way: “[Our] job [as leaders] is to try to catch them (our employees) in the act of doing something right, and then make a big deal out of it.”  DiCicco learned along the way that some lavish praise works far better than “constructive criticism,” which is often not received as constructive at all.  If you can, do this publicly.

Get Over Yourself.  Sure, you got where you are by being good at analyzing problems and making decisions.  You probably take pride in it, and see this as the key way you offer value to your enterprise.  So you have a tendency to want to be involved in all decisions.  You feel you will do it faster and better than all others.  While this might actually true, your team will never develop unless you let go of the reins and you give then the chance to exercise their decision-making skills.  Think of yourself more as the person who creates environments within which your people can make better decisions by themselves.   Schedule brainstorming sessions, set up off-sites, assign problems to teams.  It IS NOT ABOUT YOU.  Your role is more that of cheerleader, coach, and facilitator.

Invest in Knowing Your People.  Allocate some time to speak to your team members about anything BUT work.   Ask them about their weekend, their kids, their hobbies etc.   As long as your interest in them is genuine, most people will appreciate that you see them as multidimensional and more than what their job title says.

Serve them.   Mabel Crawford, one of the best leaders I think I have ever observed, was a simple elementary school principal in urban Detroit.   Her school lacked resources, and her kids came from neighborhoods where the deck was stacked against them.   Yet her school performed as well as did schools in the wealthy suburbs.   She led with passion, caring and unfathomable energy.  One of her habits was to visit EVERY teacher in her building each day, and ask them what she could do that day that would help them.  One of the teachers remarked to me privately “We hardly ever ask her for things – since we know how hard her job is.  But we really appreciate that she is sincere when she asks us, and would go to the ends of the earth for us if we asked.   That knowledge is more than enough for me.”

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INSOURCING: Time to Come Home


So many industries have “drunk the Kool-aid”, buying the premise that the way to improve margins is to outsource raw manufacturing, customer service, and technical support, particularly to Asia.

I have personal experience in China, Mexico, and Japan, and can say that making outsource relationships work can be challenging.  Working overseas where business practices and social norms are very different can be a major hurdle.  The communications task is very problematic – especially when local norms dictate that it is impolite to say no, or where people do not want to admit they do not understand something.

I have a friend who works in the steering and suspension business, having been engaged in China and India for many years.  He told me one story that illustrates how easy it is to under-appreciate the challenges.   He has a high regard for the technical ability and work ethic of his Asian engineering partners, but he told me an amusing story about cross cultural miscommunication.

Communicating engineering design intent is not always possible purely based on conveying technical specifications or mathematical data.   The products they were testing in the US that were designed in Asia were not performing up to expectations.  My friend’s US engineers were trying to explain what was wrong using terminology like “the steering was too ‘loose ’or that the suspension was too ‘stiff’”.   These are terms most experienced drivers would understand.   Their Asian colleagues all nodded affirmatively during the video conference meeting, but the truth was that virtually NONE of these Asian engineers had ever even DRIVEN a car in their lives – they really did not understand what was being said.

When you consider the communications challenges, re-work delays, the shipping times, extra inventory, obsolescence concerns and so forth you have to wonder if overseas outsourcing is truly economically sound.

It feels like more and more companies are reaching the conclusion that it does not.

  • Deloitte Consulting released a study as far back as 2006 concluding that 70% of large companies had negative experiences with outsourcing of IT services and 25% had brought outsourcing projects back in-house.
  • Boeing was plagued by massive supplier problems with its revolutionary light weight 787 Dreamliner program that significantly delayed its introduction.  In this case Boeing outsourced about 80% of its fabrication services.
  • Our national debt has now surpassed $15 Trillion dollars and our annual balance of trade deficit is in the $725 billion dollar neighborhood.
  • Faced with rising costs at home, even some Indian companies like Aegis Communications are opening call centers in the US, suggesting a reversal of this trend which was prominent during the 1990’s.

Futurist Patrick Dixon in this recent logistics conference talk discusses reasons why manufacturing outsourcing makes less sense today.  He chastises short-sighted companies that made outsourcing decisions principally on the basis of pure cost, without consideration for the increase is associated risks and diminished agility.

If we can get tactical for a moment, here is a marvelous 6 minute video case study about how a small apparel business called School House decided to reverse its own strategy, choosing instead to move its manufacturing from Sri Lanka to North Carolina.

While the task was not easy, you can see how they did it.

Here are a few interesting points that stuck out to me:

  • They are a small business, without much market power – but that does not stop them from being very selective about choosing a supplier partner . . .  (personally calling or visiting 100 places, narrowing down the list to only 5 facilities, from which they choose one.)
  • Look at their approach to selecting their partner. In addition to having the right equipment, etc., they are also looking for an “attitude” of the management (a willingness to “bring ideas to the table” that can help School House become more successful)
  • Notice how they seek to speak with the operators at the target supplier “to see what they think and feel about working for the company”  (Here again, they are looking for an attitude, an “open minded-ness to try something new”.  There is an adage that “the Secretary knows everything about an office”, and in manufacturing, the Operators also know a lot.)
  • Notice that they have VERY specific ideas about the kind of production skills they want – they are very picky about their products and the kind of factory that can produce them

I think we can all sometimes think about selecting suppliers from a checklist (like we would normally use during an audit) and overlook the key issues of

  • Management attitude and philosophy
  • Company culture
  • Employee attitude

In my experience, if these elements are lacking, I would also expect their operating and quality performance to fall short as well.  I also think it is very difficult to assess these elements (particularly when dealing with an Asian supplier because it is difficult for Americans to overcome the language and cultural barriers).

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