Read this CEO quote. Then, I have a question for all comers

In December, the CEO of a California-based high tech firm told me that "there is no amount of overtime that we will not pay, there is no level of temporary services that we will not use, there is no level of outsourcing or offshoring that we will not do, in order to prevent us from having to hire one new, permanent worker in the U.S." As I travel around the country, meeting with business leaders, I hear similar, though less succinct thoughts in almost every sector and every part of the country. U.S. wages, health care, and other benefit costs have gotten so high -- and the press by investors for high stock prices is so great -- that the premium is on wringing every last bit of work out of as few employees as possible, to do anything but incur the costs of adding permanent employees.

The above is via Charlie Cook, and his political newsletter "Off To The Races". (Go here to subscribe. It's free but there's a 2 week lag to get it.) This snippet is currently hot on several economics blogs. Decembrist. DeLong. Sawicky.

My query is this:

C-Level executives and industry are in danger of losing some vital artillery: Politically, companies and industries have used the "apple pie" fig-leaf of job creation to wheedle policy makers into tax cuts, tariff gymnastics, subsidies and free range on a lot of issues like the environment, copyright, safety regs, zoning etc.

Is this not undeniable?

Viewed this way, Outsourcing has the potential to create the Grange Wars all over again. Don't laugh. If CEOs can only winge and moan about balance sheet health and the abstract need for their companies to survive, yet offer no domestic employment growth benefit to prove their American commitment and cement their standing in society, they're going to have a hard time getting calls returned from Mayors, and State and National legislators.

In short, business has a very big problem that's been handed them by the natural course, nay, the March of economic evolution. And this one has the potential to create more headaches--far more--than the advent of IT and the personal computer had on the business scene.

Firstly, whomever (McKinsey?) gave global job transfer the name out-sourcing couldn't have done a better favor for its opponents. What finer way to characterize an Archetypal image of a malignant enemy at the gates than outsourcing? If you're not in, you're out. With the exception of maybe dining, when has out ever been a "good" thing? And when attached to something as fundamental as people's livelihoods, outsourcing has all the appeal of forced organ donation. Bad mojo. A loser.

Language matters in this case. Witness the vocabulary of state and local economic development: Quality of life. Right to work. Good schools. Competitive housing. All those terms apply to people, specifically, to attracting and retaining them. They are predicated on an Additive, not a Subtractive jobs model for American business. If there is even an implication that that is shifting, and the implications are sprouting like mushrooms after summer rain, what are the dominoes that are gonna fall?

Set aside national pride or the noble civic place of corporations. Instead, ask yourself: Where are you and I, as business people, gonna hide our money when they come for it to prop up wheezing social and health services sectors? Are we more interested in pious political speechmaking only to then have our future dictated to us? Or do we drop the bullshit and address reality in time to have a say?

That's not to say some businesses don't see the trouble coming or don't acknowledge its impact in their forecasts. But those are very large businesses--Globals or MNCs for the most part. And to date, their answer has been to "go around" the problem. It's an interesting route. The journey takes you to exotic places like Bangalore or Guangdong. Others are self-admiringly talking of "boot straps" and the need for American workers to be more "self-reliant". "Why can't workers realize they live in a contract labor world?", I've heard plaintively asked--even angrily asked--more than once.

Yeah, right. Interestingly, when I work with companies to help create these kinds of employees in-house, the first shriek we hear is "We can't do that--it would be anarchy!" Similarly, which schools are teaching kids to be these budding McGuyvers capable of living off the land, highly flexible and resourceful? Certainly none I know of and I'm in them almost daily--and this is to oversee programs we've developed for some of the more "gifted" students, no less.

There is a conundrum in this situation for sure. It starts with the fact that globals can operate internationally. Small business-owners can't, no matter what smoke Microsoft and others may be trying to blow up your skirt. Smaller businesses need the products of their local school systems--you know, those can-do warrior-explorers with freshly minted diplomas and the resourcefulness of Grizzly Adams. And yes, smaller businesses need some semblance of access to even the most rudimentary healthcare benefits for their people.

Gee, it seems smaller and mid-cap businesses have a dog in this fight.

But I only hear them voicing their "business person" personae, the stereotype and the received wisdom, rather than speaking up for their selves and their self-interest. In fact, when it comes to many current issues--I see more dream-state wishing and hoping from businessfolk than they'd ever accept from their own people.

What we have here is business environment that University of Michigan biz school professor Karl Weick says presents leaders with seemingly unforeseeable "Cosmology" events. (A simpler analogy might be "Tidal Wave".) That is, these things are there to see if you have eyes. In fact, they usually herald themselves with all the warning of a children's garbage can orchestra coming over the hill.

But alas because there is no "consensus" on "what it all means", we find ourselves clucking and swappping facts to refute or minimize the fact that something of note is happening. Denial in other words. I mentioned a dog-fight earlier. It makes me remember the story of the Dog that growls at a passerby. The passerby turns to approach the dog. The dog bares its teeth. The passerby moves closer. The dog growls some more. The passerby thinks better of it, and moves on. And the dog returns to chewing off its tail.

In this way, we all talk about "change" being the driver of opportunity but bark when the real thing approaches. Or get run over when it arrives. Weick also has a comparative for this: High Reliability Organizations.

Nuclear Power plants are HROs. So are Aircraft Carriers. They are places where a "normal" operations day is knife-edge dangerous. Where failure can be catastrophic. The result is that these types of organizations build and practice a heavy ethic of "what if?" They become masters at imagining potential failures or changes of course. And they use the knowledge for good.

Naturally this requires a certain admission of fallibilty. A rare commodity I know, but one that opens doors to the honest, courageous and wise.

Ahh, The courageous. And the wise. They don't rest on their laurels. They don't look to crucify alternative viewpoints. They are Idealists, not Idealogues; Realists not Reactionaries. (One can pooh-pooh single provider systems or villify HillaryCare of the 90s for instance, but how many are storming the Business Roundtable or the National Association of Manufacturers now that they are endorsing the same damn thing?) It seems, of late, there are a lot of people making political hay by championing the interests of the courageous and the everyman. But very few are willing to point out the obvious fact that one needs the other, and that inertia or ignorance is a poor excuse for allowing the distance and distrust to grow larger.

You see, my final question is: If the everyman looks to the courageous, and he does, where are the courageous? Are there any real business leaders out there, or are we all merely satisfied with appearing as such?

It's an important question. Time's a wasting.