A sad but unnecessary fact of life.
One more, with some wisdom.
And a perhaps inscrutable graphic.

One of the cruelest things about organizations today is that they hold executives to standards of rationality, clarity, and foresight that are unobtainable. Most leaders can't meet such standards because they're only human, facing a huge amount of unpredictability and all the fallible analyses that we have in this world. Unfortunately, the result is that many executives feel they just can't measure up. That triggers a vicious psychological circle: Managers have rotten experiences because they keep coming up short, which reinforces low self-esteem. In the end, they get completely demoralized and don't contribute what they actually could - and otherwise would.

Karl E. Weick,
University of Michigan Business School at Ann Arbor
Managing the Unexpected (2001)

Wow, I'm humming like a tuning fork. Once again, with feeling:

“The hallmark of our age is the tension between aspirations and sluggish institutions.”

That's from John W. Gardner's Self-Renewal: The Individual and the Innovative Society 1995. It's great--as was he. It's short--as is life. It's simple--as are most things. That is, if we're honest with ourselves....

SELF-DEVELOPMENT. Not just skills, but the whole range of our own potentialities for sensing, wondering, learning, understanding and aspiring. Gardner points out that this does not happen until one gets over the odd notion that education is what goes on in school buildings and nowhere else.

SELF-KNOWLEDGE. By midlife we are accomplished fugitives from ourselves. Our lives are filled with diversions; our heads stuffed with knowledge; we are involved with people. Result: weve never taken time to probe our inner selves. We dont want to know ourselves. We dont want to depend upon ourselves. We cant stand to live with ourselves. A better way is to develop a more comfortable view of who you are. It is the true basis of inner strength.

COURAGE TO FAIL. By the time we reach middle age, we carry in our heads a long list of things well never try again because we tried once and failed. Mature people learn less because they are willing to risk less. Theres no learning without difficulty and fumbling, but if you want to keep on learning, you must keep risking failure.

LOVE. Develop the ability to have mutually fruitful relations with others. Be capable of accepting love and giving it; of depending upon others and of being depended upon. Develop the ability to see life through anothers eyes and reach out to others.

MOTIVATION. A self-renewing person is highly motivated. The author points out that motivation isnt a fuel that gets injected into your system (motivation speakers wont do it); its partly inner energy and partly the result of the social forces in your life. Gardner makes the point that we live in an over-verbalized civilization. Words have become more real than the things they signify and we need to return to the solid earth of direct experience because we are drowning in meaningless word tonnage.

[From a fine Amazon reader review of the book]

"Word tonnage"? Boy have you come to the right place. (Hopefully, not too meaningless.) Hmm. Sounds like a cue for some art:



P.S.: To learn more about the incredible John Gardner (founder of Common Cause, Secy. of HUD, War Hero, the list is too long), visit The Gardner Center at Stanford University.

Fast Company: How Can This Brand Be Better?

Oooh, a contest for armchair brandbuilders and pros alike. Fast Company:

Even the strongest and most successful brands occasionally need to be refocused, refreshed, and revitalized. The Fast Company team has developed a list of aging brands that could use reinvention -- as well as some successful brands that could still improve further.

Readers can choose to help reposition and rethink one brand -- or all of them -- and the participant who contributes the most promising strategy for adding new life to a brand -- as selected by the editors of Fast Company -- will win a three-hour branding consultation with Karen Post, author of Brain Tattoos: Creating Unique Brands That Stick in Your Customers' Minds , and a free, signed copy of the book.

Full rules and entry information are available online.

The choices are:

Barbie
Brooks Brothers
Fast Company
Kmart
Martha Stewart
McDonald's
Microsoft
Office Depot
Old Navy
Radio Shack
Starbucks
Tide
Tiffany's
The United States of America
Virgin

Time to roll out your remarkable cows and evangelical epiphanies. Pick one, pick 'em all! Be as wordy or crisp, orthodox or un- as you want. Off you go!

Link via Brain|blog

Culture beats strategy. Free Prize™: It kicks bureaucracy's ass too.

Apropos of the last post and what seems is becoming "Culture beats Strategy" week here at Fouroboros Worldwide, some very good stuff from Ellig and Gable's Rise of Market-Based Management:

"Survival is very uncertain in an environment filled with risk, the unexpected, and competition. Therefore, a company must have the commitment of the minds of all of its employees to survive.... We know that the intelligence of a few technocrats - even very bright ones - has become totally inadequate to face these challenges."

-Konosuke Matsushita

For years, American business was dominated by a central-planning paradigm credited to Frederick Taylor. Taylor argued that management is a science that can be taught. In search of higher productivity, Taylor advocated systematic study to improve upon the best prevailing production practices of his day. Aided by time-and-motion studies, managers would ascertain the best way to perform each task, select the best people for each task, and teach them the one best way. Taylor laudably sought to increase business productivity so that both wages and profits would rise. Thus, he sought to replace labor-management confrontation with a harmony of interests founded on greater productivity.

In Taylor's view, managerial direction was key to enhancing productivity, because manual laborers were generally incapable of understanding the best way of doing their jobs.

...Taylor's methods generated significant productivity increases when applied to uneducated workers doing repetitive tasks. But followers tried to develop his ideas into a universal approach to be used in contexts quite different from the ones Taylor originally studied. A school of thought, "Scientific Management," emphasized that management's job is to give orders, while labor should follow these orders. This worldview has shaped labor-management relations for most of the twentieth century.

Advocates of Scientific Socialism also cited Scientific Management in support of their grand vision for society. In the Soviet Union, both Lenin and Trotsky admired Scientific Management and thought it was one of the important features of capitalism that socialists should imitate. In their view, centralized planning of the entire economy was just a logical extension of centralized planning within the factory.

...Though motivated by humanitarian concern, Scientific Management possessed a major blind spot: it ignored the importance of dispersed and tacit knowledge. In an organization of any significant size, authoritarian managers can be little more effective than central economic planners, because they lack the requisite knowledge. Much relevant knowledge is dispersed in the heads of many people in the organization, and much of it cannot be communicated to a central point for processing. Firms built on the central-planning model suffer from the same "fatal conceit" that afflicts centrally planned economies.

Memo to me: Do an org chart of the Communist system and Corp XYZ, unattributed. Show them at staff meeting, then ask, 'Can anybody tell me the difference?'

Market Incentives and Motivation

Entrepreneurs earn profits by thinking up new ways to create value for others. No one orders them to be creative; they simply find that they can make themselves better off by making their customers better off as well.

In business, though, employees frequently get raises and promotions for following orders, building political skills, attaining a specific rank, or simply hanging around for a long time. Some of this occurs because of union contracts, but such incentives are also widespread in managerial compensation schemes. As one corporate executive noted, "There must be better reasons for giving raises than the fact that the earth went all the way around the sun again."

Nucor Corporation has found a better way. At Nucor, substantial employee bonuses, paid weekly, are tied to production results that specific teams of employees can directly affect. Higher output leads to higher bonuses, and bonuses can easily exceed a worker's base pay. As a result, workers show up for work early to ask the previous shift how the equipment is running. They take extra care in maintenance and discourage each other from taking unnecessary sick days. In short, the incentives of Nucor's work teams are so well aligned with the corporate mission that little "management" of employees is required.

Free Flow Ideas and the Use of Knowledge

Freedom of action and freedom of exchange are critical elements of a market economy, and so is freedom of speech. Prices summarize a great deal of information, but because real-world markets are disequilibrium markets, prices do not summarize everything entrepreneurs and customers need to know. As a result, individuals need the freedom to exchange ideas, debate new suggestions, and advertise their products and services to potential customers.

Most corporations today espouse these ideals, but many would do well to ask themselves questions like the following.

* Do operating units supply detailed operating data to headquarters?

* Are employees directed because they lack access to information they need to make business decisions?

* Are accounting systems designed for management control instead of furnishing information to operating personnel?

Do performance evaluations include only the views of the boss, instead of information from all of an employee's major "customers"?

An organization that can answer "yes" to these questions is fundamentally channeling information to the decision-makers; at the top of a pyramid, instead of letting employees make decisions based on their own local knowledge....

Damn those Commie Business Roundtable people!

As I said, good stuff. It's not short, not too long, but very accessible. Mucho fodder for a compelling answer the next time you're at a cocktail party and someone asks: "Why are you an entrepreneur?"

A Growing Corporate Club: The Founding Felon

What a headline--Had to post it. It's one of several good stories in Knowledge@Wharton's midweek email newsbrief. A snippet:

Since many founders spend the early years of their careers struggling to build their businesses, few have the kind of ethics training that is now a part of most professional managers’ corporate upbringing, Schweitzer points out. Companies, he suggests, should appoint a corporate ethics officer to help guide employees who find themselves in sticky ethical situations....

Founders who build a major company up from nothing often have a “blurred sense of boundaries,” says Schweitzer. Because start-ups usually require huge investments of both money and time, “there is no distinction between a founder’s personal life and company life. In some regard he or she is more likely to use the company as a vehicle for personal desires,” he says. A wayward founder may also be more prone to bypass a company’s normal checks and balances. “Founders in some sense are given more leeway because everyone at the company owes their position to them.”

Martha, Bernie, Ken, Waksal, Grass, Rigas--everybody's in the barrel. It does note that companies still run by rap sheet-free founders do retain a certain bottom line Je ne c' est quoi. Interestingly, marketing Professor Stephen Hoch reckons Martha's past her expiration date:

“Irrespective of what happens [legal appeals, PR rehabilitation, etc], her personality is past its prime,” suggests Hoch. “Maybe she can make a comeback, but I’m not sure whether she would see it as worth” the effort.

I dunno, Native American warriors had their "Vision Quest" and fought big scary bears... Maybe a Perp Walk and rooming with Vinnie the Blade isn't so outlandish for Masters of the Universe?

----

PS: Scroll down for a piece on Laura Ries' Evolution of Branding: Divergence, Convergence, and Other Marketing Strategies

Culture beats strategy. Unless strategy clubs culture over the head with a phonebook-size Powerpoint™ Deck, first.

Gautam Ghosh sagely points out in comments:

It is mostly that the "hows" get drowned by the "whats"...which is where 'strategic planning' eclipses 'engaging the people' and what that results in is that the 'plan' remains in bound folders and nobody cares what it says!

And, the inestimableJohnnie Moore:

This echoes my own mantra of relationships before ideas. Many organisations fixate on their explicit strategy, usually encapsulated in formidable documents. The more detailed they make it, the more likely that people won't really digest it and they mistake a tired acquiescence for consent. Generally, the author(s) of the strategy get an illusory sense of control from their document, but that may be all.[My emphasis]

Yeah. I hear that some old English guy summed it up thus: ...a tale told by an idiot, full of sound and fury, Signifying nothing. --MacBeth

(Uhh. On second thought, I may have a new Fouro tagline.)

Put the above in simple terms and in many ways it says: "passion beats a plan." That's important, I think, in increasing measure because plans now truly do seem to last only as long as it takes the ink to dry. But, as even the Army is now finding out, flexibility, bricolage, and confidence in the face of uncertain, evolving circumstances--not a fatter training manual--is the ultimate survival tool--for battlefield or business. Phil Carter's intel-dump leads us to a report on just such a thing, from retired LTC Leonard Wong, PhD:

"Today's junior officers are not afraid to lead in ambiguous conditions. They can execute a mission with minimal guidance. They are an incredibly valuable resource to a transforming Army that has desired and sought adaptive capacity in its leaders. The crucible of OIF [Operation Iraqi Freedom] has delivered to the Army a cohort of adaptive leaders. The challenge for the Army is to encourage and leverage this priceless potential." Source: Developing Adaptive Leaders: The Crucible of Operation Iraqi Freedom

Well gee whiz. Funny thing about heat, it melts you, makes you brittle, or anneals you. One of the old saws of military command & control is that "the first casualty of contact with the enemy is your plan." If you think about it, the same often applies in business. Planning is what we do when there's not much to do. It's also often so much quasi-educated guessing. We earn our money when the stuff hits the fan or when opportunity knocks. Experience, skill, intuition takes over. It's the zone that David Maister describes when surveying his Professional Services leaders and executive clients: only 20% of what they do, and for only 20% of their clients, makes them feel engaged, challenged and worthwhile. In other words, they really feel useless and obstructed 80% of the time. (A/K/A: Punching in or punching walls.) And these are six-figure-plus executives, with supposed "power" over their destinies.

The challenge for the Army is to encourage and leverage this priceless potential.

What Phil Turner, via Dr. Wong, describes as an Army learning to come to grips with non-state, non-traditional aggression and extra-doctrinal challenges--the suddenly malleable and explosive nature of its mission--is really an Army attempting to come to grips with another truth, yet again: Sergeants and Lieutenants and Captains fight and win wars. But they often do so with one hand tied behind their back--string leading back to HQ--and the other, toting a huge manual on "How things ought to be but never really are."

Sound familiar?

Localized control and decision-making. Adaptability and amenabilty to new input. A disdain for dogma. Getting out of our own way. Yes, the average Sergeant and Lieutenant thrives in the same environment your mid-level reports dream of, or bug you for. Incoming!

One for StoryBlog?

A 100-year old nail making company had grown to mega-size and was getting rocked by competition. The Chairman called his directors together and said, "We're stodgy and boring! Nails are boring! We need personality. We need to advertise!"

His executives called in all the top creative agencies. They picked the best one and told the chief, "it's gonna be great!" 3 months later, the Chairman gets a memo from the company CEO: "Our spot airs tonite. First slot, first break, during the six-o-clock news. It's brilliant!"

The boss gets home that night and settles in front of his big screen just in time for the commercial break:

The spot opens on something tan and out of focus with the sound of wind and crows squawking under. As we pullback, we see it's dirt we're looking at as the camera begins to pan and tilt up to reveal a post--it's a post in the dirt. The camera reverses direction, still tilting, and we see sky, then another reverse and another piece of wood, only it's horizontal this time. We pan along and see fingertips, and slowly pull back to reveal fingers, and a palm, and a big honking nail through the palm. The company logo comes up and a booming biblical voiceover says: "Try...Hobson's...Nails."

The chairman drops his scotch, falls out of his chair and leaps at the phone. He calls the CEO, "Idiot!!! You don't sell nails by saying we helped kill the world's biggest religious figure! Pull it, now! Get another agency and get it right, or you're fired!"

3 months later, the Chairman gets another memo: "The spot airs tonite. First slot, first break, during the six-o-clock news. We've got it right this time, and it's brilliant!"

Same setup: Chairman, bigscreen TV, scotch and first commercial break:

Open on an aerial shot, moving high over a shimmering desert. On the ridge of a huge sand dune in the distance, we see a dust trail. As the shot moves in, we see tiny figures running; closer still we see it's 2 people chasing somebody. Still moving in, we see the guy in front has white, flowing robes and a beard just as he runs out of frame. Closer still and we see the two chasers are wearing .... dresses? ....no, they're Roman soldiers. Camera cuts to the two, now stopped and exhausted, hands on knees trying to catch their breath. One soldier turns to the other and says: "Should have used... -WHEEZE- ... Hobson's Nails."

The Ethicist's New Clothes

Slate

Credentials and committees don't make you ethical. Principles do. Those principles have to make sense. You have to apply them consistently or rethink them if you can't stomach their implications. And the easier you make them, the less they matter. The slickest way to make yourself look ethical is to narrow the definition of ethics so that it won't interfere with what you want to do. But that won't make you ethical. It'll just make you an ethicist.

Oooh-Snap! Hey, he's talking about the search for the high ground on stem cell research, but we can all be broader-minded in the application of some good prose if it fits elsewhere, right?

Culture beats strategy. It also starts lots of conversations.

It seems several out in blogland have picked up on the "People far wiser..." post, incuding the nice folks at ecademy.com. (Sorry, you have to sign up to get to the forums.)

Anyway, it only makes sense that somebody [Adriaan Wagenaar] asked the good question:

In discussing Culture and strategy issues, one is often reflected in the other. I meet organizations who want a Cultural Change and after long discussion we find out they actually were looking for a 'corporate remote control' to change others, not themselves. I also meet organizations that present their corporate behaviour as 'culture' while they basically are speaking about how they make things happen.

So I think it is most interesting to look at how culture (a particular belief system) shows up in strategy and how strategy shows up in a culture.

Yeah, where are the examples? Good for him.

I suggested an American example would be Progressive Insurance...

Their cultural mix dictates that Intrinsic Goods, rather than instrumental ones, are the product they offer. Their auto insurance claims process is built around the fact that smashing into another person is a psychological trauma for many people. Their claims response people are there, on scene whenever possible or necessary, ASAP with a calming demeanor, your sanity in mind, a blanket, a hot cup of coffee--a guide in the situation.

Spell that COMPASSION, not I-N-S-U-R-A-N-C-E.

That big C is a huge Intrinsic Good like Love or Faith--rare, but you can't live without them. Progressive knows this and knows their rarity makes them all the more leverageable as a business purpose.

To me, this is not crass: I need insurance, I desire compassion in my life and for my loved ones. When do I want both? When I need them most.

That is how corporate culture moves from flavor of the month buzzword, to real, meaningful and--GASP--sustainable, competititve advantage.

They get it. They make buckets of money at it. And they aren't embarrassed to tell their mothers what they do.

In fact, they can't wait.

Seattle Times

SEATTLE'S NEW downtown library is so striking, so revolutionary, so odd and so lovely that one struggles to find a metaphor to explain it.

"...a song of light that changes with each cloud, sun angle and surrounding shadow."

Ga-aack!

"...integrates detailed functionality with an ever-changing symphony of color, line and form."

Fluu-eh!

"A truly rational building will not look rational," Ramus [one of the building's architects] says. Seattle's library "is large but not monumental," he goes on. "The spaces are designed not to intimidate but to accommodate."

Ahh, the Jesse Jackson school of Architecture-speak. What kind of silly bat is it that architectural schools hit their students with?

Hey, libraries are about ideas, good and bad, so I can't fault them swinging for the fences on this one, even if it does look like a giant Lunar Module. But how 'bout some meaningful words and rationale to match the unconventional lines? Come on guys, "It was a dark and stormy night" is no way to sell an internationally-awaited library.

Why JFK jr. couldn't keep George Magazine aloft?

We cringe at the current "What can a [frog, blender, toilet plunger, whoopee cushion, etc.] teach us about Financial Services" campaign from Wachovia. But however tone-deaf, it does remind us that stories and narrative are the best ways to make a message stick. Why, gee, we used some recently while talking with a group of businesspeople:

...It's not primarily about values. That's means to an end. Necessary, vital, but a means. The point is competitive advantage. One you can sustain. Much management it seems takes the negative view of human behaviour, and it resorts to a push model; coercion, rather than co-option or the pull of ambition. For the short term, this approach satisfies us for two reasons:

A. We feel like we've done "something" about a problem-- we've intiated action.

B. Much like the cattle prod gets immediate results, the push, or coercive, model spikes improvement (or at least attention) in the desired area.

In stressed companies, these are the reflexive patterns we regress into as managers. And on the face of it, why not? After all, how many times have you felt comfortable giving up control in times of pressure? Oddly, the seemingly intuitive and instinctive thing to do is counterproductive to the desired outcome.

In this, management is not unique: when a plane stalls in flight and starts to dive and lose control, pilots must be trained to fight their instinct to pull back on the stick--an action that can further reduce speed an induce a much more deadly and unrecoverable event: a flat spin.

Of course, metaphorical thinkers will observe that directing a company and flying a plane are, at heart, management. Each requires the understanding of dynamics that are in turns obvious and counterintuitive. Each reqiures us to manage and interpret dynamical, rythmic systems. For airplanes: engines, conrol surfaces, inertia, gravity, weather. For business, the equivalents: resources, people, feelings, ideas and markets...

First posted way back here. [pardon the reprise, but we've been doing a little archive mining lately for a coming project and this seemed quite relevant to the "people far wiser" post just below, and to another coming, hopefully, this weekend.]

Elementary

Sherlock Holmes and Dr. Watson are going camping. They pitch their tent under the stars and go to sleep. Sometime in the middle of the night Holmes wakes Watson up....

HOLMES: Watson, look up, and tell me what you deduce.
WATSON: I see millions of stars, and if there are millions of stars, and if even a few of those have planets, it is quite likely that there are some planets like Earth, and if there are a few planets like Earth out there, there might also be life.
HOLMES: Watson, you idiot, somebody stole our tent!

People far wiser have said it far better..

...but here's how basic it really is:

1. Lose the bullcrap that says "it's not personal, it's business." If you're breathing, it is personal. Period. Disallowing that truth empties offices and balance sheets and fills SEC judiciary dockets and customer service call queues.

2. Understand that when guys like Harvard's Edgar Schein and the London School of Economics' David Maister say "Culture matters more than strategy," they know of where they speak, they mean it, and it it works.

3. Why does it work? If one must succumb to framing business as War, then here's the translation: Because nobody ever threw themselves on a hand-grenade for a spread-sheet.

4. "Work, eat, sleep" is a self-imposed life sentence. Some leaders may think that little of their lives and their futures, but millions of employees and consumers are just dying to hear one say "Enough! I want more out of this for me, too! (No, not more money.)

5. Pick any two of the better, hot business books--Semler, Jack Welch, Collins, Sun Tzu--doesn't matter. But make sure one is diametrically opposed to what you "think" you already believe. Don't read them. Climb into them. Live them, like you're going to be shot if you don't live them. Tell your people you are doing this. Then, after doing exactly this for 6 months per book, ask yourself: Which did I feel like I would have written right out of school and still not yet jaded to the working world? Keep that one. Buy copies of it for your people. Then take those assembled people into the parking lot and ceremonially burn the other book you did not choose.

You'll be amazed at how good this feels, and How can I say this? Simple. Any book that "works" and inflames people's passions for work does so because it addresses four simple ideas:

A. Simplicity
B. Authenticity
C. Community
D. Legacy

If you buy that those qualities matter in Life and in its subset, business, and that anything done must pass muster after being viewed through the prism of that uncluttered worldview, then management, marketing, production, finance, and anything else you include in your hairball begin to take on a clarity that highlights and spurns false choices. It doesn't obviate downturns.

Neither does it make one a Hare Krishna. It puts events into context. That is supremely powerful because we do dumb things not when the unexpected happens, but when the inevitable unexpected does happen and we make up ad hoc standards of behaviour to seem like we're controlling the obviously uncontrollable. In short, we clearly do everything we can to deny that our pants are suddenly around our ankles.

That sh*t happens is undeniable in any journey, but absent a well-plumbed personal-professional rationale for why you set out in the first place, well, that's downright unsettling--to leaders and/or followers. Lack of context leads to confusion. And blame. And defeat. The presence of it, even partially, is calming and powerful. Context makes molehills out of mountains of manure. [*]

If you sail, play golf, flyfish, collect stamps, make doll houses or pilot fighter jets, this is called being in the zone or going with the flow. And, this is why God is said to favor fools and drunks: Because they are thought too dumb or too sedated to do what "wiser" people instinctively do in dynamic or threatening situations: Clench up. Or Freeze.

This is why resourcefulness, humility and bravery are far more valuable than "answers," "ego," and "a plan." It is why average people or companies who hone the former talents are magnetic, and become leaders of legend. And why employees or companies of great expectation often fail to make that leap.

There. I've gone and blustered my way through another post. Damn. Why do I keep doing this? Simple: Energy and the thoughts that generate them are volatile but precious commodities. If you don't get them out, they burn up the container. And if you don't think, the container gets cold. In archetypal terms, Cold = Dead. And dead is not a fun concept for those who prefer breathing.

[* Update: Michael, of Spooky Action fame pointed out the glaring syntactical omission of this paragraph. Duh! Apologies, and thanks, Michael!]

Why does marketing often fail?

Because we don't like what we see or understand about an event, situation or product.

Because we expect others to believe our pretensions to perfection despite the fact that others know their own lives, work and efforts are imperfect.

So, do we stop "marketing"?

No. We continue to tell the varnished, flattering semi-truth.

Death.

America and Outsourcing: Eagle? Cuckoo? Ostrich?

Anonymous Industrialist: "...my factory is run by machines, no employees."
Henry Ford: "That's very interesting. Where do you find your customers?" [link]

washington post

Implored to 'Offshore' More
U.S. Firms Are Too Reluctant to Outsource Jobs, Report Says

A report by an influential consulting firm is exhorting U.S. companies to speed up "offshoring" operations to China and India, including high-powered functions such as research and development...

Particularly troubling is the report's information about confidential discussions with executives at Boston Consulting's client companies, many of whom conveyed low opinions of their American employees compared with labor available abroad. Not only are factory workers in low-cost countries much cheaper -- well below $1 per hour in China, compared with $15 to $30 per hour in the United States and Europe -- but they quickly achieve quality levels that are "equivalent to or even higher than . . . [the] best plants in the West," according to the report.

"More than 40 percent of the companies we talked with expressed significant concerns about the erosion of skills in the work force," the report states. "They cited machine operators who are unable to handle specialized equipment properly or to make the transition to new work materials. In contrast, LCC's provide large pools of skilled workers who are eager to apply their 'craftsman' talents."

Midlevel engineers in low-cost countries, the report adds, "tend to be more motivated than midlevel engineers in the West." It cites General Electric Co., Motorola Inc., Alcatel and Siemens AG as examples of companies that have set up research and development centers in both India and China "to leverage the substantial pools of engineering talent that are based in the two countries."

Indeed, the report undercuts the view that R&D jobs in Western countries will increase even as low-skill jobs migrate to nations like China and India. Among companies with large operations in low-cost nations, "One of the most intriguing advantages we have come across is faster [and lower-cost] R&D," the report states....

One could reasonably paraphrase that to say: The problem with American business isn't outsourcing, it's lazy or indifferent or disengaged American workers. Not some drone, mind you, monitoring some mindless machine process somewhere in Ohio or Minnesota. Not at all. Senior and C-level client-executives of Boston Consuting Group tell them, confidentially of course, that YOU, dear reader, are dead weight. Bachelors- and Masters-level educated engineers and professionals are obstacles to American commercial progress in this 21st Century marketplace. Up the foodchain we go, as I noted here and here, last year. Question is, where is the ceiling? Or the floor, depending on how you look at it...

More, this time from Boston Consulting Group's web publications

In terms of capital requirements, Western companies operating in China are finding they can reduce their investments compared with their home countries. For example: Western companies often pay up to 50 percent less to purchase machines and tooling in China than at home.

Moreover, companies operating in China can cut capital costs by replacing expensive machinery with inexpensive labor. One leading manufacturer of large kitchen appliances has stopped using conveyors in its Chinese factories in favor of manual material handling. The firm achieves quality comparable to that at home, but at lower cost.

China also offers other incentives to Western companies: low-cost land, low import duties and tax breaks. One major corporation claims to have received so many incentives for one of its factories that its construction was virtually cost-free.

Be careful what you wish for

For me, the irrefutable truth of the above is that "the kids are growing up." The Chinas, the Indias, the previously Second and Third Worlds are hitting adolescence. And, like parents, we're finding that they don't need us as much as we'd hoped. But, in what is perhaps a perverse analogy, Dad (American management) wants to trade Mom (American labor) in for the sleeker, lower maintainance, less worldly, easier to impress and infinitely cheaper-to-please Daughter (Chinese, Indian and elsewhere labor).

Yeah, that's harsh, I know, but there is a large issue of social taboo and cultural compact being broken here as well. The balance of producer/purchaser economics is what powers the cycle of America's success. Wages derived from production which is derived from invention allow the washing machine-maker to sell to the employees of the computer-maker and the restauranteur, and vice versa, ad infinitum. In a way, you earned your keep in the system by keeping faith in the system. As we modernized, a social agreement evolved that living wages, workplace safety and environmental caution were prudent and good for business. We were taught by institutional authority that skill, borne of experience and commitment to a trade was an economic competitive advantage and an insurance policy for your family's economic security. Similarly, the thing that anchored business to society was the implicit quid pro quo that jobs generate social stability and owner-like equity, and therefore, shared interest and burden sharing. This is what community was defined as, whether local, state or national.

Adding "Global" into that mix tends to muck up the works a bit. Global Business is a reality, but Global Community is a mirage. Perhaps, more accurately, "Global Community" is a goulash of incompatibilities, save one--money--each society being asked to cohabit and collaborate but to not concern itself with the strange screams and noises emanating from this neighbor or that as long as the grand goal of EBITDA is climbing up and to the right.

The taboo being broken by outsourcing, absent a real conversaton about its implications and tradeoffs, is that business is abstracting itself from the communities it calls home. Companies have traditionally incorporated in Delaware, Nevada or some Caribbean Idyll for more favorable civil law conditions or for more advantageous tax rules. But that was often just a paper reality. They kept operations largely close to their employment and resource bases and distribution hubs for hard and soft reasons. Some even defiantly remained where they were out of founding principle and loyalty to who brung 'em and built 'em--definitely a social compact motivation there. That was then. This is now. Some art:







USA GDP
year $Bn (yr 2000 USD) CPI/Inflation

2002.....10068.111.......................1.50
2001........9849.395.....................2.80
2000.......9824.650.....................3.40
1999........9469.269......................2.20
1998........9095.129.......................1.50
1997.........8721.603......................2.30
1996.........8351.417.......................2.90
1995........ 8063.564......................2.80
1994..........7853.953......................2.60
1993..........7549.238......................3.00
1992..........7354.111........................3.00
1991...........7136.403......................4.20
1990..........7170.047.......................5.40

(OECD Excel)

What we can see evolving is a reverse colonialism, with the U.S. potentially and paradoxically adopting the traditional Banana Republic, hourglass economic model. Lots of financial mass and focused influence at the top, yet not many people; lots of people mass pooled around the the bottom, yet not much financial wherewhithal and, therefore, not much leverage. The middle? They'll be your neighbors in Banagalore and Guangdong.



Neighbors? Sure, metaphorically speaking. They'll be plugged into the system technologically, virtually contributing to American growth by broadband while breathing Indian or Chinese air. They'll particpate in the success of American companies and learn from those efforts and then charge off and start their own enterprises which in turn will have cheaper versions of the remaining essentials that American Business leadership can't virtualize: Land, resources, infrastructure and, yes, lower management and CEO salaries due to lower costs of living.

Gee, I can't decide what this is analogous to--I'm spoiled for choice.

Is it a Trojan Horse, designed, built and proofed by America, and then, leased to China and India and others to ride over us and into the victory circle? Maybe it's the virtual and stealth equivalent of the thing America's Pat Buchanan's and others rail against: An immigration-wave of lower wage workers, except, without the visas? An invisible invasion that magically reports to work, puts in its time and takes home its paycheck without ever passing an American Starbucks^® or grocery store or BestBuy™--a workforce never breathing American air, yet siphoning off other valuable resources.

I imagine farmers, for instance, can clearly see the parallels between business' turbocharged EBITDA, inertia-driven approach and the balls-out overfarming of land that led to dustbowls and worthless fields squeezed of any life-giving potential 3/4 of a century ago.

Farmed out. Outsourcing. Same thing. CRP, [A]SCS (alert: pdf) and land stewardship and 4-H taught farmers that finesse and understanding of the properties of land yielded sustainability and greater aggregate gain. Natural resources = Human Resources. I suppose a folksy, barnyard way of looking at this is: You don't starve the horse that's going to carry you home, nor do you kick the dog that's going to guard your baby.

Business people know this, they're not dummies. They are however, victims of learned helpness.

"But what can I do?"
"Hey, everybody's doing it."
"So what's the alternative?"
"It's not in my job description."
"Isn't this a political issue?"

Implicit in this managerial worldview is that in order for lesser countries to become more like us, we must begin to look more like them. The sad fact is that there are plenty of indicators that this has already happened in production terms as noted above. Technology has given them the leg up we never had: And, now, they're capable of doing first world-quality work while still living in cities and homes that would would make first-worlders like ourselves blanch and recoil in horror.

But the seed has been laid. And well. They'll grow up and out of this incongruous poor quality-of-life versus superior quality-of-work conundrum. Like every human who gets a taste of the "good life" that technological springboards offer, they'll begin to want more. They'll have the income and leisure to ask the larger questions about qualitative measures of existence. According to Goldman Sachs and OECD, they'll be doing it in short order:



In just 50 years.

From 1950 to 2000 America went from draft horse to racehorse, economically speaking, and blew the world away. Information Tech fed efficiency advance and led to broad social benefit. These surface or low-hanging-fruit improvements were just the feed, and now that feed has lost its boost. Information flow is parity. Automation is parity. Process is price of entry.

We're now back to square one--finding people advantage:

Why does America matter?

Why should it?

Prove it.

Tick-tock.

Welcome to R-Complexville...


...where down is up, facts are interpretations, and you shouldn't do as I do, but as I say. Unless I'm cussing. Then, do neither, and avert your eyes and plug your ears.

[For newer readers unfamiliar with my reference to R-Complex, try a quick browse of this here. It will explain some of the bluntness you're about to encounter. Translation: For a business-y blog, there's a fair bit of locker room language and unvarnished spleen coming your way, some mine, but most of it from unexpected, supposedly mature sources. And that's kinda the point of the post: "Do as I say, not as I do" can be crazy-making as reality intervenes and people tamper with our worldviews.]

Fox News via David Sirota:

"I'm very disappointed that he would use that kind of language," [White House Chief of Staff, Andrew] Card said. "I'm hoping that he's apologizing at least to himself, because that's not the John Kerry that I know."

The money quote:

"When I voted for the war, I voted for what I thought was best for the country. Did I expect Howard Dean to go off to the left and say, 'I'm against everything?' Sure. Did I expect George Bush to f--- it up as badly as he did? I don't think anybody did."

Now, we could all bore each other to tears debating whether it's more insulting to use Fuck as an adverb describing someone's actions, as Kerry did to an interviewer for Rolling Stone, or, in Cheney's case, as a command, a direct conversational insult to Sen. Pat Leahy.

But wouldn't that be a waste of time?

Abso-fucking-lutely. The kabuki that is official discourse is precisely the problem in the groups we grown-ups form to try and get things done. In other words, organizations are fucked, precisely because we insist on donning the veneer of politeness when in fact, our businesses and their models and the plans to execute them are innately desensitizing, polarizing and mercenary.

Stupidly, this officialdom and its barrier to reality is only increasing in velocity and impact at precisely the moment when truth and unabashed authenticity are about the only remaining markers of differentiation and worth--and the only damnthing that can get us all--all of us Americans--out of this cannibalistic rathole.

The cover up is worse than the crime

No, I'm not talking about politicians. I mean our business dealings. With each other, with underlings, with shareholders, with *GASP* customers. Yeah, it's a wicked web we've woven as we've shambled into the 21st centruy where all the knowlegeable experts told us women would be paid the same as men, race wouldn't matter, and the reform of the [name your industry] would yield a brave new world of [whatever] based on universal ethical norms with 10% of profits tithed to protect small furry animals.

Damn. The bastards. They lied!

Yep. We lie about our motives and mistakes and wrap them in piety and patriotism. Or in Powerpont™ and bullshit ROI, TCO or rosy M&A forecasts or boardroom koolaid rallies. Hmmm. Wait a minute. Near 1/2 of the executive conversations I've participated in consist of nitty gritty, and the remainder is brainstorming sweet bows to wrap screw-ups or sniggering self-interest in. It's kind of surreal, really like grandmothers earnestly knitting little woolly hats to pretty up those icky spare toilet rolls waiting their turn in the bathroom.

But, for this 1/2, the question is never asked: Whose fuckup are we remediating here and why is he or she not prone on the floor begging for mercy?

Simple: Because, more often than not, it's the boss that's why. And should we be surprised? Hell no. Bosses get to swing the biggest hammers--an army of them. But bosses, being uniquely pressured animals within the pack, looked-to for answers, tend to make mistakes out of hurry and catch-up or leap-frog moves. The result is hunger for quick fixes and easy answers: "I'm busy, give me a formula, don't bore me with what I think I already know about my Customers."

Yeah. Let's promote my narcissism and enable my myopia. Let me be stupid about the world and its changes relative to my company and its operational universe. (Research says that depth of understanding beats breadth of offering, but that's another post.) In the face of this doubled up risk aversion compounded by "Big Chief" confidence, nodody tells the boss he's a dope--a non-seer, like most of us. In this anti-pattern-language, you never get the essential: A reversal of Otter speaking to Flounder in Animal House: "We fucked up, we trusted you."

Treachery! Disloyalty! Passion! Gut! Second-thoughts!

Nobody says it--Employees, The Press, Executive Committees, political cohort or College of Bishops. Everybody's lame and mute. That's partly because we need to believe in leaders, and, partly becasue we haven't formalized our discomfort in a clear message. They know this, and they leverage it to squelch unconventional ideas or to defeat initiatives they deem unworthy or too costly/risky by their calculus. They squelch because of "youthenasia"--the belief that an idea coming from someone younger, less senior, or less credentialed than you or me, on principle, must be wrong, and therefore, must be killed. They ask, "Are you with us, or against us?"

Inside, Rove was talking to an aide about some political stratagem in some state that had gone awry and a political operative who had displeased him... "We will fuck him. Do you hear me? We will fuck him. We will ruin him. Like no one has ever fucked him!"

We? All of us? At the same time? Damn, that guy must have really stepped over some kinda line, eh?

Who knows. But he was definitively "off the team." His tribal membership was being revoked. Bad R-Complex mojo.

Second-thoughts! Flip-flopping! (I'm always well informed and correct when I make a decision. Aren't you?) Oh, geez. Somebody going off the reservation is so frustrating!

In a competitve environment, that's often to be expected--because life is, first and foremost, about group identity, not group ideas. (Shake yourself of this piety and illusion if you do anything today.) To a degree, we often find ourselves derisively referring to people who don't agree with us or share in our situational dilemmas this way, the competiton or opposition perhaps. Then, there's the way we talk about customers.

For instance, whose "values statement" says this:

Communication. Excellence. Respect. Integrity.

Why, it's these guys:

Guy #1: "They're fucking taking all the money back from you guys?" "All the money you guys stole from those poor grandmothers in California?"

Guy #2: "Yeah, grandma Millie, man"

Guy #1: "Yeah, now she wants her fucking money back for all the power you've charged right up, jammed right up her asshole for fucking $250 a megawatt hour."

Gracious me. That's not how college educated, customer-centric, All-American businesspeople were supposed to speak in the brochures I got. People in positions of power and responsisbility, guardians of American propriety and restraint, know better. Yes, those fellows must have been an aberration, have to be...

The New Republic:

"The reason that Cheney was able to sell Bush the policy is that he was able to say, 'I've changed,'" says a senior administration official. "'I used to have the same position as [James] Baker, [Brent] Scowcroft, and your father--and here's why it's wrong.'" By February, observes a since-departed senior National Security Council (NSC) staffer, "my sense was the decision was taken." The next month, Bush interrupted a meeting between national security adviser Condoleezza Rice and three senators to boast, "Fuck Saddam. We're taking him out."

Ah, the hearty machismo of the never-been-shot-at-before. I love the smell of frathouse beer funk in the morning. See? We don't have to do, we just have to mumble the correct noises of "A Doer"; claims of caring mean your methods must be right. Yeah, belief is the Cluster Bomb of angels.

Speaking of intercourse and ordnance, collateral damage can consume political careers and marriages and also principle in one fell J-DAM swoop, provded it's a Bunker Buster. Take Sex-club cowboy, Jack Ryan. No embarrassing public use of the F-bomb as far we can tell here, but plenty of shallow piety and, yes, a few attempted bombing runs while looking for stray swinger co-pilots

JACK RYAN ON THE DEFENSE OF MARRIAGE

I believe that marriage can only be defined as that union between one man and one woman. I am opposed to same-sex marriages, civil unions, and registries....

As an elected leader, my interest will be in promoting laws and educating people about the fundamental importance of the traditional family unit as the nucleus of our society.

Ahhh. But he meant well and spoke well, even if he was repeatedly asking his wife to be a sex-show exhibit, taking on all comers. Surely he gets points for thinking well?

The African Queen --

Hepburn: "Mr. Alnut, why do you drink?"
Bogart: "Aw, it's just human nature."
Hepburn: "Nature, Mr. Alnut, is what we were put in the world to rise
above."

Indeed, we're just frail humans, made in the image of a God who told us to be fruitful, to multiply, not to commit adultery, not to abuse His name. He also told us to try not to sin, but to expect to fail. He warned against holding other Gods beside him, warned against self-worship, and said, according to my church credo:

James 1: 22-27

Be ye doers of the word, and not hearers only, deceiving your own selves.

Funny--nowhere did the big guy mention Pride, Greed, Vanity or Lust as being virtues, or slagging off my laziness and venality on others; or a corollary: "Fuck" and its leveraged inference is okay if you're a Republican or a CEO or just a venal prole with a title and Land Rover.

Are we starting to see the institutional rot of saying the right things and doing the wrong?

As a business-person, I'm so fucking tired of fucking around.

Dispatches from the "Are you sure you want to pursue this line of inquiry?" department.

Daily Kos notices that, fresh out of the gate, the RNC windage on Edwards is: He's Second String and he's short on minutes played. To call this level of debate high-schoolish would be an insult to high schoolers. It would also defy the definition of "debate"...

[McCain] from the March 18th edition of CBS' The Early Show:

Look, I don't want to be Vice President of the United States, I do not want to leave the Republican party, I would not be Vice President of the United States on either ticket. I told President Bush when he asked me in 2000 if, when he asked me if I was interested, I said I was not interested.

Ummm, you don''t ask unless you're gonna offer. Cheney was Dubya's VP- and cabinet official vetter--a consultant to the campaign--who finally offered himself up when all the initial choices didn't make the cut or said "No." So, yeah, Cheney wasn't first choice, either. So what? It's really a bullshit line of reasoning, but hey, Ed Gillespie or some other RNC wizard thunk it up first.

Kos continues:

"The most-oft repeated criticism of Edwards is that he "doesn't have experience". We'll, E.J. Dionne shares this moment from 2000:

When you hear Republicans disparage Sen. John Edwards's lack of experience, remember the words of Sen. Orrin Hatch, spoken to George W. Bush at a debate on Dec. 6, 1999.

"You've been a great governor," Hatch declared of his rival for the Republican presidential nomination. "My only problem with you, governor, is that you've only had four and going into your fifth year of governorship ... Frankly, I really believe that you need more experience before you become president of the United States. That's why I'm thinking of you as a vice presidential candidate."

Which is exactly what Edwards was chosen for yesterday.

There you go. Vice President. The same job our 32nd VP, John Nance Garner, said "wasn't worth a warm bucket of piss." (Yes, Piss. Pre-FCC media of the day changed it to "Spit.")

Kos ends his post with a simple "Checkmate," but it might be useful to also to point out that Texas' Governor is a weak executive position by design. Oddly enough, Texas' Lt Governor has most of the legislative and administrative power. The Guv makes speeches, throws out baseballs, and wields a veto pen. For example, it's the same pen Bush as Governor used to veto the Texas Legislature's Patient Bill of Rights law; a veto which was easily overridden by a supermajority of the legislature following their constituents' strong desire for the law. Naturally, Bush now includes his "support for" and "passage of a patient's bill of rights during my administration" on his resume.

Maybe we can progress to who flip-flops higher and more gracefully after we nail down "1st Choice, or 2nd?" and "too little experience, or just right?"

Kerry/Edwards 2004

Smart move.

AP's story:

The "E-mail":

Born on The @#%*&! Fourth of July?

AP:

Dick Cheney used his first campaign bus tour Saturday to label Democrat John Kerry "on the left, out of the mainstream and out of touch with the conservative values of the heartland."

Washington Post

A brief argument between Vice President Cheney and a senior Democratic senator [Patrick Leahy (D-Vt.)] led Cheney to utter a big-time obscenity on the Senate floor this week....

"[Go] Fuck yourself," said the man who is a heartbeat from the presidency.

God bless mainstream values. God bless America. Happy Independence Day!

Workers Shareholders of the World, Unite!

Interesting comment by "lobbygow" on Executive Compensation over at Political Animal:

....wages should be indexed to the number of days the employee in question can be absent without a material affect on product quality or production costs. The greater the number of days you can go missing and not register an effect, the lower your wage.

In addtion, fuck the proxy system. All shareholders are board members when it comes to voting on executive salaries and bonuses. Each quarter, we would log on to a secure site, take a gander at the performance metrics and what the C-levels did in response. We would type in what we thought the officer should be paid for the quarter. The weight of our vote would be proportional to the number of shares. The average value would be what the executive got paid for that period. He/she would be awarded a stipend in advance that was equal to the pay of the previous period. If the value exceeded the stipend, she would be awarded a bonus. If it fell short of the stipend, she would pay the difference immediately.

The post in question is about a new (End of May) study by Boston Consulting Group imploring business to outsource more rapidly and more broadly, across and up the organization. (A patented Fouro-style epic post on BCG's report will be appearing here, later today or tomorrow.)

Hmmm. Now this flavor of internet-enabled transparency looks interesting. While indexing to mid- and lower-level employee productivity could be problematic given the whole new cottage industry of metric-builders needed to support it, strategic management has no such problem. It lives to print phone books full of arcana that can be used to judge their performance on a bazillion fronts. Who can be against a broadening of shareholder accountability of management except, of course, management? As they say, if you've got nothing to hide, what's to be afraid of?

What do you think of lobbygow's idea?

Terry Malloy, dead at 80

Newsday

LOS ANGELES -- Marlon Brando, who revolutionized American acting with his Method performances in "A Streetcar Named Desire" and "On the Waterfront" and went on to create the iconic character of Don Vito Corleone in "The Godfather," has died. He was 80.

Terry Malloy: "It wasn't him, Charley, it was you. Remember that night in the Garden you came down to my dressing room and you said, 'Kid, this ain't your night. We're going for the price on Wilson.' You remember that? 'This ain't your night'! My night! I coulda taken Wilson apart! So what happens? He gets the title shot outdoors on the ballpark and what do I get? A one-way ticket to Palookaville! You was my brother, Charley, you shoulda looked out for me a little bit. You shoulda taken care of me just a little bit so I wouldn't have to take them dives for the short-end money.

Charlie Malloy: "Oh, I had some bets down for you. You saw some money."

Terry Malloy: "You don't understand. I coulda had class. I coulda been a contender. I coulda been somebody, instead of a bum, which is what I am, let's face it. It was you, Charley."