"Forces to be Reckoned" - Part 2

My article last month was “The Ten Forces that Flattened the World”, from the book, The World is Flat, by Thomas L. Friedman. In this month’s part two installment, we’ll focus on some of the responses available and leadership required to manage future organizational behavior. Don’t fight these trends (outsourcing, off-shoring, supply-chaining, insourcing and info rming) by rejecting the obvious or denying the reality. Embrace the challenge!

First, you must believe that you can summon the resources necessary to lead your organization and take advantage of the opportunities.

Tom Friedman notes that “more American individuals will be better off if we don’t erect barriers to outsourcing, supply chaining and off-shoring than if we do…as the world gets flat, America as a whole will benefit more by sticking to the basic principles of free trade, as it always has, than by trying to erect walls.”

The great hockey star Wayne Gretsky stated that the key to his success was based on the strategy to think ahead and skate to where the puck was going to be, not where it was! This is an essence of leadership. Figure out what your customers are going to need and how you must improve the supply chain for the future and prepare your organization’s strategy to ‘skate’ to that point and capitalize on the opportunity. For years now at Greco Apparel, we’ve been adding services and competencies to transition from a simple cut and sew domestic contractor to a full package supplier with global sourcing. During this time we’ve continued to provide cut and sew to those clients who preferred this service. Two years ago we became certified as a vendor to the one of the largest companies in the uniform industry. At that time, this client both supplied fabric and cut the garments. This week I was info rmed that the policy has changed and now garments would be ordered on a full package basis. The service they require and that we offer has been coined “from spec to check.” The client provides a specification and pays for the finished products. We, as the vendor, provide all other services including fabric sourcing, product development, patterns, grading, manufacturing with delivery to their door. I never would have bet that this conservative giant client would have altered their practice, but we were prepared.

During my more than thirty-two years in the apparel industry, I’ve noticed that while the nature of sourcing has changed, the relationships with vendors and clients have endured. Sure, people have moved around, but the connections, trust and credibility I have established have not only been maintained but have grown stronger.

Accompanying the proper attitude to support future growth, the leadership must commit to making the investment in training and education to keep an organization competitive. On a national perspective scale, Friedman notes that we “require a president who can summon the nation to get smarter and study harder in science, math and engineering in order to reach the new frontiers of knowledge that the flat world is rapidly opening up and pushing out.” In your organization, the leadership must build and support the infrastructure to deliver the products and services required now and in the future to meet the demands of your customers.

In response to the Soviet successes of both launching Sputnik and cosmonaut Yuri Gagarin in 1961, President Kennedy said, “I believe we possess all the resources and talents necessary, but the facts of the matter are that we have never made the national decisions or marshaled the national resources required for such leadership. We have never specified long range goals on an urgent time schedule or managed our resources and our time as to ensure their fulfillment. “

Let’s chunk this down form running a country to running a company. The scale changes but the principles remain exactly the same. The challenge is parallel. As Kennedy conceded, there would be a heavy cost to support such a major commitment to space exploration. Consider what would be the cost to the nation’s future in the advancement of science and our economic growth if the investment had not been made.

In my years in the industry, I’ve seen many businesses cease to exist because either their leaders consciously chose not to invest in improvements or they were not so fortunate as to be enlightened. Legend has it that when Buddha was asked what he would most like to be, he answered, “awake.” In his book, Tom Friedman certainly provides that wake-up call. Bob Dylan prophesied back in the 1960’s that “the slow ones now would later be fast and the present now would later be past for the times they are a changin’.”

If you’re in a leadership role in your organization and you don’t know what course of action to take, then get some help. Read, study or call a consultant. If you are a leader and know what needs to be done but won’t, then out of fairness to your associates, your customers and yourself, quickly consider changing your role. As someone wisely noted, “this is not a dress rehearsal.”

Here are seven rules suggested by Friedman to help companies cope:

Rule #1- When the world goes flat, reach for a shovel and dig yourself out. Don’t try to build walls.

Rule #2- Small companies can flourish by acting big. Be quick to take advantage of all the new tools for collaboration to reach farther, faster, wider and deeper.

Rule #3- Big companies shall act small by enabling their customers to act really big. Give them choices, flexibility and service to increase their value to their customers.

Rule #4- The best companies are the best collaborators. More and more business will be done within and between companies for a very simple reason: the next layers of value in technology, marketing, medicine or manufacturing are becoming so complex that no single firm or department is going to be able to master them alone.

Rule #5- In a flat world the best companies stay healthy by getting regular chest X-rays and then selling the results to their clients. Identify your core competencies and let go of the things you can outsource. (In Greco Apparel’s case, our clients outsource their product development, fabric purchasing and manufacturing to us.)

Rule #6- The best companies outsource to win, not to shrink. They outsource to innovate faster and more cheaply in order to grow larger, gain market share and hire more and different specialists- not to save money by firing people.

Rule #7- Outsourcing isn’t just for Benedict Arnolds. It’s also for idealists. People with great ideas about making improvements and increasing value need assistance.

Start from where you are and keep moving forward. Goethe said, “Boldness has magic in it.”

Joseph Greco is president of Greco Apparel. Visit them on the web at www.grecoapparel.com