Dr. Jac's Notebook
We hear a lot lately about how the economies of China and India are accelerating at unheard of rates. I can tell you from a recent trip there that, if anything, it is an understatement.
I conducted a training program for HR professionals in Singapore last month. Thirteen countries sent delegates. We had people from practically every country from Korea to Dubai. They are all trying to turn HR into a value generating center. I have run training in 40 countries over the past 25 years and I have never dealt with a more enthusiastic, hard working group. These people are on a mission. If they are examples of the personnel in their countries, we are in for a ton of competition.
Sri Lankans described how they are not only sewing clothes for our market, but also providing end-to-end service from design to merchandising and inventory control for U.S. stores. Similar stories of growth and market penetration came from Indians, Filipinos, Singaporeans and Bahrainis. Outsourcing administration and manufacturing is only the tip. Professional services such as market research, customer service, product design, scientific research É the list is almost endless. Professionalism is not bound by national borders, only by human capability.
A Single Market
The point of this is that there is only one market now, the world, and practically everyone is in it. If we are going to maintain our standard of
living, we have to do more than worry about cost management. The game in all developing countries is value creation through professional services. Vehicle design specification is now being done in India. Pharmaceutical houses are using research and clinical testing facilities in Russia, India and China. I am going to Russia this month to work with another group of
energetic managers. I will let you know what I find there.
It is true that some U.S. companies have pulled back from Asian outsourcers because of poor customer service. But beware, those people are not stupid. It was not so long ago that AmericaÕs quality was rapidly deteriorating. We solved that problem and they will solve theirs also.
Small technology and pharmaceutical firms are great targets for locating offshore. There are plenty of talented, trained chemists, engineers and technicians overseas who can run development labs at a third of our costs and with high quality. Start-up software companies have been using programmers for a number of years with generally good results. Financial service firms have grown rapidly by employing technical and customer support people offshore. By now you must get the idea. Nothing is safe.
Go Upscale
So what is the solution? Go upscale! Take a lesson from the electronics industry thirty years ago. When I was working for a computer manufacturer in the 1970s in Silicon Valley it was already a common practice to have subassemblies made in Singapore. We used our time to work on design issues to give ourselves a competitive advantage. The greatest leverage comes from creative work. The late, great Peter Drucker told us, ÒDonÕt worry about the future, create it!Ó People with talent are going to own the future. HR has to find those people.
HC
- Dr. Jac Fitz-enz, Senior Editor