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Turbulent times make B2B and Supply Managers more important in organizations

Think about it - if things are going smoothly in the environment like the economy is humming along, there is general peace where you conduct business and the weather is predictable you have steady demand for your products and services. On the supply side you can put together long term contracts, try Just in Time (JIT) and suppliers can drive down costs and bring steady improvements to quality. Generally, the sales forecast is working well and the sales people are making good commissions. Your internal operations are your only concern when you craft strategy.

But in turbulent times,such as these, both boundaries of the firm face uncertainties. On the supply side long term contracts are a "no-no" and on the demand side uncertainty in quantities and payment has your marketing severely challenged. You find that your boundary spanning managers (Supply chain managers and Marketing managers)  are the only ones who have been looking up (the supply managers) and down (your marketing and sales managers) your value chain. Suddenly, managers at both ends of your firm become much more important.

This was brought to sharp focus at the Keynote Session  of the 94th ISM conference,with ISM Chair Shelley Stewart where Christina De Luca   started off with a call to action by all supply managers as their work was "not good enough" for the times. Her somber example of the oil industry was powerful because while price dropped to half demand also dropped significantly, putting all calculations in jeopardy. The other panelists, including Lisa Martin  offered valuable tips to deal with this huge turbulence. The bottom line was that Supply Chain Managers suddenly find themselves center stage in their organizations and its a great time to step up.

The Stimulus and Procurement Reform

Ever since the stimulus package was announced I have been asking friends in the supply chain community as to whether the stimulus package will create new jobs in supply chain and procurement. Logically if you are sourcing stuff, you need managers to both buy (supply chain) and sell (B2B).There were two opinions on this - one was that you can always get contractors to do more if you have a rate contract already set-up. The other opinion was that many local governments will ask for fresh bids . In fact, asking for fresh bids  could really cut down supplier quotes by as much as 45% , given the slow economy. This could in turn free up money for additional projects.

Yesterday, President Obama talked about bi-partisan  procurement reform primarily for the Department of Defense. Any reform means more work for supply chain and procurement management professionals and more jobs for for both B2B marketers and supply managers. Good news as far as this blog is concerned !

Small Business, Google AdWords and B2B Marketing in a recession

If you think about it, most jobs,innovation and entrepreneurship is in the small sector. Strangely textbooks and academic work in  B2B,Supply Chain and Innovation focuses on large organizations- perhaps because large organizations are potential employers for students who read textbooks  and have been traditionally employed by large organizations. The current economic situation has many major organizations in disarray with employment being uncertain for existing managers and on hold for fresh recruits.

Students at my B2B (Organizational) Marketing class at University of New Haven are participating in the Google Online Marketing Challenge (GOMCHA). They have a presentation scheduled on April 8, Wednesday and the University announcement is here.

The students have been doing a great job and have focused on creating AdWords for B2B marketing in a recession for the seven area businesses. Google AdWords puts power in the hands of a small business who can start with a very small budget- unlike other traditional advertising. The GOMCHA itself is supported by Google who have given $200 of ad credit to each student team.Students add the Internet Marketing expertise to their resumes and I think several of them will become entrepreneurs. The student chapter of the American Marketing Association is managing the event.

From Culture's Consequences to "Project Match" - IBM needs to add home country fixed costs

IBM has come up with a rather controversial "Project Match" offer for laid off employees to work in "growth" markets in India, Nigeria, Eastern Europe etc. IBM is telling its laid off employees to look at opportunities in the IBM subsidiaries where the local market is growing. The catch is that you get paid the local salary which might be just 20% of the current home salary.

If your job is outsourced then the logic seems to be to  move you to the "source".

While IBM's idea seems blasphemous to a high cost country employee- it tells us something about the full circle that globalization has come to. In the 1980's IBM was perplexed as to why various subsidiaries understood and implemented "central commands" so differently. So the now famous Geert Hofstede was commissioned to figure out why this was so. Hofstede came up with culture's consequences and changed the way we look at national culture and its impact on work at subsidiaries of an MNC.

Today, what would a laid off IBM-US employee do with his/her kids college expenses and 401K and mortgage  if they took a job at 20% salary ? IBM and other multinationals need to look at the possibility of covering some of these "fixed" costs if the idea is to work.

But if you have an expat offer (which takes care of these costs) and have not yet been laid off - this is the time to take it up!

Happy Earth Day -"Green" Value Chain and Clorox

Today is "Earth Day" and here is to wishing readers a very happy earth day! The Earth day movement has an interesting timeline  and there is much to celebrate in terms of the progress we have made globally. However, much needs to be done. I had written about how B2B folks can help with greening the supply chain. Essentially consumers have a preference for "green" today if prices are comparable. Marketing and Sales Managers being closer to their own customers can start with one product and work with their supply management and supply chain to introduce green. Many organizations in the grocery business are doing exactly that.

An  intriguing example corporate green initiatives is the "Green Works" initiative from Clorox. One would think that Chlorine is bad for the environment but the company has gone natural and here are their definitions. I have not got around to using their "green " products but I am sure impressed by the competitive prices and great in-store displays across different segments of retailers from Home Depot to Wal-Mart.

Super bowl ads "people power" and "global outsourcing"

The Superbowl ads are always a great reflection of our times and more importantly changing times. For the very first time viewers have created an ad- The Crash the Superbowl-Doritos ad. The empowering of the amateur ad person i.e. "You" is a catclysmic change in the way clients and advertising agency creative people will work in the future.

The outsourcing phenomenon finds a prominent place with "Bud Light" and an accent training call center class in what could be India. The ad closes with a clearly geeky Indian IT professional in an American bar who just cannot pronounce "Bud Light."  But seems to be enjoying his Bud Light anyway.

Malcolm Gladwell "Tipping Point" and outsourcing

I read Malcolm Gladwell's "Tipping Point" over the last summer while in India. I was impressed by Gladwell's neat analysis of what causes rapid change. This is the tipping point kind off take-off graph. On the other hand diffusion of innovation scholars lead by the late Everett Rogers of whom I am a rather loyal follower see innovation diffusion more in terms of a gentle normal  distribution, something like this:

The problem is that some innovations simply take off like virus, with a sharp upward curve and no downslope in sight. This makes scholars like me swallow hard and look to journalists like Gladwell for some light ! The tipping point is the sharp rise of adoption with almost all people adopting something quite quickly similar to the way virus spread. Infact, it was the spread of the AIDS virus that spurred Gladwell to come out with the idea of the tipping point.

Global outsourcing is one such phenomenon. One other journalist (called Thomas Friedman) has been crying hoarse since 2005 about the impending "tipping point" in global outsourcing and business scholars like me have been arguing through papers,presentations and this blog about how Americans should deal with this phenomenon at the individual career level and how corporate American can leverage global outsourcing at a strategic level for enhancing innovation and market growth. People have started listening, slowly.

In the meanwhile, Information Week announced that Accenture CEO William Green has stated in Bangalore that India Accenture would have 35,000 employees while US Accenture will have 30,000 employees thereby having more people in India.Author Paul McDougall calls this the "tipping point" in outsourcing and I think Paul's take is just brilliant. Company Presidents will indeed accelerate outsourcing as Paul McDougall suggests, but the question is whether American workers and managements see the global opportunities in this phenomenon? Or will companies continue not to talk about outsourcing and therefore mess up the execution and the media and public simply complain about US companies not looking after American jobs? I for one think that William Green of Accenture did the right thing and Paul McDougall did just great byat least talking about the "O" word!

The word "Outsourcing"

One of my industry contacts on the outsourcer side once revealed over lunch that his American born ( probably 3rd Generation) parents were chiding him for being the outsourcing manager of a financial sector major. My friend’s Dad lamented that he was overseeing the "export of American jobs" and was generally unwilling to share the exact content of his son's job with friends and relatives. In fact, when I offered my MBA class on "Global Outsourcing of Knowledge based services" in Fall 2005; my University colleagues truncated the advertising for the class to just "Global Knowledge Based Services" and quietly dropped the "outsourcing" word. A colleague explained this to me and since there were enough students enrolled anyway - I let it go.

I find this approach quite inexplicable. Yes, if you or your loved one's job is outsourced, it is horrendous. The solution is not in being " anti-global outsourcing” but instead becoming pro-active   to see how it can benefit your career and business in or from the US.

Therefore I sympathize with Economics Professor N. Gregory Mankiw who got into controversy as the then Chairman of the the White House Council of Economic Advisors. He basically said in February 2004 that outsourcing was the new way of doing international trade and that this was something he'd say in one of his introductory economics classes.

According to this article in the NY Times, while McKinsey sees only 2% US jobs getting shipped overseas Professor Alan S. Blinder thinks this number could be much higher.

While it looks like the public outcry against outsourcing has subsided somewhat since the last elections in 2004; there is continuing reluctance to see outsourcing as a fact and a possible opportunity. It is only after both individuals and businesses start understanding and accepting this that folks would start managing outsourcing to career advantage and business advantage.

Technology, Jobs and Home-Depot

This MSN report from the Bureau of Labor Statistics offers one angle of jobs outlook for the US. It suggests that many jobs that can be simplified and done by technology will be done by technology. Simplification includes consolidation of farms to larger ones which will find the smaller farmer out of work. Stock clerks and order fillers in manufacturing and retail will also have their  work done by machines as will meter readers that will compete with optical scanning and voice recognition technologies.

The one common thread with most of these occupations is the ability to completely articulate the process or work into defined processes that can be then done by machines. Do jobs change after machines do much of the rote work ? Yes - if you go to Home Depot you see much of the check out is "self checkout" and the many former cashiers are in the aisles helping customers. Are they adding more value in the aisles than in the check-out? .. I think so.

Parents see kids college education as "investment" not "expense"

A profound bit of analysis in Business Week caught my attention. The American Economy is doing better than the numbers say. For example the expenditures on higher ed by families is considered as expense by federal economists and statisticians. Ask any baby boomer Dad and Mom about their take on their kids college expenses. These baby boomers will tell you that they are "investing" in their kid's careers. They are investing on making their kids becoming more capable in "learning how to learn." This profound shift in how families view college expenditure is reflected in the totally changed attitude of today's American parents ( the baby boomers) to their kids - the Echo Boomers, also called the Millenials and the Y-Generation. This attitude is radically different from American Parents of the sixties and seventies who basically expected kids to grow up and take care of themselves from 16 or 18.

Strangely enough the relatively new kids' "college as investments " phenomena is not fully understood as the BW article alludes to. In any case this is a very welcome change for American parenting when it comes to preparing American kids for a global knowledge economy...