Mayberry 2005: Question 4 Top Level Attitudes

Student Question: If there are members of the organizations that are opposed to off shoring what kind of pressures do they experience or is it pretty rare to have opposition within the top level of an organization?

Jack Swaim: I'll speak for HP, well also for Xerox and for Cummin's Engine. I think each of those companies was global enough that the senior leaders realized that market forces are at work and to a degree that we could make some choices, and we did. But the market forces are pretty significant. I can't think of any case where a senior leader, not one, where a senior leader thought, “Oh, this is awful. We're not going to do it at all.” There are some cases where there was enough of a psychological contract with people who, in many, many cases, with people who work in the company saying, “Ok, if we stay on our present course, the outcome is not going to be pretty.” Therefore, we have to change maybe the types of products or services we're producing. We have to rescale our employees. That kind of thing, and we've done a great deal of that. We've also done some of the rebadging both in and out of the company that Joe mentioned with respect to their deal with IBM. So I don't know of any senior leaders that are kind of blind to the reality of it. And the most effective ones are those that look for the opportunity and the creativity to say, “Given that we have a company culture and some human assets that we care a lot about, how can we best leverage those in a way that aligns with market opportunities?”

Dr. Reimann: Any other comments on the gentleman's question here?

Joe Dehler: I would add one thing to what Jack said. I think that for those of us that truly consider ourselves to be global companies, that the distinction between US employees and the global employees, the line is blurrier. And many of us, in order to compete, know we have to be global. It's still painful when you have to stand in front of a group of 400 people and tell them they could be impacted.

Steven Hoisington: Well, I for one opposed efforts to offshore and outsource. Shortly after I arrived at Excel and the rational being what management wanted to do was outsource because that's what the right thing to do for cost efficiency. At the end of the day, I wanted to make sure that management understood that the need for what they wanted to do as opposed to this is the flavor of the month or something like that. What activities are not in accord and where do we know that those things could be done better than what we're currently doing inside or outside the United States . There are a number of different things to take into consideration. And as I pointed out earlier, when all the factors aren't considered, and the whole idea of strategy is just I'm going to outsource stuff, that's when companies like Excel and others make money because they didn't take into consideration where transportation costs and the fact that maybe when you're operating in India is on a different time zone than what you have in the United States and so how does that either compliment or conflict with core competency. I think it's inevitable when identifying your core competency who does it better than you in terms of those things that aren't core competency and how can you employee the best for the benefit of not only shareholders but stakeholders in your current base of employees. I know that these discussions are not easy; in fact they are hard decisions to accept. But I am sure that most of us would attest that out careers have changed so much throughout time, that obviously we're not using the same things we went to school for, except for many of the basics like arithmetic and writing and things like that, you're going to use those everyday. But if I was going to be an industrial engineer again, and I had to do a plant layout again, there's no way I could ever do that. So you are going to evolve and you need to evolve your skills and talents based upon what you see the economy doing. And the other thing to keep in mind is there is a difference between doing what you want to do versus what needs to get done. And once you understand that and you challenge the hard stuff, and you do what needs to be done and you focus on that, it will better prepare you for shifts and changes in the economy and how your career may go.

Dr. Reimann: Any other questions?