Jeffrey Saltzman's Blog

Enhancing Organizational Performance

Earth, round or flat?

with 2 comments

The Earth used to be round.

The group that first proposed that the Earth was round is thought to be the Greeks. Although a little bit of researching turns up some potentially conflicting claims, credit is typically given to Pythagoras (of theorem fame). Some say Aristotle first thought up the idea. Either way the notion that the Earth is round has been around a relatively long time.   

The Earth is now thought to be flat.

Thomas Friedman suggests that the Greeks were wrong, at least from a current economic perspective. His book “The World is Flat” examines the consequences of the dot com bust that occurred in 2001 and the “flattening” of the world in subsequent years. This is one of the scariest books I have recently read (at least from an American or European perspective).

The dot com euphoria that captured the hearts of the world’s stock markets fueled an “easy cash” machine for the high tech companies. Anybody building things internet or computer related were showered with cash, including telecommunications companies.  Telecommunications companies spent billions and laid fiber optic cable around the world in anticipation of greatly increased utilization of telecommunication services driven by data and internet demands. Manufacturers of fiber optic cable couldn’t keep up with the demand. Then came the bust. Many technology companies went out of business, entered bankruptcy, selling assets for pennies on the dollar or simply struggled to survive in greatly diminished form.

All of this extra capacity for data transmission began to drive down the price of using the internet and related technologies for businesses and consumers. This price reduction and capacity has changed the world and brought about far reaching sociological changes.  Places like China and India are no longer simply low wage manufacturing centers but are becoming knowledge centers that can instantaneously communicate with the far reaches of the world. Today businesses are taking advantage of the “flattening” by outsourcing, off-shoring, joint ventures, etc.

Why is this scary to an American or European?

As the world becomes flatter and flatter the competition for jobs, of almost any kind, is no longer simply with others in your locale. The competition for jobs becomes world-wide and with the wage disparity that exists and the tremendous population resources, it becomes increasingly attractive for American and European companies to place those jobs not in America or the UK for instance, but in lower wage areas like China and India. Some companies handle this as a lower cost expansion and growth opportunity and others cut jobs in one place in order to move them to another.  In either case companies feel compelled to take advantage of these opportunities because of the global nature of the competition they are now facing. If they don’t continually drive down the cost of their goods or services, while maintaining quality, someone else will, taking away their customers (who feel the same pressure) and eventually driving them out of business.  

Is there any light at the end of this competitive tunnel?

There has been much talk and continues to be much talk about the differences in people by generation, by country of origin, by ethnicity etc. Much of those differences, when it comes to people at work are the results of either unchallenged folk wisdom (e.g. you just can’t trust this younger generation, I remember when I was their age…), contrivances of some of the lay press looking for interesting stories, eager consultants looking to sell prepackaged solutions as well as management teams looking for reasons as to why their policies and practices are failing or at least not working up to their expectations.

The workers of today in China, those who are currently working in sweat shop like conditions, are driven by economic necessity rather than any kind of difference in what they are hoping for out of a career or the work environment. They have the same desires, the same hopes and dreams as you or I. The same hopes and dreams that our grandparents had and our children have. Some of us have the very fortunate luck of being born in countries with fairly high economic standards that allows for us some additional freedom of choice; most of the people in the world today do not get that luxury.   

The wave after wave of immigration that built and is largely responsible for the entrepreneurial and innovative spirit that drove the US economy to its current heights was not accomplished by people who simply felt like uprooting their families, leaving behind the familiar and sometimes living apart for long periods of time. It was accomplish by people who out of economic necessity were willing to put up with conditions of uncertainty, hardship and worse. It was accomplish, by and large, by people looking for a better life, an escape from the harsh conditions of where they were from. (There were of course millions who were brought to American shores against their will as slaves).

Recently I examined the attitudes of employees of a company who had located some of their back office operations in India. They wanted to know why turnover among this population was high, what this group wanted, and what would keep them engaged in their work? The answer ended up being that given the relatively recent “start-up” nature of this group, the employees had concerns that any employee group anywhere on the planet would have. Where is the company going? How do I fit into that? How committed is the company to our group? What can my career here be like? How will I be developed? The company of course was putting into place all the business processes and procedures for the “business operation” to be successful and given the huge amount of work that represented, the impression one was left with was that they had not put the same amount of emphasis into the human side of the equation, taking into consideration what people would want out of the working environment.  The unstated assumption being made by that company was, “After all we were in India, and shouldn’t they be happy just to have a job?”  

What becomes clear if you look at organizational culture data long enough is that People are People and given the same choices, the same opportunities, will have the same desires and behave in a similar fashion (I am excluding people with various forms of pathology). They will vote with their feet if they find themselves in a situation they do not like and they have other opportunities available to them. People want to have a clear understanding of what is expected of them, what the organization stands for, they want to be enabled to perform their jobs, given the resources they need in the broadest sense, and they want to feel like there is a future for them on  a personal level if they stick around with the organization.

The notion that People are People is the light at the end of the tunnel. As economic conditions around the world equalize, as people in developing countries have more choices and more opportunities open to them, they will make the same choices based on the same thought patterns that someone in New York, Frankfurt, London or Los Angeles would make.  What we want to accomplish, in a post-flattened world is to bring the level of  opportunities available to people up to those that currently exists in places like America, rather then a lowering of the standard within America in order to be able to compete. This equalization, the eventual end-state of globalization, is how America and other western nations will be competitive. This equalization of standards is very likely a long way off, but on the other hand the world is changing very rapidly.

Longing to put the genie back in the bottle, to make things go back to the way they were before the world became flat is not the answer, both from a practical standpoint and a moral standpoint. From a practical standpoint the genie never gets back in to the bottle once it is out and there is no moral high ground is holding back people in the developing world from achieving their potential and to have a life equal to one that you or I enjoy.  As humans we need to be challenged to live up to our potential. Organizations as well can be challenged to live up to their potential – total potential, not just financial potential, as I firmly believe that organizations have a social responsibility as well as a responsibility to shareholders. (Those that execute on that social responsibility have a track record of also achieving financial results.)

One of my favorite quotes is by Stephen Jay Gould, the noted anthropologist. He said, “I am somehow less interested in the weight and convolutions of Einstein’s brain than in the near certainty that people of equal talent have lived and died in cotton fields and sweatshops”. Helping organizations tap into that potential, where ever it may exist in the world is a noble endeavor, fulfilling that social responsibility role, furthering the effort to make the world round again, not just for one group but for everyone. 

In the December 14, 2006 edition of The Wall Street Journal there is a cover story about Dr. Rashmi Barbhaiya who “lived a comfortable life in New Jersey as a researcher for drug maker Bristol-Myers Squibb Co., commuting from his five-acre suburban estate in a blue Mercedes”. Dr. Barbhaiya has moved back home to Pune, India and will continue to work on drug development with an Indian research team at a company he is founding. Why did he move back to India, back home? Because he could.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Written by Jeffrey M. Saltzman

November 11, 2009 at 7:25 am

2 Responses

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  1. I LIVE by the mantra “because I can.” Kudos to you for recognizing that flattening the world is a door opening, not a door closing, and that we in OD are the thought leaders poised to show that perspective to our constituents. This IS an honor – and a responsibility.

    R Everett

    November 18, 2009 at 12:27 am

  2. An excellent article. Great for somebody to be a realist and look forward to the future rather than the uncertain horrors of the younger generation and the changing global era.

    ‘I firmly believe that organizations have a social responsibility as well as a responsibility to shareholder’. I could not agree any more! And with social responsibility comes ethics and morals.

    Richard New

    November 22, 2009 at 9:59 pm

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