Tag Archives: outsourcing

History: how things came to be the way they are — and how things could be

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One of history’s virtues is that it gives us insights into how things are by helping us understand how they came to be and how they may look down the road.

When I was much younger, I believed that all company presidents and senior public officials were brilliant people who graduated at the top of their class and never made mistakes. The prospect of working for one was very appealing because great companies built great people and treated them well.

As it happens, companies stumble. Some right themselves, some don’t. Whatever happened to The Montreal Star or Control Data or DEC? Where can you buy a new Pontiac or Oldsmobile? Does anyone remember Eastern Airlines or Pan Am? Who’s gone from Wall Street?

The implications for stable and long term employment are obvious. The review of The Three Rules: How Exceptional Companies Think by Michael Raynor and Mumtaz Ahmed in the July 13th issue of The Economist describes the book as “a more rigorous attempt to dissect the corporate mind and its effect on success”.

If you were on the market right now, which of the following (listed alphabetically) would you want to join? Air Canada, Apple, Barrick Gold, Bell Canada, Boeing, California (the state), Campbell Soup, Canadian Pacific, CBS, Chrysler, CN, Coca-Cola, CP, Dell, Ford (as in Henry, not Rob), GM, Google, HP, IBM, Intel, Kraft, Lamborghini, Loblaws, Maserati, Merrill Lynch, Microsoft, Motorola, Nabisco, New York Times, Porter Airlines, RBC, Research in Motion (now BlackBerry), Rolls Royce (owned by whom?), Samsung, SONY, Northern Telecom, Walt Disney, Xerox.

Which ones are thriving? Which ones have changed the way they do business over the last 10 years? Which ones have changed their original focus? How many concluded that the needs of the business would be better served by contracting with third parties to operate what they considered to be non-strategic functions? Clicking here will take you to a discussion of the kind of thinking that went into Canada Post’s decision to do just that. The deal was done and Canada Post continued to deliver mail and packages to the entire country.

Many other employers came to the same conclusion. The practice continues today. Service bureaus like Data Crown and Canada Systems Group were among the first to offer faster processing speeds, newer equipment, enhanced data storage, state of the art data centres and IT professionals whose skills were always at the cutting edge, all at lower cost. Some companies have returned to in-house computing, some haven’t. You might find it interesting to research what happened to both of those companies.

Pre-packaged applications software took over from in-house systems analysts and programmers long ago. It’s produced by people who will likely never meet the users of their product or set foot on their customers’ premises. Microsoft Word and Excel and QuickBooks are three well known examples. Corel and Adobe defined the desktop publishing industry and changed the face of typesetting.

Information Technology is one of many functions being outsourced. The trend will continue. Does this apply to all employers? You’ll want to find out. What will it mean for career development in general and for the industry that interests you in particular? Is there a correlation between measures like outsourcing and being included on Canada’s Top 100 Employers list? What are smaller companies with bright futures doing? How much of what they do revolves around the Internet?

The role of permanent headcount has changed and will go on changing. Which of the companies and organizations you’re thinking of approaching are looking to reduce to the bare minimum the number of core employees they need to operate the business as you’re reading this? Are smaller companies still more likely to be sources of employment and professional development opportunities than larger ones? We know that they tend to be less hidebound, more agile than larger ones and often more innovative. That’s why they exist. Click here for some thoughts about Apple.

Are you entrepreneurial enough to start your own business?

The Canadian economy isn’t running out of steam or innovation as much as it’s shifting gears. Personal Due Diligence believes very strongly in the benefit of researching the history of the work you’re thinking of doing and of the industry in which you’re thinking of doing it. It could influence your decision about what you study or when would be the best time to change employers. We’re here to guide you in conducting and evaluating the results of that research.

As you consider companies on and off the list of Canada’s Top 100 Employers, ask yourself whether their values have historically aligned with yours. Do or will they offer an environment and a culture in which you’ll feel as though you count? Will you want to wear the company T-shirt and baseball cap? Will you look forward to going to work in the morning? How much of a life do you want to have away from the office?

While we’re on the subject, what do you think someone who works for SNC-Lavalin would have to say about its recent corporate history? Or BP’s?

Collectively, the people of PDD have experienced more corporate cultures than most working people will in a lifetime. How those companies came to be what they are and what that means for you should make for very interesting reading. And a powerful basis for preparing for and pursuing the work around which you’ll be building your life.

After all, isn’t that all that really matters?

Why do we remember?

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We seldom give memory a second thought until we find ourselves at a loss for a word or struggling to put a name to a face. We travel to a location we haven’t visited in years and we find our way around as though we’d never left. A familiar scent or aroma reminds us of people and places and times.

It’s one of our most powerful survival tools—if we use it. It lets us compare what is with what used to be. A wet spot on a ceiling where there wasn’t one before usually means that some shingles are missing or that the entire roof has to be replaced. Green, pink or amber fluid under the car? If you own one, you know what that means.

Left to our own devices, most of us would rather live in a steady-state world. Work 5 days for The Man during the week; head up to the cottage or the slopes on the weekend. But we’re not being left to our own devices. And it’s not as though we’re not aware of what’s going on. How can we not be? It’s in all the papers, on the Internet, in magazines, on TV, and streamed live to our iPads and iPhones. Outsourcing, outplacement, offshoring, downsizing, reorganizing, asset sales, shareholder revolts, mergers, acquisitions, divestitures, budget cuts, management shake-ups, plant closures, reduced hiring, unpaid internships, fixed term contracts with no benefits. And we’re not done yet.

As working adults we can be as selective about what we choose to monitor, compare and contrast as we wish, and even then we have to tread carefully. But, to quote Richard Florida in the Toronto Star:  “We are in the midst of the greatest, most thorough economic transformation in all of history.”

Where our children are concerned, we’ve reached the limits of what we can choose to ignore. Ten years ago you could ask what they wanted to be when they grew up and they’d tell you. Now what they’re saying is, “I want to be employed.”

PDD believes in telling it like it is and how it’s likely to be. We believe in educating our children so that they can think critically about what they’re experiencing, without blinders on. We believe in showing them and their parents how to identify what work Canada needs done now and will need done by the time they graduate from university, community college or trade school. Especially work in fields that didn’t exist when we were in our late teens.

On-ramp1

The driver in the vehicle shown here is on a one-way on-ramp. It’s a metaphor for how the class that will be graduating 4 years from now is growing, developing and gaining its own momentum. The expressway is a metaphor for where the world is going. They’ll have to pick their spot in the traffic at the bottom of the ramp and accelerate to match its speed as they merge and integrate with it.

It’s critical that we help them meet the world halfway. Expectations about what kinds of work will be available in the short- and intermediate term have to change. We should give our memories of our earlier years their due. But we have to recognize that those days are gone and that the next several graduating classes are going to have to come to terms with the world as it is now—their world. Their careers have to start somewhere. It isn’t hyperbole to say that theirs may well be the generation that turns this mess around. Other than during times of war, it’s hard to remember the last time entire generations were at risk.

In an earlier post, I wrote about how certain people believe that everything that matters in the world should come with a barcode and a price tag; everything else should be offshored and outsourced. For the moment, those people call the shots, but they’re going to be replaced, hopefully by younger people who see and value the world differently.

PDD is committed to helping parents and their soon-to-be university, community college and trade school graduates make that change happen. Sooner rather than later.

Voting with your feet

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Opposable thumbs and language make us different from all other living things. Thumbs are what make it possible for us to build machines like atomic force microscopes to study the unimaginably small and very large array telescopes to study the unimaginably vast. Language makes it possible for us to tell each other about it.

Sometimes language fails us when it comes to delivering messages with the intensity they deserve. A case in point is the outrage we felt when the media frenzy erupted over the story about replacing Canadians with foreign workers at a major Canadian bank. The story came down to misapplying or ignoring Canada’s immigration laws. But it seems everybody’s doing it. Just as everybody’s doing outsourcing. And they’ll go right on doing it because the story will fade away.

Complaining about what that bank and others have been doing, are doing now or will be doing will change nothing. Companies and institutions, like the people who work for them, are in survival mode. Companies are eliminating positions and functions that aren’t advancing their cause. People in search of education and work should do likewise. That means we have to teach our children how to vote with their feet.

Clicking on Surveys at the top of this page will take you to a page with a questionnaire. PDD urges you to complete it, especially if you’re the parent of someone in the midst of contemplating postsecondary education or are that someone. The thought-provoking, hard-nosed questions you’ll find there were designed to help you question everything you always believed about the automatic connection between education and the good life.

There was no outcry because downsizing and outsourcing are yesterday’s news, just as the stories at the beginning of 2013 that described the plight of university graduates who can’t find work are yesterday’s news. Once the media were done with the subject, they moved on to other things. Perhaps they might want to revisit the subject of skills shortages.

Downsizing and outsourcing have been going on in Canada, the U.S. and elsewhere since 1980. If the media do their homework, they’ll find Anne B. Fisher’s feature article The New Debate Over the Very Rich in the June 29th, 1992 issue of FORTUNE Magazine. In it, Fisher said:

“Between 1980 and 1990, FORTUNE 500 companies shed 3.4 million jobs, but companies with fewer than 500 employees created more than 13 million.”

IBM had this observation in its September 1991 issue of IBM INSIGHT:

“Rolling the dice to determine the future educational needs of a country is hardly a desirable course of action, yet Canada, challenged by a competitive technology-driven global marketplace, is heading into the 21st century in danger of becoming a second-rate country. A recent Coopers & Lybrand report says that Canadian competitiveness in international markets has seriously declined since 1988, with worse to come in the early 90s.

“We know that in 1988 there were one million unemployed in Canada and 600,000 high-tech jobs that couldn’t be filled … We don’t have the skill base to support the economic base Canada is attempting to move into.”

− Meeting the Global Challenge: Canada in Crisis
IBM INSIGHT, September 1991

“Canadians are asking what the future holds for themselves and their families. In a profoundly changing world, they know that traditional strategies are no longer enough to provide economic security and prosperity and protect our environment programs.

“New approaches are needed to meet the challenges that confront us − challenges that threaten our ability to generate new jobs, our standard of living, and our social programs.”

− THE PROSPERITY INITIATIVE, A Summary
Government of Canada
©Minister of Supply and Services Canada 1991

It’s been over 20 years since what you’ve just read was written. What was true then is true now. Only then they were predictions: now they’re descriptions of the status quo.

Since 2001, I’ve met one-on-one with 1953 people, each of whom had been told 5 minutes earlier that their services were no longer required. At least half of them were past the midpoint of their career when I met them. Their first instinct was to blame their immediate superior for the calamity that had just befallen them. All but a handful insisted that they hadn’t seen it coming. For whatever reason, the majority had failed or refused to adapt to changing circumstances. They paid with their jobs.

No one is totally immune to having the work they do shipped offshore. But there are ways of decreasing the risk. One of the most potent is to seek out work that is less likely to be exported and employers who are less likely to export it. Anne Fisher offered a clue when she referred to companies of 500 or less. Entrepreneurial businesses fall into that category.

Outsourcing and offshoring are now part of the new normal. But it doesn’t have to apply to everyone everywhere. Companies and institutions are loath to lose people who are critical to their survival, let alone success. Circumstances in Canada’s economy and labour market are changing. That part of Canada’s population that will be graduating from high school in 2014 is well placed today to respond to those circumstances. They and their parents have the time to prepare to vote with their feet.