First Order Blog

Off-Shoring vs. Home-Shoring

Case for Off-Shoring

The Alliance for American Manufacturing equipped its Washington headquarters with US-made products only. The cheapest domestically manufactured microwave was $550, 10 times Walmart Asia's offering at $55 (The National Journal).

Case for Home-Shoring

  • Oil prices are three times higher than they were in 2000, resulting in higher fuel costs for cargo ships.
  • In order to heat factories, natural gas costs 4x more in Asia than in the US.
  • Wages in China are now five times what they were in 2000, and will continue to rise by 18%/year.

Chief Information Officer

The CIO role is increasing in business performance, as more and more business core competencies are dependent on the hardware and software utilized. Today's CIO must stay up-to-date on technology differentiators, as the rate of change is only increasing.
Here are 4 C’s your CIO must consider today:

Cloud

  • Mobile disruptions are the largest (10x PCs)
    • Access enabled by 3G and 4G networks
    • More than 1.1B in 2011 with 34% growth
  • Office assets are now in the field

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Gary Burnison, CEO of Korn/Ferry

I recently heard Gary Burnison, CEO of Korn/Ferry, as a conference keynote speaker. In his role, he consults with Fortune 500 CEO’s regularly. His aggregation and analysis of these CEO conversations includes:

FOUR CORPORATE PRIORITIES
1. Fight for growth and relevancy in a tough economy
2. Hoard cash and reduce capital expenditures
3. Innovate
4. Ask more of the company, with less people and resources

THREE EMPLOYEE OBSERVATIONS

Best Companies for Leadership

Chief Executive magazine identified that the CEOs of leading public companies (P&G, IBM, GE, 3M, Southwest Airlines) commit a higher priority to leadership development. This is in spite of more complex and distracting environments, as well as added pressures for short-term financial results.

Some key findings:

  • Hire on attitude;
  • Install a systematic processes for leadership development;
  • Adhere to core values;
  • Embrace fast-paced global change;
  • Rotate development assignments every 4 years, in order to experience failure (which is the best teacher);

A Learning Culture

Peter Senge described a learning culture company as an “organization where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free and where people are continually learning to see the whole together.” Nobel Prize winner James Heckman found that investing in training pays 10-20% dividends.

To create a learning culture, a company must:

  • Define success, then identify outputs produced that lead to success and the tasks accomplished to produce those outputs;

Net Promoter Score

Does your company provide good customer service? They say that for every one customer complaint, there are 25-30 unhappy clients. John Donohoe, CEO of eBay, tied 10% of senior management’s compensation to Net Promoter Score improvement.

Perspectives

Ideology is a broadly held system of beliefs….an identifiable intellectual movement with specific positions on a range of topics. Personal values are more idiosyncratic than those derived from an ideology, but represent a desire to govern from principle and policy.

The personalization of the Internet by search engines decreases the likelihood of finding information that challenges our existing views and biases. (This is similar to viewers watching only Fox News if they are conservative or MSNBC if they are liberal.)

Coaching

The purpose of coaching is to provide self-awareness, especially about one’s blind spots so that they are not in denial about their weaknesses. Strengths can serve as a foundation for future career opportunities; individuals need to listen to feedback, accept it and act on it in order to grow into future jobs.

Strengths

59% of Americans say they would choose a different career if they could do it over again.

Why? People are likely to do their very best – higher engagement and finding meaning in their work - when they have an opportunity to play to their strengths. My hypothesis is that their careers are not aligned with their strengths.

Supply Chain Efficiency

In the 90’s, Dell beat competitors with supply chain efficiency; however, their competitors were able to copy this competitive advantage to the point that it became a market expectation. Apple turns its inventory over every 5 days; Dell every 10 days and Samsung every 21 days. Wal-Mart is known for its use of technology when integrating with partners to improve efficiencies.