From the Desk of the President

As 2012 is the Presidential election year in US, a lot of debate is going on against “Outsourcing”, both from President Obama who is seeking re-election for his second term and his opponent Gov. Mitt Romney.  Already, they are trading charges against each other related to job loss and outsourcing. Interestingly, neither of them is very specific on what type of outsourcing is bad for American economy; neither has shown any specific data or research to prove any of their points. Anyway we all know that elections are about creating an emotional appeal, which brings voters to vote for them.

Going through many newspaper reports, TV coverage and the Internet, I found that even though both contestants are targeting outsourcing as one of the main reason for decline in jobs, actually they both meant off-shoring of jobs to other countries.  Outsourcing is when a business decides to get product or services from some other firm that can produce same product or service cheaper or better than they can.  Take for example all automobile makers outsource products such tyres, batteries etc. from others.  Why doesn’t GM or Ford start making tyres and batteries themselves? Simple – it’s not in their best interest to produce these products in house. Same applies when we outsource services e.g. most small/medium businesses outsource payroll, accounting, Legal or IT services from a provider that is specialised in those services and these services are the “core competence” of the provider. The provider also have economies of scale, therefore the end consumer has an economical product or service that is most often of higher quality standard.

Look at this from another prospective – when products and services are outsourced, the products and services become economical.  As a result of these economies of scale, more consumers can afford to buy the product and in the process more demand gets created. That is sustainable outsourcing.

Often outsourcing and off-shoring get mixed;  in off-shoring the real benefit is not directly felt by people who lost their jobs and the process takes longer time. I would like to give an example – look at how many people are now using Apple products such as an iPhone in China.  Certainly the numbers are big, though the physical production of hardware may take place in China, the R & D efforts and the software are still produced in US and they are creating high demand for those engineers and professionals who do R & D and write software.

I can say for sure that Globalization and outsourcing is good for overall economic development and we at Global Sourcing Council are always looking to find the benefits and create best practices which will further enhance these benefits. I look forward for more discussions from our readers on this subject…□

Sanjay Sharma has over twenty years of Global experience in Information Technology, Supply Chain and Project Management. Sanjay has managed backend Sourcing and Procurement operations for large organizations in Europe, Far East & Australia. He led procurement operations for a large industrial goods manufacturing organization. Sanjay has articles published in business magazines and publications on the subjects of procurement, supply chain and project management. Sanjay speaks at Conferences, Seminars and Symposiums. He works as consultant for Project Management and Global Sourcing. In addition he teaches Project Management subjects. His email contact is sanjaysrr@gmail.com.

 

 

 

The GSC 3S Award Corner:

The GSC 3S Awards program – Sustainable and Socially responsible Sourcing awards— honors the best sustainable and socially responsible practices in global sourcing.

All companies, corporations and individuals who support global sustainable development, social responsibility, ethical and ecological business practices and giving back to the local community are encouraged to apply.  It is the only sustainable business and social responsibility award geared specifically towards the global sourcing sector.

If you consider yourself an advocate and example of socially responsible and sustainable sourcing, APPLY TO WIN NOW!  For guidelines go to: www.gsc3sawards.com

All applicants must submit a video highlighting how they meet the GSC 3S Awards’ mission statement requirements by September 1, 2012. The awards gala is to take place on October 22, 2012, and tickets can be purchased at

3S Awards News Flash: Jeffrey Puritt, Telus International, Joins 3S Advisory Board Council

TELUS International’s president, Jeffrey Puritt, has joined the Global Sourcing Council’s (GSC) 2012 3S Awards Advisory Council this in July.

TELUS is one of only nine Canadian companies across all sectors to be named among the Global 100 Most Sustainable Companies in the World by Corporate Knights research firm (2010).

“TELUS International is proud to work with the Global Sourcing Council and the 3S Awards Advisory Council, which recognizes exceptional social and economic leadership from sourcing leaders around the world,” said Jeffrey Puritt, president of TELUS International.  “We know that, moving into the future, truly successful companies recognize the need to work in a sustainable and socially responsible way that embraces innovative practices.”

“I believe that Mr. Puritt’s presence among the advisory council members will enrich the experience of this year’s competition for all the participants, staff and the audience,” said Angeline Judex, Executive Director of the GSC 3S Awards program.

 

MEET OUR 2012 APPLICANTS:

3S Community Engagement Award category:

AVASANT (U.S.) – www.avasant.com

Avasant is a global management consulting firm providing services in the areas of Sourcing Advisory, ICT Optimization, and Globalization Advisory. The company provides services in the areas of Strategic Sourcing, Technology Optimization, and Globalization Consulting. One of the company’s goals is empowering the citizens of developing nations by facilitating business development and local job creation.

Community Alliance Network (global) – http://www.theworldcan.org

Community Alliance Network (CAN) is a platform for international actors “to stand in fellowship with rural community leaders towards the advancement of health education and access to legal protection in marginalized and underserved communities.” As part of the GSC 3S Awards program, CAN is presenting its initiative against gender-based violence.

Forgotten (U.S., Uganda) – www.forgottenshirts.com

Forgotten Shirts produces fair trade t-shirts in Uganda, with the idea of empowering African farmers and textile workers by providing jobs and development opportunities, while also providing shoppers around the world with a quality product they can buy at a fair price. Forgotten also empowers Minneapolis teenagers by providing them job opportunities in the U.S.

Glocal Connection (Guatemala) – www.glocalconnection.com

Glocal Connection is a business platform positioning luxury products made with traditional art forms by companies owned by people from local communities. The company designs innovative supply chain solutions for each business unit, which enables them to offer competitive prices without sacrificing sustainability.

Rafflesia Luwak Coffee (Indonesia) – http://www.rafflesialuwakcoffee.org

Established in 2006, Rafflesia Luwak Coffee is the producer of organic kopi luwak coffee and a company that pays particular attention to preserving the surrounding ecosystem, including wildlife, and especially the civet cat, a native cat-like creature that feeds on coffee beans and helps support the coffee production in a purely organic process. Rafflesia Luwak Coffee employs a cooperative business model and all-female workforce, returning a substantial share of income to the local community.

soleRebels (Ethiopia) – www.solerebelsfootwear.co/

Rebels Footwear is a brand of eco-friendly shoes and sandals handmade in Ethiopia, which helps

provide local jobs and business opportunities while maintaining the local craftsmen tradition. soleRebels launched in 2004 with the idea of bringing jobs to Zenabwork, a small village in Addis Ababa, Ethiopia. The brand is now being worn by people in over 30 countries around the world.

Techno Brain BPO ITES Ltd (Kenya) – www.childlinekenya.co.ke, ww.technobraingroup.com

Childline Kenya, by Techno Bran BPO center, is a Non-Governmental Organization working to promote child rights and a culture of child protection in Kenya. The organization achieves this through activities like National Child Helpline 116, a 24 hours national and emergency helpline for children and young people in difficult situations. Techno Brain BPO center empowers Childline Kenya through adaptation of technology allowing easy access to services and information.

VADS (Malaysia) – www.vads.com.my

VADS is a BPO center that empowers the local community by hiring disabled employees and constantly innovating their work space to make it easier for them to use the facilities and fulfill their professional potential and career goals. The entire company is serving more than 500 medium to large businesses across all industries, while specializing in Value Added Services, IT Services and Business Process Outsourcing.

McGraw-Hill Companies (U.S.) – http://www.mcgraw-hill.com/

Over the past several years, McGraw-Hill Companies tackled the challenge of retaining low costs while introducing sustainable and socially responsible practices to its global supply chain. The company achieved its goals step by step, through innovation and developing its strategy for sustainability and ethical practices with patience, research and multiple consultations. One example of the company’s sustainable innovation is the launch of Staples New Online Catalog of Eco-conscious Products or a new corporate strategy to drive sustainability innovation in product manufacturing, packaging and distribution in 2010.

Pt. Iin Era Sejahtera (Indonesia)

Since its establishment in 1998, Pt. Iin Era Sejahtera- a recruitment agency that focuses on increasing the skill level of Indonesian workers by facilitating overseas employment- has sent more than 50,000 Indonesian workers to Hong Kong, Taiwan, Singapore and Malaysia. “Most of these workers have not only changed their life and increased their family economy, but have remitted thousands of US dollars to the Indonesian state,” claims the company.

VOS (U.S.) – https://www.vosflips.com/

VOS is an eco-friendly shoemaker brand that gives back to the local community. The company was started by José Alejandro “Bati,” who also established DeFlores, LLC, mother company of the VOS brand, which is a participant in the United Nations Global Compact program— a strategic policy initiative committed to aligning operations and strategies of businesses with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption. VOS is an eco-friendly brand.

 

3S Out-of-the-Box Award category:

Intel Corporation (U.S.) – www.intel.com

Intel’s efforts on conflict minerals— gold, tantalum, tin, and tungsten— mined in the Democratic Republic of the Congo (DRC) are focused in three main areas: driving accountability and ownership within the supply chain through smelter reviews and validation audits; partnering with key industry associations, including the Electronic Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI); and working with both governments and NGOs to support in-region sourcing.

prAna (U.S.) – www.prana.com

prAna is a fair trade apparel maker, one of the first ones in the United States.
 The company is always looking for new ways to fold the intention of sustainability into their materials and practices, working to reduce the impact on soils, water supplies and other natural resources.
“Every day we learn something new about the world and our need to be global citizens,” reads prAna’s website statement.

Putting the NO in Innovation


By Karen Morris

There is an abundance of “how to” advice on the subject of innovation from letting a thousand flowers bloom to “Open Innovation” to fast prototyping to a myriad other tools and practices.

In conversation with an experienced senior executive recently on innovation strategies, he commented that it was enough if he could just stop the “innovation killers” and tackle the enablers later.

Putting aside the thought that this approach might render me, well, redundant, I saw the wisdom of it.  In much of our innovation work, we have seen that learning new practices can be easier than shedding embedded old practices.  Particularly since the more typical and widespread an assumption or behavior is, the less likely it is to attract the attention of our executive mind.  We are on autopilot.

So if we want to get innovation efforts off the ground, it’s worth taking a look at those autopilot functions that may not be as elevating as we thought.  Here are four of my personal favorite devices for stalling innovation on the runway- in no particular order:

Brainstorming

There are two reasonable answers to the exhortation to “have a brainstorming session”: The first is “let’s not”. The second is “What do you mean by that?”  The second is probably more constructive.  If the answer is to gather people in a conference room to throw some ideas around, then go back to answer one.

Unstructured, undirected “sessions” fail for many reasons.  Who is present?  How much forethought is given to getting the right mix of people and perspectives in the room? How often is it just the same old crew?

What is in the room with you?  And I do not mean the whiteboard. Contributors need to take a good look at the assumptions, status, expertise and predetermined opinions that they bring with them. Most of us needed to be reminded to do this consciously. Otherwise, there risks being a baggage overload.  There are detectors for baggage­ overloads – “Yes, but” is a strong signal.  “We tried that in (insert date of choice)” is another.  “We would never do that here” is more storm than brain. But there are also much more subtle indicators. The conundrum is that the heaviest load, expertise, experience, confident opinions is simultaneously the reason we are there. It takes deliberate and talented facilitation to navigate this dilemma. Unfortunately, in the innovator Chris Conley’s phrase our MEEEP life (meetings, email, email, email PowerPoint) we may underestimate the challenge.

But brainstorm we will.  Be on the lookout for constructive debate as code for clash of egos and rapid consensus as code for conspiracy of silence (usually the latter follows an idea passionately advanced by the most powerful person in the room that will receive no criticism, constructive or otherwise until the water cooler conversation later.)

In fact, genuine brainstorming often occurs in places much more convivial than the conference room.

In conclusion, beware bad brainstorming. It is a significant and skilled task to facilitate an interactive collaborative session that challenges biases and produces fresh perspective. Signals of successful baggage handling:  You were surprised; you gave up a trusted belief; you saw a new connection; your follow-up action item is as daunting as it is exciting.

Idea Generation

This is a particular favorite.  Ask people for their ideas. Since ideas are the raw material of innovation, it is natural to seek them out enthusiastically.  However, the emphasis falls on raw or in the American vernacular “half-baked”.   The threshold question must be what are we requesting ideas for? What is the job to be done or problem to be solved? Too often, idea collection is a mere frog-kissing exercise- if you kiss enough of them, one might tum out to be a prince.

Ideas alone can fill a funnel (the ‘fuzzy” front end) but without the skills and mechanics for evaluation, recombination, constructive analysis, the funnel will jam up and frustration all around will ensue.  This frustration is likely to increase if ideas are linked to individual prizes.  Prize-based competitions for bright ideas work in pure open innovation. They often succeed the first time within a “closed” group such as employees. That is until 99% of the participants feel hard-done by. Then they back-fire.

Constructing rewards and recognition for ideation needs to be done keeping the larger context of a sustaining culture of idea exchange in mind. In this way, the emphasis falls more on exchange than the discrete idea. This is where the real value lies, in the post-idea build-out, greatly increasing the chance that the raw materials become transformed into commercially valuable out-puts. Creating the appropriate incentives will influence short and long term behavior.

The precursor to good ideas is solid insight. Insight comes from observing, questioning, understanding, seeing patterns and connections where others don’t. Mine for insight before you opt for the suggestion-box.

Focus Groups

I love the voice of the customer as much as the next person.

To paraphrase Peter Drucker, we are all in the same business, that of keeping and retaining customers profitably.  It does not automatically follow that customers know what they want outside of incremental improvements or perceived higher value (The famous ECHO response:  What do you want?  More of the same for less.)  The overused- because it makes the point so well­ insight of Henry Ford comes to mind. “If l had asked my customers what they wanted; they would have said a faster horse.”

This is not intended to be an indiscriminate bashing of quantitative and qualitative R&D. Nor am I as absolutist as Malcolm Gladwell’s reputed statement “Focus Groups must die”. Typically the problem derives not from the answer, but the construction of the questions or the exercise.  Focus groups without focus must die. Nonetheless, sharp scrutiny of the real return on focus groups is justified. This is increasingly true as means of generating insight using social sciences become mainstream. Focus groups will decline as the voice and, as neuroscience influences this field exponentially, the mind of the customer can more effectively be understood.

Project Teams

Even I wrestled with this one.  After all, project teams burst forth like spring flowers at the first whiff of innovation.  How else would initiatives move forward?  It’s not in the team but in the time.  People enjoy variety and contributing to special projects successfully.  This is a good thing. Relegating innovation endeavors to extra-curricular activity tacked on to the day-job is less of a good thing.  That’s not to say it is futile.  The important learning is that the secondary and ad hoc additional exercise tends to produce secondary and ad hoc additions to the core business.  This is fine if it is the intended consequence.  It is virtually certain disappointment if expectations are much more ambitious.

An important caveat is the practice of some companies of offering resources, time and the expertise of colleagues to the pursuit of projects of special interest- the 20% rule.  If there is a genuine allocation of dedicated time and/or a corporate culture so intrinsically motivated that volunteerism is in the fabric of the values and function of the organization then the “extracurricular” has actually been made central.  Organizations like this invariably outperform on innovation.  No one would underestimate the challenge of building such a culture in large legacy industry sectors nor the commensurate rewards of success. □

 

Karen A. Morris is a strategic advisor to national and multinational companies. She is formerly Chief Innovation Officer of Chartis Insurance, one of the world’s largest general insurance companies, Karen specializes in all aspects of innovation strategy and execution. She has over 25 years’ experience in law, management, underwriting and multinational business. This rich and diverse international background inspires her insight on product, service and business model innovation. She is a frequent speaker and writer on innovation and leadership at global forums and conferences around the world. Karen is co-founder and President of The Institute for Insurance Innovation launching in 2012.  Karen is also an adjunct professor at Fordham University in New York teaching Innovation as part of the MBA program. She has spoken on innovation at the world’s foremost executive MBA program. You may contact Karen at karen.morris2@yahoo.com.