Tuesday, August 21, 2012

“Change the Rhetoric or Change Our Name”

To quote the IAOP web site, “With a global community of more than 120,000 members and affiliates worldwide, IAOP is the leading professional association for organizations and individuals involved in transforming the world of business through outsourcing, offshoring, and shared services.”  Considering this position of strength, we have a job to do in correcting an increasingly broad and harmful misconception about our industry.

I am fairly new to IAOP membership, but far from new to the industry, and like the vast majority of our members, I could offer numerous first-hand accounts of significant, measurable business improvement resulting from the strategies suggested by our name.  A couple of these stories are ingrained in my “elevator speech”, for when someone on the plane asks, “So, what do you do?”  (I’m hesitant to reply, “I help companies outsource work”).

And yet, what business strategies have been dragged deeper into the mud recently (at least in North America) more than outsourcing and offshoring?  These very terms have become synonymous for heartless, unpatriotic gutting of the U.S. economy in order to maximize profits.

This phenomenon is not limited to the U.S., because as discourse in U.S. politics and U.S. economics becomes cemented in ideological misconception, our trading partners face an uphill battle in maintaining fair and consistent trade practices.  Nor is it limited to one side of the political spectrum or the other.  Both sides are guilty of grossly over-simplifying the issue in terms of a “bumper sticker philosophy”, with a simple, provocative spin requiring less energy than exploring and explaining the complexities of a multi-tiered, interactive and connected economy.  

This same thing occurred around the implementation of Nafta in the 1980’s as politicians demonized the “shipping of jobs to Mexico”.  However, according to a Wall Street Journal article by John Engler (April 21, 2008), “… in the case of Nafta, that job impact has been almost exactly balanced by increased U.S. production and exports of farm and factory goods.”  The general population can be faulted also, for not expending the energy to intellectually challenge these simplistic positions.

Clearly, we live in a global economy, and one more job in Shanghai or Bangalore does not necessarily mean one less job in the U.S.  An organization’s ability to become more efficient in fact enables them to strengthen their entire operation, many times allowing MORE jobs in sales or service in their home country.  This is NOT a zero-sum game.  GM sells more cars in China than in the U.S., (with a significant level of international content in parts and engineering), and would anyone challenge their right to do so?

To quote the late Peter Drucker in a 1989 Wall Street Journal article entitled “Sell the Mailroom”, which is quite possibly the most sensible piece ever written on the topic, “Systematic innovation in service work is as desperately needed as it was in machine in the 50 years between Frederick Winslow Taylor in the 1870s and Henry Ford in the 1920s.”  When an organization is not free to source goods and services to their relative advantage, this places them at a disadvantage to their competitors elsewhere, and ultimately leads to erosion of their ability to compete, and hence, their ability to sustain employment.

I invite our membership to steer the conversation towards a more logical foundation and help elevate the dialogue on outsourcing and offshoring, not only with or business partners and clients, but with our neighbors, friends, and colleagues.  

Either that, or let’s just change our name and lose the “O” word!
Guest blog by IAOP Member who may or may not be named later, pending company approval...internal bureaucracy.

1 comment:

  1. Excellent point! However, I'm not sure changing the name should be the focus, as outsourcing is an adequate description of what we do. We can spin it any way we want, but for those who don't understand (i.e. not in the industry) - the word "outsourcing" means offshoring - end of discussion. We need to start defending the industry by educating people on exactly what it is we do. Otherwise this debate is sure to never end.