cont'd from
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The six Hexawarians are sympathetic but unmoved. They disagree with the very
premise that cheap labor is hurting the US. And they think it's somewhat
laughable that, because things aren't going exactly our way, ordinarily
change-infatuated Americans are suddenly decrying change. "Back in the US,
it's all about cheap, cheap, cheap. It's not only about India being cheap.
It's quality services," says Jairam's colleague Kavita Samudra, who works on
applications for the airline industry. "The fact that they're getting a
quality product is why people are coming to us."
Ritesh Maniar reminds me that Hexaware has scored a Level 5 rating from
Carnegie Mellon's Software Engineering Institute, the highest international
standard a software company can achieve. The others are quick to note that,
of the 70 or so companies in the world that have earned this designation,
half are from India. Over several days, here and at other companies, I hear
this factoid repeated like a campaign talking point.
Translation: We're not just cheaper, we're better.
And that, they say, is good for everyone. Maniar, a senior technical
architect, describes one American client: "We helped them become
process-oriented, which they were not before. They were spending again and
again on the same thing. We explained the process that we follow, because we
would like to bring them up to our standards."
"Don't you think we're helping the US economy by doing the work here?" asks
an exasperated Lalit Suryawanshi. It frees up Americans to do other things
so the economy can grow, adds Jairam.
What begins to seep through their well-tiled arguments about quality,
efficiency, and optimization is a view that Americans, who have long
celebrated the sweetness of dynamic capitalism, must get used to the concept
that it works for non-Americans, too. Programming jobs have delivered a nice
upper-middle-class lifestyle to the people in this room. They own
apartments. They drive new cars. They surf the Internet and watch American
television and sip cappuccinos. Isn't the emergence of a vibrant middle
class in an otherwise poor country a spectacular achievement, the very
confirmation of the wonders of globalization - not to mention a new market
for American goods and services? And if this transition pinches a little,
aren't Americans being a tad hypocritical by whining about it? After all,
where is it written that IT jobs somehow belong to Americans - and that any
non-American who does such work is stealing the job from its rightful owner?
Maybe these US programmers should simply adjust. That's what Indian textile
workers did when their country's government opened its quasi-socialistic
economy in 1991, says Jairam. Some people lost jobs. They complained, but
they found something else to do. Maniar uncorks an aphorism that he doesn't
realize I've heard 8,000 times before (in part because American white-collar
workers have long said it to their blue-collar compadres) - and that I don't
realize I'll hear several times again during my stay: "There's nothing
permanent except change."
Back in the US, you can feel the rage. Application developer Mike Emmons of
Longwood, Florida, for example, is running for Congress on a platform that
calls for the end of outsourcing. Emmons also wants to curtail temporary
work visas for immigrant programmers, such as the always controversial H1-B
and its stealthier counterpart, the L-1, which he says have cost him and
other American programmers their jobs. "These cats will lie through their
teeth," Emmons says, referring to incumbent members of Congress like the one
he's trying to oust. "They're using immigration to reduce the wages of
Americans." Other programmers, once resolutely go-it-alone apolitical types,
have formed advocacy groups with righteous names like the Rescue American
Jobs Foundation, the Coalition for National Sovereignty and Economic
Patriotism, and the Organization for the Rights of American Workers.
One such group has adopted a friendlier title, the Information Technology
Professional Association of America. But its founder, 37-year-old Scott
Kirwin, voices the same indignation. "I'm very pissed off," he tells me over
lunch in Wilmington, Delaware, where he lives. "I want to make people aware
of what's going on with outsourcing."
Kirwin was a latecomer to the IT world. After college, he lived in Japan for
five years, then returned to the States hoping to join the US Foreign
Service. He didn't get in. In 1997, he and his wife moved to Wilmington, her
hometown, and he took a job at a tech support company outside Philadelphia,
where he learned Visual Basic. Kirwin discovered that he loved programming
and did it well. By 2000, he was working at J.P. Morgan in Newark, Delaware,
providing back-office database services for the firm's bankers around the
world. But after Morgan merged with Chase, and the bloom left the boom, the
combined firm decided to outsource the responsibilities of Kirwin's
department to an Indian company. For nine months, he worked alongside three
Indian programmers, all on temporary visas, teaching them his job but
expecting to stick around as a manager when the work moved to India. Last
March, Kirwin got his pink slip.
The experience did more than capsize his work life. It battered his belief
system. He's long espoused the virtues of free trade. He says that he
supported Nafta and that for 12 years he's subscribed to The Economist, a
hymnal in the free trade church. But now he's questioning core beliefs.
"These are theories that have really not been tested and proven," he says.
"We're using people's lives to do this experiment - to find out what
happens."
"I'm not religious," he tells me. "But I believe that everyone has to have
faith in one thing. And my faith has been in the American system." That
conviction is weakening. "Politicians are not aware of the problem that
information workers are facing here. And it's not just the IT people. It's
going to be anybody. That really worries me. Where does it stop?"
Seventy miles up the Northeast Corridor is a politician who is asking that
very question - and who, in the process, has become something of a folk hero
to programmers like Kirwin. Shirley Turner represents the 15th District in
the New Jersey State Senate. In 2002, Turner learned that eFunds, the
company that administers electronic benefits cards for the state's welfare
recipients, had moved its customer service jobs from the US to a call center
in Mumbai. She was stunned that the jobs were going overseas - and that
taxpayer dollars were funding the migration. So Turner introduced
legislation to ban the outsourcing of any state contracts to foreign
countries.
Word of Turner's actions rippled across the Internet. Over the last year,
she says, she's received more than 2,000 letters and emails from around the
country - mostly from programmers. "I had no idea what these people were
going through with outsourcing in the private sector," Turner told me at her
district office in Ewing, New Jersey, just outside Trenton.
Turner's bill passed the state senate by a 40-to-0 vote. But it got bottled
up in the assembly, thanks to the efforts of Indian IT firms and their
powerhouse Washington, DC, lobbying firm, Hill & Knowlton. However, eFunds,
chastened by the bad publicity and eager for more state contracts, moved its
call center from Mumbai to Camden, New Jersey. And this former small-time
civil servant found herself articulating what might be the political
philosophy of the Pissed-Off Programmer.
Turner's office is decorated in early politico. Framed pieces of legislation
hang on the wall. Large New Jersey and US flags stand behind her imposing
desk. Her credenzas are crammed with photos of herself rubbing shoulders
with various dignitaries, including three shots of her clasping hands with
Bill Clinton. She's good at what she does - so smart and likable that she
can make what many would consider retrograde views sound eminently
reasonable. After talking to her for 10 minutes, I think, if Ross Perot had
picked her as his running mate, he might have had a shot.
"We can't stop globalization," Turner says. But outsourcing, especially now,
amounts to "contributing to our own demise." When jobs go overseas,
governments lose income tax revenue - and that makes it even harder to
assist those who need a hand. Losing IT jobs has particularly frightful
consequences. In a jittery world, "it's really foolish for us to become so
dependent on any foreign country for those kinds of jobs," she says. What's
more, she continues, it imperils the US middle class. "If we keep going in
this direction, we'll have just two classes in our society - the very, very
rich and the very, very poor. We're going to look like some of the countries
we're outsourcing to."
Her solution is simple: America first. Support American firms. Put Americans
back to work. And only then, after we reach full employment, will
outsourcing be an acceptable option. "If we can't take care of our own
first, we shouldn't be looking to take care of other people around the
world," she says. "If you're a parent, you don't take care of everybody on
the block before you make sure your own children have their basic needs
met."
It all sounds so 20 years ago - when the threat to economic prosperity and
national sovereignty was not Indian coders but Japanese autoworkers. Back
then, the predictions were equally alarmist - the "hollowing out" of
America, people called it. And the prescriptions were equally blunt - trade
sanctions and "Buy America" campaigns.
So I toss a slur across her desk. I call her a protectionist.
"Oh, and I'm proud of it," she responds. "I wear that badge with honor. I am
a protectionist. I want to protect America. I want to protect jobs for
Americans."
"But isn't part of this country's vitality its ability to make these kinds
of changes?" I counter. "We've done it before - going from farm to factory,
from factory to knowledge work, and from knowledge work to whatever's next."
She looks at me. Then she says, "I'd like to know where you go from
knowledge."
Another day, another global menace. Today I'm at Patni, the software company
where Aparna Jairam worked for two years in the late '90s. Patni's
headquarters sits in another section of Mumbai - and as at Hexaware, the
contrast between inside and outside is stark. Its interior is Silicon Valley
circa 1999 - curvy door handles, funky chairs, a rooftop patio, and a pool
table. But when I glance out an office window, just beyond the sidewalk I
see a family living in a makeshift dwelling of plywood and tattered plastic.
Patni differs from Hexaware in a few important ways. For starters, it's
bigger. Patni is India's sixth-largest software and services exporter;
Hexaware ranks 18th. Patni employs about 6,500 people in offices all over
the world and has a long-standing relationship with GE and a $100 million
investment from the venture capital firm General Atlantic Partners. It also
has a more secretive atmosphere. I'm not allowed to ask certain questions
(including how much money the workers earn). When I set up my tape recorder
for interviews, my ever present Patni minder pulls out his own tape
recorder. Although security cameras abound, I'm not allowed on certain
floors unless Patni's director of security accompanies me.
Yet for all this muscle-flexing, Patni remains a relative pipsqueak. Its
2002 revenue was about $188 million. That same year, the American IT firm
EDS hauled in revenue of $21.5 billion. There's something adolescent about
Patni - indeed, about many Indian IT firms. They're growing quickly, but
they still don't quite seem like full-fledged adults. From an Indian
perspective, though, this moment is understandably invigorating. The country
now has the second-fastest-growing economy in the world. Within four years,
IT outsourcing will be a $57 billion annual industry - responsible for 7
percent of India's GDP and employing some 4 million people.
But from an American perspective, the threat this poses seems pretty meager.
A $57 billion market represents about 0.5 percent of US GDP. And for added
perspective, it's important to continue looking out those windows. India has
a long way to go. Nearly a quarter of the country lives in poverty. The
telecommunications infrastructure is subpar. And modernity stands just steps
away from ancient animosities. The week I was in Mumbai, global business
guru and former MIT dean Lester Thurow was in town trumpeting the
possibilities of "Brand India" - as militants planted bombs in taxis and
killed 53 people.
Nonetheless, as with all adolescents, through the gangliness and
overconfidence you can glimpse the contours of the future. Patni's hallways
are filled with the air of inevitability. Project manager Aditya Deshmukh
worked in Baltimore and New Jersey for three years but has no desire to
return to the States; India's where the action is. More than half of the
Fortune 500 companies are already outsourcing work to India. One reason:
Nearly every educated person here speaks English. For India - especially in
its competition with China, where few have mastered Western languages -
English is the killer app. This company and this industry will undoubtedly
grow bigger, stronger, and smarter. That represents a threat to the status
quo in the US. But such threats are an established pattern in our history.
As Deshmukh reminds me before I have a chance to cover my ears and flee,
"Change is the only constant."
A century ago, 40 percent of Americans worked on farms. Today, the farm
sector employs about 3 percent of our workforce. But our agriculture economy
still outproduces all but two countries. Fifty years ago, most of the US
labor force worked in factories. Today, only about 14 percent is in
manufacturing. But we've still got the largest manufacturing economy in the
world - worth about $1.9 trillion in 2002. We've seen this movie before -
and it's always had a happy ending. The only difference this time is that
the protagonists are forging pixels instead of steel. And accountants,
financial analysts, and other number crunchers, prepare for your close-up.
Your jobs are next. After all, to export sneakers or sweatshirts, companies
need an intercontinental supply chain. To export software or spreadsheets,
somebody just needs to hit Return.
What makes this latest upheaval so disorienting for Americans is its speed.
Agriculture jobs provided decent livelihoods for at least 80 years before
the rules changed and working in the factory became the norm. Those
industrial jobs endured for some 40 years before the twin pressures of cheap
competition overseas and labor-saving automation at home rewrote the rules
again. IT jobs - the kind of high-skill knowledge work that was supposed to
be our future - are facing the same sort of realignment after only 20 years
or so. The upheaval is occurring not across generations, but within
individual careers. The rules are being rewritten while people are still
playing the game. And that seems unjust.
Couple those changed rules with the ham-fisted public relations of the
American companies doing the outsourcing and it's understandable why
programmers are so pissed. It makes sense that they're lashing out at the
H1-B and L-1 visas. US immigration policies are a proxy for forces that are
harder to identify and combat. It's easier to attack visible laws than it is
to restrain the invisible hand. To be sure, many of these policies,
especially the L-1, have been abused. American programmers have done an
effective job of highlighting these abuses - and during an election year,
Congress will likely enact some reforms. But even if these visa programs
were eliminated altogether, not much would change in the long run.
Patni's head of human resources, Miland Jadhav, compares the Pissed-Off
Programmers' efforts to the protests that greeted Pizza Hut's arrival in
India. When the chain opened, some people "went around smashing windows and
doing all kinds of things," but their cause ultimately did not prevail. Why?
Demand. "You cannot tell Indian people to stop eating at Pizza Hut," he
says. "It won't happen." Likewise, if some kinds of work can be done just as
well for a lot cheaper somewhere other than the US, that's where US
companies will send the work. The reason: demand. And if we don't like it,
then it's time to return our iPods (assembled in Taiwan), our cell phones
(manufactured in Korea), and our J. Crew shirts (sewn in Indonesia). We
can't have it both ways.
Still, if you're 61 years old, it makes sense to borrow a page from Charlie
Chaplin and try to throw a wrench into the machine. John Bauman is 61 years
old. More than a year ago, Northeast Utilities fired Bauman and 200 other IT
consultants. From his home in Meriden, Connecticut, he created the
Organization for the Rights of American Workers. The mission: to protest
H1-B and L-1 visas. He feels that if he can slow things down, he stands a
chance. When I speak to him by phone one afternoon, I offer the standard
defense of globalization and free trade - that they disrupt in the short
term but enrich over time. But it's hard to make this argument with much
gusto to a man who, faced with his unemployment benefits running out, had to
take a temporary job delivering boxes for FedEx. The invisible hand is
giving him the finger. A compassionate society must somehow help its John
Baumans.
But the rest of us, like it or not, will have to adjust. The hints about how
to make this adjustment are evident at Patni. As I meet programmers and
executives, I hear lots of talk about quality and focus and ISO and CMM
certifications and getting the details right. But never - not once - does
anybody mention innovation, creativity, or changing the world. Again, it
reminds me of Japan in the '80s - dedicated to continuous improvement but
often at the expense of bolder leaps of possibility.
And therein lies the opportunity for Americans. It's inevitable that certain
things - fabrication, maintenance, testing, upgrades, and other routine
knowledge work - will be done overseas. But that leaves plenty for us to do.
After all, before these Indian programmers have something to fabricate,
maintain, test, or upgrade, that something first must be imagined and
invented. And these creations must be explained to customers and marketed to
suppliers and entered into the swirl of commerce in a fashion that people
notice, all of which require aptitudes that are more difficult to
outsource - imagination, empathy, and the ability to forge relationships.
After a week in India, it seems clear that the white-collar jobs with any
lasting potential in the US won't be classically high tech. Instead, they'll
be high concept and high touch.
Indeed, Kirwin, the programmer in Delaware, partly confirms my suspicion.
After he lost his job at J.P. Morgan, he collected unemployment for three
months before he found a new job at a financial services company he prefers
not to name. He's now an IT designer, not a programmer. The job is more
complex than merely cranking code. He must understand the broader
imperatives of the business and relate to a range of people. "It's more of a
synthesis of skills," he says, rather than a commodity that can be
replicated in India.
Kirwin still believes the job is "offshorable," though I'm less certain. And
he's earning less than he did at J.P. Morgan, though the downturn is much to
blame for that, as it is for at least part of the broader anxiety that
programmers are feeling.
But Kirwin does begin to address Senator Turner's question. Back in New
Jersey, she introduced what appeared to be an unanswerable riddle: What
comes after knowledge? The answer, perhaps, is an update of the slogan that
appears in giant steel-and-neon letters on the Trenton Bridge, just a few
miles from Turner's office. That slogan, affixed to the bridge in 1935 to
proclaim the region's manufacturing strength, reads TRENTON MAKES - THE
WORLD TAKES. Now that the rest of the world is acquiring knowledge, and
we're moving to work that is high concept and high touch, where innovation
is essential but the path from breakthrough to commodity is swift, the more
appropriate slogan - of both admonition and possibility - might be this:
AMERICA DISCOVERS. THE WORLD DELIVERS.
It's a soggy, breezy Saturday afternoon - and I'm hanging out with Aparna
Jairam and her husband, Janish, in their comfortable sixth-floor flat in
suburban Mumbai. Janish, who also works in the IT industry, is a genial
fellow whose laid-back friendliness nicely complements his wife's quiet
intensity. We're drinking tea, eating vadas, and discussing the future.
"Someday," Janish says, "another nation will take business from India."
Perhaps China or the Philippines, which are already competing for IT work.
"When that happens, how will you respond?" I ask.
"I think you must have read Who Moved My Cheese?" Aparna says to my
surprise.
Janish gets up from the couch, and to my still greater surprise, pulls a
copy from the bookshelf.
Who Moved My Cheese? is, of course, one of the best-selling books of the
past decade. It's a simpleminded - and, yes, cheesy - parable about the
inevitability of change. The book (booklet is more like it - the $20
hardcover is roughly the length of this article) is a fable about two
mouselike critters, Hem and Haw, who live in a maze and love cheese. After
years of finding their cheese in the same place every day, they arrive one
morning to discover that it's gone. Hem, feeling victimized, wants to wait
until somebody puts the cheese back. Haw, anxious but realistic, wants to
find new cheese. The moral: Be like Haw.
Janish gave Aparna a copy of the book for their wedding anniversary last
year. (He inscribed it, "I am one cheese which won't move.") She read it on
a Hexaware commuter bus one morning and calls it "superb."
The lesson for Aparna was clear: The good times for Indian IT workers won't
last forever. And when those darker days arrive, "We should just keep moving
with the times and not be cocooned in our little world. That's the way life
is." Or as Haw more chirpily explains to his partner, "Sometimes, Hem,
things change and they are never the same. This looks like one of those
times. That's life! Life moves on. And so should we."
If you're among the pissed off, such advice - especially coming from talking
rodents chasing cheddar around a maze - may sound annoying. But it's not
entirely wrong. So if Hem and Haw make you hurl, return to where Aparna
began when I met her that first day - the sacred text of Hinduism, the
Bhagavad Gita, whose 700 verses many Indians know by heart.
The Gita opens with two armies facing each other across a field of battle.
One of the warriors is Prince Arjuna, who discovers that his charioteer is
the Hindu god Krishna. The book relates the dialog between the god and the
warrior - about how to survive and, more important, how to live. One stanza
seems apt in this moment of fear and discontent. "Your very nature will
drive you to fight," Lord Krishna tells Arjuna. "The only choice is what to
fight against."
The Indian Machine
Computers threatened our jobs, but ultimately made us stronger. So will
outsourcing.
by Chris Anderson
Worried about India's practically infinite pool of smart, educated,
English-speaking people eager to work for the equivalent of your latte
budget? Get used to it. Today's Indian call centers, programming shops, and
help desks are just the beginning. Tomorrow it will be financial analysis,
research, design, graphics - potentially any job that does not require
physical proximity. The American cubicle farm is the new textile mill, just
another sunset industry.
The emergence of India is the inevitable result of the migration of work
from atoms to bits: Bits can easily reach people and places that atoms
cannot. India's roads and politics are still a mess, but cheap fiber and a
glut of satellite capacity have liberated an army of knowledge workers.
Never before have we seen such a powerful labor force rise so quickly.
There is some solace in history. Agricultural jobs turned into even more
manufacturing jobs, which decades later turned into even more service jobs.
The cycle of work turns and turns again. Neat.
Of course, there's another part of the cycle: anxiety. It used to be that
factory workers worried, but office jobs were safe. Now, it's not clear
where the safety zone lies. It's not a matter of blue collar versus white
collar; the collar to wear is Nehru.
For US workers, the path beyond services seems uncertain. But again, history
provides a guide. Thirty years ago, another form of outsourcing hit the US
service sector: the computer. That led to a swarm of soulless processing
machines, promoted by management consultants and embraced by profit-obsessed
executives gobbling jobs in a push for efficiency. If today's cry of the
displaced is "They sent my job to India!" yesterday's was "I was replaced by
a computer!"
Then, as now, the potential for disruption seemed infinite. Data crunching
was just the start. Soon electronic brains would replace most of the
accounting department, the typing pool, and the switchboard. After that, the
thinking went, the modern corporation would apply the same technology to
middle management, business analysis, and, ultimately, decisionmaking. If
your job was emptying an inbox and filling an outbox, you were begging for
someone to draw the I/O analogy - and act on it. Indeed, computer
terminology is littered with traces of what were formerly jobs: printers,
monitors, file managers; even computers themselves used to be people, not
machines.
Computers have, of course, reshaped the workplace. But they have also proved
remarkably effective at creating jobs. Bookkeepers of old, adding columns in
ledgers, are today's financial analysts, wielding Excel and PowerPoint in
boardroom strategy sessions. Secretaries have morphed into executive
assistants, more aides-de-camp than stenographers. Typesetters have become
designers. True, in many cases different people filled the new jobs, leaving
millions painfully displaced, but over time the net effect was positive -
for workers and employers alike.
At the same time, we learned the limits of computers - especially their
inability to replace us - and our fear of a silicon invasion diminished. The
growing détente was reflected in 40 years of Hollywood films. Desk Set, from
1957, was about a research department head who keeps her job only after a
battle of wits with a computer (the machine blows up). By 1988, the computer
had moved from threat to weapon: In Working Girl, Melanie Griffith has both
a stock market terminal and a PC on her desk and uses her skills and
knowledge to move from secretary to private office. By the time Mike Judge
made Office Space in 1999, the PC had faded into just another bit of cubicle
furniture.
We are now in the Desk Set period with India. The outsourcing wave looks
awesome and unstoppable. Like the mystical glass house of the 1970s data
processing center, India's outsourcing industry thrums with potential and
power, as if it were itself a machine. Today, the outsourcing phenomenon is
still mostly in the batch-processing stage: Send instruction electronically,
receive results the same way the next morning. But the speed at which the
Indian tech industry is learning new skills is breathtaking. Some US firms
now outsource their PowerPoint presentations to India, a blow to the pride
of managers everywhere. From this perspective, India looks like an
artificial intelligence, the superbrain that never arrived in silico. No
wonder workers tremble.
But the Melanie Griffith phase is coming, as is the Mike Judge. It's not
hard to see how outsourcing to India could lead to the next great era in
American enterprise. Today, even innovative firms spend too much money
maintaining products: fixing bugs and rolling out nearly identical 2.0
versions. Less than 30 percent of R&D spending at mature software firms goes
to true innovation, according to the consulting firm Tech Strategy Partners.
Send the maintenance to India and, even after costs, 20 percent of the
budget is freed up to come up with the next breakthrough app. The result:
more workers focused on real innovation. What comes after services?
Creativity.
Chris Anderson (ca@xxxxxxxxxxxx) is Wired's editor in chief.
Will Work for Rupees
US jobs are fleeing overseas...
United States
GDP per capita $35,060
Unemployment rate 5.8%
Labor force 141.8 million
Population below the poverty line 13%
Typical salary for a programmer $70,000
... and heading to the subcontinent ...
India
GDP per capita $480
Unemployment rate 8.8%
Labor force 406 million
Population below the poverty line 25%
Typical salary for a programmer $8,000
Top 5 US Employers in India
General Electric 17,800 employees
Hewlett-Packard 11,000 employees
IBM 6,000 employees
American Express 4,000 employees
Dell 3,800 employees
... where the work gets done for a fraction of the price.
The Outsourcer
This man just convinced the CEO to send your job to India. Kiss your cubicle
good-bye.
by Josh McHugh
US companies are expected to ship more than 200,000 service jobs to
countries like India every year for the foreseeable future. The simple
concept at the root of this trend: A trained third world brain is every bit
equal to a trained American brain, at a fraction of the price. Which is not
to say a CEO's decision to embark on an outsourcing strategy is ever simple.
By nature, CEOs are averse to appearing heartless by taking a job from a
member of the community and handing it to someone very far away. When it
comes time for such ruthlessly efficiency, a CEO needs motivation. He needs
a management consultant.
Gut-wrenching change is always good business for consulting firms, and
outsourcing is no exception. After two horrible years for the consulting
industry, spending on consulting services is expected to jump 9 percent over
the next two years, invigorated by the sudden need for advice on sending
tech jobs abroad, according to Kennedy Information. In the last few years,
the major consultancies have all beefed up their outsourcing divisions.
For an inside take on the consultant's role in pushing jobs overseas, listen
to Mark Gottfredson. As cohead of outsourcing strategy at Bain & Company,
Gottfredson tells the tale of a recent client, a CEO who was brought back
from retirement to save the struggling West Coast hardware firm he started
many years ago. A pillar of the community for having created thousands of
local jobs, the CEO originally resisted outsourcing. But as his stock price
and market share plummeted, he became desperate, and agreed to take a
meeting with Gottfredson.
Gottfredson's team paraded out a variety of charts and graphs that all
boiled down two simple options: a) become competitive again by sending jobs
someplace they could be done better and cheaper, or b) face a slow death.
The CEO ordered a complete efficiency audit, at the end of which Gottfredson
recommended outsourcing all call centers, manufacturing, HR, IT, and
back-office operations.
Exasperated, the CEO relented and has since trimmed $130 million from his
expenses. What's left of the company? Whatever it is, it's leaner and more
competitive, and, most important, it's still alive. Gottfredson is utterly
unapologetic. "The beauty of our system is that we've always had the
ingenuity to come up with new things to do," he says. "This country has an
endless supply of initiative and drive." Easy for him to say.
Daniel H. Pink (dp@xxxxxxxxxxx) is the author of Free Agent Nation and the
forthcoming A Whole New Mind.
Copyright © 1993-2003 The Condé Nast Publications Inc. All rights reserved.
Copyright © 1994-2003 Wired Digital, Inc. All rights reserved.