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Gil Laroya Headshot

Why Third World Economies Are Catching Up To Us

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So I'm at lunch with my friends Jeff and Sharyn. They are experienced business development folks who work with a large corporation. As we discuss business here in the US, I am reminded of an experience once while dealing with suppliers in China, where their companies actually share jobs instead of fighting for them. That practice is so different from what we do here, that it doesn't surprise me when I hear that overseas economies are growing while ours inches along like an injured fighting dog. So how does a superpower economy like ours waver in the midst of global competition? The old saying "if you can't beat 'em, join 'em" totally applies here.

Imagine yourself as a project manager, who has at his disposal a collection of employees, each with their own specific talents. A new project comes through the doors, and your first move is to decide who would be best suited for the task. Because everyone works for you, your best bet would be to leverage the skill sets of whomever can get the project going most efficiently. Obviously, if an employee needed special training or tools to do the job, you would probably consider having them work on the project later, after the project has some momentum and time under its belt. By leveraging employees with the most applicable skills, you get the most bang for your buck.

Now picture that scenario, but instead of employees, they are your competitors. Your task now is to "look out" for who is best suited for that project, because they can potentially be the one who takes that job away from you. Ultimately, you end up competing for that project, along with anyone else who thinks they can do that same job.

The first scenario is what's typical overseas; to consider a project like a puzzle, which can be pieced out to various companies, but offered to the end user as a turnkey product. In this scenario, everyone wins something.
The second scenario is what typically happens here in America, and it's one reason why we are shooting ourselves in the foot.

Companies will fight over a potential job, like hungry dogs fighting for a piece of meat. And by this act, we as end users are trained to purposely have them fight each other so that we can end up with the lowest price or fastest lead time. In the end, customers are forced to work with the lowest common denominator, who by the way is still bleeding from the fight (by way of lowering his price enough to get the job).

Our overseas competitors work in alliances, much like Survivor. They team up, and combine their powers to be able to accept any project that comes by, and then through sheer trust they divide the project up by skill set to make the project happen. At the end of their day, everyone got to work on something, and the end user got a complete product without having to go to five different suppliers.

For some reason, we just can't fathom that here in America. The closest we have ever gotten has been to take over smaller companies and consolidate into a large corporation that inherits various skill sets. But have you ever tried going to an IBM to buy a USB cable? It is an effort in futility, to put it mildly.

The other issue that we have here lies in how we work with start ups -- those tiny, innovative companies that start in a person's garage and burgeon into multi-million dollar acquisitions. Large corporations will swallow up a start up, and instantaneously lose all of the innovation and quick turnaround that the start up used to provide. All for some semblance of control, apparently.

We fight each other for work, while our overseas competitors share the wealth. Plain and simple. But instead of learning from this, we feed into it by sending our own jobs to our global competition. Somehow that doesn't make a whole lot of sense.

Ultimately, our overseas competition has learned to tackle the economic giant that is the USA, by gathering all of the villagers together in a common effort -- and it's working. Just walk down the aisle of a Walmart, and try to find something made in the US.

Corporate America needs to wake up to the reality that our competitors have become our suppliers -- yeah that hurts, doesn't it?

Made In America can become a reality again, once we learn as a country that business isn't all about "every man for himself", nor should it be. We have to learn to generate our own alliances in country, and not be tempted to go where the material or labor is cheaper.

Because if we continue to do what we do now, we will soon cease to be a global leader, and instead we will become just another customer...