Competitive Anguish – A Look Beyond the Headlines -- March 18, 2007 (Also appearing in the MBA NewsLink)
The financial newspaper headlines are bleak – stock delisting’s, 60%+ daily stock price declines, record delinquency rates, SEC inquiries, and loss of jobs. Made famous decades ago by singer Don McLean, the haunting lyrics of a prior generation ring ever so true, “… Bad news on the doorstep; I couldn’t take one more step…”. It’s reminiscent of the stock market millennium deterioration just a few short years ago -– everyday some company or person within the industry is in new trouble.
As the unwinding of the prior industry events and organizational decisions unfold in front page media headlines, there is little comfort to be gained as additional misery is still forthcoming. While discrete organizations are certain to fail as a result of historical actions taken, it is the consumer who will ultimately be punished providing the fuel for the next generation of stringent industry, state, and federal regulations, certifications, and compliance standards.
However, even as these events and future actions will be difficult and perhaps unwieldy, there is a hidden risk that must be highlighted. As the industry deals with contraction and increasingly unfocused corporate agendas, our ability to stay competitive and innovative after the damage has been corrected is an increasing liability. Despite the fact that there will be M&A and private equity (PE) pundits that say innovation, productivity, and efficiencies will be increased due to consolidations and “fire sales,” the long-term challenge and opportunity remaining with our industry is the ability to identify, attract, and retain the needed skills for competitive market offerings and solutions. It’s no easy task when the industry ills are splashed daily across global media outlets and the bulk of our attention is focused elsewhere.
These competitive challenges and anxieties are heightened by post 9/11 immigration and visa restrictions, combined with an increase in outsourcing of services due to globalization of workforces. At the same time, as globalization continues to be systematically played out in free-market world economies, the issue of immigration reform will become a dominate theme in the industry’s effort to remain competitive with domestically resident highly skilled workforces. With our politicians in Washington deadlocked and exchanging political slogans, the fundamental issues for securing competitive, skilled personnel will be decided by visionary corporate executives and entrepreneurs.
Large established or multi-national corporations with an ability to capitalize on global workforces will be in the best position to remain competitive and innovative. As quoted in the Financial Times, Bill Gates, Chairman of Microsoft, recently testified before the Senate committee of Health, Education, Labor, and Pensions that, “America cannot maintain its innovation leadership if it does not educate world-class innovators and train it’s workforce to use innovations effectively. Unfortunately we are failing to do so…”. Additionally he said, “It makes no sense to tell well trained, highly skilled individuals, many of whom are educated in our top colleges and universities that the United States does not welcome them or value them. America will find it infinitely more difficult to maintain its technological leadership if it shuts out the very people who are the most able to help us compete.” When the issue is examined holistically, it begs a fundamental assessment -- would outsourcing be increasing at its present post 9/11 rate if our immigration policy was changed regarding the highly skilled and legally valid workforces?
For our embattled industry, we need to take a fresh perspective and examine our opportunities and challenges beyond the headlines. Regardless of courtroom drama and government actions, our competitive anxiety and anguish should be making us all gravely concerned. Just as we recently learned that innovation and competition is not about lowering credit standards, we cannot assume that competitive needs can be met within our existing and aging domestic population base.
Therefore, as we get prepared to attend the MBA Tech, line up our meetings, and arrange to attend “Sushi Social’s,” we need to discuss, debate, and decide where our industry is going and how we (the collective we) are going to deal with this increasing competitive anxiety.
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