outsourcingI am writing this blog post in India where we are doing a project for one of India’s largest companies. This project is designed to help a large call center (18,000 people) move from just executing scripts to finding ways to add more value for its customers. The underlying driver is management’s belief that the lower-level, low-cost work that had been the basis for their growth is going to be replaced by automation and even lower cost providers. Thinking ahead, management is looking for ways to move from just answering phones to adding some real value, like reading x-rays and helping with approval for loans and similar functions. I have some ambivalence about this work. I wonder if I am being disloyal to my country by helping an Indian company, since this work is very likely to result in jobs currently performed in the U.S. moving to India. On the other hand, as a capitalist, CEO and owner of a company, I have a fiduciary responsibility to my company (Cerebyte) to pursue good business wherever it is. India is the hub of much of the current political debate about outsourcing jobs and trade treaties. Where should my loyalties lie to my country or to capitalism? There’s clearly a conflict—I can’t do both. I came down on the side of capitalism for several reasons, including:

  • – This is an excellent, high revenue opportunity that will enable us to be part of a global company. I simply could not, in good conscious, reject the business.
  • – U.S. companies have access to our capabilities too and could be moving up the value chain just like the Indian company. However, few are really making these efforts. I can’t be responsible for weak decision-making in the U.S. that puts American companies in a relatively poor position.
  • – In spite of some politicians making promises to somehow roll-back globalization (which can’t be done), the internet, easy and relatively inexpensive air travel and the spread of English as the language of international business, it’s clear that globalization is inevitable and ultimately a good thing.
So, in a sense, I am similar to the many executives who, when faced with an opportunity to either do business in India versus retain U.S. jobs, chooses the former. Let me be clear, we are not exporting jobs; we’re just something of an enabler of the exporting of jobs. I also see many implications for my country that I really don’t like. I see leadership of many U.S. businesses using India as an easy solution, primarily for cutting costs and neglecting the opportunity to find ways to add more value for their U.S.-based workers. Perhaps if the U.S. companies were more aggressive at developing better leadership and adding value, like working to be more globally competitive, this wouldn’t be an issue. Let me be explicit. Outsourcing is due to decisions by U.S. executives looking at globalization, not some political conspiracy. It’s just business as usual—with the exception of odd tax laws that promote things like corporate inversions. In fact, I am quite annoyed with the risk-aversion and general passivity of U.S. leadership when compared to what’s going on globally. We deserve to be clobbered if we don’t do better. The related problem is that executives get rewarded for these decisions and keep their jobs. While their workers, especially the lower-skilled ones, get displaced. Displaced workers are legitimately angry because the executives don’t care about them. Additionally, certain segments in the government (even while complaining about foreign competition) won’t do anything to help these workers. In the absence of institutional support for them, displaced workers’ only option is to make themselves more globally competitive by upgrading their skills. Complaining about outsourcing won’t do anyone any good. It appears we have a paradox: globalization and good business decision-making actually require executives to move work around the world and displace workers, and this can’t be stopped. The only solution is for every organization and worker in the U.S. to focus on ways to add value, just like this Indian company is doing. How are you adding value to your organization?]]>

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