Intangible Loss of Outsourced Innovation

Today’s New York Times front page features “How U.S. Lost Out on iPhone Work” about the loss of American jobs overseas and the implications for our middle class.  I’ve been thinking about the 2^nd, 3^rd order effects of outsourcing, especially now that some companies are either doing or seriously considering insourcing. 

In November, I spoke with Bernard Charlès, CEO of Dassault Systèmes, (DS), creator of 3D simulation products for manufacturing to life sciences. Insourcing is a key component of Dassault and Bernard’s personal values: a company’s role includes contributing to society and the economy through the business itself.

I’ve wondered about the cost-benefit equation of in vs. outsourcing for a while.  Most cost-benefit analysis focuses on tangibles: lower labor rates, higher freight, etc.  Are 2^nd and 3^rd order effects accounted for in the equation: benefits of training and professional/career development, adjacent businesses in manufacturing or services, other opportunities?  I don’t know.  And what about innovation?

I agree with many who believe we learn by doing.   Many innovations arise by trying to do something one way and figuring out a better way or an entirely different way to do it.  If we’ve outsourced the ‘doing’ doesn’t it follow that we’ve outsourced the ‘learning’?   I wonderful how many opportunities for innovation we’ve lost because we weren’t ‘doing’.   In the NYT article, Apple’s executives said the reason for outsourcing went beyond cheap labor; overseas factories could scale faster and workers were more flexible and skilled than in the USA.  Perhaps because they learned to?

While ‘learning from doing’ is not easy to quantify and add into the equation, it needs to be.   Isn’t that an important part of the ‘business case’ for insourcing?  Perhaps it wasn’t viewed as important in the last century, but it sure is for this one. As we rapidly move from knowledge stacks to knowledge flows, per John Hagel, the ability to capture and apply learning becomes one of customer, and competitive, advantage, if not survival – of companies, economies, societies.

So, have you tried to quantify your ‘learning by doing’? Have you made it part of any business case for out/insourcing?  Please share – these are important and valuable lessons.

Mentoring Paradox

I believe mentoring is a gift for the mentee and the mentor.  Throughout my career, I’ve been blessed with incredible mentors who, perhaps unknowingly, taught me how to mentor.   It’s something I take seriously and joyfully. It is a paradox - an incredibly selfless thing that is also very selfish.

Recently, my mentoring has increased.  In addition to mentoring Brown seniors and startups, I’m mentoring Oberlin College students applying for a fellowship to start their business after graduation in May.  Many of these kids were in my recent Business Model Innovation class. They are eager for advice and guidance.  They really listen! For some reason, the stakes seem higher to me than in mentoring 'adults'. For these kids' their first entrepreneur experience will shape their view of entrepreneurship, innovation, success and failure.  That's part of why they are making me a better mentor.  How? They make me challenge my own ‘status quo’ views and improve my ability to ask dumb questions.  Here’s what I have (re)learned from them:

• Status Quo is a powerful Siren Song: It’s so easy to succumb to the status quo; though I fight it, it’s the boiled frog syndrome – and it’s so very human.  When you’ve been doing, investing in and supporting startups and consulting with businesses for a long time, it’s easy to get lulled into thinking you know a lot; and you do, but not everything and not forever.  In our dynamic world, the lifespan of knowledge is increasingly decreasing. I have to challenge my own reasoning and ideas;
• Paradox of Inexperience and Experience:  The blank slate, the fresh naïve perspective these kids have creates innovative solutions to real needs with non-traditional business models for non-traditional customers and markets.  I learn so much about different perspectives, shifting my lens so I see the ‘usual’ in unusual ways. And my clients will benefit from lessons I’ve experienced from the inexperienced.
• Mentor Mentors: Through the network of alumni mentoring women at Brown and my friend Whitney Johnson’s insightful, must read posts about mentoring, I’ve learned how to be a good mentor: what does/doesn’t work, when, why, in which circumstances.  This has also broadened the network I can share with my mentees – teaching them the importance of The Network.

So, take some advice from these kids – start mentoring.  It will stretch you in ways you can’t imagine, let you to share your learnings with others for their success, and provide life-long experiences to be shared, imparted and enjoyed.

Season of Giving - Gift of Work

Tis the giving season.  My kids always ask what I want they can ‘wrap’ instead of ‘do’, like empty the dishwasher, fold laundry, not argue, etc.  They don’t view chores, ‘work’ as a gift.  But, I sure do!

Work has a lot to do with Christmas and Chanukah.  Our work creates gifts and capital for gifts.  It’s not just ‘stuff’.  Work creates products, services, capital…and relationships – with colleagues, employees, bosses, peers, service providers, and suppliers and of course customers.

Bear with me, this may seem circuitous but it ‘works’.  One of the Hebrew words for work (used in the 4^th Commandment) is Melakah: work, occupation, business, workmanship, service, purpose.  Melakah has the same root as mal’ak, which means messenger or angel. Talk about work with meaning and purpose!  

For me, work is a way to deliver a message, it’s a ‘calling’.  To me, melakah implies the actual work AND its outcome.  If we aren’t providing meaningful, purposeful outcomes that meet or exceed our customers’ needs, we won’t be around too long.  Work is about ‘thou’ (other), not about you and me. Which gets back to relationships, doesn’t it?

So, as we prepare for Christmas and Chanukah, take a moment to thank G-d for the gift of work and the gifts of our works.  When we unwrap our gifts, think about the hands that designed, built, packaged, shipped, shelved and wrapped it – rejoice and give thanks.  And, as we prepare for 2012, let’s think about the message we will deliver to those who receive the gifts of our work – and how we can better their work and lives. 

p.s. A special thanks to my friend Michael Stallard for turning me onto Skip Moen’s site which prompted this post.