Archbishop skewers Balls…

… worldsourcing and size matters.

The Most Reverend and Right Honourable Dr John Sentamu is the 97th Archbishop of York and may well be one of the more colourful holders of that post. Appearing on the Andrew Marr show on BBC TV on Sunday morning, he ranted about the shameful situation in Zimbabwe and the lack of leadership shown by other African nations in the effort to remove Robert Mugabe. After accusing Mugabe of robbing people of their identity Sentamu removed his dog collar, a symbol of his identity, and cut it up in front of an astonished Marr. He said he would not wear one again until Mugabe is driven from power.

Then the Secretary of State for Children, Schools and Families, Ed Balls was interviewed on various education issues including SATs. At the end of the programme, Archbishop Sentamu wagged his finger at Ed Balls and said, "If you want to fatten a pig you should feed it, not keep weighing it." Priceless! The only answer that the Secretary of State could come up with was, "That's very interesting."

The BBC has been a rich source of information this week, in this case from their website business pages. William Amelio, CEO of Lenovo, a global PC company, wrote an article that summed up very eloquently the way business is heading in the 21st century. He talks about ‘worldsourcing’ replacing outsourcing. Outsourcing is about lowering costs by shifting non-essential operations to a contractor in order to cut costs. With worldsourcing, all aspects of business - including materials, human talent, innovation, logistics, infrastructure and products - are sourced wherever the best is available.

Amelio sums up: “Worldsourcing is about increasing value and quality, not just lowering costs. All parts of a global enterprise are worldsourced to where the best resources, talent, ideas and efficiencies exist.”

In this new world, nationality is not important. Amelio continues, “My own company presents an example of worldsourcing: I am an American chief executive based in Singapore. Our European President is Dutch and based in Paris. Our chairman, who is Chinese, works from the USA. Meetings of my company's senior managers looks like the United Nations General Assembly.”

He says, “We have just opened a global marketing hub in India and announced a new manufacturing plant and fulfilment operations centre in Poland. Our European operations hub is in Paris, we have fulfilment centres in North America, and factories in China, India, and Latin America.”

Not all companies are operating on the scale of Lenovo, but even quite small businesses are going global. As an example, a few weeks back we ran a business workshop. One of the participants owns a website design business. He had three employees, two of whom are based in the Philippines. So it’s no good being parochial any more. We can try to stem the tide, but King Canute demonstrated the ineffectiveness of that approach. The alternative is to embrace ‘the new world’ and look for areas where we in Britain can provide the ‘best’ solution to a particular element of business. This requires us to be ever more entrepreneurial, more innovative, more enterprising, more creative and more flexible. It means that we have to free our young people to learn, not just to pass exams.

When we talk global companies, we tend to think big. It used to be thought, and indeed still is in some quarters, that big is beautiful, that economies of scale win the day. In a recent article, management guru Tom Peters comments on research carried out by Professor Pankaj Ghemawat at Harvard University's School of Business Administration. This demonstrates that, more often than not, big does not equal beautiful in the business world, or indeed, in the world in general. Depending on what data you look at, the order varies a little, but nevertheless, Luxembourg, Norway, Switzerland, Iceland, Ireland, and Denmark are right at the top of the GDP per capita league. None is exactly a large country, so it seems that Alex Salmond’s Scottish National Party might be on the right track in seeking to separate Scotland from the rest of the UK!

It is only a short while ago that John Reid famously declared that the Home Office wasn’t fit for purpose and it was split into two to try to make it more manageable. And on reflection, merging the Inland Revenue with Customs and Excise to form HM Revenue and Customs, hasn’t proved to be an inspired move!

For 2008, think small!


David Wike