Sign of the Times

In perhaps the most significant recognition of the beginning of the new world economy everyone should take note of a Newsweek Article, Where the Jobs Are.

Foreign companies, via various internet placement agencies, are hiring contract workers in the US at a rate that is four times greater than just a year ago—and I would bet, a fraction of what it will be in five years.  As foreign corporations in Russia, Brazil, India, China, etc. , strive to meet the incredible growth opportunities in their own countries, good ‘ole American know how, skills and work ethic will be in ever-increasing demand.

Today these overseas jobs are being accepted mainly  because of  the current US recession and, as such, the wages paid may also be comparatively low, but that won’t be the case in the very near future. What is now termed as “reverse outsourcing” will become as impossibly mainstream as it seemed home computers would be two decades ago when (as  popular legend has it, Bill Gates) was informed by investors that personal computers were a great idea, but that they would never catch on.

Those people  lucky enough to be gaining priceless experience working for foreign companies (not traveling anywhere, mind you—they’re working from ordinary places like Tampa, Florida and Flint , Michigan)–including their cultures, their logic and more—will definitely have a huge head start on understanding how to succeed in the new world economy.

As I’ve said time and time again, EVERY PERSON who is in business  or who is carving out a career path in this day and age will need to learn how to work and communicate effectively with other cultures in order to be  truly successful.  Whether you’re a global entrepreneur or a graphic artist living in Omaha, the insights from the book Lies, Bribes & Peril will prove invaluable!

FORD IN BRAZIL

As if more proof of the speed and “nowness” of globalization is necessary—on top of the likes of McDonald’s, Yum Brands & Caterpillar—this video provides a fascinating look at what Ford is doing in one of the world’s fastest growing and “regulation friendly” foreign markets.

Not only is the whole idea brilliant,  it also provides a look at a fundamental change in business philosophy about today’s global marketplace (one that has brought Ford out of the automotive Middle Ages). The main underlying reason why this plant could never be built in the United States (given at the end of the video) is a genuine wake up call!

No matter what global market or markets one may work in, reading my book, Lies, Bribes & Peril, will assure a leg up on success. Check out Ford in Brazil: http://bit.ly/fordinbrazil

Organizational Corruption is Rarely Isolated; It’s Systemic.

In one of the largest criminal fraud cases to be brought by the US Government in recent years a Kuwaiti owned logistics firm, Agility, was indicted last February for multiple instances of fraud and other crimes totaling (what has been reported to be) as much as two billion dollars.  Yes, that’s billion—with a “B”—dollars.

The criminal indictment issued by the US District Court in Atlanta is public domain and is available on many web sites.  It includes two conspiracy counts alleging (in simple terms) fraudulent large-scale over-billing, fraudulent large-scale concealment of distribution fees into item pricing, fraudulent retention of rebates from vendors, and fraudulent  large-scale repackaging of items. The indictment counts detail a time-line of fraudulent behavior from June of 2003 to December of 2008 and lists dozens of instances, meetings, communiques, and transactions covering contracts totaling about 8.5 billion dollars (whew, now it’s easy to see how the fraud could be a much as two billion). It’s a pretty damning document.

This week the indictment was amended to include the major US subsidiary, Agility Defense and Government Services (DGS) headquartered in Alexandria, Virginia, that seems to have been the contracted and operational entity. Lawyers for Agility DGS have pleaded ‘not guilty’ even though recent news reports suggest there are negotiations underway between the US District Attorney’s office and Agility that would have Agility pay 750 million to avoid a trial (now—in my understanding of the world—no organization pays three-quarters of a billion dollars if its’ innocent).  Also see Article in Atlanta Journal-Constitution.

Agility is a competitor in my industry so I have been closely watching the events unfold from a couple of viewpoints. First, as one of the largest competitors in my industry their demise would certainly be a boon to not only my company but other logistics companies as well; so I can’t say I’d be sad to see them crippled by their own folly.

Secondly, I’m keenly interested from an international corruption standpoint how the USG resolves the matter—I certainly hope it’s with greater impact than the 2008 Siemens corruption scandal.

In the Siemens matter no one went to jail and—incredibly—Siemens was not barred from doing business with the US Government.  ((I wrote a Letter to the Editor about the Siemens incident that was published in the Wall Street Journal on December 24, 2008:  If You Do the Crime, You Should Do the Time.)

Roughly half of Agility’s revenues come from business with the US Government and if any non-trial resolution of the indictment allows Agility to continue to do billions of dollars of business with the USG–well, there are very important reasons why that would be an incredibly bad outcome. To begin with (like the Siemens case), it would present no deterrent. If Agility is only “fined” 750 million dollars then, and from any knowledgeable cost assessment, they are way ahead—no question they probably profited much more than that penalty amount. Most importantly, if one looks back over large corruption scandals like Siemens as well as the great UN Oil for Food incident—the most notorious in recent memory—the similarity that cannot be ignored is the corruption was not isolated within those organizations; like a metastasized cancer it was systemic.

Best new jobs (in the not so distant future)? Inquire with the companies playing in the world’s emerging economies…

At the beginning of the year I wrote about the tremendous growth that will occur outside the US. Both business (Goldman Sachs) and world policy institutions (International Monetary Fund) have  presaged the new world financial order that will have the rapidly growing emerging markets like Brazil, Russia, India & China (BRIC) equaling the GDP of the current G7 within the next fifteen to twenty years.

An indicator that American business has embraced this thinking are the actions of two of the US’s preeminent fast food chains, MacDonald’s and Yum Brands (Taco Bell, Pizza Hut & KFC).

Yum Brands has just opened its first Taco Bell in India while it has already established roughly 230 Pizza Hut & KFC outlets there. With a heady adherence to cultural issues in India, the company is making its offering spicier with a large selection of vegetarian foods and will not serve beef—which many Indians will not eat for religious reasons.

With 230 of its 250 non US outlets in India (is that an eye-opening stat, or what?), Yum is targeting to have over 1,000 total  restaurants there by 2015—that would be over 400%  growth in just five years—wow.

MacDonald’s has had a foothold in mainland China for twenty years now (60,000 employees in over 1100 outlets) and has just established its first Hamburger University in Shanghai (first in China & seventh worldwide) to train and develop new generations of managers.

Why in China? Well—not surprisingly—China is MacDonald’s fastest growing global market with the fast food market there expanding at an annual rate of over 10% compared with just 2% here in the US.

With that kind of market expansion MacDonald’s is hoping to double its restaurants in China to over 2000 in just three years—double wow.

And just what kind of opportunity does this present for American jobs? You guessed it—Huge! As I have noted before, the best new jobs  in America (offering the greatest possibilities for advancement and salaries—not to mention excitement and satisfaction) will come from those companies, both US and foreign, looking to capitalize on the incredible growth in the world’s emerging economies.

Want to be a part of this new global order and establish a fabulous and interesting career? Silly question, huh? Besides having or getting a good education what should you be aware of and know? Well, both Yum and MacDonald’s have a keen focus on cultural issues and so should you. No matter if you might wind up in India or China—or any other global market—my book Lies, Bribes & Peril will be a critical guide to  success.

Doing Business Internationally – BNN Interview August 2009

Trading Day : August 17, 2009 : Doing Business Internationally

Business News Network (Canadian CNN) interview with me about the book “Lies, Bribes & Peril: Lessons for the Real Challenges On International Business“:  http://watch.bnn.ca/trading-day/august-2009/trading-day-august-17-2009/#clip204256