Washington Brief

Quarterback Yes, PM No!

New York. Feb. 18th, 2005 ---- Speaking to a group of executives about the scenarios they may face in India and China over the next 10 years I asked my usual "yardstick" question... Name the Quarterback of a major football team, and the Prime Minister of the country they are risking the future of their company. The results get worse every time I ask.

I almost feel like apologizing to some of the young "Upwardly mobile" executives, particularily the aggressive female ones for suggesting that there is a decision maker other than themselves in the potential scenarios that influence their business model. What happens if there is a civil disturbance? Are there any security issues? What about taxation changes? The typical answer to the effects of a political party change on taxation is that "Our lawyers will sue!"

Wake Up! Bangalore ain't Kansas Dorothy!

Many years ago I warned a company about sending their executives to Karachi until the anti-American riots had subsided. They were shocked and in their Texas drawl told me in no uncertain terms that if a single hair on any of their their heads was disturbed, Uncle Sam would "Kick Butt". Well they were roughed up and Uncle Sam did nothing. Uncle Sam got the Iranian hostages back after a year by paying a huge ransom. Ollie North never mentioned "Kicking Butt" when he arranged the Arms for hostages deal. He never mentioned suing the Ayatolluh if he didn't deliver on time either.

My point is that most outsourcing countries around the world do not beat to your drum, they have drums of their own, and local, regional and national political agendas. True Mr. Singh will promise you whatever you want to get the hundred or so workers of his out of poverty, and into comparitive luxury by entering your data into the computers kindly supplied by you. But if the data center is levelled by a mob, Mr. Singh will be no where to be seen. He may even be leading the mob.

Over the years working in 85 countries I have seen many riots and military excursions, and you would be surprised on how quickly many of your representatives can change sides when the bullets start flying. The flag on the flagpole can become an object of disdain and a bonfire as the fortunes of civil disturbance change.

That's a little drastic but I do wonder how many of these outsourcing operations have been fully researched for risk, and loyalty of the workforce. More important how many companies have a Plan B just in case. Hey, the US Government rarely has a Plan B for it's projects and the invasion of Iraq should teach us all a lesson on believing that Governments know what they are doing! Maybe Saddam Hussein shipped all the Weapons of Mass Destruction to Crawford, Texas. Better ask Fedex!

So what have we got. We have executives planning to move their critical operations to countries half a world away, with a different moral and legal system, communication networks under the control of governments somewhat hostile to the USA. But don't worry these companies have Corporate Intelligence Departments who track these things. Or do they employ yet another group of young "Consultants" fresh from doing their MBA's who come up with a scenario straight from the recommended book as prescribed by their professor.

In fact few do either, they just assume the lawyers will sort out the mess and sue someone, anyone. Or failing that the perky young executives will move on, their failures shielded by liberal HR consultants who insist that we do not ask former employers about expensive failures, for that would embarrass and prejudice a person from repeating a disaster for another company.

And many of these outsourcing contracts give ample opportunity to fail on a grand scale.

Alan Simpson brings you regular commentary from the corridors of power in Washington DC . With experience of working in over 80 countries he looks at events from a global perspective.