I am in the process of reading Thomas L. Friedman´s latest book "THE WORLD IS FLAT" wherein he presents some very interesting and thought provoking information.  I thought you might like the highlights to review in your environment.

Mr. Friedman starts out discussing a phenomenon most of us have encountered (often less than pleasurably) when we seek customer support on a technical product - the dreaded Indian call center that has resulted from this new seamless global world.

The first section of the book covers the ten forces that he sees as being responsible for flattening the world.  These include:

• When the Wall came down and the Windows went up.  The fall of the Berlin Wall not only liberated the captive people of the Soviet Union, but also tipped the balance of power to those advocating democracy, consensual, free-market-orientated governance.  The Windows operating system brought a critical mass of PCs to life.
  
  
• When Netscape went public or when we shifted from PC based computing to Internet based computing and web browsing provided open access to any document on any computer anywhere in the world.
  
  
• Work Flow Software that facilitates the integration of work between and among multiple individuals, departments, or function in far-flung locations around the globe.
  
  
• Open-Sourcing or open-source software that allows free access to the basic operating code of the program or system as contrasted to earlier times when IBM, Microsoft and others labored to keep their underlying code secret and proprietary.
  
  
• Out-sourcing which, in his example, has allowed India to be the "second buyer" of the digital backbone after the "first buyers" went bankrupt.  This, now very low cost backbone, allows India to be the location of choice for various banking, systems, and customer service functions previously performed here in the States.
  
  
• Off-shoring which Friedman differentiates from out-sourcing because out-sourcing takes one or more functions that were performed internally (call center) and transfers those duties to another company.  On the other hand, off-shoring occurs when a complete production facility or capability is moved to a third world country.
  
  
• Supply-Chaining is exemplified by the RFID (Radio Frequency Identification) tagging system that can locate a product anywhere within the supply chain and the associated integrated purchasing, shipping, warehousing, distribution, merchandising, and POS (Point of Sale) systems that both record the sale and then generate the purchase order and move the replacement merchandise through the supply chain seamlessly.  Wal-Mart, a prime example of supply-chaining, even advertises this in their commercials.

• In-sourcing as exemplified by those guys in the plain brown shorts.  No longer is UPS or FedEx just delivering packages, now they are taking over the entire logistics function of their clients.  Or, when UPS establishes and staffs a computer repair facility at its Louisville hub to eliminate the need to ship the computer to and from some other remote repair facility thus saving both time and money.
  
  
• In-Forming or the Google experience where with a few keystrokes in Google, Yahoo, MSN Search or some other search engine we can be immediately inundated with the latest information about that subject.  Have you Googled yourself lately?
  
  
• And finally, the Steroids of the digital, mobile, personal and virtual world we live in today.  It all started with the cellular phone in the 80´s and has come to the point where we can office anywhere in the world wirelessly.

According to Friedman, flattening really began when a triple convergence took place.  The first convergence was the coming together of these ten flatteners.  The second was when these new technologies were coupled with the basic way we do business - when they were integrated into the basic fiber of our business.  As an explanation of these first two convergences Friedman offers the light bulb or basic telephone as examples.  Although both the phone and light bulb were invented and perfected long before they were generally in use, it took the development and implementation of the delivery system, the power grid and the network, for wide spread usage to become the norm. 

The final convergence is the mass of individuals who can now take advantage of this new way of doing business around the world.  As I have mentioned in previous letters, with the Web I could be trading currencies on the world market today - not that I would be good at it, but I have the capability and that is what this third convergence is all about.

Friedman provides examples including one of ex-Secretary of State Colin Powell who in the past would ask a staffer for information about a specific resolution and then wait for that person to find the information and bring it to his attention.  Now, he simply types into Google "UNSC Resolution 242" and gets the information instantly.  Add to that the technology of a Blackberry or Treo and you have constant contact with not only the information, but also your staff or associates.

After defining these changes, Friedman goes on to suggest that our hope for not only survival, but also continued prosperity is to move up the food chain.  As we outsource or offshore operations we must replace those operations with new ones of greater customer value.  This also requires continual learning so that we are able to meet the challenges of this new flat world.  As basic programming tasks move to India, Russia, or China we must have the capability to be the system integrator or the system architect.  This is the only way we will continue to grow and prosper.

An interesting read and certainly thought provoking, if somewhat verbose.  How are you preparing for this flat world - personally and for your company?  What impact will a flat world have on your strategic plan - the way you do business?  One of my clients has started to question where they should be manufacturing their products.  Is it enough to have subassemblies manufactured overseas and do the final assembly here in the States or should the final assembly be done elsewhere?

Even more importantly, from my perspective, how will you help your employees prepare for this flat world?  Are you offering, or will you offer training so they can upgrade their skills?  Is tuition reimbursement enough, or should you consider in-house training classes?  Remember, they are the one input or resource that can differentiate your company from your competition and create that significant and sustainable competitive advantage.

Friedman quotes this proverb that I had seen before and think offers an appropriate closing thought:

"Each morning in Africa a gazelle awakens. He has only one thought on his mind:  To be able to run faster than the fastest lion. If he cannot, then he will be eaten.

Each morning in Africa a lion awakens. He has only one though on his mind: To be able to run faster than the slowest gazelle. If he cannot, he will die of hunger.

Whether you choose to be a gazelle or a lion is of no consequence.

It is enough to know that with the rising sun, you must run. 

And you must run faster than you did yesterday or you will die.

This is the race of life." - African Proverb

While I could remember the gist of this proverb, I could not quote it verbatim, so I opened my MSN browser and typed in "African proverb of lion and Gazelle" and had this immediately.  Looks like Friedman and his "THE WORLD IS FLAT - A Brief History of the Twenty-First Century" is upon us - ready or not. 

Copyright 2005 J.E. Mittler & Company.  All rights reserved.