Numbers illustrating the decline in U.S. manufacturing in the past few decades are stunning: Manufacturing’s portion of GDP has fallen from over 25 percent in 1970 to about 13 percent now, while employment has dropped from 18 million workers in 1990 to 11 million today. Simply put, manufacturing–ironically, even among many manufacturers–lost its luster. The new idea was that the U.S. could farm out the dirty business of making things and become primarily a service economy–clean, simple and digital. What a nearsighted mistake.
In this speech, Rothfeder offers a guide for manufacturers to survive and thrive in this difficult global environment, based on his many years of award-winning coverage of large and small manufacturing companies. Among the valuable recommendations are engage in so-called high-road manufacturing by harnessing the knowledge, experience and creativity of workers for continuous factory and product innovation; don’t over-automate and don’t obsess over lean; spend freely on R&D and place research and design teams inside the factories themselves; develop industrial clusters in which suppliers, research partnerships, academic centers and laboratories orbit around the manufacturing plants; use unorthodox and proactive strategies to attract and hire the smartest engineering and industrial operations students; and promote the best managers, even if they are not the most qualified.
The world is bumpy, not flat. The idea that low-cost labor overseas would provide a staging ground for multinationals to undertake inexpensive manufacturing and swell the middle class in China, Thailand, Malaysia and Vietnam giving multinationals a huge global consumer base has fallen, well, flat on its face. In fact, if you look around the world at the global business landscape, trade barriers are rising, intellectual property is stolen and privacy is under assault, emerging market governments are harassing Western companies, even raiding their offices and working conditions are often not up to Western standards, nor are environmental conditions. National enmity – see Japan and China in the East China Sea – is decimating global trade and labor costs are going up. The upshot is that though they won’t often admit, multinationals struggle mightily to find profits overseas.
In this speech, Rothfeder describes why our assumptions about globalization were so wrong and offers a series of steps that multinationals can take to safely navigate the global economic landscape and drive profitability. Included among the steps, which are based on years of first-hand research into multinational activities as an award-winning business journalist, are a unique global localization strategy; a blueprint for global innovation; ways to export corporate culture around the world; and a plan for distinguishing a company in any market it enters.
Although most companies won’t admit it, for many of them corporate culture is an afterthought. They may have the best intentions to be principled and openly supportive of innovation and worker engagement in the organization, but few understand how to implement a winning corporate culture and, more importantly, how to link corporate culture to revenue and earnings growth. That’s a significant shortcoming because, in fact, a company’s culture – its values and guiding tenets, the depth and supportiveness of its relationships with its employees, its partners and its customers – can determine the level of continuing success that a business has.
In this speech, Rothfeder uses company anecdotes and stories gleaned from his award-winning in-depth articles and books about companies like Honda, Boeing, Zappos, Amazon, 3M and McIlhenny Tabasco, among many others, to explore the substantial role of culture in corporate success. The talk covers the myriad ways that culture is created and embedded in an organization, taught and shared by management and distributed globally throughout a company’s international facilities as well as how culture can drive employee innovation, customer loyalty, sales, expansion and product development. Examples of how a strong corporate culture has led to lucrative breakthroughs – such as Honda’s recent development of a revolutionary jet – and illustrations of good and bad corporate cultures and their impact on their organizations are offered.
Most companies think quarter to quarter: are earnings up this quarter over the prior quarter and last year, by how much, and do they meet the often incomprehensible expectations of analysts and industry watchers. This view of business performance, in which earnings are analyzed out of any real context except a comparison against prior periods, is extremely shortsighted. It ignores such salient details as changes in business conditions, the status of integrating acquisitions, how competitors are faring and the health of the supply chain. And it leads to potentially harmful myopic strategies like the all-out effort to be number one in market share – on the presumption that increased volume drives earnings, no matter how costly in discounts and giveaways these additional sales are. That approach is the beginning of a vicious cycle in which the added expense of volume is addressed by cutting costs; that, in turn, reduces innovation and quality, further stressing the revenue channel, and so on into a deep hole. Ultimately, it’s all bad news for the company.
In this speech, Rothfeder offers a series of lucrative and novel earnings growth strategies based on his many years observing and writing about the Fortune 500 and startups as an award-winning business journalist.
Jeffrey Rothfeder is a veteran business journalist and the author of the critically acclaimed Driving Honda: Inside The World’s Most Innovative Car Company. He was Editor-in-Chief at International Business Times, National News Editor at Bloomberg News, Executive Editor at Time Inc., Dept. Editor at Business Week, Editor at PC Magazine, Senior Editor at Strategy+Business Magazine and Special Correspondent at the Washington Post. His expertise covers a wide range of topics including corporate leadership and management, corporate culture, globalization, privacy, technology security, manufacturing and business and economic models.
Rothfeder has won numerous journalism awards including Excellence in Technology Writing, the Jesse H. Neal National Business Journalism Award and the American Society of Business Publications Editors award for feature writing. He has been a finalist for a National Magazine Award and was part of the team at Popular Science that won a National Magazine Award in 2004. His articles have appeared in CondeNast Portfolio Magazine, The New York Times, PC World, Chief Executive, St. Petersburg Times, Science, This Old House, Popular Science, CIO Insight, Consumer Reports and Forbes, among many other publications.
Among his books, Make or Break was a Wall Street Journal bestseller; McIlhenny’s Gold was a Library Journal Best Business Book, 2007 and Top 10 Nonfiction Book: JP Morgan’s Prestigious 2008 Summer Reading List; Every Drop For Sale was Nominated for National Outdoor Book Award: “Nature and Environment Book of the Year”; and Privacy For Sale was named National Computer Book of the Year.