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Why bad job numbers are good for jobs

June 9, 2010

It doesn’t take a genius to clamp down on all spending and control cash, like the modern day equivalent of Civil War medicine with its emphasis on saving patients through amputations.  When it comes to helping distressed organizations, it takes finesse to know the client’s customers’ perceptions, access the situation from the market’s point of view and plan accordingly.  Recently, our market researcher has been finding a very interesting accelerating trend with impact on both the economy and joblessness.  More and more ‘bread and butter’ Americans are becoming very sensitive to ‘made in the USA’ types of labeling on anything they ingest and continue to be less so on much of anything else.

The impact on the economy is very clear.  Anything ingested needs to be made in the USA.  Really made in the USA.  Made in the USA translates to a good feeling about keeping jobs here as well as a belief that there is quality control on the products I ingest. The former halo put upon imported foods is not as prevalent and people are worried about Chinese imports with Cadmium (currently keeping McDonald’s up at night) or lead. Even the Gulf oil spill is reinforcing the trend towards quality and accountability.  We were all appalled when BP, Transocean and Halliburton pointed fingers at each other in front of Congress, showing the only thing they had under quality control was profit sharing.

About cars and other items not ingested.  People still want quality and value, with the understanding that all cars pass the safety tests, are all reasonably well styled (design being very personal but in an example of cross fertilization, upmarket Mercedes Benz recently lured middle market up- comer Hyundai’s US design chief) and price is important. Here, the ‘made in the USA’ banner is much less important, and so the impact on US jobs will be more of the same unless we change the operating paradigm.

What exactly then does ‘made in the USA’ mean to the average consumer?  Traveling a lot to the UK on business, I’ve noticed that in every restaurant there’s a menu notation saying their chicken and beef are UK grown, the assumption being purity/lack of mad cow disease. This reinforces the ‘if it’s ingested I want it to be USA sourced’ trend we’re seeing.  But what about non-foods?  Made in the USA should be less about jingoism and more a statement of purity and quality control and therefore can apply to manufactured products as well.

Germany has a set of standards by which products are graded, called DIN and we have MIL Spec (military specifications) covering a wide range of products as well as ISO.  Europe has a set of standards as well, less known, and called the EN. Many of us know about the ISO 9001 standard for quality management systems and ISO 14001 for environmental quality management systems, but these are far from standards useful in bringing jobs back to the US.  To be factious, you could be ISO 9001 compliant if you wanted a bad product and produced each product perfectly defectively, i.e. adhering to your published procedures.  We need more very specific standards from ISO specifying exacting requirements for individual products, from hose clamps to rocket engines and as widely consumer accepted and expected as the DIN system is in Germany.  We should modify our empty ‘made in the USA’ label variations to ‘made in the USA under ISO standard ####’.

How does this affect local jobs?  China does not really guarantee quality, in fact, Chinese companies often fudge raw material and ingredient labels all in the name of making a quick buck; lots of bucks, actually. With China having to raise wages due to publicity about suicides at their factories from worker underpayment and abuse (and assuming they will actually keep their promise to keep paying higher wages, which is anyone’s bet given their business culture), prices for American consumers will soon rise.  This gives us the ability to compete, finally, against China and its intentionally understated currency.  If we can manufacture a wide range of goods domestically, under an ISO standard which the public wants (akin to the beef/chicken from the UK we talked about above), we can bring higher paying manufacturing jobs back to our country.  A large number of ISO standards already exist, and a company would be wise to list their compliance on their label, and in their advertising.  Think how powerful it would be if domestic auto manufacturers listed 2 pages of ISO compliance for a car, battling the perception that overseas manufacturers do a better job.

Besides manufactured goods, we often say we have a service economy.  Germany has been publishing an ever growing set of DIN service standards, and we should do the same so our entire economy has the ability to comply.   For those hating Big Government involvement, it must be noted that the DIN standards are voluntary, but the German buying public expects their goods to be DIN compliant and we can follow suit.  Let everyone know that ‘made in the USA under ISO ####’ means quality and trust.

One thing we learn through qualitative market research is changing a customer’s mind is really expensive and hard.  Our operational experience has taught us changing employees attitudes, especially that of inside promoted management is even tougher, but we’re at an inflection point and at those points, change happens fast.   Washington would be wise to spend stimulus dollars on expanding the ISO standards and educating the public on their very existence so the market can demand compliance in all goods and services. Even the Chinese would then have to comply for competitive reasons to everyone’s benefit.

Why then, not leverage the trend as a nation and emphasize published standards compliance?  As the Wall Street saying goes,’ the trend is your friend’.

On another note, our chapter in a graduate level textbook, Business Driven PMO Setup,  can now  be found on  Google Books: http://books.google.com/books?id=6HXFixpn4REC&pg=PA110&lpg=PA110&dq=richard+eichen&source=bl&ots=A9Lz_T_-yq&sig=067SsApb4AjyzZUZZX40CXjqxak&hl=en&ei=svEHTMmyIoK78ga5rZmkAQ&sa=X&oi=book_result&ct=result&resnum=6&ved=0CCkQ6AEwBQ#v=onepage&q=richard%20eichen&f=false

Rich Eichen is the Founder of, and, a Managing Principal of Return on Efficiency, LLC, who’s website is http://www.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years experience reshaping companies, Operations, IT and key initiatives. He can be reached at richard.eichen@growroe.com

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