If the U.S. economy continues to show signs of a slump, it will be increasingly likely that our politicians and special interest groups will look for a bogeyman to blame. In his New York Times bestseller (2006) Take This Job and Ship It, Senator Bryon Dorgan did just that: he pinned the loss of jobs in manufacturing and services on greedy CEO’s, and foreign competitors who don’t play by the rules.  But what exactly are rules in a global economy? If American politicians define rules as fair trade, they have a lot of explaining to do as for why America’s wealth creation for the past hundred years towered over practically the entire world, combined. Simply stated, most managers within today’s U.S. Corporation have no clue as to what the definition of productivity is within their operations and corporation. If you ask this average manager how to define productivity, he will likely give you a definition of how to reduce costs, which isn’t the same thing as productivity. During America’s Gilded Age during the late 19^th and early 20^th centuries, productivity was defined as business growth achieved through a more efficient use of labor, capital, and technology. Productivity achieved could only exist if it was in the best interest of both the worker and management, as anything short of this would lead to contention and blame. Today, America is shipping much of its manufacturing and a lot of service work overseas in need of achieving productivity. But can productivity be achieved through simply offshoring to a lower cost provider? In many cases, the answer to this question is no, and corporations use outsourcing as a mask to hide their true productivity issues, versus as a tool to solve for it. In my book, I call this practice an easy out.

An Easy Out is simply the American Executive’s way of making money via showing short-term profitability versus the more Difficult In of building longer-term economic growth. Sure, an overuse or misuse of outsourcing in order to mask a problem and show profitability may appear to be favorable on a short-term accounting statement, but rarely ever do such actions lead to sustainable economic growth that allows U.S. Corporations to remain viable in a hyper-competitive global economy. In such an instance, the act of outsourcing becomes the symptom, and a lack of focus/understanding of productivity becomes the problem. What is missing within U.S. Corporations is the willingness to dig into the root of a problem in order to derive at productivity (cost reduction and innovation/market growth). A growing dysfunctional relationship between the worker and management is also a problem, as productivity is not achieved, and the relationship becomes one of win-lose. Public problems have hampered productivity, such as declining U.S. education scores in math and science stemming from a lack of innovation and accountability in our educational system. Our public infrastructure is failing, and not able to enable economic growth through our ports, highways, and oil refineries, to name a few. Our federal statistical systems are antiquated, and not sophisticated enough to give businesses meaningful and valid data regarding the state of our economy. A new Gilded Age for business can be defined across all sections of Americans, as we all own a piece of improving the state of our economy in a growing global environment. Never before have the two most populous nations in the world grown at such a fast rate of economic development. The stakes are higher than ever before, and we all must focus on productivity in order to compete. We must also remember that America came to economic prominence when Europe was embroiled in their constant wars of the 19^th and early 20^th centuries: will China and India take advantage of the U.S. in the same manner?

When outsourcing is defined as a function of productivity, as opposed to a means to an end, both the customer and the supplier forge a new win-win relationship in the deal that is missing today (70% of all companies are dissatisfied or concerned about using a 3PL). 3PL providers that understand these principles will take on a new role within the U.S. economy, enabling American goods and services to be more competitive on the world market. When customers understand that they shouldn’t outsource until they understand in detail the nature of their business activities, they make wiser outsourcing decisions. When suppliers avoid customers who wish to make easy out decisions, they don’t put their credibility at risk by avoiding unhealthy partnerships. Today, these unhealthy relationships are deemed as fairly typical in the surveys being conducted, as too many customers are unsatisfied with the results. That’s too bad, as the use of outsourcing, when used properly, is a powerful tool for a company to use. But, unfortunately, it’s a devastating easy out when misused, and has dreadful consequences on the entire U.S. economy as a whole.