TWIF+Chapter+11

The World Is Flat Ch11 Summary V. Gurnari How Companies Cope In his research of companies large and small Friedman was surprised to find that almost all of them had a similar outlook on the nature of change in past few years. “Just in the last couple of years…” (p.441) was the overall sentiment that the heads of these companies kept repeating. To them the pace of change was somewhat staggering, and the way that they were being forced to do business was altered. Now it seemed that all companies great and small needed to be everything to every client. This led to Friedman creating a series of nine rules that all companies must adhere to in order to have chance of being successful in the current and future business climate. Rule 1When the world is flat, whatever can be done will be done. The only question is whether it will be done by you or to you. (p. 442) This rule is explained by an anecdote relating to Friedman’s travel to Budapest where he discovers that his cab driver has a very sophisticated website that allows travelers a wide array of choices. He furthers this by showing how a consulting company in India outsources its overnight work to Uruguay. Rule 2 Because we are in a world where whatever can be done will be done, the most important competition today is between you and your own imagination. (p. 447) This rule relates directly to the work done by Pink. Friedman suggests that the only way for companies to thrive and even survive is to generate an atmosphere where the freedom of thought is the highest sought after commodity. The example he uses is that of not only free trade but to be a “radical free trader” (p. 448) Rule 3 The small shall act big…. (p. 449) He illustrates this point by explaining in detail how Aramex a package delivery service that operated in the Arabic speaking world used not only technology but a synergy of many small companies to help move them forward not only in the region but eventually selling their system to a larger company then improving the system and starting again. Rule 4 The big shall act small…(p.454) This rule then exposes a great secret in business “They are actually making their customers their employees and having them pay the company for that pleasure at the same time!” (p. 455) The example given is that of Starbucks allowing their customers to customize their own drinks. This allows the consumer to feel like they are receiving a personalized item when in fat they themselves are creating the item. Rule 5 The best companies are the best collaborators. (p. 457) In simple terms Friedman is explaining how companies must look to the largest base possible to generate ideas, market product, and diversify themselves. Rule 6 In a flat world the best companies stay healthy by getting regular chest X-rays and then selling the results to their clients. (p. 461) Rule six is about seeing what you are good at identifying a market for that thing and then selling that to your clients. The example used is that of the Bank of India outsourcing its banking systems to HP. HP found that a segment of their business could operate the banking systems more efficiently and cheaper than the bank could so they sold the bank their services. Rule 7 The best companies outsource to win not to shrink. (p. 465) Friedman describes this process as a need for companies to continue to look for more aggressive ways to improve their business. When a business outsources they should only do so to expand their market share not simply to cut costs. Rule 8 HOW you do things as a company matters more today than ever. (p. 467) Companies are more transparent due to a more interconnected public. Consumers can decide if they like they way you do business. Then decide if the wish to use your services. “Before you just needed to do the right things’” “Now you need to do them the right way” (p. 469 Rule 9 When the world goes flat –and you are felling flattened-Reach for a shovel and dig inside yourself. Don’t try to build walls. (p.469)  Friedman argues that as the world flattened companies need to expand their thinking from within. They need continue to provide the services that they are good at but also need to expand the possibilities of that service in an in house format. The example given is that of a mid size multimedia company that suddenly found that they needs to be all things to their clients. From soup to nuts. Chapter 11, How Companies Cope (Analysis) Laura Reilly

In Daniel H. Pink’s book, //A Whole New Mind//, interviews with industry leaders and an analysis of present economic conditions in the U.S. call for a focus on “Right-brain”, or R-Directed, thinking for business success. In chapter 11 of Thomas L. Friedman’s //The World is Flat,// entitled “How Companies Cope,” the author extends this defining and provocative concept by analyzing the various stages of companies’ developments and demonstrates that Pink’s assertion, that R-Directed thinking is an integral component of success, has been the means in which companies have seen extraordinary growth in the last fifteen years. Many occupations in the U.S. which require the use of L-Directed thinking (which generally includes the use of knowledge, logic, and analysis,) are being out-sourced to countries where the salaries are only 10% of those in the U.S. As a result, potential employees need to hone their R-Directed skills (those that involve sensibilities such as emotion, imagination, and creativity) to separate themselves from other candidates. According to Friedman, this, too, is true for companies themselves. Companies must learn that building a meaningful customer experience is necessary to compete against other companies or, in some cases, single freelancers who can price themselves competitively, having no overhead but a basement computer. R-Directed skills enhance collaboration and promote partnerships both outside and within companies where no department acts singularly. Rather, separation between levels of management or departments are porous where the exchange of information and materials promotes improved communication and the mastery of the task. Additionally, companies must look at their many parts and cease from considering themselves a “whole” separate from other companies. Specifically, companies need to examine each function that it performs and determine if any can be out-sourced, either to reduce costs or improve the mastery of the task. And no longer can employees consider only their own job description and believe that they will have a job for life. Today, employees need to constantly reassess their duties and consider how they can prepare themselves to remain in their position. Friedman asserts that companies need to differentiate themselves from others by “how they treat their colleagues, customers, suppliers, and investors,” (468). The personal attributes that enable positive relationships are primarily R-Directed skills. This, coupled with the need for employees with imagination and creativity (also R-Directed skills), demonstrates the need for today’s curriculum to reflect this major defining feature of the competitiveness of today’s global business world. Additional highlights of this chapter include the importance of opting for what Friedman refers to the only survival strategy: using a shovel, rather than building a wall, as a response to changes in commoditization (473). Friedman quotes Economist Paul Romer regarding companies’ hesitation to alternate the way they do business, “Everyone wants economic growth,” he says, “but nobody wants change,” (441). Friedman’s metaphorical shovel, then, highlights the importance of constantly reassessing and analyzing each aspect of a company’s productivity to ensure that the task is being done at the lowest possible cost, or at the highest level of quality.