FC NOW: The Fast Company Weblog
April 27, 2005
Reflections from Shanghai
I just returned from a fascinating experience in Shanghai. During this visit I had the opportunity to work with 20 MBA grads who are part of a 20 year documentary project called "China 2024".
My guess is that most Americans don't have a clue as to what is going on in Asia.
Both candidates in the last election had the same stupid quote, "Given a level playing field - the American worker will always win".
I have met 28 year olds in India, China and Eastern Europe with IQs of 150, MBA degrees (as good as ours), an 80 hour per week work schedule and a salary of $20,000 per year. In the US for $20,000 you can get a bag boy with an attitude problem.
"Given a level playing field" I am not betting on the bag boy.
In America we need to wake up to the reality of global competition, invest heavily in education and innovation and quit electing politicians who just lie to us to make us feel good.
Posted by Marshall Goldsmith at April 27, 2005 11:40 AM | Category: globalization |
12 Comments
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The same applies to France. We have only a different style of arrogance, but we are as blind as Americans in many areas.
Vince
And yet, attempts at pointing this out, are met with derisive cries of "Wolf" if you read this review of Tom Friedman's book, The world is flat.
http://www.nypress.com/18/16/news&columns/taibbi.cfm
I agree that we, in North America, may not be as aware globally as we should be. We will get there though.In response to Marshall's comments:
Having an IQ of 150 does not mean that they can manage a business or people. It just means they have an IQ of 150. So what?
The MBA is one of higher education’s most respected degrees. Universities that offer MBA programs in India, China and Eastern Europe are probably using the ‘case study’ method, which has not kept up with this fast-pace wired world we are living in. Most MBA’s lack people and leadership skills, the most important factors in managing a business, a department, and people.
Professor Henry Mintzberg, Cleghorn Professor of Management Studies at McGill University has stated that “Management education should be restricted to people who are actually in managerial careers, and who have accumulated some managerial experience, instead of to graduate students.” He also said that “Trying to teach management to someone who has never managed is like trying to teach psychology to someone who has never met another human being”.
I agree.
Working 80 hours a week only leads to an earlier heart attack or some other stress related illness as North Americans are acutely aware. A heart attack for $20,000 a year. Please. And in the countries you mentioned with the exception of Europe, $20,000 is a decent salary.
And you mentioned that in the US for $20,000 you can get a bag boy with an attitude problem.
You’re probably right about that.
Marshall, I would have to say that I agree with you on most of your comments. Currently living in Shanghai, there have been many times when I have felt the competitiveness of this culture. There is a tendency between people in China to be competitive. There is a "huge gap" in the two cultures in terms of motivation and the simple desire to learn. I think, "I hope" that people will wake up to this fact early in the US, so we can invest in our own domestic resource of human capital. In China if you can get away with something, then it was meant to be, and that person deserves to have it. In the US we see this as very rude, and uneducated. This might demonstrate the level of competitiveness. This is only one example that I can think of at the moment. I have been coming to Shanghai since 1986, and have been leaving here this trip for four years. I will be returning to LA this year, and I am really hoping to help make a difference in this area.
I very much agree with Al Gates. Except graduate level managerial education should be available to all, not just to those with years of management background. However, not all can become managers right away after getting the managerial education. As to the people working a lot in 3rd world countries or wherever - I'm not impressed, I worked and studied myself in a very similar fashion for some time. Unsustainable pace leads to mental and physical decline, that is why the mentioned country is still a 3rd world. Focus on the right not many. It has been proven.
Being in the offshoring business, this is one of the areas I have most trouble with-- we underestimate the intelligence of the Chinese and Indians.
A few months ago, I was sitting in an office in Oxfordshire and had a man sit and tell me, "I know a lot of people are going to India for coding, but I've heard that they can't code." Then he droned on about "hold out a pile of money and they'll tell you they can code". I was gobsmacked. In fairness, this was an older man. All I could say was, "Out of a billion people, you don't think any can code?" I know that you can get a developer in India with a doctorate and ten years experience for the price of a developer in the UK who is just out of univerity. But this man was still living in an age where we could ignore it.
This may sound like an exaggeration, but it isn't. We are resting on our laurels.
Can I stand by while local developers charge higher prices but not higher value and select them just because they live down the street? Can they expect to always get my business just because they own the local shop?
Comments on comments -
Vincent - I agree with you. I think that France and Germany face even bigger challenges than we do in the USA.
Niti - I read the review of Tom's book. I agree with you. I think that the review sounded like some literary snob who was judging the quality of the writing. The review had little to do with the content of the book. I think that the content of the book is great.
Al - You are probably right about the MBAs. On the other hand, if you are smart enough - and hard-working enough, you will probably prevail anyway. Bill Gates has noted that a lot of his company's most innovative new software is coming from China. He is just focused on hiring amazingly smart, hard working people and then training them.
B. Lance - Best wishes on your journey back to the US. I hope that you can make a positive difference in this area!
Mike - I think we have a lot to learn from people in third world countries. If you look at Shanghai - what they can do is already being proven.
Eric - As you can see in my earlier comments - Bill Gates clearly agrees with you. I think that Bill Gates knows what he is talking about!
Marshall: Yes, Friedman is making a valid point, regardless of his language, and perhaps if the language is a little dumbed down and emphatic, it needs to be, if the reaction to the changes are ultimately being based in complacency of the "superior" intellectual prowess of the "West."
After all, for those that believe that the Indian MBA is not competitive enough, recall examples like Vinod Khosla, cofounder of Sun Microsystems and currently a partner at Kleiner Perkins. You may say he did his graduate study here, I will say his strong foundation is still Indian.
I am a manager from Poland, and I only can disagree with Al. First of all, if having IQ of 150 is no big deal, then I guess it should work both ways - thus having IQ of 60 or less is no big deal either. True?
Now let's get to the other point. "Universities that offer MBA programs in India, China and Eastern Europe are probably using the ‘case study’ method". I do not knot about India or China, but in Eastern Europe MBA programme is a post-graduate study, where participants are usually successfull business people with years of experience. Apart from that, every single MBA course in Poland is conducted in cooperation with respectable US or European university, which incorporates modules conducted by american professors (in case of MBA programme that I attend). I agree, that MBA is a respectable degree, but please notice, that most of MBA courses incorporate 'case study' model - Harvard Business School is one of the better examples here. There is a great number of business people that claim, that MBA graduates (from US or any other country you will) have great analytic skills, yet lack 'soft' knowledge on leadership and motivating people. This is main reason why most modern MBA courses put such a great pressure on those "hot" topics.
Last, about 20.000 salaries and 80hour weeks. I believe, that Marshall intention was to make everyone consious, that a highly educated Indian, Chineese or Pole with MBA degree in hand and motivation of someone earning 20k a year can move to US or get outsourced. Then I would like to see how american MBA graduates would perform as salary levels would (and will as this is the most probable case) plummit.
I am currently enrolled in an MBA program. We spent more than a week in China (including Shanghai). The trip was eye opening from the perpective of the potential of what China can do with it's labor force which includes a dramatically growing number of Engineers.
This discussion really needs to focus on the long-term (10, 15 or even 25 years out). In this time frame it is easy to imagine that MBA and Engineering programs in China will be producing higher quality graduates, close to those in the West. This quality in education is strongly correalated to the experience they are starting to aquire. Think of the long term impact of moving PC production from IBM to Lenovo. While PCs can be viewed as simply a commodity product, it gives the Chinese experience needed to move them to the next level in their understanding of markets, in their understanding of technology, in their understanding of economics, and their understanding of the consumer and consumerism. This shift may make sense to anyone who believes in the global market...but the move should also open eyes of those worried about the future of our (US / Europe) place in the global market.
In the specific 20K, 80 hour per week discussion, I may find I get what I pay for...and cheap labor at long hours may not give me much. But at some point (again long term) I may be willing to pay, say $40K, for off-shore labor especially if they are willing to work 50-60 hours in a week and have output in line with what I get here for 80K.
Countries that are successful will not only be the ones with the cheapest labor force, but more than likely the ones that are more efficient and certainly the ones that are the source of innovation. Therefore, the solution for the US and Europe is probably related to education, and while MBA prorgams may be part of that, I believe the core of the answer is more likely found in the quality of secondary and undergraduate education.
I agree with Brian. As China may be a giant with legs of clay right now as their success is mostly based on cheap labour and technology provided by US and European companies, they will certainly improve their own research as they are reinvesting huge amounts of GDP - just check the CIA Factbook on China and compare it to USA for example. It will take years, but one day we are going to see computers with "Invented in China" rather than "Made in China" sign on them. The same applies to mangerial staff.
Hi, my name is Doug Kahn, and I am enrolled in a Part Time MBA Program @ U-Mass Boston. My International Travels (Fun) Include Israel, Greece, England, and Mexico. Although I haven't lived/worked abroad, I do know what it's like to encounter an alien culture. Yadda Yadda Yadda.
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Looking carefully at the responses above, the foreigners not only have the same education as us, but also work harder. Over time, they will use this competitive advantage to economically overtake the United States. No Doubt! One important consideration is that the odds of meeting a Chinese or Indian MBA is very very very small!!! I don't care if you're in Shanghai or in Hong Kong, the percentage of the population is MINISCULE. I could have a foreign diplomat from India visit Intel's R&D Lab. They'll walk out of the building absolutely stunned that everyone in America Has a PH.D in Physics plus has 6 patents to their name. China is 20% Urban and 80% Rual. It will take alot of time before Chinese Industry swamps America the way the Japanese did in the 80's. But, YES the point is well taken. China & India will economically overtake the US one day. Anyone who thinks otherwise is not facing reality.
Doug,