RECENT controversies involving product quality and safety underscore the importance of protecting consumers in our globalised world. Looking to government regulators is a first step. Beyond government regulation, there is a powerful emerging market force that imposes a more potent and far-reaching natural corrective - 'worldsourcing'.
Worldsourcing is a strategic outgrowth of globalisation. In a world with just one time zone ('now'), business must source materials, innovation, talent, logistics, infrastructure, and production wherever they are best available.
And we must sell wherever profitable markets exist, anywhere in the world. In today?s global economy, companies must worldsource or die. It's that simple.
Worldsourcing is transforming the fundamental structure, operation, and culture of business on a global basis. Despite its growing impact, the worldsourcing phenomenon is not clearly understood. And the result is an environment in which, to borrow the famous maxim from Albert Einstein, everything has changed but our way of thinking.
Worldsourcing is a bulwark that protects both consumers and manufacturers everywhere. How? Global companies that worldsource their goods and services are exposed to probing light and criticism from demanding customers and government regulators in many countries. They must create trust by adhering to the highest standards of governance, transparency, compliance, and quality.
Nike, for example, launches surprise inspections to make sure its global manufacturers meet worldwide standards. The giant French retailer Carrefour worldsources fresh produce by training its supplier - farmers around the world in the use of safe pesticides.
McDonald's creates closed, proprietary supply chains on a global basis to assure product quality. Goodyear Tire & Rubber demands all suppliers be ISO 9000 certified.
I live the worldsourced life. I am an American CEO based in Singapore. Our chairman, who is Chinese, works from North Carolina. Other top executives are based around the globe. A meeting of my company's senior managers looks like the United Nations General Assembly.
My company is like some of the world's most popular consumer products. It may say 'Made in China' on the outside, but the key components are designed and manufactured by innovative people and companies spread across six continents.
Like globalisation, worldsourcing has complex consequences. Bringing more people into the marketplace extends material comfort to millions who have never known it. At the same time, it threatens the jobs of people without high-value skills. That is why governments and business must partner to bring education swiftly up to the levels required in the age of globalisation.
The benefits of worldsourcing are material and strategic. A child's toy with a label that says it was made in Asia may give an American parent pause, but a popular-brand notebook computer with the same label won't stop consumers for a nanosecond.
The obvious difference: consumers trust worldsourced brands. Brands earn that trust by collaborating globally with the best minds in design, semiconductors, manufacturing, logistics, finance, and other business functions. The label on the outside simply identifies the last stop on a complex global journey.
The products of companies that practice worldsourcing may be labelled 'Made in Switzerland', or 'Made in the USA', or 'Made in China', but in the new world in which we all now live, they should more truthfully be labelled, 'Made Globally'.
The distributed logic of worldsourcing suggests a radically decentralised organisational model. Since companies today source everything where best available and sell where best markets exist, it stands to reason that worldsourced business functions should be located solely on the basis of finding the most attractive people, skills, proximity to key markets, infrastructure, language proficiency, IT capabilities, costs, and facilities.
A worldsourcing company can work 24 hours a day, following the sun. It can be Irish in Ireland, Nigerian in Nigeria, Australian in Australia, Chinese in China, and Singaporean in Singapore.
In today's world, assessing companies by their nation of origin misses the point. The true flag of each global company is its brand. The more a company reaches out to the entire world for the best ideas, people, and processes, the more it becomes the refined essence of its brand.
Its attributes are the quality of its goods, services, governance, transparency, and degree of corporate social responsibility. It is evaluated solely by the level of value it delivers to customers worldwide.
Worldsourcing is by no means a panacea for the potential pitfalls of globalised trade. As Deloitte Consulting concluded in a report last month, the organisational characteristics that deliver competitive advantage to successfully globalised companies 'have created a new genre of systemic risk'.
With our operational hubs located globally and our marketplace the world, we - and the governments in whose countries we do business - must work to assure our customers the quality and value they deserve. If we don't, we will disappear, and deservedly so.
That said, the worldsourced label stands as the free market's best global enforcement mechanism for product quality.
William J Amelio is the CEO of Lenovo, a global leader in the PC market with research, manufacturing, sales, and marketing operations on six continents
