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Posts Tagged ‘outsource

“Jargon” — words, words, words

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The late great George Carlin once did a bit on how “shell shock” transformed into “battle fatigue” into “operational exhaustion” into “post traumatic stress disorder,” with each successive description distancing itself from the reality of the condition the words describe.

Facile spin doctors are always using words to misdirect and misrepresent, to make the unpalatable acceptable.  Would you rather be “fired” or “laid off” or would you be “let go?”  Jargon is useful in many fields because the complexity of those fields requires precise terminology.  As such, those without a background in the field of that jargon often find the terms confusing and/or misleading, merely because they lack the context for the meaning of the jargon.

Yet the business community often uses jargon to a) placate stock analysts and b) attempt to spin unpleasant situations.  It is considered unwise to say, “We’re firing American workers to invest money in foreign countries in order to make more gross profit so that we can have slightly higher net profits while inflating the salaries of the executives who think all jobs except theirs should go to the lowest bidder.”  In business jargon, this activity is called outsourcing or rightsizing.

Here’s a new jargon term for you, one that I think is particularly appropriate in our current economic environment:  dumbsizing.  Dumbsizing refers to any shift in the workforce that damages the overall, long-term financial well-being of the company.

Let me give you a real-life example of dumbsizing from a Fortune 500 company, an entity split off from an even larger Fortune 500 company about 20 years ago.  This company has never, not once, given a dividend.  This, in turn, leads to short-sighted goals, since the only performance the majority of investors are interested in are short-term to mid-term gains in stock prices.

Opportunity costs being hard to quantify and predict, this company turned to cost cutting measures to survive.  In general this meant little additional money would be thrown at the rank and file.  A hiring freeze went into effect.  For months, only one job as allowed to be posted at this large corporation.  That job?  The title was “Executive Compensation Specialist.”  The only exception to the hiring freeze.  Because, as the Wall Street types put it after the housing/banking meltdown, “you have to attract and retain the best and brightest.”  At least at a certain level of compensation, apparently.  Or, in a different example, remember the airline executives that pressured the unions and pilots into $X million in cuts, saying that the company would fall without those cuts?  Only to turn around and distribute the same amount to the executives of the corporation for their success in cutting costs?

Back to the original Fortune 500 I was talking about.  Given that people in the Phillipines and India would code for a fraction of what a competent software engineer in America is paid, someone decided that “non-critical” work could be done overseas as a cost saving gesture.  Capital investments were made in the Philippines and India.  People were hired overseas.  A few people in the United States, mostly those doing the grunt work of the coding or testing, were “let go.”

Disaster after disaster in the code followed.  Communications errors abounded.  If code written overseas compiled it was “done.”  The fact that it wouldn’t run didn’t seem to make any difference.  Crashes that weren’t the result of a test case went unreported.  Personnel in the US began to complain.  Dozens of us were told (unofficially) by a wide range of managers that “the overseas initiative CANNOT fail.”  Not “cannot” fail in the sense that it must work, but “cannot” fail in the sense that no matter what happened, operations overseas were going to be called a success.

One overseas department spent 9 months working on a code update for a major system.  The code was, for the entire time of the work, checked into the wrong code library, rendering the entire 9 months of work completely useless.  They had to start over from scratch in the correct library.  Two weeks after finding out this disaster the manager of that team was promoted.

This was not a case of start-up problems, these exact same problems continued for years.  Coders in America were named baby-sitters for groups overseas, with the responsibility of fixing whatever didn’t work. One developer told his manager that he could do all of the work his three assignees could do using only 80% of his time, leaving the other 20% for doing something else.  But that fixing the problems of the three took 100% of his time — why not cut out the middleman and save the cost of the three?

In response the developer was told that the US was transitioning into a watchdog group, and that more and more of the work was to be done overseas, where it was cheaper.  When the developer complained that he’d just demonstrated it WASN’T cheaper, he was told, “Yes, well, the money for the salaries overseas comes from a different fund than our money.”

The corporation had dumbsized.  They’d incurred additional expense (“restructuring costs”) at the expense of profit.  They changed their most talented producers of product from producers to babysitters, changing the focus of their jobs from creating excellent product to trying to fix bad products just enough to get them to market.

In a more pointed example of dumbsizing at that company, at one point the executives decided that too much money was wasted on sanitation service.  Janitorial staff was slashed to the bone and beyond, and multiple messages went out, and signs went up, telling the engineers (who were making at least 5 times the amount of the janitors) how to do the jobs of the laid off janitorial staff.  This, of course, resulted in the predictable:  a few engineers did some of the work, but mostly it was ignored.  The buildings began to stink.  The floors were covered in filth much of the time, the garbage in various areas began to attract insects.  After not too many weeks the janitorial staff was brought back, a rare but understandable case where dumbsizing was recognized and fixed.

Correct short term decisions do not necessarily lead to correct long-term decisions.  As long as executives, and those who pressure executives, create an atmosphere where short-term gain is privileged over long-term success, catastrophe will eventually result.  When people cover up that catastrophe with buzz words and ill applied jargon, meant intentionally to deceive, you’ll get — well, go look at a synopsis of the American economy in 2009.  That’s what you’ll get.


Written by Bill O'Rights

September 1, 2009 at 3:11 pm