How many times have you heard that you must outsource to remain competitive? Crying We need to reduce labor costs… Surprised American’s can’t produce high quality industrial products? Well I thought a message about the opposite would influence the few -maybe save a few jobs, a few family incomes. We tend to have forgotten the long by gone days where the employee was treated well first, then the customer, then the shareholder- in that order…Well paid, tenured employees mean well fed and happy families who can then go to the store to buy products. Here is a good example of a company which stood its ground not only here but now exports its products from the US worldwide, Lincoln Electric.
Lincoln Electric produces arch welders for a variety of industries with its headquarters located in Ohio. Lincoln was established by John C. Lincoln and his brother in 1895 with a total investment of 200 dollars. In 2006 the company made 6 billion dollars. The brothers believed that a strong, motivated person through reward could accomplish great things. Everyone had the capacity in them to do extraordinary things and become who they wanted to be…
Could this still apply today?
Lincoln’s treated everyone equal from manager to assemblyman, success was based on high levels of productivity, individual effort from its employees and the sharing of its gains as a company with consumers, employees and shareholders. Lincoln as a company practiced an open door policy where barriers to communication between “workers” and managers were eliminated. Lincoln’s culture is merits based not privileged based on title or seniority. You are rewarded well for your work, if you work well. How can a company such as this still be competitive in today’s economy?
Simple answer: The rules did not change, we think they did. As Lincoln Electrics business began to expand the company considered entering foreign markets. However they as a company were told the stereotypical adage: “American goods don’t sell well in other countries” (being Europe)
Lincoln at the time (during the early 1990’s) decided to accept the advice of its European distributor counterparts and began to set up wholly owned subsidiaries in other countries to manufacture Lincoln equipment locally.
However, it was not long before Lincoln’s foreign ventures failed to deliver the gains forecast. This was because Lincoln’s American organizational culture and work system was resisted in the countries with which it set up manufacturing and distribution locations. Local managers in those countries in which it owned subsidiaries were unwilling or unable to enforce Lincoln’s individual effort, merit based corporate culture. Well, after roadblocks in Germany and Brazil, and issues in Japan and Venezuela, the company went with its heart and shifted to what they originally had planned to accomplish- exporting quality made arc welders to compete with those made locally in other countries.
And you know what, not only did they compete with other countries products on their own soil but out sold them on their own turf. Contrary to what foreign distributors had told them, their products did quite well in Germany. Lincoln did not have to set up partnerships in that country, but it could export their goods directly from America to them.
From then on the company focused on exporting welders and has done well, as it always has…made in America and made well, by well compensated employees. Here also is a YouTube video on what is needed to expand business globally.
Swim upstream when everyone is surfing down to the bay….