The World is Flat
by Thomas L. Friedman
reviewed by Steven Bryce

Imagination is more important than knowledge.
- Albert Einstein

Freidman says "On such a flat earth, the most important attribute you can have is creative imagination - the ability to be the first on your block to figure out how all these enabling tools can be put together in new and exciting ways to create products, communities, opportunities and profits."

Key summary

I cannot tell any other society or culture what to say to its own children, but I can tell you what I say to my own: The world is being flattened. I didn't start it and you can't stop it, except at a great cost to human development and your own future. But we can manage it, for better or for worse.

If it is to be for better, not for worse, then you and your generation must not live in fear of either the terrorists or of tomorrow, of either al-Queda or Insosys. You can flourish in this flat world, but it does take the right imagination and the right motivation.

While your lives have been powerfully shaped by 9/11, the world needs you to be forever the generation of 11/9 (the Fall of the Berlin Wall in 1989) - the generation of strategic optimists, the generation with more dreams than memories, the generation that wakes up each morning and not only imagines that things can be better but also actions on that imagination every day.

Thomas L. Friedman, who is lauded on the back cover of The World is Flat, "as the world's best newspaper columnist (he is the foreign affairs columnist for the New York Times), "brings home the speed, closeness, complexity and deep mutual entanglement of the world economy by relating in detail a plethora of truly amazing facts about how it works. Freidman's book is an essential read for anyone interested to know where the next lightning-fast passage of travel over the surface of our ever-flattened earth is going to take us.

This is a very thought provoking book. It brings with it the excitement of being part of some of the greatest changes, across the broadest sweep of its population that this world has ever probably been through.

Freidman sets the stage with the "10 flatteners:"

11/9/89

The fall of the Berlin wall … which leads to just one superpower and allows the capitalist world to begin focusing on future growth;

8/9/95

The search engine. Yahoo going public. This begins to bring the interconnectivity to the internet to a much broader group of the world.

Work Flow Software

Xrays taken in hospitals digitized and read over night in India; McDonald's drive thru call centres which summarize your order to the cooking area within the 15 seconds you are driving your car up (improving accuracy of the order and thus speed at the window, allowing the franchisee to serve more customers) etc.

Open Sourcing

There is a whole movement of computer programming which believes that these programs should be free for anyone to work with, and will continue to be upgraded by many programmers world wide; the tradeoff being if you use and improve the program, you must share you invention with the rest of the open sourced world.

Outsourcing

The breaking down of companies into their various business processes and finding the best company with that core competency to manage it. This has lead to much work being managed in the third world, particularly India and China.

Offshoring

The movement of much of the manufacturing into low wage countries, like China and Mexico. As opposed to outsourcing some particular processes, this is moving the entire factory, producing the same product in the same way, except with cheaper labour, lower taxes, subsidized energy and lower health-care costs. The key policy situation with this is likely China joining the WTO, Dec 11, 2001.

Supply-Chaining

The use of worldwide sources for many different products, as opposed to either having it as part of the vertical chain of the business in question or local suppliers. Wal-Mart is the 4th largest country relationship with China ... and many other firms have higher % of the goods directly imported from other countries. There are suggestions that by treating suppliers like partners, Wal-Mart has a 5-10 % cost of goods advantage.

Insourcing

Where companies with specific skills (FedEx or UPS) in fleet management or truck distribution (not the right word) are sold to other companies They will also work to be a key link in a repair or warranty process with computers, pizza delivery companies, or a ton of product delivery types.

In-forming

Using Google and Yahoo or other search engines to be informed about a variety of things. Senior people now are able to have basic information at their finger tips, rather than using researchers etc. The easier and more accurate searching becomes, the more global Google's user base becomes, the more powerful a flattener it becomes.

The Steroids

The technologies that are amplifying and turbocharging all the other flatteners. They are taking all the other forms of collaboration that have been highlighted above and making it possible to do each and every one of them in a way that is "digital, mobile, virtual, and persona ... thereby enhancing each one and making the world flatter by the day.

Triple Convergence

All 10 flatterners have been around at least since the 1990's. But they had to spread and take root and connect with one another to work their magic on the world.

1st convergence

Take Southwest Airlines: printing of your own boarding pass, which allows Southwest and their customers to collaborate in a new way …. there were enough PC's, bandwidth, computer storage, Internet comfortable customers and software know-how for Southwest to create this workflow system.

Or Minolta's scanning, emailing, printing, faxing and copying all from the same machine. It is the complementary convergence of the ten flatterners, creating this new global playing field for multiple forms of collaboration.

2nd convergence

Why does it take time for a big surge in productivity to be associated with the big technological leaps. It always takes time for all the flanking technologies, and the business processes and habits needed to get the most out of them, to converge and create the next productivity breakthrough.

In addition to the 10 flatteners to converge we needed other things ... we needed the emergence of a large cadre of manager, innovators, business consultants, business schools, designers, IT specialists, CEO's and workers to get comfortable with, and develop, the sorts of horizontal collaboration and value-creation processes and habits that could take advantage of this new, flatter playing field.

The 10 flatteners begat the convergence of a set of business practices and skills, that would get the most out of the flat world - then the two began to mutually reinforce each other.

3rd convergence

As all these things start to happen, primarily in the west, 3 billion new people entered the field, and were able to plug and play with everybody else. This was essentially all of China, India, Russia, Eastern Europe, Latin America and Central Asia.

Right as the field was being flattened, right when millions of them could compete and collaborate more equally, more horizontally, and with cheaper and more readily available tools than ever before. Indeed, thanks to the flattening of the world, many of these new entrants didn't even have to leave home to participate, the playing field came to them!

Triple Convergence

  • Developing new processes and habits for horizontal collaboration is the most important force shaping global economics and politics in the early 21st century. Giving so many people access to all these tools of collaboration, along with the ability through search engines and the Web to access billions of pages of raw information, ensure that the next generation of innovations will come from all over the Planet Flat.

  • The triple convergence is not only going to affect how individuals prepare themselves for work, how companies compete and how countries organize their economies and geopolitics, it is going to reshape political identities, recast political parties and redefine who is a political actor. When the world starts to move from a primarily vertical (command and control) value creation model to an increasingly horizontal (connect and collaborate) creation model, it affects everything:

    • How communities and companies define themselves;
    • Where companies and communities stop and start;
    • How individuals balance their different identities as consumers, employees, stakeholders and citizens;
    • What role government has to play.

What do we tell our kids?

There is only one message: You have to constantly upgrade your skills. There will be plenty of good jobs out there in the flat world for people with the knowledge and ideas to seize them. America had 4,400 colleges and universities…with the rest of the world combined having 7,768 Coupled with America's unique innovation-generation machines - universities, public and private research labs and retailers - are the best-regulated and most efficient capital markets in the world for taking new ideas and turning them into products and services.

The New Rules

Rule #1

When the world goes flat - and you are feeling flattened - reach for a shovel and dig inside yourself. Don't try to build walls.

Rule #2

And the small shall act big…..One way small companies flourish in the flat world is by learning to act really big. And the key to being small and acting big is being quick to take advantage of all the new tools for collaboration to reach farther, faster, wider and deeper.

Rule #3

And the big shall act small….One way that big companies learn to flourish in the flat world is by learning how to act really small by enabling their customers to act really big.

Rule #4

The best companies are the best collaborators. In the flat world, more and more business will be done through collaborations within and between companies, for a very simple reason: The next layers of value creation - whether in technology, marketing, biomedicine, or manufacturing - are becoming so complex that no single firm or department is going to be able to master them alone.

Rule #5

In a flat world, the best companies stay healthy by getting regular chest x-rays and then selling the results to their clients.

Rule #6

The best companies outsource to win, not to shrink. They outsource to innovate faster and more cheaply in order to grow larger, fain market share and hire more and different specialists - not to save money by firing more people.

Rule #7

Outsourcing isn't just for Benedict Arnolds. It's also for idealists, i.e. - social entrepreneurs Michael Hammer once remarked "one thing that tells me a company is in trouble is when they tell me how good they were in the past … the same with countries. When memories exceed dreams, the end is near.

"The hallmark of a truly successful organization is the willingness to abandon what made it successful and start fresh."
- David Rothkopf

Insights

The more people with the imagination of 11/9, the better chance we have of staving off another 9/11.

No doubt the world will be more competitive in the flat world, more equal and more intense. We need to not underestimate our strengths or innovation that could explode when we really do connect all the knowledge centres of the world together.

On such a flat earth, the most important attribute you can have is creative imagination - the ability to be the first on your block to figure out how all these enabling tools can be put together in new and exciting ways to create products, communities, opportunities and profits.

In the author's words:

"That has always been America's strength, because America was, and for now still is, the worlds greatest dream machine."

The World is Flat - a must read!


Steven Bryce C.A is a consultant, trainer, coach, and turnaround change artist, with 20 years of senior financial and logistics experience in some of Canada’s largest retailers and 3rd party logistics providers. Steven is currently a Partner with kbconnection - Executive Recruiting and a regular reviewer for The CEO Refresher. Visit www.kbconnection.ca/ for additional information or call 905 625-4032.

The World Is Flat:
A Brief History of the Twenty-first Century

by Thomas L. Friedman
Farrar, Straus and Giroux
April 2006

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