Why Professionals Need to Compete Globally

April 14th, 2008 by Klaus Wiedemann

The answer is simple: if you don’t, you will be in trouble.

Get me right: I am not saying that you as an individual professional need to chase business all over the world. But, you need to be aware of your global competition. With high-speed Internet, well educated and trained people are available and reachable all over the world. Unlike last century, where low paid blue-collar work tended to be outsourced (or off-shored) to developing countries such as India or China, this is happening in the 21st century with white-collar job as well.

For example, More than 75 Percent of Financial Companies [are] Now Offshoring, Saving $9 bln a year.

Seems like tough times ahead, especially if you consider some of the aspects presented here (a pretty nice presentation, but lacks in my opinion a proper citation of the sources. Anyway, some good food for thought, if you take it with a grain of salt):

So, what to do? In my opinion, the outlook is not as bleak: Although competition is global, professionals have an invaluable advantage when competing locally against global competition: Trust, reputation and transaction costs.

What do I mean by that? Outsourcing and offshoring comes with transaction costs for your customer: more travelling to set up remote operations, more controlling and supervision. Because your customer does not know your fellow competitors from another continent yet: He is not familiar with their culture, he can not judge easily on their reputation. He still needs to build up trust to lower his transaction costs. This is the main (if not the only) entry barrier professional from a different country or continent face (no matter where they reside).

Therefore, in the 21st century, it is essential for a professional to focus on a few things:

• Reputation: This is what helps a customer to decide. In the knowledge business most professionals are in, this is probably the most important factor. Knowledge is not tangible, and selling a service is just a promise for a future delivery. But it’s not only reputation about your knowledge. I would rate the reputation about your (business) ethics as even more important. We believe that the ethics of the ancient Samurai can provide some guidance here.
• Professionalism: Once you got the contract, make sure you deliver what you promised: on time, in budget, in quality, and in a professional way.
• Your personal and professional network: This is where your reputation ressonates, and this is also where your potential customers refer to in order to get recommendations for service providers: “Do you know somebody good at… ? Can you recommend me someone who…?” Here, they know, they get services for the lowest transaction cost: recommendations from people they trust.

Trust is the currency of the 21st century, and your network is your bank.

Treat it wisely.

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