OUTSOURCING

A Japanese company and an American company decided to have a canoe race on
the Missouri River. Both teams practiced long and hard to reach their peak
performance before the race. On the big day, the Japanese won by a mile.
The Americans, very discouraged and depressed, decided toinvestigate the
reason for the crushing defeat.

A management team made up of senior management was formed to investigate
and recommend appropriate action. Their conclusion was the Japanese had 8
people rowing and 1 person steering, while the American team had 8 people
steering and 1 person rowing.

So American management hired a consulting company and paid them a large
amount of money for a second opinion. They advised that too many people
were steering the boat, while not enough people were rowing.

To prevent another loss to the Japanese, the rowing team's management
structure was totally reorganized to 4 steering supervisors, 3 area
steering superintendents and 1 assistant superintendent steering manager. !

They also implemented a new performance system that would give the 1 person
rowing the boat greater incentive towork harder. It was called the "Rowing
Team Quality First Program", with meetings, dinners and free pens for the
rower.

There was discussion of getting new paddles, canoes and other equipment,
extra vacation days for practices and bonuses.

The next year the Japanese won by two miles. Humiliated, the American
management laid off the rower for poor performance, halted development of a
new canoe, sold the paddles, and canceled all capital investments for new
equipment.

The money saved was distributed to the Senior Executives as bonuses and the
next year's racing team was outsourced to India.