The Tree of Industry

Bahram R. Shahmardaan, PhD

 

If we observe the relationships between different parts of a tree, we find that with a few exceptions, the roots draw the basic chemicals and water from the soil and pass it on to the trunk. The trunk processes the chemicals it receives from the roots and supplies it to the branches and the leaves. The leaves absorb light and oxygen (not carbon dioxide as is popularly believed) from the atmosphere and through the process of photosynthesis complete the nutritional cycle of the tree. Flowers grow from the secondary and tertiary branches of the tree and serve the needs of the insects, birds and mammals that in their turn serve the tree by completing the pollination of the flowers. The pollinated flowers develop into fruits, which in their turn serve the birds, and animals that disperse and return the seeds of the tree to its source namely the earth. The cycle is completed when the dispersed seeds germinate and the cycle restarts.

Now if the flowers of a tree did not serve the needs of the insects, birds and animals, then they would not get pollinated except through the medium of air. Similarly if the fruits did not serve the needs of the creatures that live on them, the seeds of the tree would not get dispersed. The point to be noted in this example is that for its own survival, it is in the interest of the tree to serve the needs of the insects, birds and animals that consume its products i.e. the flowers and fruits. And unless the various parts of a tree i.e. the roots, trunk, branches, leaves etc. cooperate with each other fully the tree will not be able to develop and produce the flowers and fruits. So it is in the interest of the roots to ensure that they draw the best chemicals from the soil and deliver them to the trunk. The trunk in its turn must support the branches by processing and distributing what it receives from the roots to the branches that then must make them available to the leaves and vice versa. Without this mutual cooperation between different parts of the tree the tree will be unable to survive much less develop flowers and fruits for its continued propagation.

Every company is a tree within the industry it operates and every industry is also a tree within the market place it serves. The roots of a company are the suppliers of raw materials. The company is like the trunk of a tree and processes the raw materials into finished products. The company then ships the finished products to a Wholesaler. Wholesalers are like the main branches of a tree. If you will notice a tree, fruits do not hang on the main branches of a tree but are available on the smaller branches. Wholesalers distribute the products to the retailers who then offer it to the consumer.

If consumers do not like or need the products/services of a company or industry then the company/industry cannot survive because there is no demand for its products. History is full of products that are no longer made because they became obsolete and consumers no longer needed and/or wanted them. This is particularly true in the fast paced world of consumer electronics.

So it is in the interest of a company to ensure that it delivers a product that the consumer will want. The best way to do that is to offer products that deliver the best value. In order to do that, it is in the interest of all the departments within the company to cooperate with each other fully. Further it is in the interest of the company to make sure that it views its suppliers, wholesalers and distributors as its business partners and vice versa. Therefore all the partners must ensure that each can make a profit. If not, they will not be able to survive. Yet if we observe what is happening in the, so-called real world, the business world we find that, in the name of competition and free economy, the usual custom is the exact opposite.

Within a company, department heads do not cooperate fully with each other. Instead of sharing the profits of the company with the workers that help create it, quite often, Management tries to give labor the lowest possible pay. Labor retaliates by going on strike or on a go slow strike. Similarly instead of viewing their suppliers, wholesalers and retailers as true business partners, within an industry, Companies try to squeeze the suppliers by demanding a price that is so low that the supplier cannot make a profit. Often Suppliers try to make a profit by delivering substandard material. Wholesalers will try to get the lowest price from a Company and quite often delay paying their bills. Retailers do the same thing to the Wholesalers. All of this results in the consumer not receiving the value they deserve.

Such attitudes may work for some time in a closed economy. They will spell doom in a Global economy. So it is in the interest of everyone concerned to view their co-workers as team members and their suppliers and distributors as true partners with whom they share a common objective i.e. deliver the best value to the consumer who pays all our bills. Consumers are not a problem. They should not be preyed upon. They should be revered and served because they are the only reason why we are in business. If there were no consumers, there could be no business.

Companies that are nationalized or who function within protected markets, do not see the wisdom of serving the best interests of the consumers. Companies with such attitudes will be unable to survive in a Global economy. Companies that are truly Global recognize this fact. The Global Oil Companies, the Global Automobile Companies and the Global companies within the Telecommunications industry recognize that they really do have to cooperate fully with their suppliers and workers. Very often in order to compete successfully, as a first step these large companies integrated vertically by buying out their suppliers. Even that worked up to a point within a national economy that works within national boundaries. However when the economy became truly Global, the companies had no choice but to seek greater protection for themselves by sharing the risks and rewards with their competitors. Witness the many mergers within the Oil industry, the Automobile industry and the Telecommunications industry.

Last year, Ford Motor Company recognized that their greatest asset is an educated workforce and that accurate and immediate inter-departmental communication is most important. So Ford gave every employee a computer free of cost. The employees could take the computer home. Ford Managment did not do this out of benevelonce. They did this out of self interest and self conservation. They have become wise to the extent that they realize that in order to survive and prosper in a Global economy, to protect their own self interest, an educated and well informed work force will develop better products faster.

This same Principle of mutual cooperation and sharing has been taken one step further by the Information Technology Industry. For the first time we are witnessing an Industry that is truly global. The pace at which things change in the IT industry is unprecedented. Small companies can compete Globally with international giants. The playing field has been levelled. This has forced investors and management to recognize that without their workforce, they will not be able to build their companies much less compete. So for the first time the contribution of employees is recognized in a tangible way. In the IT industry new employees are offered stock options as part of their total compensation. As a result of the stock options, employees work long hours and many of them have become millionaires. The IT industry and California's Silicon Valley has produced more millionaires quickly than any other industry and/or region of the world.

All of this demonstrates that the Universal Principle of working with Love and Harmony that keeps a tree alive within a forest i.e. the different parts of the tree working together in harmony to fulfill a mutual objective holds true also for the Tree of Industry. But has the increased wealth made those who receive it more happy than those who do not have it?

That will be the subject of future articles.

Bahram R. Shahmardaan, PhD