Are Sourcing Customers Going to Stop Hiding?

The practice of trying to hide corporate activities, investments and liaisons has a long and colorful history in the United States. The very idea of ‘hiding’ something almost always conjures up the presumption that the corporation is doing something wrong or illegal, or at the very least – unethical.

We, meaning those of us in the business press as well as consumers of media, seldom fully understand the potentially wide-ranging ramifications of public disclosure of corporate activities. We often buttress our ‘right to know’ around full disclosure laws governing public companies and also the inherent belief that our country is supposed to be a place where businesses have high levels of transparency as if it is part of the code of doing business in this country.

But the reality, of course is quite different. US corporations have a long list of reasons to keep the kimono closed. The concerns often boil down to some perceived risk – to corporate image, to the bottom line or some kind of potential liability. Not surprisingly, companies often don’t want their competitors to know about their strategic plans.

Despite the fact that there may be a mile-long list of reasons to keep quiet on certain issues, we still see many companies doing just the opposite of clamming up. They are open – sometimes exceedingly – to public scrutiny. They open their kimonos wide, share strategic visions, talk about their market challenges and – quite plainly – put an imperfect human face on corporate machinery. John Chambers, CEO of Cisco, comes to mind. He’s a candid, humble and seemingly open chief executive whose commitment to attracting and retaining high-quality talent is part of the reasons he gets ‘out in front’ of issues by speaking openly. Displays of this kind of leadership characteristically help solidify a corporation’s public image and give employees and potential employees a reason to be inspired… and loyal.

When we examine the issue of public disclosure on the topic of relying on third-party outsourcers, either domestic or offshore/nearshore, it’s an entirely different discussion. For one thing, US corporations are laggards compared to other regions of the world in speaking about the strategic advantage of outsourcing. The UK, for example, is far more developed in announcing sourcing deals as they happen. It’s a matter of course for many organizations to disclosure long-term contracts with sourcing partners, almost in the same way a new corporate office is christened.

But in the US, we have a hodgepodge of practices. Some corporations are quite public about how they have leveraged sourcing partners to drive innovation, cut costs or achieve other objectives. Yet we also have hundreds of others who just won’t go there.

In my view, in the next few years we are likely to see a clearer delineation between the talkative firms and the reticent ones. Corporations in the US are highly sensitive entities and are still trying to cautiously navigate in the web 2.0 world where reputations are more vulnerable than ever. We also have chief executives who are far more worried about signing off on compliance requirements, protecting the corporate firewall and keeping up with Wall Street expectations than disclosing corporate expenditures that could open up a can of worms.

But, one things for sure – as the Web 2.0 world continues to break down previously sacred boundaries in the corporate domain, more and more corporations will be suddenly challenged to either stay on the straight and silent road or seize the opportunity to be more forthright. It will be interesting to watch which way they go and the likely boost they may achieve by liberalizing their communications strategy.

Kirk Laughlin is Editorial Director of Nearshore Americas