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Workshop Presentations

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Implications of Offshoring for Engineering Management and Engineering Education Anne Stevens An initial hypothesis of the study group was that offshor- that 10-year engineers really wouldn’t be considered for ing is a huge risk and a major issue for all of us in engineering hiring because they would be too hierarchical. I do believe in the United States. But, from another point of view, it is not that in some of our industries—such as Ford and General as big a risk as all the hype makes it out to be. Which is it? Motors and some others—in some academic areas, and in In terms of engineering, how much is actually being off- the government, we do have an issue with hierarchical struc- shored? If we look back at history, we have been offshoring ture. To be competitive in the new world, we must know engineering, distribution, marketing, and selling of products what is going on in the global economy. Old hierarchies all over the world since the early 1900s. Ford Motor Com- cost money. They cost the morale of young employees. And pany has been operating in Argentina, Brazil, and Mexico they are inefficient in terms of bringing products or services for more than 90 years. General Motors, too, has been par- to the marketplace or education to students. What is really ticipating in business, including offshoring engineering, for important is how we transition these hierarchies into more just as long. nimble structures. There are already many nimble structures But what are the facts? One problem in understanding in existence today. Just look at firms like Google. the issue is some confusion about both the binning of the The second issue is workforce transition and adaptability. data and the accuracy of the data. But what is important is A 50-year-old engineer who is in or out of the market today what we do with what we know. What are the implications for various reasons needs reentry plans. Another issue is for engineering management? What are the issues? the op- the middle class. Companies like Ford Motor Company and portunities? What should we do as an academy, as leaders General Motors are displacing tens of thousands of hourly in academia and industry and government? workers, who were the foundation of the middle class in the What is the role of engineering managers? Does that role United States. Their ancestors were farmers who came off have to change? Should engineering managers be spending the land and into the factory. Companies started paying $5.00 their time differently? Do they require new skills? If so, what a day, which grew the domestic automotive market. The is- are they? What is our plan to give engineering managers, in sue is about transitioning people in the prime of their lives their 20s, 30s, 40s, 50s, or 60s, those skills? who have amassed much education and experience. How The first issue is that in some countries, such as India, can they—as well as other segments of the population—be there is a “hire-ability” measure for one-year engineers, mainstreamed back and contribute value to our economy or three-year engineers, and 10-year engineers. It was noted our educational system? The third issue is allocating the right level of resources to the right areas of R&D. Where, what, when, who, how much? Bob Galvin, a keynote speaker for this workshop   Anne Stevens is chairman, president, and CEO of Carpenter and retired Motorola CEO, is still very active and is work- Technology. ing to realize important engineering activities. There are 181

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182 THE OFFSHORING OF ENGINEERING many more Galvins out there. The question is how we use the manufacturing plant by a superintendent, he asked more their brainpower and their energy to address some of these questions about the power train of the trucks than the super- issues. intendent could answer. All this information was learned As for engineering management, we have to retool, but from the Web! not just retool. We must change our attitude in several ways. These are the kinds of individuals we are going to be It is critical that we tap into the skills and inherent creativ- dealing with, as customers, employees, and students. They ity and innovation in the millennial generation, the group are different, and the rules have changed. born between 1977 and 1995, which is going to be bigger The last example: I was privileged to give the com- than the baby boomer generation. Estimates range from 60 mencement speech this year for the engineering students at to 74 million. So we must look at the millennial generation. the University of Michigan. Before my address I had lunch These are the customers of the future, the politicians of the with several of the best and brightest in the class. They had future, the students of today and of the future. Engineering a lot of questions for me, and I had one question for them. management cannot expect to lead this generation with the My question was what don’t I know about them, what is it same set of skills that were used to lead many of us. that people in my generation don’t understand. These very The millennial generation will be a huge economic and savvy, brilliant, top-of-the-class engineers all looked at me social force in our world. Their perceptions and attitudes and said one thing: Facebook. are different from those of previous generations. They are Technology like that can really network in the virtual a connected generation. The Net is their primary source of world, as we offshore engineering. But if we bring these news; the next closest source is radio. Compare that with young people into organizations and try to evaluate their older generations, which strongly prefer TV. Technology has worth and their performance by whether they are in at 7:00 always been part of their lives. Whereas prior generations see in the morning and whether they are in their seats until the Net as something to connect to, millennials see the Net 7:00 at night—if we use those rules and many other current as a way to connect to each other and the world. rules—we are not going to be able, as engineering manage- Here are a few personal examples of the millennial ment, to tap into their creativity and innovation. As leaders generation. in engineering management, we need to increase the appeal First story: I have a granddaughter, Courtney Anne. She’s of science, engineering, and technology to the millennial nine years old, but the story I am going to tell you took place generation. Galvin’s road map, with his grandson leading when she was four. Courtney Anne’s other grandfather, my it in terms of defining technology management and areas daughter’s father-in-law, has a Ph.D. He is a very, very edu- of engineering and science for the future, is right on and cated, savvy professional. He is retired now. Courtney Anne brilliant. was sitting with him at the computer. I don’t know what he And what about those 50-year-olds who have been dis- was saying, but he was pretty upset. She looked at him and placed and the middle-class hourly workers or workers in said, “What are you trying to do, Pop-pop?” He told her, and other fields? Many of our institutions were really responsible she said—at four years old—“let me show you how.” for their predicament. In the Depression era people were The second story took place when I was with Ford. A encouraged to go to school, join a company like AT&T, Bell young man sent a letter to Jack Nasser who was then CEO Telephone, or Ford and GM, and stay there until they retired. of Ford Motor Company. “Jack, let me tell you something. Today that model of job security has changed! I’m 13 years old, but I know I need to start thinking about Many people in the generation that have been displaced things now. I know for sure in the future that what I want to basically thought they had signed a parental contract, with be is CEO of Ford Motor Company. The thing I don’t know employers and with governments. “We are going to take is what I should be studying. What is my field when I go care of you. In exchange for your loyalty, you’ll have a to get a university degree? Where do I start in Ford Motor retirement benefit that’s going to be there, health care, and a Company when I come in, knowing that I want your job?” job for 30 years.” The rules have changed. Generation Xers Public Affairs was fascinated with this young gentleman. know it, and the millennials know it. This is not going to be I got a phone call asking if I would please meet with him an issue for them. They have their skills, their abilities, their when he came into the company, which I did. He came in capability, and their networks. We need to figure out how to with his mother. They flew in from California. We set up take these lessons from the Generation Xers and millennials a very interesting day for this young man. We put him in and re-teach 50-year-olds and the middle class and hourly the design studio with the designers. We took him into the population—how to generate value back. All of us have some manufacturing facility. The individual engineers who met responsibility there. with him at the end of the day were absolutely shocked, Going back to the appeal of science, engineering, and because in the design area, this young man knew more about technology, Galvin’s example is one that works. Maybe it’s future design trends from what he had read than many of the “hairy, audacious goals,” as put forth by Collins. Maybe it’s designers did sitting at the tubes. When he was taken around higher salaries, as some speakers have said. Maybe it’s figur-

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IMPLICATIONS OF OFFSHORING FOR ENGINEERING MANAGEMENT AND ENGINEERING EDUCATION 183 ing out the next version of the space program to reenergize bring forward what we have always been able to do best. youth, or maybe it’s MacGyver on steroids on the Web. But The biggest risk we face is complacency. But, culturally, as whatever it is, we know we need to reengage the population a country, we have what it takes to succeed. to give us the talent we need for the future. America was, is, and always will be the lion. America In summary, what about offshoring? First of all, it differs knows how to eat. The gazelles are out there, and we are from industry to industry. It is a very exciting issue, and, at going to figure out how to feed ourselves. The key to that the end of the day, we should be optimistic. Offshoring for is some of the things summarized during this conference. us is an opportunity. But we have to get at the roots of who Academia, industry, and government all have major roles we are as people living in the United States of America and to play.