Today is the first Friday of the month... so time for another guest blogger to join us...
Siyamak Khorrami is an entrepreneur and the president of Sky River IT.
I have known Siyamak for about 5 years. He offers so much insight that I often seek out his opinion although he is beyond 20 years my junior.
I am proud to call Siyamak my friend and mentor.
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"Failure is simply the opportunity to begin again, this time more intelligently"
As a foreign born, permanent U.S. resident, I have been given a unique opportunity to see the world in a slightly different way than most native citizens.
I was born and raised in Iran. When I was only 17, I moved to Mexico City to work with an international trading company. A few years later, a new position with a start-up life science company took me to Beijing, China where I was given the opportunity to help build a company from the ground up. After 5 years in China, my journey has taken me to San Diego where I now own and operate an IT service company.
Having spent several years in living in various metropolises throughout the world, I believe that I can offer a different perspective with regards to world business.
So much has been written recently about how the United States is losing its edge in innovation and the development of new ideas. However, I can say without reservation that this is simply not true.
The United States is the undeniable leader in technological advancement and will continue to stand above the rest in terms of innovation for many years still to come.
There are many reasons for my conclusions, but I would like to offer just a few areas that differentiate the United States from other places around the globe.
1) Government Impeding Business
From my experiences around the world, I have found national and local laws to be extremely vague and difficult to follow. It is to the point where it is nearly impossible to operate effectively in most developing countries.
Because the laws are so complex and arbitrary, companies working abroad regularly break laws sometimes unknowingly, other times with full intention. The successful company is forced to negotiate, on an individual basis, with local and national government officials to run interference or help mitigate potential adverse legal interpretations by enforcement officials.
Your success is directly tied to your relationship with these government officials. If you have "assistance" from the government, your path is protected. Conversely, if you do not have strong government ties, you are under the constant harassment of enforcement agencies.
Your applications for permits are always seemingly "lost" or delayed, your factories are under constant inspection by officials who find dubious infractions, and your workers are often harassed and threatened.
Many of these hardships can be traced back to your competitors who may have long-standing local government relationships and who would rather that you were no longer in business (at least in their local market).
As an entrepreneur, it matters very little whether or not you work hard, have good ideas, or can serve market needs. Your success is strictly tied to your government relationships... which will cost you much, if not all, of your potential profits.
In places like China, India, and Mexico... it’s matter very little as to what you know but rather who you know.
Here in United States, even though people constantly complain about government red-tape and regulations, there are a known set of laws and a proven court system.
As an entrepreneur, you can easily start a company and compete with established companies and if you are following the law you can easily succeed.
Instead of worrying about nurturing your government relationships, you can spend your resources, energies, and money on focusing on innovation and improvement of your products / services.
2) The Fear of Failure
In China and many developing countries personal reputation and close relationships are paramount for social acceptance and maintaining good standing within their communities.
Most people have been raised within a system where failure is fatal (sometimes figuratively... sometimes literally). Because of the culture of failure avoidance, people will always look to save face and will never admit that they have made a wrong decision or an error in judgment.
When you are scared of failing because failing cost so much, in terms of financial and social capital, you won’t take risks, you won’t make decisions, and you won’t think outside the box.
Therefore, creativity, innovation, and risk are regularly discouraged by financial backers and management. New ideas are risky and can’t be tolerated. The less risk the better... but the less risky approach will never be "cutting edge" where innovation mostly occurs.
Here in the United States, failing and learning from your mistakes has been ingrained into the culture.
The American people are quick to give those who have shown remorse second, third or more chances for redemption. We often see public figures making mistakes... even as far as committing serious crimes. Yet, once they announce to the public they know they have made a mistake and they have learned from it, the public is open to embracing them again.
Many venture capitalists in the U.S. won’t invest their money in a management team that hasn’t had some level of failure in the past. They believe that the entrepreneur who fails and isn’t afraid to get back up and try again is worth investing in. They have had their "comeuppance" and are now more focused than ever to learn from their past mistakes to avoid making the same mistakes in the future.
When people are not afraid of failing they are open to new ideas and ways of doing things..
3) Top Down Leadership
Most countries of the world are governed from a privileged ruling class. This varies from place to place from a complete and total dictatorship (China, Iran, Saudi Arabia, Cuba) to that of a ruling oligopoly elected under the guise of free democracy but only open to a select few (Russia, India, Venezuela, Mexico).
People who live in these places are used to being told what and what not to do from the highest levels. The rules are never to be questioned. When the leader makes a decision, it is presumed right by everyone, even if the decision is wrong.
This is the culture... what the people know to be true.
Every day this same idea permeates into business where all the decisions come from the top of the organization. The idea of a management team is a foreign concept because decisions are never made as a team but rather as an individual at the top. Subordinates see their job as a reinforcement of the leader’s decisions, never questioning or offer alternative opinions.
Contrast this management style with that of the most successful companies in the U.S. where many of the best ideas come from the people on the front lines. Creativity and new ideas come from those talking directly with customers or those spending their time in a laboratory. These are the people who are the closest to the problems.
Whereas the boss still makes decisions, he/she is assisted by a team that has no problem advocating different opinions or strategies.
Places like China are indeed slowly changing, but too much change threatens the current status quo which is being held tightly by those with the power to do so. It will require several generations to see significant changes in attitudes and cultural paradigms.
The United States, even with all its problems, is still the land of opportunity for all it can offer in terms of entrepreneurial freedoms and a culture of risk-taking, management teams, and bottoms up innovation.
Sure... it’s not perfect, but from the viewpoint of somebody who has seen the alternatives, it is still the best in the world...
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