Earlier this year, I suggested that an economist should negotiate your next 3PL contract. I referenced a report by The International Association for Contract and Commercial Management (IACCM) that contrasted key differences between the way lawyers and economists approach negations. Here is an excerpt:
Economists have moved beyond this point [assuming selfishness and that economic interest is ‘best served by looking after yourself, at the expense of other parties’], with their understanding that people and organizations are in fact able to grasp the benefits of cooperation and team behavior. The law is struggling to catch up and still appears to believe that the best way to manage risk is to allocate it to someone else and the greatest incentive to perform is via threats of dire punishment for failure.
After reading an article (“The End of Men”) by Hanna Rosin in the July/August 2010 edition of The Atlantic, I’m wondering if differences between men and women could also affect the 3PL negotiation process and outcomes. I encourage you to read the article; it contains some interesting statistics about the changing demographics of the workforce and education (e.g., women now account for 51.4 percent of managerial and professional jobs—up from 26.1 percent in 1980; women earn 60 percent of master’s degrees, about 50 percent of all law and medical degrees, and 42 percent of all MBAs; women dominate 13 of the 15 job categories projected to grow the most over the next 10 years in the US).
But here are the two excerpts that caught my attention:
We don’t yet know with certainty whether testosterone strongly influences business decision-making. But the perception of the ideal business leader is starting to shift. The old model of command and control, with one leader holding all the decision-making power, is considered hidebound. The new model is sometimes called “post-heroic,” or “transformational” in the words of the historian and leadership expert James MacGregor Burns. The aim is to behave like a good coach, and channel your charisma to motivate others to be hardworking and creative.
A 2008 study attempted to quantify the effect of this more-feminine management style. Researchers at Columbia Business School and the University of Maryland analyzed data on the top 1,500 U.S. companies from 1992 to 2006 to determine the relationship between firm performance and female participation in senior management. Firms that had women in top positions performed better, and this was especially true if the firm pursued what the researchers called an “innovation intensive strategy,” in which, they argued, “creativity and collaboration may be especially important”—an apt description of the future economy.
The words that jumped out at me were creativity, innovation, and collaboration—key elements that shippers and 3PLs talk a lot about, but then fail to walk the talk because they, to paraphrase Richard MacLaren from Unipart Logistics, lack “the courage to manage for the long term against the pressures [they] face today for instant results” (see “On Courage, Trust, and Patience in Logistics” and “In Search of a Smart 3PL Request-for-Proposal”). If the management style of women, as the research suggests, is better aligned with enabling “innovation intensive” strategies, then having women take a lead role in establishing and managing 3PL relationships seems like a good fit.
Of course, when it comes to negotiating and managing a successful outsourcing relationship, there are many factors involved. The way each person at the negotiation table is measured and compensated certainly has more influence on the process and outcome than whether the parties have two X chromosomes or an XY. If your bonus is based on cutting costs by 10 percent this year, then the focus of the negotiation (from the shipper’s side of the table) will be cost driven and short term.
Nonetheless, the trends and research cited in Rosin’s article are worth thinking about. A few weeks back, my colleague Steve Banker and I wrote a couple of postings about labor demographics (see “Baby Boom Logistics” and “BMW Revamps Assembly Plant for Ageing Workforce”). We focused mostly on how the workforce, particularly in blue-collar positions, is getting older and how this trend will impact logistics operations down the road. But as the statistics I referenced earlier show, a different workforce trend will impact white-collar and managerial positions in the logistics industry moving forward: there will be more women in leadership positions.
Would having a greater presence of women leaders in the logistics industry help transform the state of 3PL-customer relationships? I’m willing to bet so. I also find it interesting that the leading voice calling for change in the way companies approach outsourcing is a woman: my friend Kate Vitasek, part of the faculty at the University of Tennessee and author of “Vested Outsourcing: Five Rules that Will Transform Outsourcing” (I’ve highlighted Kate’s work in previous postings about performance-based outsourcing).
So, if your outsourcing relationships have been stuck in a rut, maybe it’s time you give a woman a chance to take the lead. And if she’s an economist, even better.
