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Wednesday, November 28, 2007

Which company goes there - Friend or Froe

Last week I was reading an article in the FT who were interviewing Martin Sorrell CEO of WPP. He highlighted the potential growth of China - one statistic really stood out. The US produces 56k engineers per year whilst China produces 465k.

As Ive posited in a number of previous posts Sorrell identified a paradox - there is a vast oversupply of products, whilst because of demographics there is a distinct and worsening shortage of talent to provide companies with the brain force that they are likely to need.

Basically companies will be pressuring their governments in my opinion to be encouraging immigration of talented engineers for example from other countries to fill in the gaps in their talent base.

In a post from Bill Taylor from HBR highlights another interesting comment by Sorrell where he talks about the competitive dynamic between marketing firms such as WPP and digital giants like Google.

He has coined the concept of froes and frenemies. Sometimes firms need to be both friends and foes/enemies. Occasionally companies have to be nice to companies one minute in say another part of the world whilst being competitive enemies in another part of the world.

Taylor concludes by asking companies "who is their most valuable froe and who are your most worrisome frenemies. Have you figured out how to co-operate with and compete against the most important players in your field. "

Old certainties are breaking down and the business environment changes in the globalised world. It's a bit like 1984 where Winston Smith rewrites history so that Eastasia are now our friends and Eurasia are now our enemies in the world of friends and froes.

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