skip to main content
Business Journal
How to Secure U.S. Jobs
Business Journal

How to Secure U.S. Jobs

Excerpted from The Coming Jobs War

To win the jobs war, America needs to be the best in the world not only at entrepreneurship and innovation, but also at customer science. The country simply cannot win new jobs unless it uses the most advanced sciences in the world to create billions of new global customers.

When foreign companies take over American businesses, something changes. Americans feel somehow that they're not what they used to be.

Simply put, new global customers create new U.S. jobs. That's why America needs to more than triple exports in the next five years -- or continue on a downward slide. The battle for global customers will be the defining element in the new war for jobs and GDP growth. Whoever sells the goods and services, and whoever owns the companies that own the customers, wins. The United States needs to average a minimum 10% annual increase in exports over the next 30 years to maintain its leadership of the free world.

The big advantage China has over the United States right now is that China wins customers with low prices. This strategy really can work -- not great, but OK for a while -- because as long as America invents the new products and innovations, it can produce them for the first iteration and create millions of great jobs. But when China evolves to understanding customers and their needs better than U.S. companies do, the United States loses its advantage.

If America allows China -- or India or anyone else -- to get further into behavioral economics and customer science than it does, the country will lose the jobs war. That is what Toyota, Volkswagen, and other automakers did to U.S. car companies. They won by simply listening to customers better and then delivering what customers wanted at fair prices. America cannot afford to concede the science of customer insights or customer-centric innovations to China or any other foreign competitors or it risks losing to them. This is a "game over" moment for America.

Why? Because if those countries learn to provide better service and meet customers' needs better, then customers won't need U.S. retailers and supply chains to deliver products. China will set up its own retailers and supply chains, and God help America if that were to happen. Its best retailers, shops, banks, car dealers, restaurants, grocery stores, malls, and even movie theaters would be Chinese owned and controlled, which means that the best cash flows, margins, and stock values all become foreign owned. The Coming Jobs War

There has already been a trend lately toward foreign-business takeovers, and the effects have been economically and psychologically devastating in headquarter cities. Belgian-based conglomerate InBev bought American icon Anheuser-Busch. When that happened, a little bit of St. Louis died. Brazilian-backed 3G Capital acquired Burger King, and a little bit of Miami died. When a national oil company in Venezuela bought out CITGO, a little bit of Houston died. When the Arcapita Bank, formerly First Islamic Investment Bank, bought a majority of Caribou Coffee, a little bit of Minneapolis died. No question, when foreign companies take over American businesses, something changes. Americans feel somehow that they're not what they used to be.

This might sound controversial to some Americans, but they should all love Walmart, no matter what particular beef they might have with the company. If it weren't for Walmart eating up all the little corner grocers and hardware stores, the Germans, Japanese, French, and for sure the Chinese would have. Somebody will come do it better. Walmart, Target, and Costco should be applauded for leading the way in reinventing retailing in America because if they hadn't, foreign companies would have. Right now the big box stores are worried about the "dollar stores." That's great -- Americans want Americans competing against other Americans.

The flip side of great performers like Walmart, Target, and Costco is poorly run companies. They're job killers, especially in their headquarter cities. Local firms, big or small, that are bad with customers will be cannibalized by outside companies. The most dangerous outside companies, as far as your city is concerned, are foreign. Jobs appear in combination with customers and GDP growth and then again in combination with American ownership and control.

You might think I'm an advocate of protectionism. I am not. Quite the opposite, I am 100% pro trade, pro competition, and pro law of the jungle. By no means do I think America should erect barriers against foreign-owned companies.

Leaders have yet to learn that relationships trump price in almost all businesses, from hair salons to high-tech consulting.

The solution isn't to avoid competition, but to take it head-on. Americans have to know more about American customers and all customers in the world than Europeans do, and especially more than the Chinese, Brazilians, and Indians do. The country that best knows the needs and preferences of all 7 billion customers will have a prohibitive advantage in winning the world's best jobs.

Sure, companies should do a great job of executing Six Sigma, lean manufacturing, reengineering, TQM, and so on. These practices all work and are essential to winning, but they are no longer enough. I don't know about your organization, but Gallup has squeezed the last drop out of most of these brilliant practices, all to its great benefit. But the low-hanging fruit of improving processes and efficiency has all been picked. What remains untapped is the incalculable opportunity within the emotional economy of customers.

In fact, one of the biggest blind spots in most American businesses is that they don't realize how big the emotional economy is within their own customer base worldwide. The best corporate leaders in the United States are still unaware that they are leaving a great deal of money on the table through abysmal execution of the employee-customer links because they are so focused on the "hard numbers," of which they have already squeezed every dollar to diminishing returns.

You and your teams can double and quadruple exports and foreign sales by increasing the number of your current customers who give you a 5 for partnership on a 1-5 scale. Let's assume that 20% of your customers give you a top score, which is about the global average. By raising that number to 40%, you will experience record sales increases without spending a nickel more on advertising and marketing. You grow, America grows, jobs grow.

From my 40 years of studying customers, this represents the biggest missed opportunity of all organizational leadership -- probably because it is easier for leaders to talk a good game and then at the end of the day, just cut their price, falling back to the rule of classical economics that every decision is rational, which is not true. What customers at any level really want is somebody who deeply understands their needs and becomes a trusted partner or advisor. The business world fails at managing this one most critical behavioral economic variable more than any other, but it remains the lowest hanging fruit for organic growth for virtually all businesses.

Leaders have yet to learn that relationships trump price in almost all business circumstances, from hair salons to high-tech consulting. He who most deeply understands the customer's needs tends to win and always gets the highest margins. That's why talent and relationships can almost always beat low price -- they inspire customer engagement. To measure customer engagement, these are the best 11 questions Gallup scientists have found to ask customers anywhere in the world:

CE1. Taking into account all the products and services you receive from them, how satisfied are you with (Company) overall?

CE2. How likely are you to continue to do business with (Company)?

CE3. How likely are you to recommend (Company) to a friend or associate?

CE4. (Company) is a name I can always trust.

CE5. (Company) always delivers on what they promise.

CE6. (Company) always treats me fairly.

CE7. If a problem arises, I can always count on (Company) to reach a fair and satisfactory resolution.

CE8. I feel proud to be (a/an) (Company) customer.

CE9. (Company) always treats me with respect.

CE10. (Company) is the perfect company/product for people like me.

CE11. I can't imagine a world without (Company).

Copyright © 1994-2000 Gallup, Inc. All rights reserved.

If America doubled the number of engaged customers -- those who respond with a 5 on these statements -- worldwide, it would secure its economy and more than triple exports.


Jim Clifton is Chairman and CEO of Gallup. He is the author of The Coming Jobs War.

Gallup World Headquarters, 901 F Street, Washington, D.C., 20001, U.S.A
+1 202.715.3030