What’s Your Exit Strategy?

I read over the weekend about the role Elon Musk has in creating a new Department of Government Efficiency that would drive “drastic change” and save perhaps up to $2 trillion dollars in government spending.

When Musk purchased Twitter, the story was that he cut his staff from 8,000 people to 1,600 and then dove deeper into what was really needed and managed to get his head count down another 100. From a commercial point of view, I understand clearly what he did and how he thinks when it comes to making money with fewer people. I can only imagine how many of the 2.25 million that work in the U.S. Federal Government's civilian workforce will lose their jobs. Hopefully  it’s not a Twitter redux.

All of this makes me think of what is going on in our industry now as droves of purchases for apparel leave China, Turkey, and Bangladesh, and walk all smiley into Pakistan and Egypt with huge orders and red rose promises.

Again I get it. I understand Turkey is getting expensive, and I get it that Bangladesh is having political issues which creates risk. And it seems everyone can muster a “let’s get out of China” mindset. But what about the factories being left and what about their workers? What about “loyalty” and “appreciation” for the past? What about fairness? Or empathy? Or even sharing risk in the future? Doesn’t it all sound like customers  simply say “thanks but I gotta go now.” Is that it? Adios. I guess it is.

The prevailing opinion at Twitter is that butchering a workforce is smart business just as wiping out scores of jobs in the government is clever and leaving factories that no longer meet your price or geopolitical needs is simply good business.

More than a decade ago I was asked to speak at a social accountability conference to talk about the impact “ordering” has on the workforce — how reduction of orders caused job loss and how sudden unplanned increases in orders created sub-contracting in unknown conditions. I was never asked back and nothing has changed in our industry since the time I made that presentation.

The intellectual side of our minds allows us to think long term. England’s textile industry left, and England survived. New Englands’ mill jobs left and much of the Southern USA jobs in apparel and textiles have also gone and life continues. Those hurt the most are invisible and their stories and pain have no volume.

But if we look at our world as one world, and we care about the sections of the world that suffer, we should deeply consider what evacuating national apparel producing nations means to the people who work there.

Ending factory relationships should be done with empathy, with transition time, with respect for previous performance and commitment. Factories need time to redeploy workers and or help them find other work. It’s not enough to say, “oh your price is too high, your politics are too scary, good bye.”

Responsible exits should be an industry standard practice.

I urge everyone to read what is recommended by the Responsible Contracting Project HERE:

6.1) Should Buyer wish to disengage from its suppliers because of a potential or already-occurred adverse impact, Buyer will do so responsibly and as a last resort where (i) attempts at preventing or mitigating adverse human rights impacts have failed, (ii) the adverse impact(s) is irremediable, (iii) there is no reasonable prospect of change, or (iv) severe adverse impacts or risks are identified and the entity causing the impact fails to take immediate action to prevent or mitigate them.

6.2) Any disengagement, whether for commercial reasons, in response to an un-remediated human rights harm, a force majeure event, or for any other reason, will take into account Buyer’s sourcing volume and the potential adverse impacts related to disengagement, so that Buyer may identify appropriate measures for disengaging responsibly and for mitigating the hardship that termination may bring upon stakeholders. Decisions regarding mitigation will involve reasonable consultations with affected stakeholders.

Retailers all have manuals outlining how to do business with them. Sellers should have the same, which to ensure contract sanctity and exit “manners.”