This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

March 7, 2007

Don't Offshore, Lakeshore

A fact of corporate life is that there is constant pressure to "beat yesterday," to increase corporate earnings, and push more profit to the bottom line. In their drive to increase profits, many organizations have resorted to outsourcing outside of their home countries. We call that "offshoring" and for years, The Herman Group has been sounding the alarm that, in most cases, the savings from offshoring are simply "not worth the effort."

Recently, Joyce learned of an extraordinary United States company that faced this issue and rather than offshoring, they decided to "lakeshore." Lakeshoring means outsourcing to another organization within the home country. Sedgwick CMS, one of the few organizations to earn the Employer of Choice® designation for three years in a row, embraced this seemingly counterintuitive idea.

When Sedgwick faced the choice, "to offshore or not to offshore" their claims processing unit, unlike its major competitors, its enlightened CEO David North made the executive decision that they would not. Instead, he charged his troops with finding a location within the United States where there was an available workforce with significantly lower costs. The result: the "Lakeshore Project," including their facility in Dubuque, Iowa.

The Lakeshore Project, providing "jobs, training and modest salaries for employees in small communities throughout the country, has led to savings for customers," North said. The real payoff for the company is in lower employee turnover, thus providing a higher continuity of service and bottom line savings. In fact, in the first six months of the program, the company did not lose one employee at the new facility.

In 2004 by Minnesota’s Northeast Higher Education District coined the term to promote its tech-prep graduates. Called the "True North" initiative, this program, using federal funds, encourages companies to locate in the region.

Lakeshoring avoids many of the challenges associated with offshoring: language and cultural differences, quality control, resentful domestic employees (though Sedgwick calls them "colleagues"), shrinking salary differentials, high turnover, deficient infrastructure, and even the loss of social capital. Our forecast: in the years ahead more organizations, large and small, will resort to lakeshoring, rather than offshoring.

© Copyright 1998- by The Herman Group, Inc. -- reproduction for publication is encouraged, with the following attribution: From "The Herman Trend Alert," by Joyce Gioia, Strategic Business Futurist. 336-210-3548 or To sign up, visit The Herman Trend Alert is a trademark of The Herman Group, Inc."

Our author Joyce gets quoted in TIME Magazine and other national media on a regular basis. You can, too! Sign up for You will be found by the news media and in Google search: 1. Through your personal search-engine-optimized press room by 39 topics you choose; 2. By news releases pushed out 10 ways including Google News; 3. Be found in the 2020 printed Yearbook of Experts, Authorities & Spokespersons. Save 15% when you register by October 31st @

The Association of Professional Futurists proudly presents its annual online learning experiences on Full Spectrum Futures. Network with leading futurists from all over the world. And best of all, it's free to attend, though contributions are encouraged to help defray costs. For more information, visit here.

Excellent translation services from English, French, or German into Spanish. Especially well-versed in medicine/pharma and automobile industries. 5-year Bachelor Degree in Translation. Also editing and proofreading of all kinds of Spanish language documents. Flexible rates, depending on number of words, degree of difficulty/technicality, and turnaround. For an instant quote email Mariana Campora Lesti at or contact her on SKYPE at marianacampora.

To read this Herman Trend Alert on the web:

Herman Trend Alerts are produced by the Herman Group, strategic business futurists, Certified Management Consultants, authors, and professional speakers.

New subscribers are always welcome. There is no charge for this public service. The Herman Trend Alert is read by over 30,000 people in 90 countries, including other websites and printed periodicals. Click here to sign up for the Herman Trend Alert.

Do you enjoy receiving this weekly e-mail update? Contact us about our co-branded Herman Trend Alert service.

Subscribe or Unsubscribe to weekly Herman Trend Alert
View this week's Herman Trend Alert
Archived Weekly Herman Trend Alerts


[ Home · About · Products · Resources · Media ]


7112 Viridian Lane
Austin, TX 78739
Voice: 336-210-3548
Toll Free in US & Canada: 800-227-3566

  © The Herman Group. All rights reserved.

Web site design by WebEditor Design Services, Inc.