10/5/2004
There's a lot of debate right now, especially in this political season and with the current economic climate, about the outsourcing of jobs and all that good stuff. And we're going to bring Mr. Nies in here now to get his thoughts on it.
Interviewer: Tom, thanks for joining us. Mr. Nies are you there?
Mr. Nies: Good morning.
Interviewer: Good morning Mr. Nies how are you doing?
Mr. Nies: I'm fine thanks and you?
Interviewer: Thanks for joining us here on The Morning Show here on New Radio 1270 WFLA.
Mr. Nies: Thanks for inviting me. I'm happy to be here.
Interviewer: Well good. Well first of all, in this segment here, we want to get to all these questions I have for you. But just tell us a little about your company. People know about Microsoft, but possibly not a whole lot of people know about Cincom Systems, Inc. Tell us a little bit about the company.
Mr. Nies: Well Cincom's actually the oldest software company in the world. We helped to start the industry back in 1968. Back in those days, we sold to commercial customers - people who had the large-scale computers - and we built, developed, and offered what we call strategic software. We've been doing it ever since.
Interviewer: Well how'd you get started in the business, Tom?
Mr. Nies: We simply saw a need that needed to be filled and we did so. This is what almost all entrepreneurs do. They see needs. They try to fill them. They take an opening and try to do so in the way that they can keep their heads above water, make a profit and grow and expand the business. We saw a need and we stepped in. In the process, we helped to create one of today's most important industries.
Interviewer: Now Tom, like I said, the software industry is very competitive now and like you said, yours is one of the oldest in the business. How have you been able to stay so successful with the Microsofts and all the other companies that continue to pop up all the time?
Mr. Nies: In a scene from an early movie, W.C. Fields once was telling a young English boy, "Earn 20 pounds a year and spend 19, and you'll be a happy man for life. Earn 20 pounds a year and spend 21, and you'll be a miserable wretch, like me my son. Basically what we have attempted to do is just that. Grow responsibly as fast as we can, satisfy as many customer wants and needs as we can, but to do so in such a way that we're economically viable. We just continue to do that. You're right. Our industry is highly competitive today, just like all businesses. We've probably got two, three, or four times the supply of software providers that the world really needs today. That's a good deal for the customer though because this means he can "buy right." The customer can make demands on the provider and get very good deals.
Interviewer: Well definitely. You now provide software to commercial companies and more than the individual software owner.
Mr. Nies: We serve strategic users, not personal end-users. We don't sell games and software to personal buyers. We sell to businesses, government, hospitals, healthcare organizations - what we call strategic users, commercial users.
Interviewer: Gotcha. And Tom, something I've been reading about in some of the literature about you is that you believe in a psychology called "Giving Forward." Would you explain to the listeners a little bit about what that is exactly?
Mr. Nies: I think that most businesses and people who've done well in life "give back" to society. We know that a healthy America provides good opportunities for many of us. If one is fortunate and works hard, one can succeed well in America. So, a lot of people have made a lot of money in America. And we've come into America at a time when America has been strong economically; so there are lots of opportunities . I think that most people who succeeded believe that they should give back something. Normally they give back donations, charity, and so on. We like the idea of trying to help people give forward so that they're not relying on charity. Our goal is to help others to build better lives for themselves, their families, and the people around them and develop businesses. And we think that entrepreneurship and entrepreneurial activities are the best ways to do that.
Interviewer: Well that's definitely great and we're going to run away to a quick traffic update and get a little break here in a second Tom. But when we get back, I want to hear how you've been able to do this. I see that you've created more than 10,000 jobs and opportunities for people. We'll talk more about giving forward instead of giving back. And I'm very interested in how you've created these jobs, especially in today's economy, and how a lot of people are saying there's not a whole lot of jobs out there. We're joined by Mr. Tom Nies who is the CEO of Cincom Systems. We'll be back in a second to talk more with Tom - definitely a guy who we want to hear more about, especially when it comes to creating jobs and opportunities the way he has. This is The Morning Show here on News Radio 1270 WFLA. It's Brian Willard filling in for Preston Scott. It's 8:12.
Interviewer: Yes, it is The Morning Show right here on news radio 1270 WFLA. It's 8:15 here on news radio 1270 WFLA. This is Brian Willard filling in for Preston Scott on The Morning Show and we are talking to Mr. Tom Nies who is the President, Founder, and CEO of Cincom Systems, and he has an interesting philosophy here of giving back. Like giving to charities or societies but giving it forward. Creating jobs and opportunities for other people. And he has created 10,000 jobs and opportunities. Now we want to talk to him about how he's exactly doing that. Tom, explain to us how you've been able to create so many jobs and opportunities for different people during your pay-it-forward, give-it-forward campaign here.
Mr. Nies: We live in a democratic system built on the capitalistic model in a free-trade environment. Essentially, entrepreneurship combines these three attributes in the best way possible. I think our company is an archetypal example of all that is best in entrepreneurship. Let me just give some figures. We started out 35, 36 years ago with $600 dollars of capital and a card table in my basement. Over the years, we've generated $3 billion worth of revenue. Now that's $5 million dollars worth the revenue generated for every one dollar invested.
Interviewer: That's a pretty good return there.
Mr. Nies: Yes, that's a good return. In the process, we've employed a lot of people to help generate that revenue. And as we're generating the revenue, there are good opportunities for the people. So we share the growth and development, the well being of the business with our staff who helped to create it. Capital is simply a store of energy; the people are the true energy source. So entrepreneurship and an entrepreneurial business combines the best of capitalism with the best of a people-energized oriented system and we've worked that pretty well. But we're not alone - a lot of other entrepreneurs have done the same thing.
Interviewer: So it's pretty much not depending on somebody else to give you a paycheck. You give your people who help you along the way the opportunity to create other things, create their own money to become an entrepreneur as you put it.
Mr. Nies: We help our people to develop entrepreneurial opportunities within our business. Our business is a completely entrepreneurial or intrepreneurial business. It has grown and been developed by the energy, commitment, and resourcefulness of our people, and Cincom shares the wealth among our people the best we can.
Interviewer: Well Tom how have you had so much success as you said creating 10,000 jobs and opportunities? We seem to be in an economy where jobs are scarce right now and not a whole lot more are being created. Here you're on the exact 180 flipside of that, creating more and more jobs and opportunities for people. How are you able to achieve this when some other companies are not?
Mr. Nies: The secret I think is competitiveness. If a business is competitive, it can grow. If it's not competitive, it must contract. And many mature businesses today in America and in the West are no longer competitive. So they have to contract. The secret to being competitive is good, high-skilled people who are very, very productive, know what they're doing, want to work, and are eager to perform day in and day out. We believe that if we provide good incentives and good opportunity for good people, they will perform. They'll grow and develop the business. It's simple enough; just make the pie bigger. That way, everybody can get a bigger slice.
Interviewer: Right. You basically have to change with the times, that's what it is. It's a vastly changing economy here and basically manufacturing jobs are very down because stuff can be done a lot quicker. So your industry, the software industry, is also something that changes very quickly. You sort of gotta update yourself with the times. You have to move forward, you can't be stuck in old ways, or like you said, you would have to contract jobs instead of creating jobs.
Mr. Nies: You're right, absolutely, change is a way of life. One simply cannot improve one's situation or yourself unless you're willing to change. All change may not be improvement, but all improvement demands change. If you try to hold onto the past, you're a dead duck, you're like a deer froze in the headlights. The world takes advantage of people who are unwilling to change and improve. It's a competitive world out there, you've gotta improve your team every day or you get beat. What worked two years ago, five years ago doesn't work in business today. It's pretty simple really.
Interviewer: Definitely what it is, Tom, a lot of software - especially technology and computer companies - software companies are starting to go overseas to sort of outsource jobs. Do you see that as a bad trend, a good trend or something that doesn't necessarily need to happen?
Mr. Nies: One of the most powerful forces at work today is what is called "globalization." Capital seeks the most efficient, most cost-effective means of producing goods and services. If the work cannot be improved, the productivity of an American worker cannot be improved to produce more and better output per dollar of wage, that job is probably going to be moved abroad - or outsourced to some other firm which can deliver the quality and cost demanded. Now software and services, anything that can be moved across a wire in the networks, can be outsourced. So it's not just management jobs, it's not just manufacturing jobs that can be moved abroad. It's services jobs, too. Today in America, 68 percent of all the jobs and all the economy is in services. Many of these are subject to transferring abroad with the globalization system that's in place.
Interviewer: Definitely. Does it seem like we're talking about changing? Do American workers need to go back to school, do they need to learn new skills, do they need to basically learn how to work a computer and learn to do a lot of things to keep jobs in this country and to continue to create jobs here in the United States instead of sending them overseas?
Mr. Nies: I think we need to learn to be more productive, more efficient, more output-per-dollar focused. It's a complex problem. If there were easy answers to complex problems, we'd have them all in place already. But there really are no easy answers.
Interviewer: Definitely.
Mr. Nies: Since it's a complex problem, I think the first thing is to help the people to understand the globalization forces at work worldwide. In the five stages of dying we know that the first stage is denial, the second is anger. Similarly, we must now first face up to the fact that in America and in the West, we have a problem. Denying the problem isn't going to make us any progress. Nor is the fermenting of anger against the Chinese, Indians and others going to positively help us to resolve our own problems.
Interviewer: So denying and complaining about problems doesn't help. You have to do something about it. By denying and complaining you just take up time when you could be doing something constructive about it. Mr. Nies, I thank you for joining us. I love what you're doing with your 10,000 jobs and opportunities. I hope we can have you back sometime to update us on the great things that you're doing with Cincom Systems.
Mr. Nies: Thanks a lot. It's nice to be invited, best wishes to you.
Interviewer: Thank you. Have a good day.
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