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Nov 2, 2010

Dancing in the lion's den

By now I suppose most of us have read or heard about the arrogance of Lionbridge and its Vice President of World Wide Vendor & Supply Chain Management, Didier Hélin, whose name appeared at the bottom of a ransom note sent to the company's "partners", which demanded a 5% cut in fees for future work. Though there is no hard evidence presently available to confirm rumors that the company is in the process of merging with a well-know organized crime family as a means of improving its organizational discipline, this letter does at least indicate that the extortionist traditions of such families are not unappreciated by senior management at the Big L.

I must admit to feeling a bit left out, not having received an invitation to the discount party. In this Age of AIDS, I am a bit careful in the choice of my associates, and I never felt the urge to catch what Lionbridge has been so generously passing around in our professional circles, though I've seen the drill with similar organizations. Nonetheless, the wealth of responses to the company's initiative to increase the bottom line by flogging the bottoms of its vendors harder has been commented upon widely in our circles. Interesting reading can be found
and many other places. The response triggered by Mr. Hélin's brilliant missive has led to the coining of a lovely new word, crowdscorning, which is sort of like the shunning practiced by the Mennonites in my old home in Scio, Oregon (population less than I could pack in my house for a party if we're all really good friends) and elsewhere but which has the scope one would expect in this global age. I expect Didier Hélin will become the new poster child for No Peanuts, and he and other Lionbridge executives will be greeted eagerly at industry events by others hoping to learn what other measures are required by a company that claims to have achieved record profits recently.
    None of this is new, really. Those accustomed to dealing with the supply chain etiquette of many large companies will recognize the uncouth, predatory practices that are encouraged in this environment. That is perhaps not universally the case, but it is close enough to universal that it is a good working premise when dealing with organizations like the top volume LSPs. You might as well dance in the lion's den, but don't count on coming out of it as well as Daniel.

    My experiences in dealing with LSPs are largely positive. In thousands of interactions over the past decade, I can probably still count the issues of concern on my fingers and have a good number left over. This is in part due to careful screening of my agency partners, a selection process which includes a very conscious preference for smaller, specialized agencies or at least SMEs with a very personal touch. They don't spam me with cattle call project "inquiries" sent to hundreds of translators, they don't play twist-my-arm-to-save-a-penny games, but they do work with me rather often as real partners to get jobs done, deliver some real value and retain our dignity while we do it. These are the LSPs who deserve our best efforts and support. For all the talk of "consolidation" as the big fish try to swallow each other and encourage the little ones to feed on their excrement, I believe that disciplined, well-focused small LSPs have a bright future. For all the mindless babble about our collective future as post-editors of MT-spew, I know that there will always be room at the top for real translators and LSPs able to do real, crafted translations for a clientele that not only cares about quality but needs it as well.

    Addendum 2010-11-17: Thanks to Kirti Vashee for tweeting this bit of news from today's Wall Street Journal online:
    Lionbridge Technologies Inc. topped the list of Biggest Percentage Price Decliners among common stocks on the Nasdaq Stock Market.
    Looks like shareholders know value when they see it ;-)


    9 comments:

    1. You know what, Kevin? Lionbridge is just a business like any others. I just read "Lionbridge Technologies 3Q loss widens" (http://finance.yahoo.com/news/Lionbridge-Technologies-3Q-apf-2433326736.html) and see sharks and vultures circling. Crowdscorning doesn't help at all. I am pretty sure that there are sufficient desperate translators who will comply with the demand of 5% discount. No many can do anything about it, like the massive protest against a translation whorehouse was responded with pages of "Post removed: This post was hidden by a moderator or staff member because it was not in line with site rule" and yet translators stay as silent as lambs.

      When you put frogs in a pot and start to pour in some hot water, they jump out immediately. But when you put them in a pot, pour in some tepid water and start simmering gradually, the frogs stay and die in the pot. 5% discount is a bit too hot a pour into the pot. We hear screams. Just wait and see. For some addict translators, 5% discount is not that hot at all. They stay in the pot like they stay at the translation whorehouse. Besides, there are people who believe that they don't have to run faster than the lion - they need only to run faster than the others.

      However, I like your concluding paragraph. There are quiet a few LSPs with whom we can work reasonably. It is always a personal choice and, of course, some luck.

      Keep on and keep up, Kevin!

      ReplyDelete
    2. @Wenjer, of course the Big L is a business, but not "like any other". Be aware of the clichés you use and their implications. I agree that it shares characteristics with other LSPs of that magnitude; thus my recommendation to turn one's back on that crowd and live a better life elsewhere.

      But it is important to remember that at any level, each business has unique characteristics, and these determine not only its profitability and possibility of survival but also what it's like to do business with them. "Company culture" matters a lot, though my feeling is that when you reach the size where insiders routinely use that term, you're in the trouble zone.

      The loss notices for Lionbridge are more in line with what I remember of them losing their shirts a few years ago, closing European offices and laying off PMs. With so many levels of subcontracting to MLVs, SLVs, etc. is it any wonder that the "value chain" is more like an anchor chain tangled around one's leg and headed for the bottom of the sea? So the attempt to move more business to their awful online system GeoWorkz is understandable. Gotta give those 1200+ software engineers and others (at last count) that Lionbridge employs in India something useful to do.

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    3. Kevin, whatever one writes or says, there are always people who find some implications. You can do nothing about it.

      I remember you wrote somewhere something like "one cannot exercise power over me if I don't let him." While Miguel Llorens writes, "Some commentators on this sorry episode have said things along the lines: 'I wouldn’t work for them. But, hey, that’s the market. You’re free to take it or leave it. That’s capitalism.'...I’m sorry, but that’s not capitalism. That is feudalism.", your comment there reads, "When I consider what sort of 'qualified professional' they’ll probably get to do the work (in my language pair), I’m not the least bit annoyed." Lionbridge might regard itself an empire (feudalism), but it doesn't affect us who don't work for the empire. Yes, we don't mind what sort of "qualified professional" they can get. We are lucky enough not to "have to" work with/for them.

      But why is LIOX that much confident of making translators (not you and me, of course) comply with their policies (pay for use of Workspace, 5% discount, etc.)? The same trick was applied when there were massively "this post is hidden from public view..." or "I lock the thread." Then, everything returns to "business as usual", silent and harmonious.

      Think about the fact that you can criticize LIOX there, but you cannot criticize (products of) another similar company, then you understand that it is just a matter of affiliation (or sponsorship or patronage?).

      You see, Kevin, that's the way sharks do businesses. When you have to make a living within their kingdoms or their empires, comply or perish.

      Yes, "company culture" matters a lot. But kingdoms and empires are almost alike. The ones who benefit from the system (shareholders?) help the system suppressing less fortunate ones. They don't care even to let die. (Who cares why a freelancer falls? He failed, didn't he? The bell doesn't toll for him and the sun also rises.) Without the decision of the LIOX management, Didier Hélin wouldn't have staged the so-called Halloween horror show. There wasn't "Didiergate" at all. From their point of view, translators won't "die" on a 5% discount. Besides, there are quite a few translators who are just as ready to comply as they are ready to do the same in order to stay at any portals waiting for their luck.

      I won't be so naive as to believe that the downfall of LIOX or any similar companies would bring us translators any benefit. There are some more serious problems in our industry. And I know that you are aware of them. That's why I follow your writings and wish that you keep on and keep up.

      - Wenjer

      ReplyDelete
    4. > I won't be so naive as to believe that the downfall
      > of LIOX or any similar companies would bring us
      > translators any benefit.

      There's always another company ready to take the position of the fallen. Just for laughs, I looked up some of the current and past rankings of LSPs by the Common Sense Advisory. The movement up and down the scale, on and off the list is quite considerable. One Spanish company that I recall being on someone's Top Ten list is now nowhere to be seen. The quality nerd in me wants to believe that this is due to their current policy of cheap "spot checks" instead of real reviews, but I'm sure the real reason is much more mundane - something like not swallowing enough competitors.

      Today Lionbridge is in the stocks. Tomorrow another large LSP will earn tomatoes and rotten eggs thrown at its executives in the public square. But all this entertainment rather misses the point that in many cases, the clients and contractors who choose to dance with these lumbering behemoths will spend a lot of time getting stepped on.

      That translators should go elsewhere to subcontract is a given. But clients can generally do much better as well. For occasional needs, individual translators found through professional directories are a place to start, or smaller, more focused LSPs with less overhead. However, companies with regular translation needs of a diverse nature would be well-advised to consider insourced project management. Software solutions like OTM, Worx, Plunet, etc. to support this are available to everyone, and the databases could include specialist PMs, reviewers and whatever other external support may be needed.

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    5. The Lion and the Bridge

      There was a Lion
      The Lion had a Bridge
      That lead right to the island
      Through which it could be reached.

      The lion had a lot friends
      Who filled his life with glee
      Until he started charging them
      For crossing over sea.

      There is a lonely island
      Across a lonely bridge
      Where lives the lonely lion
      Unwilling to be reached.

      ReplyDelete
    6. Kevin

      Your comments should be required reading for translators. I hope that many of the best translators will find LSP partners who are willing to build long term partnerships and realize that you are a critical and strategic element of their success.

      My sense is that the most valuable people and possibly the only people who cannot be replaced in the supply chain are the good, reliable, consistent, quality-focused translators. The firms that know how to attract and keep the "best" translators will have an advantage and as we see from the reaction to the many HUYA LIOX initiatives - you cannot build a quality focused business by bullying your core production assets. I expect that such tactics will only erode their access to quality producers and corporate customers who are awake will notice this.

      You may have noticed that while the company stock seems to suck away, the LIOX CEO has no problem paying himself $1M+ for his performance excellence. The CEO self-congratulating, delusion of grandeur malaise in America has yet to run it's course. It would be nice if he applied the same rules to the people who keep him in business.

      I have been accused of saying that there is a coming consolidation in LSP land. Let me explain more clearly what I meant.

      There are perhaps as many as 20,000 "LSPs" according to CSA - many who only provide brokering services with freelancers of unknown quality and provide the most rudimentary project management services if any. These are the people who will likely be marginalized and removed from the supply chain. In the current market situation it is often hard to tell the low quality from the high quality producers because they all seem to say the same things, but as process and production automation improves it will be easier to identify opportunistic brokers who push down prices and deliver crap and thus hurt the whole eco-system and profession.

      I believe that SLVs who produce consistent high quality and are known to be fair to their translators are likely to be highly desirable partners for both the MLVs and the Global Enterprises who choose to bypass MLVs and go straight to the quality production players. Collaboration and process management technology makes it much more possible to bypass MLVs who add little value but charge "project management fees" for handing off the work to SLVs. The best MLVs will need to do more than project management, and play a meaningful value adding role in initiatives like developing MT engines, community/crowd management, increasing process automation, JIT translation, user generated content translation management and handle the many ongoing flowing streams of content that drive global business. There are thousands of LSPs who can do basic project management but very few who can really provide value in MT or community engagement and other quality management initiatives.

      While I do predict that many LSPs will be marginalized in this coming world, I also predict that the value of the best translators will continue to rise as global enterprises realize that they are key to making high value content multilingual in a cost-effective and timely way but yet maintain target quality levels. It is possible that some or many of these "best translators" will learn how to make MT work for specific purposes with available resources. I also predict that the best translation technology will come from those ventures where there is a respectful, cooperative and collaborative partnership between technology developers and skilled language translation professionals. There is a bigger role for skilled language professionals in MT than post-editing. Hopefully this starts getting clearer over teh coming years

      If you do not wake up every day thinking about how you add value to the people you interact with and if quality is not one the most frequent words you use - you should be worried.

      I am proud to be in the company of translator bloggers that you have on your site.

      ReplyDelete
    7. One way to possibly escalate this concern for fairness is to make more powerful stakeholders who will care what this mean for the future of the company.

      Identify all the research analysts that cover LIOX and inform them in a clear and dispassionate tone how this move will very likely cause the best translators to refuse to work with LIOX and result is lower quality for many services provided by LIOX thus resulting in customers leaving and a lower stock price. Remember that these are the guys who publicly quiz the executive management about how things are going every quarter and also write reports to inform interested investors what they think about the company and its future. Here is a start:
      - Vafi, Joeseph of Jeffries & Co
      - Baldry, Richard of Signal Hill Group LLC
      - Hynes, David of Canaccord Genuity
      - Liu, Kevin of B. Riley & Company, Inc.

      They also have coverage by Friedman Billings, Matrix Research, First Albany and Piper Jaffrey so find the analysts and let them know why you think LIOX has a shaky future

      Identify the Investment Officers at their largest institutional investor firms and inform them why LIOX may be a bad investment and why their stock price is likely to fall, again in a dispassionate and clear way so that they understand that there is a real risk of the stock price collapsing and staying in the gutter.

      This link provides a list of all their largest Institutional Investment holders http://finance.yahoo.com/q/mh?s=LIOX+Major+Holders
      Find their addresses/emails and make sure they hear about this from you and all your best friends who disagree with this policy.

      Write them all an email explaining the role of the translator in the localization supply chain making sure they understand that quality comes from good translators who are likely to work best when they feel fairly compensated. You could also explain how alienating good translators will undermine LIOX quality in the long run. LIOX will probably have a story on how easily translators are replaceable - it is important to explain that like in any other profession, the best translators are not so easily replaced. Give them examples of how bad translators undermine product and services offered by LIOX.

      Then attach a link to all the blogs that explain why this is unfair / bad strategy etc.. There is a good summary of the LIOX Crowdscorning with many links at http://t.co/ArVJtc7 I suggest that an even and considered tone like the one employed by Kevin Lossner will be the most effective way to make your point. Angry people are tiresome and best ignored.

      Make sure that you and a 100 of your best friends send some form of this summary to anybody who is interested in investing in LIOX stock or currently owns a significant amount of LIOX stock.

      Make it clear that this is likely to cause the following:
      - Loss in service and product quality
      - Increasingly lower quality translators working for Lionbridge which will be reflected in their deliverables
      - Imminent and sustained drop in LIOX stock price (i.e. it will be very hard for the stock to rise again)
      - Continued losses as some large customers realize that they have so much ill will that it is going to affect their ability to deliver services and choose to find other suppliers who have better relations with the supply chain
      - Perception of LIOX as a sweatshop which will make many blue chip customers shy away and avoid LIOX as a supplier

      But my real advice to all of you is that you are probably best served by finding new people (SLVs too) to work with, who treat you with more respect and fairness and realize that in this industry quality is accomplished through human partnerships. Working with people who recognize and acknowledge your value always makes for a better life. Right?

      Good Luck.

      ReplyDelete
    8. Thank you for some excellent suggestions for how to beard the corporate lion in its den and apply pressure through the markets. This is an approach that might be followed with any publicly traded company.

      But the best tip really is "you are probably best served by finding new people (SLVs too) to work with, who treat you with more respect and fairness and realize that in this industry quality is accomplished through human partnerships". This isn't about that loser Lionbridge. (I mean "loser" quite literally - profitability has not been the company's strong point for a while.) It's about building sustainable, nourishing relationships with real business partners. They do exist. I've cited some by name in this blog, and there are many others I know and don't name and far, far more whom I will probably never know.

      Life is too short to waste it chasing around with overgrown, disrespectful MLVs who have neither your interests nor the end client's in their hearts. Doug Lawrence has some interesting comments on negotiating with big shops in the interview Ivette just published with him. It is worth reading as you consider alternative partners.

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    9. I'd prefer to remain anonymous, as I'm ashamed that I ever worked for Lionbridge. But I thought it might be useful to spread the word that Lionbridge appear to be offering (unsolicited) free subscriptions to their GeoWorkz/Translation Workspace product.

      I consistently refused to use TW when it was first introduced (though I did have a free trial), and shifted my business away from Lionbridge towards more satisfactory clients, though I continued to do a few specialist jobs for L using my own tools. I told the L office for which I worked that I would have nothing to do with the 5% discount wheeze, and this was respected and they still sent me work.

      I haven't done any L work for some time, so the notification last week that my free GeoWorkz account had been set up came as a surprise. I imagine this is a way to boost their subscriber numbers. I haven't yet found a way to cancel the account.

      I no longer wish to use my specialist skills to support Lionbridge.

      ReplyDelete

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