Tech suppliers need more responsible leaders

In my November 2017 Insights column (“Advocate for responsible outsourcing”), I discussed the various factors that led to over-outsourcing. For example, many companies just look to source from countries with low labor costs. I identified the most glaring factor missing was justice. I wrote, “Companies, like people … owe national debts … A multinational company that has successfully built a business in a country should not favor foreign residents over domestic ones. In addition, companies hiding trillions of dollars in other countries ought to invest some of it domestically. Lastly, a company that avoids paying taxes by just changing the location of its headquarters to another country is acting unjustly. Why? Because a company is beholden to its home country.” 

Fast forward to my July/August 2019 Insights column (“Advocating for responsible supply chains”), and I singled out that at least one well-known tech executive also believes in “justice and national debts” as well. On Feb. 26, 2019, it was reported on IT news website Neowin “that over 100 Microsoft employees signed a letter addressed to CEO Satya Nadella and President Brad Smith, complaining about the company’s $480 million contract with the U.S. military to develop an Integrated Visual Augmentation System (IVAS), which also includes HoloLens. The document primarily revolved around an ethical debate regarding Microsoft offering technology that could potentially be used to increase to hurt and kill people.” In a statement to CNN, Nadella had the following to say about his decision to honor the contract:

 “We made a principled decision that we’re not going to withhold technology from institutions that we have elected in democracies to protect the freedoms we enjoy. We were very transparent about that decision and we’ll continue to have that dialogue [with employees]. It’s not about taking arbitrary action by a single company, it’s not about 50 people or 100 people or even 100,000 people in a company. It’s really about being a responsible corporate citizen in a democracy.”

 At the time, not all high-tech companies believed that they owed a “national debt.” It was reported in Business Insider on June 1, 2018, that “facing both public pressure and unrest from within its own company, Google will not renew its contract to help build artificial intelligence tools for the military.” Apparently, working with the military casts doubt on “Google’s old motto: Don’t be evil.” Did Google forget that it benefited greatly from the development of the World Wide Web, which evolved from research initiatives funded by the Defense Advanced Research Projects Agency (DARPA)?

 Apparently, Google employees viewed it as a moral and ethical issue. One I believed should have been addressed as a responsibility issue. According to dictionary.com, ethical is an adjective “pertaining to or dealing with morals or the principles of morality; pertaining to right and wrong in conduct.” Meanwhile, responsible means “answerable or accountable, as for something within one’s power, control, or management.” I believe the latter is more appropriate for business decisions, because the law dictates what businesses are legal (i.e., good) versus illegal (i.e., bad).

In a following Insights article in September/October 2019 (“More about being responsible”), I discussed a variety of my responsible career choices that others around me thought were moral issues. Two major ones were:

•  Early in my consulting career my boss asked me if I wanted to lead and build a military consulting group. I declined. When he asked why, I told him I was happy to do consulting for the military (having done service in the Army National Guard). I just did not want it to be my profession.

•  I consulted with a large tobacco company to install a state-of-the-art downstream-based forecasting system. Was the client bad because their customers might get cancer? Who was I to judge the company and its customers. So as a legal business, why not? The innovative experience I gained from that project has (I hope) been transmitted to managers via my consulting, the hundreds of speeches I’ve given, and my publications.

The history of mankind

I have always been a student of history. I recently watched a video series, “Mankind: The Story of All of Us” on Amazon Prime Video. A brief synopsis of it is: “On a unique planet, a unique species takes its first steps: Mankind begins. But it’s a world full of danger. Threatened by extinction, we innovate to survive, discovering fire and farming, building cities and pyramids, inventing trade, and mastering the art of war.” The show ends with a summary that says war has been in the DNA of mankind throughout history. And like DARPA’s funding, which was instrumental to the development of the World Wide Web, militaries have always been on the leading edge of technology development. Why? The rich and the powerful are willing to spend big money to go to war to enhance their wealth and power. For example, the sun never set on the British Empire. Also, while the Roman Empire spent a lot of money on bread-and-circus to placate its citizens; it was minuscule compared to the amount spent on the army to expand the empire. Napoleon credited his advanced military logistics as paramount to building his empire.  

Today’s high-tech employees protest supporting military

As an older Baby Boomer, I’ve been at the forefront of the digitization of businesses my whole career. It was all about selling computers and software applications to businesses—including the military and defense contractors. While many boomers protested the Vietnam war and other social issues, many of us more “responsible” people had no problem working with digitizing the defense supply chain. Thus, it disappoints me a bit that today’s pampered high-tech employees are protesting and demanding that their employers not sell to the military, even if they don’t represent a significant portion of the company. As well as depriving some of their coworkers of future job opportunities; that is, those that might enjoy working on state-of-the-art technology in the defense supply chain.  

For example, two headlines from the Wall Street Journal (WSJ) publications paint the picture. For example: In “Bosses Lose Their Patience With Staff Activists” (April 22, 2024), it stated that “business leaders are sending a warning to staff: dissent that disrupts the workplace will no longer be tolerated.” Later in “Tech Staff Stage Revolt Over Gaza” (Aug. 28, 2025), it stated “that while tech giants have long given employees latitude to engage in political speech at work, the latest wave of activism over the war in Gaza has put some workers at odds with their employers. Evidently, Microsoft has fired a couple, while even Google has evolved and done so to dozens of its workers.

 The most disappointing recent title was: “Anthropic files suit in Pentagon AI dispute.” The AI startup had insisted that the AI tools it would sell to the defense department cannot be used for “mass domestic surveillance or autonomous weapons.” “The Pentagon said it wouldn’t do those things and always follows the law, so the company should trust it to use AI in all lawful scenarios.” Anthropic refused to agree, so the Pentagon declined doing business with it, and declared it a “supply chain risk.” Why? I believe it is, because those in the supply chain business know, that an integrated complex supply chain is susceptible to its weakest link. And the U.S. military has to be able to overwhelm the enemy’s capabilities—not just be on par with them. It doesn’t bring “a knife to a gun fight”—in fact, it brings a lot more and can’t be hampered by a weak supplier.

In my mind, every business knows that the customer is king. One of my mentors in the corporate world was Dick Clark. He was responsible for guiding the forecasting and planning processes at P&G. He once rhetorically asked me if we really knew a customer’s “true demand.” He was always worried that supply constraints at P&G might be altering customer demand. Because if it is, then you will lose that customer in the long run. So, his question was simply: “is supply hampering demand;” because it shouldn’t. In Insights (March/April 2016) “First do no harm to true demand,” I stated my view as follows:

“First do no harm” is an important tenet of medical doctors. While supply chain management is perhaps not as noble a profession as medicine, we do have a noble goal. Our goal (and real purpose in life) is to optimally match supply and demand over time. This is what I’ve termed optimized demand management. Paraphrasing the medical tenet, we should “first do no harm to true customer demand.”

I guess Anthropic doesn’t realize it’s the supplier (on the supply side) not the customer.  If it cannot meet the military’s specialized needs, then don’t waste taxpayer money. Especially if it is not going help make the U.S. military stay the world’s fiercest fighting force, with the goals of winning all wars. For example, Walmart is one of the best large-scale supply chains in the world, and strongly adheres to its “every day, low price” strategy for its price-conscious customers. Any supplier that insists that Walmart sell at the supplier’s recommended list price cannot be a part of the Walmart supply chain. The defense supply chain is huge, and much bigger than Walmart’s. What was Anthropic thinking? Frankly, the tail does not wag the dog.

Evidently, OpenAI, its major competitor, understands the supply-side tenet and made a “responsible” decision. “In OpenAI CEO Defends Pentagon Work to Staff” (03/04/2026), it states that OpenAI will “allow the Pentagon to use its tools for classified work.” Evidently, its CEO (Sam Altman) had to strongly defend his decision to his dissenting employees, making it clear it was his decision to make. The article gave some of his statements as:

•  “He said the government was willing to give OpenAI influence over how its technology was deployed, and that he wanted his company to have a seat at the table in shaping future decisions.”

•  “A strong U.S. military had been a ‘great benefit to all of humanity over the past 250 years,” Altman said adding “that he respects that the military gets to make decisions.”

•  “Clearly, the military has done things that I extremely disagree with, and I am sure will do more in the future,” he said. 

Clearly this CEO made a “responsible” decision for his budding company, while recognizing that “war is Hell” and “all’s fair in love and war”—as long as it is legally conducted.

Why did these newer tech companies come to this?

In the early days, during the explosion in the number of new internet companies, firms struggled to get internet-savvy workers. Many created work environments loaded with high salaries and perks like Friday pizza parties and great food in the cafeteria. Sometimes for free. Trying to emulate a college-like environment. Fierce political debates were allowed, as was free speech.

However, this created dysfunction in collaborative working meetings. Employees got the idea that they could keep their jobs for life. At one point Google’s CEO told “Google staff he doesn’t want any more political debates in the office after firing 28 employees over [the] Israeli contract protest.” Google “is a business, and not a place to act in a way that disrupts coworkers or makes them feel unsafe, to attempt to use the company as a personal platform.” (Fortune, April 22, 2024).

Reality set in when many companies had layoffs, and executives cracked down on unproductive political debating. Meanwhile, while a few tech CEOs have become “responsible” leaders willing to work with the military, too many have been afraid to act, placating their employees. With mankind’s history as a guide, the U.S. won’t be the leader in AI without some of the best tech workers working with the military.

I have experienced a number of years as a software analyst—advising hundreds of startup software companies, their founders, and their management. A frequent question I’d get is: We have the best technology, why won’t customers understand that, and buy from us?  My answer often started by explaining that technology is just an enabler, not a solution to their prospective customers. Corporate buyers need to be convinced that the technology will make them more competitive and help them compete in the marketplace. In military terms, maybe even wipe out the competition.

SC
MR