`Megatrends' sequel: brainpower will displace brawn even more
Boston — Scarcely a week passes without our office receiving another book on management, entrepreneurship, or corporate advancement. Most such books get a quick peek and then are tossed onto overloaded shelves or into giveaway piles. But a new one, ``Re-Inventing the Corporation,'' by John Naisbitt and Patricia Aburdene (Warner Boooks, New York, $17.50), merits more attention.
Partly this is because of the important demographic and economic trends Mr. Naisbitt and Ms. Aburdene forecast. And partly the book should be noted because of the widespread success of Mr. Naisbitt's first work, ``Megatrends,'' which made the author a kind of socioeconomic guru to many young business people.
The authors (husband and wife) see three major forces at work in the economy: (1) the end of the baby boom and consequent labor shortages in the years ahead; (2) the emerging global economy; (3) a shift from an industrial to an information economy.
Because of these forces, the authors contend, corporations in the United States will need to emphasize brainpower over industrial might, will need the best and brightest workers, and will consequently have to make their corporations more humane and rewarding places.
Naisbitt and Aburdene predict less corporate hierarchy and more creativity, flexible hours, stock ownership plans, and benefits such as day care. They cite a number of companies that already show signs of developing in this direction, among them People Express, W. L. Gore & Associates, and Apple Computer.
The authors mention many established companies that have adopted bits and pieces of this new corporate philosophy. But they don't hold out a lot of hope for most of the old Fortune 1,000 firms. Management lines here are fairly rigid, they say, although they grant that IBM has experimented with ``intrapreneurialism'' and General Motors is promising a radical new workplace at its Saturn plant.
The authors see full employment in the United States in 1986-87. There will be ``not nearly enough people on the way'' to fill the millions of new jobs created in the US each year, Naisbitt said in a recent interview. ``We will have full employment and labor shortages for the rest of the century.''
Ms. Aburdene cites New England, where unemployment rates are well below the national average, as an example of what the rest of the nation will experience.
``There'll be terrific competition for good people,'' she says, ``and the best people will be attracted to the kinds of companies that are reinventing themselves, that are offering a stake in the company with ownership and profit-sharing plans, that are able to be flexible about scheduling.''
Naisbitt says the standard will no longer be ``a hierarchical, authoritarian company where everybody had a superior and everyone had an inferior -- surely somewhat corrupting to the human spirit in both directions.''
And labor shortages, they say, will draw more and more women into the work force, with the attendant social changes at home and on the job: day care, flexible hours, and at least a second look at whether the male-oriented corporate structure must remain that way.
Naturally, one has quibbles with the Naisbitt-Aburdene assessment.
The danger is of extrapolating based on too short a span of time. Are we really sure the entrepreneurial and high-tech boom that began in the late '70s is here to stay? A deep recession, a renewed bout of inflation, or a wave of protectionism could have untold consequences.
Then there are the shareholders, who actually own the corporation. Just as today, shareholders in the 21st century will want a strong bottom line and may put pressure on companies to cut costs, trim benefits, and fire employees to achieve it.
Corporate culture also depends on whether the company is closely held, how the local labor force is composed, the market in which the company's products compete. Each corporation is different.
One Washington, D.C., consulting firm, for instance, used to think the old approach was correct: Only now has the Naisbitt Group itself changed ``from a hierarchical structure to [one with] management task forces,'' says its namesake.
``We've put a lot of emphasis on personal growth, everybody owns stock, everybody participates in profit sharing.'' But, he concedes ``We don't have day care.''
Quibbles aside, there is still a good possibility that Naisbitt and Aburdene may be right. Many American corporations may in fact evolve along the lines the Naisbitt Group has.
That's bound to be an encouraging thought to most employees. Case study of whiz-kid company shows a corporation has a life of its own
Here's one for the ``Re-Inventing the Corporation'' casebook:
Working in a garage, a young entrepreneur and his buddy cobble together a small computer. It sells like crazy. They incorporate. Soon the company has 5,000 employees, more than $1 billion a year in sales, plants in Singapore, Texas, Ireland, and California, and competitors right and left.
Then the industry hits a slump. Profits sag.
Not long after, the two young entrepreneurs are out. Professional managers are in charge.
This is pretty much the story of Apple Computer. In any recitation of the stars of the ``New Economy,'' one usually hears about the Cupertino, Calif.-based Apple and its whiz-kid founder Steven P. Jobs.
John Naisbitt and Patricia Aburdene cite them frequently in their new book, ``Re-Inventing the Corporation.'' They quote Mr. Jobs as saying, ``The way we run Apple is by values .. . . In general we hire people who tell us what to do.''
Yet as it matures, Apple appears to be evolving toward traditional management and marketing -- and away from Steven P. Jobs.
The freewheeling days at Apple began to appear numbered last year. The computer market was in a slump. Cofounder Steven Wozniak left. And in June, after a power struggle, president John Sculley, whom Jobs had brought in from PepsiCo, nudged Jobs out of operating control.
Two weeks ago, Jobs told Apple directors about his new company, which he is calling Next Inc. After initially showing interest in the venture, Apple became alarmed at Jobs's plan to hire away five key Apple employees. Jobs then resigned as chairman of Apple and last week Apple sued him, charging he was violating his fiduciary duties with the company and misappropriating proprietery information.
Ms. Aburdene notes the irony of what happened at Apple. ``Steve Jobs said, `We hire people who tell us what to do.' Apparently he definitely hired someone who told him what to do.''
There are many lessons here for young entrepreneurs. Perhaps the most important is that a corporation has a life of its own, subject to the rigors of the market, and to the desire of shareholders for profits.
``Apparently they've grown to the point where they want to become more of an institution,'' says Aburdene, ``and that's what the stockholders and the company want to do.''
The traditional approach -- particularly in a sluggish market -- is to control costs and enhance earnings, which is what Mr. Sculley has done. After a poor second quarter and a spate of layoffs, analysts say the company is actually in much better financial shape. School sales have been strong, and with new products on the market, Christmas sales look promising.
``Steve Jobs is the consummate entrepreneur,'' Aburdene says. ``So when you think through what's happening, it doesn't really sound that outrageous. He's going to go off and do what he does best. He's got a lot of money to be able to do it. It's part of the maturing of a company.''
One wonders, though, if other young firms won't mature the same way.
And if so, after a while the New Economy may look pretty much like the old.