As the Great Recession drags on and millions of Americans remain unemployed with little prospect of re-entering the traditional labor market new kinds of relationships between workers, customers and business owners are emerging. The old model of an organization arranged in a hierarchy of authorities, with bosses at the top and workers at the bottom is going away. This should not be much of a surprise because that traditional model was created to meet the needs of an industrial economy in which workers were needed to tend to the needs of machines. In that kind of environment a large docile workforce was needed to carry out the directives of owners and managers of factories.
Our public school system emerged at the dawn of the 20th century to supply workers for industry, and reflects the setting of a factory. School boards take the place of a board of directors, the role of the school superintendent is much like that of a CEO, school principals represent plant managers and teachers take the place of supervisors. Students, of course, are treated like workers in a factory.
School systems still look like factories, but the ways we make our living today is more a product of creativity and innovation than compliance with authority and repetition of a standard task. For example a friend of mine owns part of an auto parts supply company that does business completely online. Because he is an owner he receives regular payments form the company in the form of earnings dividends. He is an employee, but only for purposes of health insurance, and draws a part time minimum wage payment. He also works for the company as a contract web developer and sales associate. He sits at a computer terminal in Tucson Arizona, and his business partner/supervisor/coworker sits at another computer terminal in Reston Virginia. Between the two of them traffic is driven to the site, sales and inventory is tracked, and accounting is maintained. Concepts from the industrial economy like employee, supervisor and manager don’t really fit in this organization, and concepts that accurately reflect the roles and duties in this kind of business do not exist. Both men are constantly solving unique problems, creating new systems and going where customer demand leads.
People who study the way we work are in a quandary. So many new ways to make a living are being created that it’s hard to keep up with new developments. Roberto Tapia (2006) has identified seven new kinds of business organizations, all of which are decentralized networks held together with social relationships mediated by the internet. Decentralized businesses built around social relationships bring up questions of structure and control. Chris Maravelias (2006) and Madsen, Neergaard, and Ulhoi (2003) argue that these kinds of organizations can succeed only when highly educated professionals run them because they have the benefit of the discipline and structure of their academic training.
With today’s technology you can live anywhere and work anywhere else. We have the technology, but our perspectives and assumptions about creating value and wealth need to be updated. We no longer need hierarchies, spans of control and lines of authority. The problem is that we don’t really know what we need. The work systems and organizations have to change – telecommuting never took off because old time managers wrongly assumed making small talk around the water cooler had nothing to do with organizational efficiency – but that is a challenge to overcome, not a reason not to try.
Health Net of Arizona no longer has a Human Resources department. Instead they have an Organizational Effectiveness department. That may seem like a modest change, but it reflects a sea change in the values the company has regarding the people who work there. Health Net used to encourage employees to carpool and offered telecommuting. Now working from a home office is the standard policy for increasing numbers of employees. Employees are no longer a resource, like a machine or credit rating, but rather a dynamic part of an organization dedicated to learning and change. That is about as far away as one can get form the bureaucratic organizational model of the 20 century.
Given the economic situation we are facing we have no choice but to explore new ways to create organizations, (or more accurately, relationships), that could connect isolated but smart and creative people with opportunities for lucrative work. The old machine-like bureaucratic system that we are so tightly tied to is a relic of the industrial age; in a knowledge/service economy we need to create something that brings people together to create wealth and value using the technologies at hand.
What you have just read is an example of this emerging system, and you have participated in a new kind of work just by reading these words. This essay was written late at night on my laptop between dips in the pool next to the weight room in my Wi-Fi equipped apartment complex. I could just as well we writing it during traditional work hours in a cubicle, or in my home office after dinner. Location and time of day is irrelevant, but creativity and connection is critical.
Madsen, H., Neergaard, H., & Ulhoi, J. P. (2003). Knowledge-intensive entrepreneurship and human capital. Journal of Small Business and Enterprise Development, 10(4), 426.
Maravelias, C. (2003). Post-bureaucracy--control through professional freedom. Journal of Organizational Change Management, 16(5), 547.
Tapia, R. (2006). What is a Networked Business? University of Twente, The Netherlands: Centre for Telemetrics and Information Technology.