Recipe for Upheaval : Futurist’s Business Ideas Mix Fun With Profit

John Naisbitt’s condensed business philosophy for the future sounded as seductive as it was simple to tell:

1) Make money.

2) Have fun.

3) Deal only with pleasant people.

However, Naisbitt said, putting those terse directives to work involves nothing less than a sweeping social, economic and corporate upheaval, the like of which has not been seen in America since the Industrial Revolution.

Naisbitt, a social forecaster and author of the best-selling “Megatrends,” a book of social and cultural predictions, told an audience at Santa Ana High School Auditorium on Wednesday evening that traditional hierarchical corporate structures and policies are fading as more innovative and humanistic philosophies are finding acceptance in sleek, successful new corporations.

Naisbitt’s talk was one of a series of speakers’ forums presented as part of the weeklong Great American Talk Festival, sponsored in part by the City of Santa Ana.

The title of Naisbitt’s presentation, “Reinventing the Corporation,” was taken from his latest book of the same name, a sort of how-to for the business person of the Information Age.

In the new corporate environment, Naisbitt said, there is, above all, “a new respect for the individual. It’s understood that it’s commitment and not authority that produces results.”

It was a rosy picture: companies reducing useless management layers, toppling rigid authority structures, offering equal pay for equal work, restructuring, rethinking, communicating throughout the work force as never before.

And, Naisbitt said, in many companies worldwide, such overhauling already has borne fruit.

He pointed to Jan Carlzon, the president of Scandinavian Airlines Systems who, in one year, Naisbitt said, turned SAS from a company losing $17 million a year to one earning $54 million by “turning the organization chart upside down. He put those who dealt directly with the customer in charge of the company. He said he wanted not to do things 1,000% better, but to do 1,000 things 1% better.”

He pointed to W.L. Gore & Associates Inc., the maker of Gore-tex waterproof clothing material, a company with “no titles, no bosses, no map of managerial authority and only two objectives: to make money and to have fun.” New hires at Gore, said Naisbitt, are not shunted into an office and a prearranged job but are encouraged simply to “go find something interesting to do”--in effect, choose their own job.

He pointed to People Express, the airline where “people are considered the hard assets and the airplanes are the soft assets,” and to New Hope Communications where employee benefits are varied and unusually generous and business is conducted “only with people who are pleasant. You would be amazed at the cost efficiency of that rule,” said Naisbitt.

In his talk, as in his latest book, Naisbitt outlined how the shift from what he called dehumanizing layers of corporate authority to flexible, less-structured companies would work. The methods and trends included:

- An emerging “seller’s market” for potential employees. In the new and more vigorous economy during the last 15 years of this century, more people will be leaving the work force than will be entering it, said Naisbitt. The baby boom will be followed by what he called a “baby bust,” during which fewer people will be available to fill a growing number of jobs. Competition for the best people will, consequently, be fierce, he said.

(Irvine Co. President Tom Nielsen, who sat on a panel that discussed Naisbitt’s theories, said that in an Orange County business climate brimming with new entrepreneurs, it was still “hard to find qualified individuals” to fill positions at the Irvine Co.)

- “There will be a tremendous whittling away of middle managers,” said Naisbitt, who said that the job of the middle manager has traditionally been that of a mover of information. The manager’s replacement? The computer.

- Managers will undergo a shift “from being order-givers to being facilitators,” he said. Employees will be given freer rein on the job, and managers will see that the work flows smoothly.

- Specialization will give way to generalization. Workers, said Naisbitt, will be prized not for specific skills, but for the ability to “learn how to learn.”

- “It appears that in the 80s we will deal with the issue of comparable worth,” said Naisbitt. “In a seller’s market, companies will compete for good people and the companies that decide to pay fairly will become known and attract the best of both men and women.”

- Traditional layers of authority will give way to “companies reconstituting themselves as groups of entrepreneurs working under the umbrella of the corporation,” said Naisbitt, who added that nearly 800,000 new companies were created this year in the United States, the most since the Industrial Revolution. “The entrepreneur is the new hero in our society,” he said.

- Benefit and incentive packages will increasingly include profit sharing and stock options.

- “Intuition, hunch, even faith will gain new respect” in the corporate world, said Naisbitt.

Such revolutionary changes in structure and attitude toward work, said Naisbitt, have been sparked by the computer revolution and the ability to process information with great speed. That ability, he added, will create not only a new trend toward self-reliance but a new curiosity about and emphasis on literature and the arts. That phenomenon, a balance of technology and renewed humanism, Naisbitt called “high tech, high touch.” For example, Naisbitt said, in highly computerized corporate Japan there has been a burgeoning interest in such social traditions as the tea ceremony and flower arranging.

Fernando Nielba, president of the Orange County-based computer firm Infotech Inc., asked, following Naisbitt’s presentation, whether some employees might not prefer a structured corporation to an unstructured one. Nielba with the Irvine Co.’s Nielsen formed the two-man panel that discussed Naisbitt’s theories.

“We run across people,” said Nielba, “who seem to want structure in order to better relate to their work. High touch makes some uncomfortable.”

The transition to the new corporate model, answered Naisbitt, “will not be a smooth turn of the wheel. There will be a lot of lurching. But the old model is not the one best for success.”

Ironically, Naisbitt’s own Washington-based company, the Naisbitt Group--which does trend analysis and publishes regular newsletters documenting innovative social, cultural, political and business practices--came under fire in a recent article that pictured the corporation as hierarchical and creatively stifling.

Naisbitt said the story was “not representative of what the company is like. It’s not a model company, but we’re working on it. We’re trying to learn.”

Offer Stock Option

Employees of the Naisbitt Group, he said, are offered a stock option and profit-sharing plan and management has, for the last year and a half, been conducted not through a traditional hierarchy, but by task forces.

Because of America’s growing ethnic mix and the consequent growth of fresh ideas, Naisbitt said “there is no country in the world that is better positioned than the United States to reinvent the corporation.” But, he added, “we need a strategic vision to guide us,” such as President Kennedy’s proposal to put a man on the moon within the decade of the 60s.

Each corporation “needs to decide what it wants to be,” he said. “People are dying to make a commitment. They only need that strategic vision.”