BRACING FOR THE 21ST CENTURY

By MARTHA GROVES

March 25, 1996 12 AM PT

TIMES STAFF WRITER

For executives geared to thinking ahead only to the next quarter, here’s a daunting prospect: The 21st century--not to mention a new millennium--is just around the corner, bringing with it a raft of management challenges that could make the upheaval of the last few years look like child’s play.

Thousands of managers are so consumed with their companies’ latest reengineering efforts--or with laying off workers and then hiring them back as contractors--that they can’t focus on The Future.

One consultant glibly notes that some senior vice presidents of personnel at Fortune 500 companies have forbidden talk about projections for the work force in 2000 because they intend to be retired by then and it won’t be their problem.

Well, managers, brace yourselves. The future is barreling toward us, and a manager’s role in it is likely to be drastically different from today’s.

Forget lifetime employment. Tomorrow’s workers will be freelancers, contractors, analysts-for-hire. “Mobility” and “flexibility” will be the watchwords of 2000 and beyond. Get ready for intergenerational conflicts, as anxious but aging baby boomers seek to throttle back a bit and ambitious Generation Xers strive to zoom ahead into a shrinking pool of management jobs.

Management as we’ve known it is being shaken to its core. For starters, fewer people in coming years will get paid simply to manage others.

“I am no longer using the word ‘manager’ much, because it implies that you have subordinates,” said Peter F. Drucker, the management professor and author for whom the management center at the Claremont Graduate School is named. “Increasingly, people won’t have subordinates. They’ll have colleagues.”

Consider what else is headed our way:

* The already breathless pace of technological change will accelerate. By 2005, the half-life of skills could be as short as one to three years, projects the Human Resource Institute at Eckerd College in St. Petersburg, Fla.

* Managers will need the technical and people skills to be able to quickly bring together cross-functional teams, get them focused on completing a task, then disband them. Many of these far-flung folks will be freelancers communicating strictly by computer and teleconferencing.

* Managers will have to allow workers to gain access to information and to make their own split-second decisions, in locations scattered around the world. As global competition intensifies, managers will have to cede unprecedented authority to workers to be entrepreneurial and innovative.

“In an empowered organization, the role of the manager and supervisor will be very different from the old-fashioned hierarchical pyramid,” said Eric Greenberg, a researcher at the American Management Assn., a New York group that studies and teaches business practices. “It will be the manager’s job to coach and guide the people in how to do a task and get them the resources.” In other words, the manager will be working for his or her “subordinates.”

Greenberg illustrates this notion of management turned on its head. A friend of his was complaining at a Nordstrom store that suits like one she had recently purchased were on a markdown rack for 30% less. A sales associate overheard and immediately offered to credit the difference to the woman’s Nordstrom charge account.

“The point is,” Greenberg said, “that this saleswoman could do this. She was empowered to do it without having to ask a supervisor’s approval.”

No one knows exactly what the corporation of the future will look like. But what we call “big companies today will be hollowed out,” said Philip M. Burgess, president of the Center for the New West, a Denver think tank. They will farm out tasks such as personnel, maintenance, security, legal and payroll to outside companies.

Burgess said savvy managers should look to Tinseltown for clues about how companies will operate. In many industries, as in Hollywood, intercompany alliances and joint ventures will be the rule. The manager will be like a movie producer who pulls together money, a director and a writer to develop a project.

“Managers of the future will be process integrators, not people integrators,” Burgess said.

On the manufacturing side, it’s a good bet that a fast-growing Anaheim manufacturer has many earmarks of a new-era company.

Back in 1990, when defense and aerospace cutbacks were in full swing, Arthur “Jim” Goodwin left a Defense Department software supplier to buy into Taylor-Dunn, an Anaheim maker of electric carts used in airport terminals and factories. (More than 200 of the vehicles will be scooting around the Olympic Village later this year in Atlanta.) The work force quickly grew by 35%, to 200 employees, and revenue soared as the company increased export sales.

Six years after Chief Executive Goodwin signed on, the company has held steady at 200 employees, including 130 in the factory, but sales and profit have continued to rise.

“We’re seeing a lot more done with a lot fewer people,” Goodwin said.

Goodwin describes Taylor-Dunn as a “very, very flat organization,” with one level of supervisors at the factory. People work at training themselves, and the company reimburses 100% for school tuition or training. The satisfaction workers derive from such policies helps account for the productivity gains, Goodwin said.

“We try not to pigeonhole people,” he said. “If you were a welder for 10 years and want to work in the parts department, that’s OK. People can move in both directions, up or down.”

The biggest challenge for management is to instill in people the idea that they work for the customer. Only companies that listen carefully and make it easy to do business with them will succeed, he contends.

Knowledge of global markets is also important. A quarter of Taylor-Dunn’s business is overseas now, but Goodwin expects that to leap to 50% within 10 years.

Taylor-Dunn puts an interesting twist on hiring that Goodwin believes could become commonplace in years to come. A temporary agency handles the screening and hiring of applicants, taking pressure off Taylor-Dunn. Benefits kick in after 30 days, but all workers go through 90 to 180 days of training--as much to ensure that they like the company as the other way around, Goodwin said.

What should a forward-looking CEO be thinking about? People.

To give workers more time with their families, Taylor-Dunn runs its shift from 6 a.m. to 2:30 p.m. That way, Goodwin said, they can attend parent-teacher meetings and Little League games.

“What makes the company tick is people,” he said.

That comment might draw snickers from today’s managers, who have grown cynical after years of corporate purgings in high tech, aerospace, banking and retailing. Far from seeming vital to companies’ success and well-being, workers--especially middle managers--instead have become expendable. Rather than being able to count on a steady rise up the corporate ladder, baby boomers in particular have seen advancement opportunities wrested away. AT&T;’s decision to lose 40,000 employees tells the tale: The implied social contract--work hard, be loyal, move up--is extinct. Now the message is: Work harder to make up for lost colleagues, but expect little in return. Many academics and consultants see this as a formula for a worker backlash.

“The amount of anger that is emerging is a significant issue for management,” said Robert Theobald, a New Orleans-based consultant and author. “Even the people who were willing to work hardest no longer are. They want to have their lives.”

If corporations expect to thrive in the 21st century, he said, a return to some semblance of a social contract will be necessary. Without that, some companies might find themselves so overwhelmed by unrest among the work force’s underclass that they cannot function.

“Morale is still central to effectiveness,” Theobald said. “If companies don’t look at their human capital . . . they cannot expect to meet the challenges of a rapidly changing world.”

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Millennium Millstones and Milestones

Old: Old Ideas

New: New Ideas

Old: Bigness

New: Smallness

Old: Stability

New: Change

Old: Predictability

New: Uncertainty

Old: Continuity

New: Flexibility