"Never make forecasts,
especially about the future"
are those large scale forces that produce change at lower levels of system
organization. Typically, these change drivers consist of global, demographic,
economic, technological, information, and other factors that create a changing
environment to which organizations must adapt. The primary result of these
forces is an increase in competition among organizations. In order to compete
more successfully, organizations must continually reevaluate the way they
do business, and seek to respond faster, use resources more efficiently,
produce high quality products and services, and create management paradigms
("mental models of how things work") to keep reinventing business. Some
of the recent initiatives to improve organizational response include decentralization,
downsizing, total quality management, virtual organizations, and increasing
automation. However, there is high risk attached to taking new directions:
A study at Ohio State's College of Business reported that only about 50%
of business decisions were successful; the lowest rate of implementation
was for the most successful practices (e.g., involving workers in the decisions
that affect them), and the highest rate of implementation was for the least
successful practices (e.g., issuing directives).
Global Change Drivers
Perhaps the largest scale change driver is that of globalism, or the
expanding scope of business and communication from a primarily national
level to a highly interactive international level. This focus brings new
competitors, new markets, and new rules of business to the fore, and requires
organizations to rethink how they have done work, perhaps for decades.
Some of the indicators of increasing globalism include:
Demographic Change Drivers
In 1994, Americans bought $663 billion worth of foreign produced goods.
In 1950 the US market share of motor vehicles was 76%--in 1994 it was 25%.
In the 1960's East Asia accounted for only 4% of the world's economic output--today
it is 25%.
The US has about 286 million consumers--compared with 330 million in the
EC, and a half billion in China alone.
Of the 25 world's largest banks, the US (Citicorp) ranked 25th (1998).
High unemployment rates in other countries (e.g., Spain 20%, Ireland 17.5%,
India 15%) provides cheap labor.
Regional gross domestic product (GNP) growth is 17% in the Americas and
64% in the Asia Pacific region.
Telecommunications are now global.
Many overseas locations offer raw materials, low entry costs, new markets,
lower distribution costs, and fewer regulations and restrictions.
The number of US students taking jobs overseas jumped 20% in 1994 compared
to 1993 (Time, Sept. 1994).
One in six US jobs depends on exports.
Of major corporations that were searching for senior executives in 1995,
28% required international experience--up 4% from from 1994.
Many companies also have significant investments outside the US or have
global markets that contribute to their success:
Baxter International reported that 48% of its sales are outside the US
but they produce 73% of its profits.
GE's foreign revenues reached #33.3 billion or 40% of total revenues (up
from 20% a decade earlier)
GM reported 37% of automotive sales outside the US, and expects that to
reach 50% in the future. Net profit margins for GM were 1.2% in North America
and 4.3% on international operations.
IBM's 1996 sales in the US accounted for 52% of its total sales but only
14% of its profits (Wind & Main, 1998).
In 1983 AT&T was in five countries and had 1,000 employees overseas.
By 1995, AT&T had 52,000 employees in more than 100 countries.
Total investments by companies in one country investing in another country
increased from $192 billion in 1988 to $610 billion in 1998 (World Bank).
Exports and imports are growing rapidly globally, with foreign trade a
proportion of total economic activity increasing from 27% in 1987 to 39%
Demographics, or the study of the distribution and characteristics
of population, is also changing rapidly and requiring organizations to
more closely examine their workforce and human resource policies. Here
are some of the events in this arena:
Technology Change Drivers
By 2000, the workforce was estimated to be composed of 15% white males,
25% white females, and 60% "minorities" (will this make the concept of
"minority" meaningless?). In 2000, 80% of new entrants were women and people
of color. By 2006, minorities will fill one of four jobs in the US.
Although there is no shortage in the labor pool, there is a large shortage
of skilled workers in the US. For example, one Delaware Power Company had
to take over 11,000 applicants to find 731 qualified workers!
A 1993 Adult literacy in American Study found that up to 90 million adults
were highly limited in reading, writing, problem solving, or math proficiency.
The number of single parent and dual career families is steadily increasing,
requiring employers to expand their attractive benefits (see Working Woman
magazine for an annual study of organizations that provide a range of "family
By 2000, 61% of all American women were estimated to be employed. More
than half of working mothers were employed full-time, but only 13% wanted
to work full time.
By 2010, 20% of the US population will be over the age of 65; increased
longevity and limited social security will keep people in the workforce
longer and change market trends. In 2000, 56% of 55-64 year olds were still
in the workforce. When they retire en masse this will create a huge labor
People over 50 are the fastest growing and have the greatest purchasing
power, they control half of our disposable income, and 75% of financial
Society is becoming increasingly diversified with different cultures living
in close proximity to each other. One multinational company in Los Angeles
conducts its new employee oritntation in 17 languages!
Databases now encompass about 95% of American households for some form
Birthrates are falling in industrialized countries, with the US adding
only 2.5 million per year, partly from births and 40% from immigration.
This will likely affect labor availability.
While other segments of the US population are stable in growth, Hispanics
will account for nearly 40% of our population, and nearly 500,000 arrive
each year through immigration. Hispanics represent a market of $350 billion
a year, and is expected to increase 60-70% over the next 20 years.
African American purchasing power will increase about 55% in each of the
next two decades.
Fortune's 50 best companies for Asians, Blacks, and Hispanics consistently
match or outperform the S&P 500 stock index (Coffin, J. (July 19, 1999).
The 50 best companies for asians, Blacks, and Hispanics: Companies that
pursue diversity outperform the S&P 500. Coincidence? Fortune.
Most growth is in the southern states and coastal regions, with the midwest
By 2008 women will comprise 48% of the labor force, more will reach upper
Nearly all Fortune 500 companies now offer dependent care spending accounts,
with 8,000 providing on-site child care services (up from 1,000 in 1986).
(cited in Patrice Hill, (September 19, 1999) In jobs, mothers count on
flexibility: family-friendly schedules give employers a competitive edge.
Washington Times, p. C1.)
Of women who started their own businesses in the past 10 years, 22 percent
cited the "glass ceiling" as their reason for doing so.
Technology is one of the fastest changing aspects of the emerging business
environment as the following reflect:
Information & Telecommunications Change Drivers (perhaps a subset
Technology has enabled speed of response to be as valuable a commodity
to businesses as the actual products or services they sell. A business
that can respond more quickly than its competitors has improved positioning
and competitive advantage. As a result, many organizations are experimenting
with innovations to cut cycle time for product development, respond more
to customers, and do whatever they do faster:
What it takes the average person one day to do now, took three days in
the 1950's, one month in the 1800s, and a lifetime in the 1600s.
In the 1900s, 85% of workers were in agriculture-- now it's only 3%; in
1950, 73% of workers were in manufacturing--now it's less than 15%. Most
are in the service industries, and increasingly in the knowledge industry.
In the next five years, 80% of people in the industrial world will be doing
jobs differently from the way they have done them over the past 50 years.
By 2000, it was estimated that 75% of all employees needed to be retrained
in new jobs or taught fresh skills for their old ones.
Artificial intelligence is expected to affect 60-90% of all jobs in organizations--augmenting,
displacing, or eliminating workers.
By 2002, e-mail and related technology should enable 15 million workers
to telecommute; a 650% increase from 1992.
50% of US workers currently use a computing device for their job.
The amount of electronic information is doubling every 60 minutes (Mangan,
K. S. (2000, April 7). In revamped library schools, information trumps
books. The Chronicle of Higher Education, A43-44.)
between 1995-1998 information technology accounted for only 8% of US GDP,
but contributed an average of 35% to the country's growth. Nearing 2000,
software companies were growing at a rate of 13% while the economy as a
whole grew only 2.5% (Work in Progress, Special Report, The Economist,
July 24, 1999. www.economist.com/editorial/justforyou/19990724/sa7348.html)
The intense demand for the new Model T Ford and new manufacturing machinery
pushed Henry Ford into developing the assembly line. In 1913, using a moving
assembly line, the labor needed to assemble a car dropped from 12 hours--8
minutes, to 2 hours--25 minutes, and later to 1 hour--35 minutes. Ford
had a better idea!
The Information Age is upon us. In the 1900s, 85% of workers were in
agriculture; now only 3%. In 1950, 73% of workers were in manufacturing;
now less than 15%. The new "knowledge worker" (see below) is emerging and
replacing previous job roles.
Complexity & Chaos
While these examples emphasize the emerging central role of information
technology, there remains a gap between actual and desired status. A 1996
Wharton School survey of business executives showed that 72% reported that
the use of information technology and other high-tech tools is critical
to being competitive, while only 17% said "we are there" (Wind & Main,
The estimated number of Internet users is over 30-35 million people in
135 countries. The growth rate of Internet is 10-20% each month, and it
has been doubling in size each year for the past six years.
Almost 12 billion messages were left in voice mailboxes in 1993. Close
to 19 million people carry pagers.
It is estimated that there are over 14,000 newsgroups and perhaps as many
as 100,000 other kinds of discussion forums.
Nearly 75% of Internet growth is from the business community, and 65% of
registered networks are comprised of businesses. Business connections accelerated
at a rate of 260% between 1993-94.
Over half the Fortune 500 companies have initiated marketing campaigns
on the web.
Conversion from paper handling to electronic processing is estimated to
save 45% of secreterial time and 25-75% of all office related activity.
Aetna Insurance placed its 435 separate manuals (that had to be constantly
updated) online thereby enabling immediate distribution to all 4,200 field
staff at an annual savings of $6 million.
The "virtual corporation" now allows people to hold real time electronic
conferences from nearly anywhere in the world.
It is estimated that all information doubles about every five years; in
some fields it appears to double every six months. The hal-life of information
(when half becomes obsolete) is 3-5 years.
Workers who work with data instead of things currently number at least
1/3 of all employees. In the past, 80% of all jobs involved compliance
with clear rules and procedures, and 20% involved exercising judgement--todays
that's just reversed.
More Americans work in biotechnology than in the entire machine tool industry;
twice as many make surgical and medcail instruments as make plumbing and
In 1970, US corporations spent 11% of durable equipment outlays on information
processing equipment; by 1989 it was 51%.
About 75% of a product's cost is determined at the conceptual stage.
By 2000, it was estimated that 80% of jobs in the US and 70% in Europe
required conceptual rather than manual skills.
Developed countries spend 28-30% of GNP on knowledge.
Business investment in computers has also been steadily increasing. In
1960 $3 billion was spent on information processing equipment (4% ratio
between total durable equipment and IP equipment). By 1980, expenditures
were $45.4 billion (17%), and by 1996 they were $241.9 (42%) (Wind &
In 1915 the American transcontinental telephone system could handle three
calls simultaneously; a generation later AT&T could use a coaxial cable
for 480 calls; and by 1980s Telstar satellites could handle 100,000 links.
New forms will be able to handle 1 trillion per second, the equivalent
of three centuries of daily newspapers (Harmon, F. (2001). Business
2010. Washington, DC: Kiplinger.)
refers to the number of connections among events or the rate at which relationships
among elements of a system change. Chaos refers to the unpredictable pattern
that often emerges from complex phenomena; not random, but not altogether
predictable either. Both these represent the turbulence present in the
marketplace as a result of the above mentioned change drivers. As a result,
there are some who suggest that the planning and control function of managers
may become increasingly limited as the future becomes increasingly difficult
to predict. For example, forecasting is based on replications of the past;
as we innovate and invent new business structures, the past has less predictive
power. In addition, as we monitor production and performance more closely,
we create more feedback loops which also increases complexity. The personality
of managers is also an issue here, since some people have more
tolerance of ambiguity, uncertainty, and risk than others and thereby can
entertain fuzzy thinking and multiple planning scenarios.
Complex systems also make simple, linear thinking, short term solutions
less workable. Instead, we must develop systems thinking that examines
dynamic patterns of relationships. Much of this is beyond the mental load
of most people, and increases our reliance on computer modeling to crunch
the big numbers. All to often, inadequate planning with the best intentions
has resulted in revenge
Economic Change Drivers. Another driving force behind organizational
change is the gradual erosion of the profit margin for businesses. Following
WWII, the other major industrial countries, particularly Japan and germany,
had their economies deeply injured by the war. In contrast, the US had
successfully mobilized mass production, trained large numbers of military
leaders, and created a baby boom. In the 1950s it was a whopping 16.9%
that allowed businesses the luxury of running in a somewhat inefficient
manner and lax use of discretionary funds. By the 1970s and 1980s the margin
of profit was so small that organizations had to return their attention
to how they structured and ran their businesses. With so little "wiggle
room" they decided to become "lean and mean" by downsizing, reexamining
the value chain of their product lines, and find other ways to use their
resources more sparingly.
Business goes where the growth (related to globalism). In 1997 the Economist
showed the US and Japanese gross domestic product advancing 3.1%. However,
countries that had been lagging for years were now growing quickly: China
9.4%, Argentina, 9.2%, Thailand 8.6%, Malaysia 8.1%, Indonesia 7.8%, Chile,
7.7%, Mexico 7.6%, South Korea 7.2%, India 7% (Wind & Main, 1998, p.
37). There is faster growth in living standards and consumption globally:
US doubled output per capita in 47 years starting in 1839; it took Japan
25 years starting in the 1880s; Indonesia doubled output in 17 years following
WWII, and South Korea and China in 11-10 years.
The Response to Change Drivers
In a rapidly changing environment, each time an innovation occurs that
makes an oranization more competitive, it often makes previous successes
irrelevant--past success is no guarantee of future success. As a result,
organizations must attend to new markets and opportunities, reevaluate
their structure and processes, and rethink how they think about the change
process. Although many of the current approaches are short-lived attempts
at quick fixes, they point out the need to continually reevaluate the way
we do business, and seek to understand highly complex and dynamic forces
that change the marketplace and the world.
Downsizing, rightsizing, reengineering, delayering, riffed, voluntarily
retired, involuntarily retired, adjusted, discontinued, displaced, dislocated,
surplused, bumped, rebalanced, outplaced, oursourced, and a host of
other terms refer to the ways in which organizations reevaluate and change
their staffing pattern and organizational structure. Following WWII, US
companies were confident that the way we conducted business was not only
a good way, but was the "best" way. Few efforts were expended to revise
what had worked in the past. As Germany and Japan redirected their efforts
into building their economies (with US assistance to do so!), they were
in a position to reinvent their way of doing business--and they did. Japan,
for example, listened to a statistician and quality expert named W. Edwards
Deming who's ideas on Total
Quality Management had not been particularly well received in the
US. The US had become "fat," with too many organizational levels that slowed
and distorted communication and decision making, too top heavy and expensive
with high numbers of managers, and top-driven making them slow to respond
to rapid market changes. As a result, organizations begand to "downsize"
by cutting layers of organizations and laying off workers. Too often this
was done without consideration of long term and spin-off consequences,
as shown below:
commonly considered as a "quick fix" to save costs by reducing one of the
largest sources of expenditures--salaries. While there are many examples
of organizations that have become "top heavy" and "over layered" with too
many employees, there are also serious risks involved in reducing the workforce.
The diagram shows a potential effect on customer satisfaction: diminishing
revenues leads to quick cuts thereby reducing the workforce; this results
in heavier workload and decreased customer satisfaction; this lowers revenues
even more than before. Point: the intended solution creates even more problems
and makes the original one worse!
However, there are some highly successful examples of downsizing. For
example, ABB Ltd, a Swiss-Swedish electrical engineering company, in 1987
cut the combined headquarters staff of 6,000 people to 171. They supervise
1,300 operating companies with 5,000 profit centers in 140 countries. Downsizing
can be a viable option, but its long term consequences should be considered.
[also see articles on "Downsizing"
Effects.] . Some results of downsizing have not been impressive:
BUT--it's not all bad. There are many examples of highly favorable change
resulting from reengineering:
Although stocks initially went up with expectations that reengineering
attempts reflected substantial changes in the organization and would lead
to more profit, in many cases the increase was short-lived (Cole, 1995,
US News & World Report, p. 95)
Actual outcomes have often been disappointing: The Wall Street Journal
reported only 12% increased market share from downsizing, improved product
quality in 9%, technological advances in 6%, improved decision making in
14%, and increased competitive advantage in only 19% (WSJ, Cole, 1995,
In 1980 US Steel (the largest integrated steel company) employed 120,000
workers. By 1900 it had cut its workforce to 20,000 but was getting the
Bridgestar, a Japanese rubber producer, acquired a Firestone facility and
reengineered it. They flattened the hierarchy from 8 to 5 layers, reduced
job classification, introduced work teams, invested $70 in new quality
controls, and instituted job retraining. Te result: In less than five years
production went from 16,400 tires per year to 82,175 per month, and production
blemishes were reduced by 86%.
Goodyear Tires in 1988 began producing 30% more tires with 24,000 fewer
workers, while Dunlop invreased productivity 40% with 30% fewer workers.
From 1983 to 1993 banks eliminated 179,000 human tellers or 37% of the
workforce and replaced them with automated tellers. By 2000, over 90% will
be replaced. A human teller can handle 200 transactions a day, works 30
hours per week, has a salary of $8,000-20,000 per year plus fringe, coffee
breaks, vacation and sick time. An ATM can handle 2,000 transactions a
day, work 168 hours a week, costs about $22,000 a year to run, and doesn't
take time off.
Although corporate downsizing has created the new social concern of
"job insecurity" it would be mistaken not to acknowledge this phenomenon
as a natural occurrence during a period of great change. Historically,
there have been other periods of sweeping change in which jobs were lost,
but the changes actually produced more jobs in the long run. For example,
millions of workers today earn their living doing jobs that did not even
exist at the beginning of the 1900's:
Source: U. S. Bureau of Census
|Airline pilots, mechanic
Fax machine wkrs
Truck, bus driver
The New York Times estimated that 43 million workers have been displaced
since 1979, although civilian employment grew from 98.8 million in 1979,
to 126 million in 1996--or, 70.2 million new jobs were created (Wind &
Main, 1998, p. 113). Yet, until the economy gets through the change period,
many workers will have difficulty finding jobs with commensurate wages:
However, by 1994 to 1996, the Bureau of Labor Statistics reported that
68% of new jobs created paid wages above the median, suggesting that the
change is progressing.
In 1960-70 80% of displaced workers found similar waged jobs
In 1980-85 50% of the 4.3 million displaced workers found similar jobs
In the late 80s only 25% of the 5.6 million displaced workers found similar
In the 90s only 10% have found like jobs.
Innovation is also a requirement in the emerging organization. As noted
above, following WWII, Japan and Germany placed strong efforts into rebuilding
their damaged economies. They initiated strong research and development
with government support for their inventiveness, while in the US, inventors
have more of an adversarial relationship with the government. American
organizational cultures are tend to restrict open communication. For example,
most American companies are lucky to receive suggestions from employees.
In 1985, Matsushita received one million suggestions from their employees!
For some US companies, like Microsoft, 90% of their revenues come from
products that were not developed two years previosuly. Still, for many
organizations it is difficult to balance the need for structure and set
procedure with flexibility and creativity that leads to innovation and
invention. However, some businesses are breaking ground--or better:
Pioneer Hi-Bred International Incorporated (an Iowa corn seed company)
has helped American farmers quadruple corn production from 25 bushels an
acre in 1926, to over 100 bushels an acre in 1996. To be competitive, Pioneer
develops 70,000 new hybrids each year, and picks 15 from among them to
send to market. The time to develop a new successful hybrid has been reduced
from 13 to seven, and they invest $130 million each year in research and
The 40-60-80 Rule. The importance of innovation and problem solving
also extends to the customer base of any business. The Technical Assistance
Research Program (TARP) in Arlington, VA, a consulting firm, found that
a business that cannot solve the problems of a customer has only a 40%
chance of retaining an unhappy customer, a 60% chance of retaining a happy
customer, but an 80% retention rate if you solve the problem to the customers
satisfaction (Wind & Main, 1998, p. 70).
Wells Fargo & Co., has closed 1,000 conventional branch banks since
1980, and replaced them with one or two-person branches in supermarkets
and with remote banking. It makes loans from Maine to Florida although
it has no branches outside California. By the end of 1996, it had 200,000
"cyberaccounts" up from 20,000 in 1995 based on banking by computer.
Hewlett-Packard reports that the life cycles of new products lasted for
years only a decade ago, and now is 9-19 months. HP and Intel canabalize
their own products and replace them with new versions in a short a time
as six months. HP moves in such a fast-paced tech world that two-thirds
of its revenues come from products produced in the previous two years.
They also introduce new PCs and printers to replace older models as often
as twice a year.
At Corning, 75% of the flat panel TV and computer screens sold in 1995
were not made in 1994. Products in this market change almost quarterly.
Time, like quality, has become a commodity. The faster a business can respond,
the better it can position itself. The Just-in Time (JIT) idea was developed
by Taiichi Ohno of Toyota who observed that Japanese street peddlers often
had a booming business, because customers could get what they wanted when
they wanted it. A faster response means a more satisfied customer and an
advantage over competitors:
3M has a 15% research allowance in which engineers are encouraged to spend
15% of their time working on a pet project or favorite idea, regardless
of what their formal work assignment is. Post-it Notes and masking tape
were outcomes of this kind of opportunity, and they continue to bring out
about 600 new products a year.
Outsourcing has become one of the bywords of the 1990s, and refers
to contracting for certain services or functions outside the organization,
rather than providing it from within. It has grown to an $800 billion a
year business and the proportion of businesses using outsourcing increased
from 58% in 1992 to 86% in 1996 (Wind & Main, 1998).
At Toyota, die changes took from 2-3 hours in the 1940s, but improved to
15 minutes and one hour in the 1950s, and 3 minutes by the late 60s. (However,
JIT makes a company more vulnerable to strikes, bad weather, and other
disruptions such as parts shortages).
The Milliken textile company cut lead time for deliveries from 42 days
in the 1980s to 7 days in the 1990s, and its on-time record got close to
Levi Strauss cut the time it took to replentish sold out goods in stores
from 14 to three days, and set another goal of delivering fabrics in 3
weeks instead of 16.
Car manufacturers have worked hard to cut time from the mid 80s when Japanese
makers took and average of 46 months to develop a new car, and Americans
60 months. By the mid 1990s, GM takes 48 months, Chrysler 29 months, Ford
24 months, Honda at 24 and Toyota at 18 months.
Teams & Teamwork
are another attempt to reengineer the way businesses work. The hierarchical
and rigid structures of many large organizations often slowed decision
making and distorted communication. In addition, much of the expertise
of the front line workers was left out of planning, and they were not often
given responsibility over their work. Increasing specialization of workers
also left individuals doing segments of work properly, but leaving the
overall product poorly integrated. Teams worked so well in Japan, and recently
the US has been enamored with Japanese management successes, that teams
seem to be a current interest in the workplace. The proportion of companies
that planned to use teams grew from 60% in the 1990s to 68% in 1993, and
more recent estimates have been as high as 82% (Gordon, 1992). That they
are successful is attested to by the following results:
Many teams can also fail, and the shift to teams to make an organization
should be carefully thought out and the workers prepared for the transition.
Some of the sources for such failure include:
Shenandoah Life improved case handling time from 27 to 2 days.
Sherwin-Williams Paint lower costs by 45% and reduced returned goods by
Tavistock Coal increased output by 25% and reduced absenteeism by 75%.
Proctor and Gamble had 30-50% lower manufacturing costs.
Kodak improved statistical process control by 228%, safety by 67%, output
by 12%, and decreased cost by 11%.
GE improved productivity by 250%.
Ford had lower defect rate than most Japanese competitors.
General Mills productivity was 20% higher in team operated plants than
in its traditional plants.
In a study of Self Directed Work Teams (SDWT) in seven countries: 93% increased
productivity, 86% lowered operating costs, 86% enhanced quality, and 70%
improved employee attitudes.
However, a clear discrepancy exists between the actual and desired use
of teams. In a 1995 Wharton School survey of executives, 77% reported that
it was critical to have responsible, trained employees working in teams,
while only 26% reported that they were doing it (Wind & Main, 1998,
US cultural emphasis on individuality
Hierarchical structures and directives
Distrust of management fads and insufficient support
Managerial power, role and control become threatened
Middle management fear job loss
Team leader roles are poorly defined and often overlap or change
Emphasis is on homogeneity rather than diversity
People are better a learning than unlearning
Expect a quick fix: too much too soon; things get worse before they get
Insufficient interpersonal skills
Insufficient time, budget, training to develop skills
Teams are not a substitute for good business basics
In a 1996 survey by Training magazine (1996 Industry Report), teams
were assuming more functions traditionally carried out by management: set
work schedules (67% carried out by teams), dealing directly with external
customers (67%), training (59%), set production quotas and performance
targets (56%), dealing with vendors/suppliers (44%), purchase equipment
or services (43%), budgeting (39%), performance appraisals (36%), hiring
(33%), and firing (14%).
Education & Training
National status and organizational competitiveness is no better than
the level of the workers who make it up. As with business, our educational
system is reevaluating how and how well our people are educated. Education
can no longer be satisfied by simply getting by, nor is education completed
with high school graduation. To be competitive in a dynamic environment
(and this is true for individual's seeking or holding onto better jobs,
as well as organizational success), one must continue to learn throughout
the lifespan. The recent coining of the term "learning
organization" reflects this recognition of its centrality. However,
as the diagram below suggests, we may have a long way to go:
Part of the reason that other countries are excelling in innovation
is that they may be better preparing their youth to enter the workforce
and engage in knowledge conpetition. As an example, Japan has a higher
literacy rate, higher school completion rate, requires more school time,
and provides better financing than does the US. This disparity has led
the US to recently propose the School
to Work Act in which American businesses work more closely with
school systems. Some other facts:
Japanese workers get 6 times as much training as North American workers,
receiving 300 hours during the first 6 months of employment.
It used to take 7-14 years for a workers skills to become obsolete; today
it takes 3-5 years for 50% of skills to become outdated.
According to ASTD,
42% of the workforce needs additional training, and KPMG (2000) suggests
that 75% needs retraining!:
16 million need skills or technical training;
5.5 million need executive, managerial or supervisory training;
11 million need customer service training;
17 million need basic skills training.
This doesn't include the 37 million who need entry level skills training
just to get hired!
In 1992, the ASTD Chief Economist estimated, based on econometric and case-based
data, that workplace training resulted in a value three times the cost
In the 1949-50 academic year, about 31 million Americans were enrolled
at all educational levels, and by 2000 the number enrolled had expanded
to 67.6 million.
Many older Americans have returned to school, with 3 million aged 35 or
older enrolled (in 1996).
In 1941 11,000 students took the SAT (when it was first administered);
in 1995 one million took it.
Corporations are now investing as much as $70 million in their own universities
to train and education people at all levels in their company.
In 1870 only one doctoral degree was granted; in 1999 46,000 were conferred
in US schools.
Worker Adjustment in the New Workplace
These demands have required us to reexamine and redefine what it means
to be successful. Previously, our esteem, status, and career success was
reflected in the visible and often tangible rewards directly related to
the job. Today, downsizing and delayering are reducing career ladders to
a few rungs, titles (and even the concept of "job" according to Bridges)
are lost, power is shared, and status differences are reduced as employees
are empowered. We must reassess what rewards are relevant to workers, involve
them in determining incentives, and create new reward structures that are
It's not the big companies that eat the small; it's the fast that eat the
slow. --Wall Street Journal
The problem ain't what folks don't know, it's what they know that ain't
The truth will set you free-- but first it'll piss you off! -- Solomon
1996 Industry Report (1996, October), Training, p. 69.
Gordon, J. (1992, October). Work teams: How far have they come? Training,
Harmon, F. (2001). Business 2010. Washington, DC: Kiplinger.
Wind, J. Y., & Main, J. (1998). Driving Change. New York:
last updated 2-16-02
David X. Swenson Ph.D.
Please do not use without permission
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34% of the Federal civilian workforce is over 50 years old?* By 2003, over
one third of the Federal workforce will be eligible for retirement.