• Strategy
  • The Economist

Survey: The Near Future

Peter Drucker explains how it will differ from today, and what needs to be done to prepare for it.

The same legal entity — eg, a business, a government agency or a large not-for-profit organisation — may well contain several different human organisations that interlock, but are managed separately and differently. One of these is likely to be a traditional organisation of full-time employees. Yet there may also be a closely linked but separately managed human organisation made up mainly of older people who are not employees but associates or affiliates. And there are likely to be “perimeter” groups such as the people who work for the organisation, even full-time, but as employees of an outsourcing contractor or of a contract manufacturer. These people have no contractual relationship with the business they work for, which in turn has no control over them. They may not have to be “managed”, but they have to be made productive. They will therefore have to be deployed where their specialised knowledge can make the greatest contribution. Despite all the present talk of “knowledge management”, no one yet really knows how to do it.

Just as important, the people in every one of these organisational categories will have to be satisfied. Attracting them and holding them will become the central task of people management. We already know what does not work: bribery. In the past ten or 15 years many businesses in America have used bonuses or stock options to attract and keep knowledge workers. It always fails.

According to an old saying, you cannot hire a hand: the whole man always comes with it. But you cannot hire a man either; the spouse almost always comes with it. And the spouse has already spent the money when falling profits eliminate the bonus or falling stock prices make the option worthless. Then both the employee and the spouse feel bitter and betrayed.

Of course knowledge workers need to be satisfied with their pay, because dissatisfaction with income and benefits is a powerful disincentive. The incentives, however, are different. The management of knowledge workers should be based on the assumption that the corporation needs them more than they need the corporation. They know they can leave. They have both mobility and self-confidence. This means they have to be treated and managed as volunteers, in the same way as volunteers who work for not-for-profit organisations. The first thing such people want to know is what the company is trying to do and where it is going. Next, they are interested in personal achievement and personal responsibility — which means they have to be put in the right job. Knowledge workers expect continuous learning and continuous training. Above all, they want respect, not so much for themselves but for their area of knowledge. In that regard, they have moved several steps beyond traditional workers, who used to expect to be told what to do, although later they were increasingly expected to “participate”. Knowledge workers, by contrast, expect to make the decisions in their own area.

From Corporation to Confederation

Eighty years ago, GM first developed both the organisational concepts and the organisational structure on which today’s large corporations everywhere are based. It also invented the idea of a distinct top management. Now it is experimenting with a range of new organisational models. It has been changing itself from a unitary corporation held together by control through ownership into a group held together by management control, with GM often holding only a minority stake. GM now controls but does not own Fiat, itself one of the oldest and largest car makers. It also controls Saab in Sweden and two smaller Japanese car makers, Suzuki and Isuzu.

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