“Successful business people have a sense of where they are by understanding trends already underway
which are not fully recognized."
– Edward R. McPherson

"A Sense of Where You Are"

– by Edward R. McPherson, President and Chief Executive Officer of InterSolve Group

One out of every four employees among the Fortune 500 companies in 1979 was gone by 1991 -over four million people. During the peak of recent downsizing during the first quarter of 1994, announced layoffs totaled just under 200,000 people or more than 3,000 each working day which is over two per minute! In an era of downsizing, outsourcing, partnering, alliances, flexible manufacturing, joint ventures and so forth, the challenge clearly is doing more with less - in short, learning to conduct business quickly in scale without size.

The Rise of the Flexible Workforce

By the year 2000, one-half of all working Americans, some 60 million people, will be free-lance providers of skills and service, up from about one-third or 40 million today. Manpower Inc., the temporary staffing company, is now the largest private employer in the country with over 600,000 people on its payroll, hundreds of thousands more than either General Motors or IBM." Elite" or highly skilled temporary employees, including interim executives, now account for about 25% or $9 billion of the total temporary payroll of close to $40 billion. In fact, the recent elevated total returns, price/earnings ratios, growth in market capitalization, and global consolidation of the publicly-held staffing companies are tangible evidence of this phenomenon.

Emerging New Workplaces

The average company is becoming smaller. Recently, as many as 20% of the two million new businesses recorded annually by Dun and Bradstreet have no more than two people! Furthermore, the total number of employees of Microsoft, Apple, and Novell combined is about 10% of IBM. Enterprises are increasingly taking the form of a network of specialists as the old vertical division of labor is replaced by work focused on customers and corporate-wide processes. The four-day work week is becoming a mainstream way of life as one-fourth of large U.S. corporations now offer - or require - a four-day schedule for at least some of their people which is twice as many as five years ago. Telecommuting is fashionable, and a "balanced life" is valued by today's workers.

Innovative Organizational Structures

Virtual enterprise is gaining acceptance in which companies marshal more resources than it has on its own using collaboration both inside and outside its traditional boundaries. For example, Visioneer is a document communications company in Palo Alto, California, whose miniaturized scanner consists of boards made in Singapore which are encased, tested, and shipped by a company in Boston with software provided by another East Coast manufacturer - thus unencumbering Visioneer to focus on planning, marketing, and selling. Nike's modular structure enables it to design shoes in Oregon and produce 90 million shoes a year in non-owned plants in Asia. There are lots of successful alliances among international airlines, and partnerships account for a growing portion of earnings in many leading companies. Alliance Airport outside Fort Worth, Texas - a 7,500 acre industrial multi-modal facility for logistic dependent companies - offers a Federal Express hub and the Santa Fe/Burlington Northern rail container and trucking center, all strategically located at the mid-point of North America with gateways to Asia by air and the west coast ports of Mexico linked to the United States by rail and highway, thus enabling concurrent logistics.

Outsourcing is migrating from commodity functions such as data processing, accounting, transportation, and other administrative services to more customized solutions such as executive development, interim management, and specialized advice and counsel.

Electronic Infrastructure for Conducting Commerce

We have seen the proliferation of fax machines, electronic mail, video conferencing, computer-aided design and manufacturing systems, local and wide-area networks, and cellular phones. Now we have the explosive growth of the Internet, groupware, remote and mobile computing - in fact, hand-held interactive order entry toots enable McKesson to recast its external relationships and customer interfaces as a distributed company.

Consider how Federal Express uses computing to integrate an organization and excel at customer satisfaction by orchestrating 400 airplanes, 30,000 trucks, 90,000 employees, and 1.5 million packages each day - only about 15% of which are documents, with growth in volume stemming from on-demand inventory and the connectivity of global enterprises. Winners in the financial services industry are re-inventing themselves through information technology in distributing products electronically - and becoming intimate with customers through the new literacy of banking such as database mining, knowledge discovery, and predictive modeling.

Refreshing Leadership Styles

Perhaps the most fundamental and sustaining trend is the expectation for refreshing leadership styles people have of the business leaders of the flexible workforce in the emerging workplace organized in innovative structures supported by electronic infrastructures. Leaders are no longer "bosses"; instead, everyone seems to be a versatile coach who deals directly with everybody it takes to get the job done in sharing information and demanding value added results. Leadership attributes which align well with today's cultures and "satisfiers" include people who are secure in themselves at ease in demonstrating great integrity, have foresight for creating the future, balance a sense of urgency with a legacy of progress in depth, and believe in the power of one unit of human capital.