The intensity of the tides that have been tugging at organizations for a while is about to increase. According to a worldwide Anderson Consulting survey of 350 executives, an overwhelming 79 percent of those who were asked, "What will your company look like in 2010?" answered that the pressure to change will accelerate.13 If they are correct, then adaptation is going to grow to unprecedented levels of importance as a competitive business tool. Successful adaptation surely requires having the right technology, information, finances, and market opportunity. But the key to adapting to market shifts is the presence of a workforce with the desire to contribute ideas about what might be and a willingness to let go of the familiar comfort of what is. Crucial to successful change are employees who will agree to and participate in major changes because their own goals and those of their organizations are more joined than separate.
Doing More with Less
Companies are increasingly required to do much more with fewer staff for a larger customer base than ever before. Periods of protection from competitors' responses to product innovations are shorter today than they were yesterday, and they will be shorter still tomorrow. Companies are able to copy rivals' products and processes with ever-increasing speed and ease. In response to the threat of such market incursions, companies are already seeking to shorten innovation cycles by organizing large sections of their workforces around temporary projects rather than permanent assignments. Personnel rosters not only are smaller, they are also constantly changing in composition so that managers can rearrange skill concentrations spontaneously and urgently. These onrushing events are aggravated by the mounting use of part-timers, of "virtual" workers (who are physically separate from work sites), and of temporary workers (currently some 30 percent of the workforce and, significantly, labeled disposable and throwaway workers by economists). The increasingly common use of nontraditional job arrangements widens the psychological distance between workers and employers, thereby worsening the prospects for success in future efforts to build the ties that bind employees to their organizations.
Leo Mullins, CEO of Delta Airlines, understood how a workforce's diminished organization identity undermines the potential power of technological innovation. When he became CEO during the summer months of 1997, the airline was a mess. Flight delays, lost luggage, fraying aircraft interiors, poorly served customers, and an angry staff were the carrier's hallmarks. Just a few years earlier, things had been very different. The airline was making money and it had a level of employee commitment that was envied throughout the industry.
Delta's problems began during the recession of the early 1990s. In order to deal with the economy's financial fallout, Ronald Allen, Delta's CEO at the time, probably paid too little heed to employee input and instead handed down his own measures designed to control and cut operating costs. Long before the program achieved its desired goals, however, it had to be terminated because of the devastating effects that it was having on employees' moraleand therefore on the service that they gave their customers. One Delta director, who was part of the effort to replace Mr. Allen with Mr. Mullins, explained why these adverse effects occurred. "You had a rending of the social contract that had existed for years and years within Delta."14 Leo Mullins' efforts, because they included rather than excluded the employees' needs and opinions, initiated a turning of the tide. In 1998, Delta earned a record-breaking $1 billion. There was a two-for-one stock split and a $50-million stock buy-back program. Lost luggage problems declined markedly and the airline's on-time arrival record pushed its ranking to number four among airlines, whereas it had previously been near the bottom of the heap. Part of Mullins' remedial effort focused on improving the company's computer systems, including innovations that gave Delta's gate agents more time to deal with customers. As Mullins pointed out, travel crises send airline customers rushing to the gate for help, and "that's where problem-solving expertise and expertise of the professional talent come in."15 Equipping employees with the best-tooled computer technology facilitates their expertise only if those employees choose to make that expertise available. Their willingness to contribute whatever knowledge they have acquiredon the spot, when not strictly superviseddepends on their psychological commitment to their employing organization and its goals. The need to develop this commitment within Delta's workforce was one of the main reasons why Leo Mullins spent so much time talking and meeting with Delta employees. Recognizing the costs of neglecting the labor side of the business equation, he explained his efforts by saying, "This is an organization where the trust factor suffered materially. I have been attempting as best I can to restore that, but it takes a long time because a lot of damage has been done."16
Globalization serves to place an even greater premium on rapid adaptation as a competitive advantage. More and more pressure is being put on more and more companies to meet different and shifting customer demands of a suddenly worldwide scope. Maintaining sales volume and profits while matching product mix, quality, and other attributes to the idiosyncrasies of markets ranging from Brooklyn to Bangkok requires companies to be capable of mass customizationwith unimpeded deliveryat the lowest possible prices. Lacking such abilities, companies will watch their customers, who are generally more loyal to self-interest and convenience than to any brand or supplier, flee to the nearest competitor.
Advances in computer technology undoubtedly increase the speed and ease of collecting and organizing information relevant to the challenges of globalization. But knowing what information to collect, whom and where to collect it from, and how to interpret the data's implications for product development and marketing strategies all require the expression of employees' insight and the exercise of their creativity. A readiness to make contributions such as these is characteristic of workers who are emotionally attached to their employers, not those who are disaffected and alienated from their jobs. Consequently, the rise or fall of companies competing in the global arena will be greatly affected by how well they manage to develop their workforce's organizational identification.
Globalization has also loosened the hold that corporate headquarters have on affiliates, granting them greater freedombut often breaking the bond between employer and employees in the process. In expanding worldwide, many companies have abandoned landmark sites that they believe are too narrowly identified with one nation, a plan that backfires when it cuts off the feelings of identification that workers might have for such traditional sites. In 1995, for example, Pharmacia AB, a Swedish company, acquired Upjohn Cosmetics, a U.S. company based in Kalamazoo, Michigan.17 The headquarters for the new company that resulted, Pharmacia Upjohn Inc., were placed in London, a location that decision-makers presumably hoped would prove more neutral ground. If so, it was a reasonable ambition, but the move might have ended up being no more than a costly eradication of a corporate symbol to which employees felt attached. Perhaps it is a good example of how bosses' Field of Dreams hopes that a new corporate identity and faithful customers will magically emerge once balanced arrangements and neutral sites have been constructed, are destined for disappointment, because they overlook the importance of workers' identification.
Outsourcing, a growth industry these days, has also made company success more dependent on the thorough development of organization identity. Originally conceived as a cost-cutting tool, outsourcing is increasingly seen as a means for more effectively producing products and for serving internal and external customers. The idea is that by allotting certain tasks to firms outside the company, the firm can focus its personnel resources on a narrower range of tasks, and specialized skills and economies of scale will be developed in place of sprawling efforts to cover all bases.
Peter Drucker, an author and consultant with a half century of well-deserved fame for his insights about business and organizations, has predicted that within the next decade or two, all organizations' support work will be outsourced. He might be right, but before that happens, someone had better solve the problems that are afflicting outsourcing. A 1996 PA Consulting Company survey of companies in France, Germany, Denmark, Hong Kong, Australia, England, and the United States showed that one-third of the responding firms believed that outsourcing's disadvantages were greater than its advantages.18
Companies to which work and workers are outsourced face a different version of the common lack of emotional connection between employee and employer. Customers and clients, like some cousins, are "once removed." They are, in fact, part of another organization. This requires firms that receive outsourced work to build strong ties to their employees, so that their goal of serving someone else's employees and customers will become their own workers' goals as well.
Employing Generation X
During the next several years, certain existing social trends, if they continue, will add greatly to the difficulties of building ties of organizational identification. One example is the stylishly alienated behavior that's become a trademark of members of "Generation X." Converging evidence from a variety of surveys shows that young employees increasingly treat their employers' interests and their own as if they were incompatible. Their common resolution is to lean away from supporting organizational interests and toward satisfying goals that are more personal. From an individual perspective this might very well be an admirable activity; however, from a corporate perspective, it means that compensating measures are requirednot necessarily to reverse the younger employees' personal decisions, but to offset the dysfunctional consequences to organizations. Successfully employing Generation X necessitates having policies of company management that create affiliation, not alienation, more effectively than ever before.
Investigators and observers are nearly unanimous in pointing out that the group of adults currently moving into the labor force in the United States and elsewhere in the industrialized world lacks a pro-organizational orientation. In a Coopers Lybrand study of 1,200 business students, 45 percent identified a "rewarding life outside work" as one of their lives' leading priorities.19 And 68 percent of nearly 1,800 MBA students at major U.S. universities agreed "the family will always be more important to me than career."20 In 1995, three-fourths of the respondents to a poll conducted by Penn, Schoen, and Berland supported the idea of giving workers a choice between overtime pay and compensatory time away from the job. They opted for the choice because, in their list of priorities, time often comes ahead of money.21 The effect of this trend is as evident in the professions as it is in corporate business. For example, a Law Practice Management Journal article, titled "The Loyalty Crisis," complained about how young lawyers have less commitment and willingness to work the hours typically expected by law firms, preferring instead to focus on personal matters away from the office.22 There is reason to be uneasy about the wisdom and accuracy of branding an entire generation of human beings as being any one way. Generations do tend to share common experiences during their formative years, growing up with Howdy Doody, Star Wars, or the war in Vietnam, and a unifying batch of TV sitcoms and news programs offering a fairly homogeneous portrayal of world politics and events. But individual members of any generation also have experiences that are unique and idiosyncratic. In suburbia's country clubs, in urban tenements, and in rural malls, people have a diverse array of encounters that effectively distinguish them from the pack. Nonetheless, it is clear that employing organizations face a distinct uphill battle in seeking to earn the allegiance of the young people now at the beginning of their vocational lives. Generation X represents an additional challenge in the new obstacle course of employer-employee relations, joining globalization and outsourcing as changes in business conditions to which competitive organizations must swiftly adapt.