Beverly Goldberg, vice president, The Century Foundation, and co-author, "Corporation on a Tightrope"

Bowen:     Beverly, your organization has obviously done a lot of research into the American economy and issues relating to the American worker. I wonder if you could tell us about the sort of trends you're seeing in the American economy and what today's organizations and organizational members are experiencing as a result of those trends.

Goldberg:    Basically, one of the major trends we've been tracking for a number of years is the growing inequality between wealth and income in the United States. The richest one percent of the population controls about 48 percent of the wealth, which is a somewhat startling figure, and it's one that leads to a great deal of unhappiness. At the same time, people are finding jobs. They might not be wonderful jobs, but jobs are out there. The unemployment rate has dipped below five percent for the first time in eons and it is looking as if the tight labor market is going to be maintained because we don't see an easy immigration rise. We're limited to the workers we have, which makes us question, among other things, in our looking at aging of the population how much we want to continue to encourage people to retire early in the United States.

Bowen:     Coincidentally, a recent front page article in Investor's Business Daily was captioned "Do Americans Hate the Rich," and the byline is "Well, to some degree, but not enough to start a class war." The example they give is Ben & Jerry's Homemade Inc., where after much ballyhoo for a CEO search in 1994, the company vowed not to pay any more than five times the multiple of the lowest paid worker. And of course they ended up with Robert Holland as their CEO at 14 times the lowest wage. After two years he was replaced by someone making even more. Is that the kind of thing that's contributing to worker anxiety or dissatisfaction?

Goldberg:    I think that when the media covers the enormous wages that CEOs currently receive, there is a grunt of dissatisfaction. But overall, when a company does well, people don't mind it. People chortle at a Bill Gates, never mind the government after him for antitrust. People who make a company successful are perceived as earning what they get. And don't forget the dream. Everyone thinks they have the next chance to be a millionaire. I think that the causes of anxiety and anger in the workplace are somewhat different than salaries of the top people. It's more a perception of chaos, of uncertainty that makes people very restless and unhappy.

Bowen:     What do you mean by 'chaos'?

Goldberg:    Companies are constantly restructuring themselves. They're downsizing. Someone recently noted that of the 41 percent of the companies that downsized in the past couple of years, a third ended up with larger workforces. The people they've hired are doing different jobs. Companies today, in order to remain successful, are having to reinvent not only the way they do work, but the work that they do, which often means the people just don't have the skill sets that are needed in the current environment in a company. When you see those changes taking place and you're one of the people it's likely to affect then it's "what do I do next? My world is crashing around me." It can be pretty unhappy.

Bowen:     Obviously from your vantage point you see lots of contradictory things going on from a statistical perspective. Perhaps you could comment on that for us.

Goldberg:    It's very strange out there. Unemployment in Nebraska is at 1.6 percent -- under five percent overall and yet everyone is screaming that jobs are going abroad. It's the nature of the jobs going abroad. It's the kind of changes taking place because of global competition, where companies can't really raise the price of goods because of competitors and yet if they put the work out there in another country to be done there are screams about that. Our economy is booming. Why aren't people happy? Because what they're finding is their own world is not staying stable and they can't be certain that their jobs will be there tomorrow. That's really at the heart of what's wrong.

Bowen:     So it's the uncertainty around "will I have a job in the future?"

Goldberg:    Will my skills enable me to have a job in the future? What kind of work can I do in the future? How will I ever get from here to there?

Bowen:     There's a tremendous dislocation of middle management and senior management in this economy as we have gone through all kinds of restructuring, right-sizing, downsizing. I don't know of any company that's ever gone through wrong-sizing. The net seems to be that for the most part people are working more and making less, specifically those who have been unseated from higher paying jobs. Do you have any data that would tend to support that?

Goldberg:    The income levels of the middle class have been dropping. There's no getting away from that. There is a little more growth on the upper end. The middle class is shrinking and the poor are the most badly affected. They are just getting poorer. People just don't trust that things will remain good normally. However, right now with the stock market booming we're seeing some very surprising numbers of people saying they expect things to get better or remain the same for a long period of time. Forty five percent think the economy improved over the last twelve months; 30 percent see more improvement in the next twelve; 53 percent say it will stay the same over the next 12 months. So people aren't anticipating great disasters and yet they're still uncomfortable because an overall economy isn't the same as your job, your position. Middle management sees new technology coming in that makes their jobs much less managerial. Lower level workers aren't certain their jobs will exist, whether they'll have to go outside, whether they'll have to take contract work. It's the uncertainty. I keep getting back to that because it's what we hear over and over again.

Bowen:     Well certainly the uncertainty, the anxiety is essentially discomfort and stress over expected job change, expected danger, if you will. From your research and personal information gathering, can you cite situations that are arousing feelings of fear, anxiety, anger and the extent to which you think these anxieties are impacting organizational performance?

Goldberg:    I was recently teaching a course in clear communication to technologists. I ran into a 22-year old to whom I asked, "Why are you taking this course?" he said to me, "I was working on a coding project for six months. I went to dinner with some friends and you know what? I'm behind. I don't know the new languages coming in. I need to learn everything I can learn. I don't know what's going to happen next." When a 22-year old making a lot of money in computer technology is frightened because of the changes they see happening, the obsolescence of their skills, you begin to see how everybody is looking for the next opportunity --the next thing to learn -- and trying to hold onto the job they have now for as long as they can. That makes it very difficult for an organization to easily bring in change.

Bowen:     So the pace of change also is a factor here?

Goldberg:    Absolutely. Recently I also talked to with some elderly ladies at a nursing home and two of them were talking about their career as bookkeepers and they had been bookkeepers since World War II until the late 60s. And you know their jobs had not changed. They were full charge, explaining everything they did. One of them said, "Suddenly there were these machines that could do everything that I did faster and better and I didn't know how to work them. I just decided it was time to retire."

Well I took a look at that world she was in from the 60s until now and the changes have been extraordinary. New recording procedures, new accounting, new ways of tabulating. A job that once could last for 20 years with the same skill sets no longer exists. Also take a look at printing. Printers today are technologists. They're not printers in the way we think of it in the general sense. That whole world has changed, but the changes came from almost 400 years of the type being prepared by hand, the machine running over the page to 75 years of linotype to suddenly in 20 years its moved from cold type to desktop and everyone is a printer. It's a remarkable set of speedy changes that makes life very difficult for people. Who is a printer? I asked one printer I know how he was going to make the transition because his company had closed under him. New York is a terrible place for the print industry right now. And he said, "I don't know. I don't have any skill sets except printing." This is somebody who traffics material, who handles production, who buys supplies. And when we started looking at the skill sets underlying the printing it was suddenly a whole new world for him. And he said, "Yeah, you know I could probably get a job." And he looked at me and said "but I've been a printer all my life. I always wanted to be a printer." He had a meaning for that word. And it no longer exists. It's no longer a skill he can use. He has skills but he has to apply them to something new. There are a lot of changes going on for him. It's that personal lack of identity that once made people feel very secure and the need to reassess what you can do and find new ways to do it and apply it and learn more because he's going to have to learn in whatever field he goes into a whole new set of skills and learn to think of himself as something other than a printer.

Bowen:     Are these changes having an affect on particular classes or groups of workers in our country? I think for example of those who are older workers.

Goldberg:    The problem for people who are older is that they need to engage themselves in a great deal of retraining if they're going to hold onto work. Many people are opting out. They don't want to go through it. The whole notion of learning is something America has not focused on, so learning new skill sets -- which is always difficult -- is more difficult when it's not habitual and you don't have the talents or skills needed to do that. Now take a look at your five percent unemployment and these older people who are retiring, 60-percent of them at 62, and you begin to see that America had better find some solutions for this because workforce lack is not going to keep the economy moving ahead. We need workers.

Bowen:     If the learning process is still rather foreign inside corporations, does that not signal an opportunity for growth for corporations and some hope for individuals?

Goldberg:    Yes, and it has to be done on two levels. It has to be done on an individual level and it has to be done on the corporate level. Offering training in corporations does not work very well if you have people who are resistant to it and don't know how to incorporate what they learned very easily.

One of the things I think needs to happen is that people have to face the fact that technology is here and its here to stay and its going to make a huge difference. People have to do that by taking a number of steps to cope with the anxiety created by technology. One of the things you can do is accept the fact that change is inevitable. Easier said than done. Part of what you have to do is realize that your skill sets aren't necessarily going to get you a job tomorrow. People need to begin to save more. One of the disgraces in this country is our national savings rate. When someone loses a job, particularly someone middle class or under, they don't have the resources to take the time to learn a new set of skills, to take advantage of retraining opportunities. Instead they jump into the first thing they can find, often at a lower salary, which means that they're not very happy. They feel very displaced, very threatened. There are ways to look at what you earn and find ways to save just that little bit to have a safety net to buy a month or two to look for another job. Brown bag your lunch and put the money you would have spent those two days in your pocket. Eat out one less time and put the money somewhere. It doesn't take long to have $500 to $600. For some people that can mean the difference from being able to take that computer course for two weeks that the public schools are offering or having to plunge into a job at a dollar an hour lower, which makes a huge difference on the low pay level.

Bowen:     So what you're suggesting is that we as individuals need to look at the marketplace differently and anticipate that there are going to be downturns in our careers or job situations? I'm hearing you say that in addition to learning new skills and skill sets and constantly thinking ahead, we also have to build up little war chests to tide us over during down times.

Goldberg:    Absolutely right. We have to look around us all the time. We need to look at our workplace and notice, "There are a lot of consultants in here lately. I wonder what's going on." And, "Gee whiz, they're starting a pilot program with some computers. They're asking for volunteers." You know what, if you want to learn something, volunteer. Also volunteer outside the workplace if your job doesn't involve computers at the moment. Hospitals are always looking for good volunteers and that's a good opportunity to get a chance to learn a little bit about computers. Work in the office. Be someone who offers to cover the desk on someone's break. They're going to teach you how to use the computer so you can do it. Take any opportunity that presents itself for learning anything. It never hurts to learn more skills. It gives you a marketable resume. It gives you an advantage over the next guy and that's the only way to succeed.

Bowen:     In your book, "Corporation on a Tightrope," you suggested that the future for companies will tend to be different and there are a number of things they will need to do to thrive and, in some cases, survive. Tell us a little about that.

Goldberg:    What I'm seeing is that products change, markets change. Companies are going to have to be extraordinarily flexible. They're going to have to be able to expand and contract at will, which means that workers aren't going to have long-term jobs with one company. There will be a core group of workers who stay with one company, but there will be a lot will be contract work, short-term assignments. In order to get the best people, it's up to the flexible corporation of the future to present itself as a good employer. The better you are as an employee the more likely it is that you can jump on a new product possibility and get the right people to work for you. To do that you've got to have ethical standards. You have to have a social contract with workers -- that is, communicate with them, let them know that the contract is, say, for two years, but build three months into the year where they can get some training so when they leave they can move on to something else. It has to be a new, lean organization based on core competencies and that's the heart of the organization -- the group that will call on people to train when they need to expand. Leadership has to happen at every level because in the core organization these people are the ones who train the new people to do what they do. At every level you'll need more secretaries, but who's going to instruct them and give them the institutional memory? The social contract has to cover what we call affinity workers who come in temporarily, as well as those who are there all the time. You have to encourage your people to be open to learning. You have to encourage experimentation, innovation. A very important part of this is avoiding restructuring when you should re-govern. That's an issue that people don't quite grasp. But if you are setting up a lot of teams within your company and you are a hierarchical organization, you're looking for trouble. You have to have a unified governance and accountability structure. And of course, today you have to ensure connectivity with your suppliers, your customers. Technology is the wave of the future.

Bowen:     Beverly, when you refer to the term unified governance, specifically, what are you saying?

Goldberg:    If you have a hierarchical organization at the top, you can't expect a company to work well when what you have is a flatter structure underneath. The reporting doesn't work correctly. You have people who think they can make decisions and the person at the top is saying, "Oh, this is wonderful. We want teams. The teams will make the decisions." Except their own systems at the top is on a hierarchy with formal reporting structures, which violates team structure. So you have to make decisions. Are you a federation internally? Are you a confederation? Are you a hierarchy? Are you a matrix organization? Are you totally team-oriented? How flattened are you? And everyone has to buy in. When we get to the whole idea of communication, people need to know exactly what is expected of them. Companies have to know what message they are giving to their people and it has to be one message and a clear message. Again, not doing that creates uncertainty, which creates anxiety, which we all know creates anger.

Bowen:     So in one sense what you're saying is an organization has to be clear around its decision-making process and communicate "the way it is,'"so to speak, if its hierarchical. Otherwise a unified governance is one where decision making occurs throughout the organization and that there's a congruence in a unified governance that may not necessarily be in hierarchical form.

Goldberg:    That's exactly right. There are organizations that do it hierarchically and do it very well. But they can't fool themselves into thinking that because they say they're going to be flattened or teamed that they really believe it at the top. Unless the people at the top accept the diminishment of their own authority, it's not going to happen and the employees get mixed messages. It's very frustrating and people tend to leave in situations like that. You can't say that teams can make their own decisions and then say they can't spend more than $2,000 without approval from above if what they constantly need to do is buy items that cap out at 7 or 10. People who are wed to the hierarchical mode of thinking try to push this notion that decision-making is below, but they can control it by financial accountability.

Bowen:     So they mixed messages really contribute to the frustration?

Goldberg:    Absolutely, Brayton.

Bowen:     You've identified a number of things that are contributing to frustration and anger in the workplace such as changing technology, insecurity related to the social contract, mixed messages in terms of communication, etc. Those certainly seem real to me, but what about the other aspect of perception and media hype, etc.

Goldberg:    One of the real difficulties in taking a look at the world around you and feeling in control is differentiating what's real from what's not and what the media tells you and hypes. If you look at reports of the paperless office in the 70s, it wasn't until 1979 that some of those computers began to be used. They were there, sitting in offices row upon row unused, but technology was taking over the world. We've been hearing for how long that its going to be a cash-less society? Generally, any innovation takes 10 years to begin to be implemented and another 10 years just to become part of the workplace. And today the media is so entranced with the notion that the world is so dramatically changing that every discovery is paraded as making the total difference in the world. It might make it, but it's not going to make it tomorrow. We really do have time to learn and people forget that in the huge amount of media hype that goes on around this area-some of it pushed by technologists.

Bowen:     So the difference between reality and perception we can conceptualize, but at a very base level perception is reality for all of us, and if there's anxiety about a message coming from the media, that's going to exacerbate the situation.

Goldberg:    Right, because people believe it. They hear it over and over again and it's hard to ignore. You see all these advances being shown on television. Go back to the first pictures of the robots that were going to run our factories. It hasn't happened yet. We've been hearing that for 30 years.

Bowen:     That's a very good analogy. So it sounds like there's some hope in this message.

Goldberg:    I think there's a lot of hope. I think there's a lot of chance for growth for people. There's a good opportunity to learn, to grow personally, to begin to think of what you do in the workplace a little differently. That it's not a job, a specific task, but rather applying a set of different things you know and learning an additional one here or there and applying that and having a chance to make a difference as we move on to a new century. That's a very exciting thought for a lot of people.

Bowen:     So what you're suggesting is that each of us needs to take a longer view with respect to change.

Goldberg:    Yes. Change is going to happen constantly, but we have to stop thinking that every change is a major, huge change. I hear people saying, "They're going to a new system in our office." And I say, "Wait a minute. What do you mean by a new system?" Everything's going to be done differently. So you question them a little more and what it turns out is the old word processing system is being changed and it's going to take about a week of sitting there and learning it. It's not all that frightening. If you break it down, look at it, think about it and stop worrying about it and start mastering it. Part of it is that when a company introduces change, it fails to introduce it properly. They come in with this notion that we're spending so much money so obviously there's this huge, major change. Well, you're spending so much money because technology costs a lot of money. It eventually brings productivity returns. If its introduced right its going to work on your behalf, but you can't introduce it with so much hyperbole that you terrify your people into thinking that everything they knew is out the window. That isn't true 99-percent of the time.

Bowen:     So what I'm hearing you say is that corporations sometimes shoot themselves in the foot by not preparing the organization in a timely fashion and not working through the communication process.

Goldberg:    Right, and not taking the time to think through that yes, we're spending a lot of money on "a" but "a" is going to have long-term impacts. We're investing in this technology now, not because of the small changes we're bringing in at this minute but because of changes we need to think about in the next five or ten years because the whole system is becoming obsolete. This is a good time to do it so we're investing "X" millions of dollars. Because that's such a frightening figure, they get caught up in presenting this dramatic set of changes instead of saying to their employees, 'We're putting in this huge system. Right now all it's going to be is X, Y and Z; however, over the next 10 years, long term, it's going to mean A-Z.

Bowen:     The other aspect is in the announcement of that investment, the way in which the organization is or is not involved. So if the corporation not only comes forward with an announcement but with a process involving people in the organization, it would seem that would go a long way to alleviating the anxiety and anger and fear that is natural.

Goldberg:    Absolutely. Brayton, one of the things I've learned doing change management projects is that you really have to introduce them properly. In the old days the goal was to open the organization, make the change and refreeze the culture. To an extent that's a lot of what's still happening. Learn this program and everything will be all right. No, what you have to say to people is that the old program doesn't work anymore so we're unfreezing the culture and we're going to bring in this new thing. But we're not going to say this is permanent. It's the way it's communicated. We're going to learn this now and there are going to be add-ons. Over the years you're going to learn a whole new set of things and it's going to be exciting and wonderful. Don't refreeze that culture. That's the worst thing you can do because two months from now you're going to be opening it up for the next change and that's just making people unhappy and miserable. Communicate what you're going to do in a clear, no nonsense fashion. Keep long and short term very, very specific.

Bowen:     How realistic is it to think that corporations will ever meet the needs of people in coping with fear, anxiety and anger associated with change?

Goldberg:    They're not going to be able to do well on their own. People have got to grow up a little about this. I think that it's time for us to say to people, "You know the human resources group has some programs in place that will inform you about ways you can keep up with the changes taking place in the world, but you've got to do some of the work. You've got to look out there." We can't promise lifetime employment any more. We never gave it really. It was a few companies like the IBMs. Traditionally in this country layoffs have been a way of life. The companies that did this lifetime with the organization are very unreal. The average time people spend with companies is about eight years. That hasn't changed. So you really can't make those promises. People have to accept the responsibility and nobody likes that. I think it's up to the individual and companies have to be up front about that. You have to do part of the work.

Bowen:     Is there a sense that people doing part of the work and potentially raise the stakes of being able to stay with the organization longer?

Goldberg:    Either being able to stay with the organization longer or knowing that they could make a good move in the future. When I offer things like the clear communication course, one of the requirements I have is half the time has to be on the employee's own hour. I will not accept that they come into the class during work hours. That is not enough motivation. I want people to want to learn so I will teach a course only if the person is giving me something to get it. I've found it makes a huge difference in the results.

Bowen:     How does the pay issue for top management relate to the individual and their feelings of personal anxiety about their own economic situation on the job?

Goldberg:    I think for the most part the kinds of numbers we hear out there are so phenomenal to most workers that they don't have an impact if the company is doing well. It's when the company is downsizing, that people feel there's an unfairness, an injustice. But if everything is going well in your company and you hear these mystical figures and stock options, but you know you're earning what the peers in your work group are earning, the company seems stable and the benefits are good, it really doesn't matter.

Bowen:     Certainly we've seen CEOs leave companies with incredulous amounts of money. Doesn't that create some dissatisfaction on the part of some workers?

Goldberg:    The anger that people feel in response to that is proportional to their own situation and their own anxiety. If it's a company where groups are leaving with golden parachutes worth phenomenal amounts of money and what they've done is pull the price of the stock down, 20-percent downsizing has ensued, the people who are left are furious. But if that hasn't been the case, it's just looked at as "oh, well, the rich always get richer." It's background noise anxiety rather than actual felt anxiety. It doesn't impact your life in the same way. People don't see quite how that affects them.

Bowen:     Certainly we can see that CEOs are rewarded in many ways for their downsizing activities. At some point doesn't that get into the craw of the worker?

Goldberg:    Yes it does, but it also is something that cannot be avoided. We live in a world of free markets. These people are making that money and there is little to be done about it unless we change our whole system. I don't think this is a country where we could say you can't make a lot of money. We're not communists, we're not socialists. And it does anger people, but I don't think its as overwhelming as it would be if we lived in a country where everyone couldn't, at some point in their lives, have the aspiration to be that person on top.

Bowen:     And yet aren't there organizations where the top teams have pulled back their own economic rewards to enhance the economic aspects of the organization? Isn't that a longer-term view?

Goldberg:    It's a much longer-term view and America is known for the short-term. We're a nation that never has had the patience to say this is what we're doing so we're around in 20 or 40 or 60 years. Tom Peters wrote a book about excellence among corporations and four or five years later every one of those companies on top wasn't there. Take a look at the changes in the Fortune 500. Companies in this country don't live very long in terms of life spans and that's in part because of the short-termism.

Bowen:     Your organization obviously looks at trends in today's economy. What about looking out into the future as we go into the new millenium?

Goldberg:    I think we think the economy is very strong and is likely to remain strong for a while, that America has really found its place again, that globalization is going to continue to take place and have effects. We see a good century coming up.