BOOK TWO
III -NEW SHAPE OF CORNUCOPIA
3. BOARDROOMS, BIG AND SMALL
He will take care... but don't think he will be all excited about it.
January Sale and nets below shareholders will help a lot, because they will
spread ownership of the means of production over almost everybody and defuse
a few annoying issues. But it will not be enough, for the sale is not candid
and portfolio entrepreneurship is not real entrepreneurship yet...
The new decision-makers
What makes that move less than perfectly candid is that, as they become investors, we will pretend that the common folks are getting closer to the decision level of our society. Which will not be true, of course. Workers will not really be invited to sit in the boardrooms of Exxon, G.M. or I.B.M. because, in case somebody hasn't noticed, the seats there are already occupied. The man who will physically pass the threshold of the big boardroom to displace an attorney/estate-administrator is most unlikely to have calloused hands and drink beer; he will be the smooth attorney/manager-of-the-Pension-Fund, trained to think and act as an investment manager... and to talk friendly to executive production managers.
As Top-dogs shake hands and congratulate themselves on their swindle, as workers are happy about their new purchase, managers will go on venerating both Wealth and the People... and paying them as much attention in day-to-day business as to a most sacred relic of the Holy Virgin. Managers, come what may, will go on running the production show, wielding the real power as long as a corporate industrial production system will endure.
Candid or not, passing the buck of corporate ownership to Johnny Worker is rather innocuous since, should the Big Bum Cheque be allowed to bounce, we would all in fact take the great shellacking together, no matter the name in the Shares' Registry. So why argue? Let's keep our eyes on the shining horizon; portfolio entrepreneurship, in a creative society, will be only the beginning. It is not only lacking in candor, it is also rather irrelevant. Profit participation and portfolio entrepreneurship will be a little beside the point, because the "swindle" works both ways. When the worker has shares in Exxon, it does not mean he has acquired power..., but it does not mean that the system has acquired his unconditional dedication either.
If given the shares, or personally invited to join by the Top People, the worker may see his participation as some kind of "recognition" and break his back for a while. For a short while though, because, very soon, awareness is bound to dawn upon him of the tenuous link that exists between his own work-output and the ups and downs of Exxon's shares on the market on which depend the money value of his shares, the real, tangible, material reward vested in his participation. The worker will soon find out that he, personally, has no impact on these variations.
Enlightenment will occur even more quickly if the worker has had to buy the shares and actually stands to LOSE money on the venture! Even in the best of cases, though, the pride of "owning" A.T.&T or an equivalent Blue Chip is unlikely to be sufficient to move out of bed, and through the punch clock, the average worker down with a cold or a great "morning-after" hangover. Capital participation in large corporations will be a glamorous but rather ineffective move, not because it is fundamentally wrong, but because it does not really address the problem of motivation.
Sharing in the profits of a large corporation is far too remote a reward to be effective for the day-to-day motivation of the workers. We will need something else as an incentive, something entirely different than selling each worker one-millionth the share-capital of his own mammoth employer; we will need something that will link more efficient work to more money, for instance. Selling Cornucopia to the workers will not achieve this result.
Good to invest and to gamble on somebody else, but much better to have everyone gamble on himself! The best way for the system to derive all the advantages of the motivation that comes with profit, is to go back to the old "sow and reap" approach, to try to have all profits correspond to the risks, at all decision-levels...
Peasants of yore were not so enthusiastic about pure entrepreneurship, but neither was Johnny Worker happy in his decision-free job for machine. Absolute bliss, for human beings, is to have a constant choice between risk and security. Drive forward and build your ego, then relax and feel proud; this is why we go skiing, make war or make love. Could our production system fulfill that dream and remain efficient? The answer to-day is YES.
Decision-makers may, or may not, be working for a profit and be "taking risks": those who do are entrepreneurs. In the early industrial production system, when there was a small minority of owners/deciders and a mass of workers/doers, "profit" could look like a dirty word. In a creative society, it is the worker who is the moment-to-moment decision-maker, the prospective profit maker in a production process in which machines do and the human actors are introduced specifically to decide. In this revamped production system, with Helots doing the leg work and GIA providing for security, the decisions of each worker have a new significance; they have a definite impact on results and it becomes a reasonable choice to relate once again rewards with results. We may now offer the best of two worlds to the workers: entrepreneurship at will and a net below.
As every decision-maker takes the risk for his decisions, not only does he work with more enthusiasm, but he is also granted more leeway from "above" to do it without hindrance. The net result is that it becomes possible, then, for all decisions that are needed to be taken without delay, at the lowest level where all the information is available and by the very same worker who is closest to the situation: this means efficiency. More profits, both individually and collectively. This is the way of real momentum, the way of direct entrepreneurship..
If our production system, the great Cornucopia from which we derive our wealth and welfare, is to continue to rest on private initiative, as we suggest it should, rather than to fall into the hands of our own equivalent of "Commissars" for some "American S.S.R", we must not rely only on the acumen of the few - or even the of many - to pick the right horses. Commitment through investment will not be enough. We will need direct entrepreneurship. We must broaden the base of entrepreneurship and have each and every worker feel that results and rewards are once again related to decisions and achievements at the execution level, which happens to be the truth, now that workers are not interchangeable anymore, but are expected to become creative.
How close can we get to the reality of work, reproducing the old peasant's
"sow-and-reap" situation and pegging the worker's compensation
to concrete results? Entrepreneurship should mean that the worker is given
a chance to mind his own business, to be the senior partner in a going concern
and to manage a profit-center of his own. Can we get initiative and entrepreneurship
in the workshop, and deal with Johnny Worker running his own boardroom?
Direct entrepreneurship
Direct entrepreneurship is not only possible, it is all but inevitable. Its already gathering momentum from day-to-day, and it will take over at the moment we have GIA for security. It will, for the same reason that free labour got the better of slavery in Rome: a well pampered, unionized worker, on a 9-to-5 schedule, is no match for an ambitious self-employed person with an eye to profit. The latter can simultaneously bake a bigger cake for himself, his clients and Society. Entrepreneurship is also, by the way, an immediate if not final answer to the workaholics' backlash and the threat of decadence.
How will we put profit back into the game? It is through managers that entrepreneurship will infiltrate Cornucopia and ooze through the holes in the GIA net. Having the best of two worlds, the manager may links some of the security of GIA with his initiative and apply it within the job framework: he is the Trojan Horse for universal entrepreneurship. At first, we need do little to help things along; just relax and take advantage, both of "trustophobia" and of a growing tendency, for large corporations and conglomerates, to let some divisions operate almost as independent units.
This tendency reflects the understanding, even today, of the necessity to give more room to managerial entrepreneurship, to facilitate profit participation and to increase motivation and incentive. After GIA, which will give more freedom to both employers and employees to terminate a relation, motivation will be foremost in everyone's mind, leading to more options and perks for star managers. After the "January Sale", when workers will become shareholders, but rather unenthusiastic shareholders, will it be surprising if we end up with managers working on "profit-sharing only" compensation plans?
The present giant corporations will subdivide, rather than offer more options and perks, and it will become common procedure for managers to renounce salaries in exchange for profit sharing and capital participation only, not in the huge corporation themselves, but in smaller corporate entities that will be offshoots of present corporations and in which the impact of good management can be felt tangibly on profits.
These smaller offshoots are unlikely to break all ties with the parent corporation, for sometimes "big" is beautiful also; the parent or head corporation will retain responsibility for things that can be best handled in common. The embryonic model for that relation already exists in American conglomerates and, most of all, in zaibatsus , the old Japanese tentacular trading corporations.
Honorable ancestor company will manage the overall policy planning, financing, marketing, the relations with the State and sometimes the research and development of the whole group of participating or subsidiary companies. It will also vouch for the all-important financial, technical and ethical credibility of the participating companies and their products. From there on, the more autonomy with the companies and the less intrusion from the huge parent corporation the better. Let the managers' entrepreneurship prevail.
"Zaibatsus", or conglomerates if you prefer, will go on belonging to shareholders - mostly their own employees - and their shares will go on selling on the open market to keep the traditional money game going. How could the managers' entrepreneurship not prevail, though, when all key-personnel is paid on a "profit-sharing only" basis, and it is managers who are both the major shareholders of the zaibatsu and the owners of the smaller offshoot companies.
Managers doubling as major shareholders will be the first step from portfolio to direct entrepreneurship. The very essence of the creative society though, is that managerial entrepreneurship will not be enough. How do we get it to apply all the way down the line, and how do we get the last worker/decision-maker in the shop, in symbiosis with his Helot, to become profit-conscious and involved in results? Here, necessity will follow a tricky back-and-forth path.
It will begin, as we said, with the security of GIA and a gambit on leisure. Workers will first become entrepreneurs, moonlighting steadily on a "4-to-3 for leisure" schedule. Some will show imagination, and whole new chapters of Ripleys and Guinness will have no doubt to be rewritten. Most of the workers, though, if there is any demand for it at all, will try and do in their spare-time more of what they know best how to do, that is of what they get paid to do in the job framework. In all the sectors that do not require expensive equipment, they will succeed and soundly trounce competition from salaried employees.
This will lead, in those sectors, to less demand for employment, more leisure for workers, more competition from self-employed, more profit-sharing being offered as an incentive, until the whole sector is operating solely on a mix of self-employment and limited partnership with profit sharing rather than on the usual approach of jobs for salaries. Facts will bear out what managers had thought all along - (but were not inclined to tell, as long as they were working for salary, perks and hyperjobs, and hiring for Epsilon-drive gratification) - that almost any job will be done better by a person working for a profit than by a salaried employee.
The message will not be lost on profit-sharing managers. Workers/entrepreneurs will be invited to join rather than lick the system. They'll be back on their own terms. For a zaibatsu in the hands of entrepreneurial managers whose remuneration will be derived only from a participation in the corporation's profit - and even more so for manager-owned smaller corporations - subcontracting and consulting will become the common way to do business.
"Brain-work", be it the planning of a marketing strategy, the development of a new technology or what not, everything except decision-making, will soon be handled by independent consultants or teams of consultants hired on a project basis and paid, at least in part, according to the results of their "projects". Except for Executive Secretaries - (hired directly by their own boss, since a secretary and his boss are such a natural mini-team of their own) - secretarial work (pool-type) will all be sub-contracted; so will borderline cases of clerical work for or with monster gigabytes computers, so will maintenance, security, etc.
Now, leap forward and suppose that production itself is subcontracted. Once a zaibatsu has its strategy, controls its market, has obtained financing, enjoys the necessary credibility, maintains privileged relations with the State and has paid consultants to prepare plans for production, why not subcontract the realization of these plans, on a project basis, to a "production team"? The President of a zaibatsu named GM may call upon Mr. Smith, Mr. Jones or Mr. Doe - each one a Director of so many different teams of production managers - and ask for proposals or bids for the production, let's say over 5 years, of so many units of a particular model just designed by the zaibatsu's engineers or, more likely, by a team of engineers and designers working under contract with the GM zaibatsu.
When a contract intervenes between GM and Mr. Smith, for instance, the latter's team will be in business. Big business. According to the conditions of the contract with GM, Mr. Smith's team may have more or less financing of its own to do, but Mr. Smith and his colleagues are certainly not going to do it by mortgaging their homes: they will act as a corporation ... and get their own large boardroom, complete with oak panelling and crystal chandeliers. Mr. Smith and his colleagues will certainly get some more managers on their team on a permanent, profit-sharing basis, but they will otherwise follow the same pattern as the GM zaibatsu: hire consultants... and subcontract as much of the work as they can. Why so? Because by letting go one by one of the fabrication modules for instance, and keeping in-house only final assembly, Smith & Co. will be sure that all subcontractors - working for a fixed price, and with their own profits dependent on their own productivity - will really be driven to work as efficiently as possible.
The subcontractors may be entrepreneurs of their own, maybe a small team
of specialists, maybe another zaibatsu that will itself break up the tasks
along other lines and redistribute them to other subcontractors ... And
so on down the line, of course. How far down the line? Pretty far... because
entrepreneurship will have bloomed also within the corporations.
Teams and piecework
How do we get entrepreneurship at the operator's level? Once upon a time, most workers in industry were entrepreneurs of a sort; they were paid by the piecework. One would load so many tons of coal, or sew so many hooks or buttons, and would receive so many dollars and cents. Neat and effective... and totally inhuman when there is a surplus of manpower, since a minimum of workers will then be driven to deliver all the goods and unemployment will be maximized.
Inhuman in times of manpower surpluses. However, in years that will follow Clause #1, years of full-employment, guaranteed income and a will to leisure, it will be another story altogether. Piecework will not solve the problem of entrepreneurship in a creative society, but to reject it on principle and for the wrong reasons would be a mistake.
To have a sensible discussion on piecework, let's remind first our left-of-center friends, who see red whenever it is mentioned, that it is not a purely capitalistic trick to exploit the workers but a way to reward efficiency when efficiency is needed. Let's remind them of the great comradely institution of "Stakhanovism" that flourished in the U.S.S.R., and made heroes of those who could really let loose and break production records. It worked, but could have worked better, if in what was definitely not a situation of "affluence", stakhanovites had been issued more food stamps and fewer medals.
Second, let's understand that piecework did not lose ground because it was inhuman, or because Trade Unions objected, but because chain-production made it impractical. There was no way, simultaneously to have the advantages of chain production and to let each individual worker go at his own speed. We decided to accept the standardized pace that the dumb machine would impose, and to have all workers produce at the working speed of the slowest man on the line. We all became "average", but it was not a victory for social justice: just a matter of expediency... which happened to kill dead any motivation that might otherwise have survived mechanization.
Now, we want motivation back, GIA will control the exploitation threat and, try as you may, "thinking" is not done on a production line but at one's own pace and rhythm. The debate, therefore, should be open again as to whether the workers must go on being paid by the clock, for elapsed "thinking time" spent on the job... or whether it should be linked to results obtained: so much for a job done, so many dollars and cents for a working "idea".
Agree to it in principle, agree to peg reward to results once again, and you are back on the right track, ready to think in terms of real entrepreneurship. With some hard thinking required to make it operational, because, more often than not, the nature of work in modern production will not lend itself to piecework compensation in the traditional sense. This is not because results cannot be assessed properly, but because so much of it is teamwork: if piecework compensation is used, what is yours and what is mine, when it is "our" common work and we are both indispensable?
Wouldn't the obvious solution consist in breaking down the production process into functional units, along the lines that technology imposes, linking the compensation of those "teams" as closely as possible to the results they obtain... and then letting the "team workers" discuss their individual pay-checks amongst themselves, within their team, within the family-size functional unit to which they would belong and to the success of which they could visibly contribute?
It has been sometime now, since we realized that workers will identify more closely and develop more loyalty towards smaller units than towards a parent company. Intuitively, the workers are doing the right thing. Although it is known to bring positive as well as negative results - usually positive results for leaders and negative results for the followers, identification to another entity than the self, large or small, is probably a mild or serious form of madness. We all do it for emotional security, "to belong"... but it is probably less nefarious for us, little ducklings, to take up as a mother a small group, than to identify with some vast impersonal object as the State or the Corporation.
As we move towards more personal family-like relations and a more benevolent, even paternalistic leadership in a more democratic creative society, the urge will manifest itself to identify with small groups, each member of which we know personally, and so to contribute to power building from the bottom up. This urge will have an impact in the corporate world, because it will merge with and reinforce the trend towards entrepreneurship and will lead to "teams".
Not only will outside teams be hired as consultants but, even within the company itself, workers will also be encouraged to act as teams and to take over full-responsibility for some well-identified and measurable aspects of the production process. These teams will become not only the basic production units but, eventually, will grow into genuine small corporations in whose results and profits the individual workers will participate, and in whose success a visible and significant contribution can be made by the efforts and motivation of each individual.
Teams will be paid for results, maybe on a piecework-like basis. Isn't it the proper way for corporations to be paid? Teams will bring not only motivation and efficiency but also the cross-fertilization of increased mobility, since they will switch allegiance periodically.
We can go pretty far down the team line. Until most work and even the overwhelming majority of present jobs are performed by workers whose compensation depends on the result of their work: entrepreneurs, professionals singly or in teams, all the "profit-sharing" managers and profit-rewarded workers acting as decision-makers in zaibatsus, subcontracting corporations and teams down the line. Until most of the income in our society is derived, not from salaries, but from profit and goes to members of "boardrooms", big and small.