A BRAVE NEW DARWINIAN WORKPLACE Forget old notions of advancement and loyalty. In a more flexible, more chaotic world of work you're responsible for your career. For the adaptable, it's a good deal.
By Stratford Sherman REPORTER ASSOCIATE Ricardo Sookdeo

(FORTUNE Magazine) – THE greatest social convulsions of the years ahead may occur in the workplace, as companies struggling with fast-paced change and brutal competition reshape themselves -- and redefine what it means to hold a job. Apple Computer CEO John Sculley made the point recently to Bill Clinton: The continuing ''reorganization of work itself'' is part of a social transformation as massive and wrenching as the industrial revolution. Deep thinkers as diverse as futurist Alvin Toffler, author Tom Peters (Liberation Management), and Allied-Signal CEO Lawrence Bossidy agree: The demise of the old authoritarian hierarchies, from the U.S.S.R. to General Motors, is a global, historical phenomenon that none can evade. Like it or not, everyone who works for a living is helping create a new relationship between individual and corporation, and a new sense of self for employer and employee alike. Bit by bit, the forces of technology and economics are destroying the artificial constructs -- such as rigidly hierarchical schemes for organizing work -- that since the 19th century have limited the ability of < people, organizations, and markets to behave in natural ways. The next few years of transition will be brutal for all concerned, but the result promises to be worth some suffering. The workplace will be healthier, saner, more creative, and yet more chaotic -- like nature itself. By the time the most radical of the restructuring is done, workers and companies will be more accustomed to negotiating voluntary relationships that benefit both parties, this instead of the rigid and ultimately alienating liaisons and dependencies of the machine age. Businesses will benefit from an abler, more flexible, and vastly more responsible work force. Job holders will get more respect, and their work may become more engaging, as employers seek employees' ideas. Anyone who wants to be around for the fun part needs to start adapting now. Those who can't, sadly, will number in the millions. Major political shifts, notably pension and health care guarantees and large-scale training programs, may be the price of peace on the streets. Abraham Zaleznik, a psychoanalyst and professor emeritus at the Harvard business school, believes the theme of the dawning era is greater accountability on the part of both individuals and corporations. Says he: ''We're all up against a relentless, impersonal reality called the marketplace, which will reward those who do good jobs and punish those who don't.'' If the ax falls on you, try hard not to take it personally: Odds are the causes have nothing to do with you, but rather with structural changes in organizations and industries. Ameritech, the Chicago-based regional Bell company, has eliminated almost 2,000 white-collar jobs since 1984. Now -- despite record profitability -- the Baby Bell is cutting 2,500 more such jobs, 12% of its managers. The harsh truth is that Ameritech, remaking itself to meet the challenges of the 21st century, simply doesn't need so many people. If big corporations honestly examined themselves -- and just about every one will, sooner or later -- most would reach the same conclusion. William Morin, chairman of the Drake Beam Morin outplacement firm, estimates that roughly a quarter of the U.S. work force is still imperiled by downsizing. ''It's rough out there,'' says Harvey Mackay, author of the upcoming self-protection guide, Sharkproof. He adds, with a touch of hyperbole, ''The worried people are the ones who've got the jobs.'' That goes double for managers. Bluntly put, the U.S. has too many for the number of conventional managerial jobs around, and the gap will only grow. Says Nicole Morgan, a professor of public administration at Queen's University in Kingston, Ontario, and author of Nowhere to Go, a book about how people plateau in their careers: ''What we have is a lot of ambitious people with huge career expectations competing for a diminishing number of positions.'' Widespread denial makes the transition all the tougher. C. K. Prahalad, a business professor at the University of Michigan, explains why the changes are hard to accept: ''You are telling top management that their accumulated intellectual capital is devalued, that their 30 years of personal experience is less valuable as we move forward. This is so traumatic that senior managers find it hard to change unless there's a crisis.'' James Clawson, a professor at the University of Virginia's Darden School and a consultant to Comsat and GE, estimates that over 80% of employees haven't yet faced up to the consequences of abolishing the old hierarchical ways. ''That's a great improvement!'' he says. ''Regardless of the hardness of the facts and the clearness of the data, there will always be those in denial. It's going to take a generation for the old dogs to die.'' For anyone with the courage to face reality, the implications of the workplace revolution are becoming clearer. The most important:

-- Each person must take full responsibility for his or her career. James Taylor, CEO of the research firm Yankelovich Partners, says one of the most important trends in American society is a new determination of people to control their destinies. Only 12% of survey respondents trust public statements made by corporations, but an unprecedented seven out of ten agree with the statement ''I'm the one in charge of my life.'' According to Taylor, ''That's a real change in the psychology of being an employee. It's the price corporations are paying for breaking the loyalty bond.'' Ralph Waldo Emerson's classic 152-year-old essay ''Self-Reliance'' offers perhaps the best advice for coping with the brave new world of employment: ''Trust thyself . . . Accept the place the divine providence has found for you, the society of your contemporaries, the connection of events. Great men have always done so, and confided themselves childlike to the genius of their age, betraying their perceptions that the absolutely trustworthy was seated at their heart, working through their hands, predominating in all their being.'' ! Achieving such serenity doesn't mean you just sit there and hope for the best. Those who would take charge of their careers should commit themselves to a lifetime of learning -- including exploring new job possibilities. Richard Nelson Bolles, the Episcopalian minister who wrote the job hunter's bible, What Color Is Your Parachute?, argues that a great lesson of the 1990s recession is that victims of layoffs rarely get much warning. Along with other experts on careers, he advises everyone to inventory his or her skills, add to them every single year, and always have a ready answer to the question: What would you do if you lost your job tomorrow?

-- The old career path no longer exists. Fewer middle-management jobs means less vertical mobility, which the wise will translate into giving less importance to making the next rung. A decade or so ago at GE, many ambitious executives scorned functional posts in such areas as manufacturing or finance in favor of the general-manager jobs that came with control of a profit-and- loss statement. But as CEO Jack Welch has streamlined the GE organization, the number of general-manager jobs has declined by two-thirds: Only one such job per 5,500 employees remains. That is forcing the company and its employees to search together for ways to enrich functional jobs.

-- Workers will be rewarded for knowledge and adaptability. Specialization is out, a new-style generalism is in. The most employable people will be flexible folk who can move easily from one function to another, integrating diverse disciplines and perspectives. Similarly, people who can operate comfortably in a variety of environments will fare better than those stuck in the mind-set of a particular corporate or even national culture. Michigan's Prahalad argues that people will need the ability not only to learn fundamentally new skills but also to unlearn outdated ways.

-- Teamwork will replace hierarchy as the dominant form of organization. Tom Peters suggests a movie production company as the new model: It brings together a group of highly skilled people to complete a focused project and then disbands. Anyone who has observed a film being made may scoff at the notion of emulating such inefficiency. But look at the larger picture -- America's unchallenged domination of the multibillion-dollar world market for movies -- and the genius of this apparently chaotic system becomes apparent. Peters also observes that more people are working for a company for < a year or two, then going off to labor on behalf of somebody else, then returning to their original employer when they're needed again. While most organizations may never become quite so flexible, managers are sharing more power with people they once regarded as subordinates, and employees of nominally lower rank are experiencing the joys and burdens of increased responsibility. With so many middle managers gone, there's no practical alternative to empowering workers. This makes people skills supremely important, and as Prahalad points out, even leaders will have to learn how to follow. ''A team is not like a pack of sledge dogs, with one dog the leader,'' he explains. ''It's more like the flight of wild geese: The leader always changes, but they fly in a flock.'' The paired forces of globalization and information technology imply an increased likelihood that teams of people will be working together across great distances, requiring yet another type of relationship skill.

-- Workers who can flourish in the new environment will be so prized by employers that companies will go out of their way to build a new corporate loyalty. So argues Martin Strasmore, president of the Silvermine Consulting Group in Darien, Connecticut, a consultant to Chase Manhattan Bank and Siemens. ''Every time you hire a person, you have to make a significant investment to get him up to speed and in tune with your vision and culture,'' he argues. ''You'll continue to invest in your employees, training them in new skills and giving them the tools to manage change. That implies, if not a lifelong pact, at least a long-term pact with your people.'' Companies that haven't made such pacts may suffer. ''As soon as the economy turns around, many people are going to bolt from the companies they are working for,'' says Mitchell Marks, a principal at the William M. Mercer consulting firm. ''All this downsizing is going to come back to haunt companies. Executives are going to have to spend a lot of energy to recover esprit de corps.'' Employers may bind valued workers with contracts, larger gobbets of freedom, or a bigger share of profits. For models, look to any business that depends on highly skilled -- and therefore highly mobile -- professionals: for instance, advertising agencies or Wall Street investment banks. Offering some form of security makes sense. People terrified of being laid off -- and Yankelovich Partners' survey data suggest most workers still are + -- tend to become risk-averse. That renders them unlikely to produce the new, creative ideas that companies will need to prevail in competitive markets.

-- It pays to offer learning opportunities to employees. Besides improving the skills of your work force, an investment in training can help you attract and retain desirable employees. Writes professor Karl Weick of the University of Michigan: ''Training and management development . . . can increase ((employee)) commitment if it is used to teach knowledge that is less firm- specific and more generalizable. Ironically, in-house management development may produce more committed workers and higher performance if it focuses on skills that are needed by other firms than if it focuses on skills needed within its own firm.'' This may prove the core of the ''new psychological contract'' that companies such as Apple are offering workers: increased employability in return for hard work and commitment.

-- Corporate values will become central to leadership. It goes without saying -- or should -- that as relations between employers and employees begin to rely more on voluntary behavior, the niceties of relationship become more important. A key role of leadership is to give people permission to change. That means allowing a reasonable measure of dissent and, as Prahalad says, careful differentiation between simple business failure and experimentation that results in learning. The perception of fairness, rationality, and reward based on merit is essential -- and actions speak louder than words. ''It's very analogous to a marriage,'' says psychologist Dee Soder, president of Endymion, an executive assessment and counseling firm. ''If you're shallow and just out for one-night stands, you could lose. You get from it what you put in. You have to work at these relationships.''

-- Age is an increasingly important factor in defining the opportunities and challenges workers will face. In general, says Harvard business school professor John Kotter, ''the older you are, the less prepared you are for this.'' On the other hand, older people tend to be much better off financially -- and not only because they've been working longer. Here's how the outlook breaks down by generation: Baby-boomers, having won the White House, will soon move into other centers of power. Financially, boomers have barely kept their heads above water by maintaining two-income families, but now their generation is poised to inherit | enormous wealth from parents. On the job, boomers are fast transforming their unconventional career choices -- working more at home, for example -- into a new status quo. Generation 13, as historian and author Neil Howe dubs the 80 million people born between 1961 and 1981, will continue to scramble for the boomers' meager leavings. Street smart but cynical, members of the 13th generation born since the American Revolution may feel they have been cruelly slighted. Raised to an unprecedented extent by absentee parents, under-35-year-olds are earning 20% to 30% less in real terms than people their age did in the 1970s. People ages 50 to 60, though still energetic, are being passed over, pushed out, or shot with the so-called silver bullet of early retirement in extraordinary numbers. In general they can afford to cope with their reduced career prospects. Most will hang on to their jobs as long as they can; some will switch to new careers. Like everyone else, they should identify their most valuable aptitudes -- basics like salesmanship or problem solving or three-dimensional thinking -- and find ways to enhance them. The new workplace will be ferociously Darwinian for corporations and individuals alike. Without the financial strength that comes with well-managed operations, companies won't be able to afford to focus on what used to be called the softer management issues that are becoming all-important. Without inner strength, individuals may hesitate to accept responsibility for their lives. As Harvard's Kotter warns: ''Just because people watch out for No. 1 doesn't mean they manage their careers intelligently. A lot of people manage their careers just as badly as some corporations have managed themselves.'' For the transformation of the workplace to establish a new equilibrium, employers and employees must somehow find ways for workers to lead balanced lives. Empowerment and shared responsibility are undeniably good -- but paradoxically, they increase the burdens on people who are already overstressed. Workers who lack the time and emotional energy to lead balanced lives risk burnout, and the companies that depend on them will lose. Find the solution to that one -- somebody has to -- and you'll be the biggest hero of the new world of work.