(FORTUNE Magazine) - Clay Shirky can be counted among the lucky few who not only appear to have mastered the wired world (and the wireless one) but also get paid to decode it for the rest of us. He teaches graduate courses in interactive telecommunications at New York University. He writes online essays that bag countless links. He has a busy technology consulting practice whose clients include Nokia and the Library of Congress.

Yet faced with the unlimited distractions of a Digital Age-- e-mail, smart phones, killing time in the blogosphere--Shirky was getting nowhere recently on an important book proposal. Until one day he found himself working on it underground, riding the R train from his home in Brooklyn to NYU's campus in Manhattan. "Suddenly I was flying," he says. "I thought, Why get off the subway now?" He stayed on the train as it rumbled through Manhattan and into Queens. Thirty-two extra stops later (16 each way), he emerged victorious. Score: Shirky 1, distraction 0.

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Good for him. But if Clay Shirky, ace technologist, needs the imposed digital isolation of the New York City subway to get his work done (and even that won't last, as plans are afoot to bring wireless access there), clearly something has gone haywire in the world of work.

It's not that getting a day's work done has ever been easy. As your first boss undoubtedly told you, that's why they call it "work." But where once there were clear chains of command and straightforward tasks to be accomplished, now we have flat hierarchies, constant corporate turmoil, and a greater focus on results than on the process of achieving them. Digital tools are essential for survival in this environment, but they can also be maddeningly distracting.

So how are modern knowledge workers to weave their way through the minefield of interruptions and conflicting priorities? The simple answer is this: By figuring out what is actually worth paying attention to, and when. Which turns out to be really hard to do.

The peoples of the earth sent and received 400,000 terabytes of information by e-mail in 2002, according to research by the University of California at Berkeley's School of Information Management and Systems. That's equivalent to the print collections of 40,000 Libraries of Congress. (And that was measured way back in 2002; the quantity has only grown since.) As for phone calls--which accounted for some 17 million terabytes of information in 2002--now they can follow us everywhere. How much of that infotraffic is bad e-mail jokes or stockbrokers making cold calls? No one knows--and as far as a harried cube dweller is concerned, by the time you find out it's too late. For the always-on generation, subject headers and caller ID are woefully insufficient gatekeepers.

Being human isn't helping either. "To a large degree we sandbag ourselves," says Shirky. "We don't like to telegraph to co-workers and bosses that we are not going to be available, because availability is a desirable indicator." Someone who is responsive looks effective. Constant e-mails and phone calls bring a sense of urgency and importance that's tough to resist, not to mention the thrill of instant accomplishment. It feels like working. But unless it's your job to be interrupted--like a beat cop or sales rep--the work is working you.

The problem is balancing the need to be responsive and the need to complete those critical-thinking assignments that define knowledge work. The supposed strategy of the 1990s white-collar worker (and even more so the 1990s power mom) was "multitasking"--increasing output by doing several things at once. It is a phrase borrowed, incorrectly as it happens, from what people think a computer does: processing multiple tasks simultaneously. In fact, most computers do tasks serially, one thing at a time. Just like people. Only a lot faster. And without whining.

When tasks are familiar and simple, switching from one to another wastes little effort--it is possible to talk on the phone and jam laundry into a machine and get both done. But a much-quoted study published in 2001 by psychologists at the University of Michigan and the Federal Aviation Administration found that substantial time and comprehension are lost in switching as tasks become more complex and unfamiliar. That's why talking on a cellphone while driving is so dangerous: You're actually paying only partial attention to both--and one of them, if mishandled, can be deadly.

At work, knowing when and how to focus is equally crucial, even if the only thing in danger of being killed by the failure to focus is productivity. "The art of being wise," philosopher William James wrote more than a century ago, "is the art of knowing what to overlook." Those high up the corporate ladder usually have someone to be wise for them, by screening calls and e-mails, but everyone else is on their own. Calls can go to voicemail, and e-mail boxes can be ignored --"Anyone who has his e-mail client notify him anytime an e-mail comes in has already lost," says Shirky--but sooner or later most people must get to them. Usually sooner.

Unless, of course, the extraneous noise created by technology could be filtered out by ... technology. I am sitting in Eric Horvitz's office at the Microsoft Research Group, which lives deep in the heart, physically and metaphorically, of Microsoft's campus in Redmond, Wash. Horvitz is research area manager for the Adaptive Systems and Interaction Group, a division that focuses on attention, learning, and memory.

The quest of Horvitz and his team is to develop ways of overcoming the overload created by phones, e-mail, and instant messages. They show me several prototypes of systems that make perfect sense but hardly feel groundbreaking--for example, new desktop layouts that let you group documents in "piles" so you can see them, thus not forgetting them once you open another screen or document.

It is, however, the machines that purport to know me better than I know myself that grab my fragmented attention. Microsoft's ultimate goal is to create a suite of filtering tools that can assess which messages and calls need to get through immediately and which don't. (The company hopes to ship an early form of the software with the Windows Vista operating system this fall.) To do this, Horvitz and his crew are trying to figure out what "busy" means to workers. They've built a hefty knowledge base: More than 12,000 Microsofties have been using a prototype version, contributing detailed information about "interruptability preferences" (always put through calls from my manager, direct reports, and Mom) and calendar notations that flag busy times so they can be communicated to others ("Ellen is in a meeting now and isn't available to be interrupted," an onscreen message might say). This information is being sorted by job description to create default settings for salespeople, software coders, managers, and such.

But the power of the system will come from what the software learns by watching you work over time. It examines patterns of text and the content of messages--like specific references to time or upcoming events--and considers the relationship between the sender and recipient, the history of the correspondence, which calls you consistently take, even your location in the room when the message comes in. All with a little help from Big Brother: Microphones listen for your voice, and cameras follow where your eyes go and note what you are paying attention to. Statistical models enable the program to make decisions about which calls, e-mail, and instant messages are worth tapping you on the shoulder for and which aren't.

More technology in a time of digital overload is a tough sell--especially coming from a company that has devised some of the most irritating digital interruptions of our day. ("It looks like you're accomplishing something," the little pop-up Office guy seems to say. "Can I get in the way?") But Horvitz promises that future technologies will be adapted to human use, not tech for the sake of more toys. As a result, they will be less intrusive. "It's not about being bothered at home with work," Horvitz says. "It's about developing truly smart tools that extend our power and ability to enjoy ourselves."

There is a long history of new work technologies that at first seem foreign and disruptive but eventually become trusted tools. The technologies get better over time, for one thing, and we humans can adapt, especially if given a generation or two. The most crucial adaptations often have to do with how we organize our work. Family farms, guilds, and steam-driven factories all were pushed aside or reinvented to cope with new technologies. Right now, the old go-to-the-office-from-9-to-5-to-get-your-work-done model is in the midst of a wrenching reinvention.

That is probably most obvious among free-agent workers like Clay Shirky or at relatively recent startups like Google or JetBlue (whose customer-service reps field calls from home). But big, established corporations are also feeling the pressure to change. AstraZeneca, the Anglo-Swedish pharmaceutical giant with U.S. headquarters in Wilmington, Del., began surveying workers after the merger that created the company in 1999. "We had a series of challenges to deal with," says Andrea Moselle, whose title at the company is senior manager for work life. "It wasn't only the merger of two campuses--it was the coming together of two distinct cultures." Being fragmented didn't help: Of 12,000 employees in the U.S., over 5,000 work as sales reps in the field.

For the field sales reps, many of whom work from home or spend long days on the road, technology started as a lifeline that often failed them. They yelped about it. "We send huge files to each other on a weekly basis," says Carrie Krentz, a district sales manager in AstraZeneca's oncology division, who supervises seven sales reps. "Before broadband, it was a nightmare." What a difference a few years makes: Now all the field reps, even those in rural areas, have broadband access. Some are starting to work with tablet PCs, which enable them to more readily keep up with paperwork on the road.

The surveys also revealed a workforce feeling distracted by life--child care, elder care, career-development issues. "Employees consistently tell us that the enabler to effectiveness is flexibility," Moselle says. Job sharing, reduced hours, and telecommuting policies were formalized and supported with technology. But among the biggest barriers to success at work, according to the oft-polled AstraZeneca employees, were meetings. Too many, too long. Friday meetings, in particular, were killing the gift of flexible scheduling. So they were effectively banned.

We can't all work in enlightened, flexible, technologically adept, quasi-Scandinavian workplaces. (And even those who do still have to navigate their way through all that enlightened flexibility.) Ergo, the thriving business in time-management advice. The time-management phenomenon is hardly new: Business proprietors, lawyers, and other professionals have for centuries had to juggle rote tasks with work that required deeper thinking. But such knowledge work only became a mass endeavor in the 1950s or 1960s, and the rise of the modern time-management industry followed soon after.

One early guru was Alan Lakein, a Harvard Business School grad who, after his software consulting business failed in the late 1960s, devised a time-management system that he codified in a massively successful 1973 book, How to Get Control of Your Time and Life, which is still in print. In the late-1980s another Harvard MBA, Stephen Covey, rose to the top of the heap with his Seven Habits of Highly Effective People. (Quick: Name one.) Today the guru with the most buzz is David Allen of Getting Things Done fame, but there's plenty of work to go around. There is even a largely open-source "DIY Planner" site offering advice and free printable day planners online--retro technology delivered in a shiny new way. Regardless of what method has promised to change your life, most of us have boxes full of dead Filofaxes and Day-Timers that chart a history of failed "get organized" good intentions.

If this sounds discouragingly like the diet industry, in which hundreds get rich dispensing advice that is paid for but ignored by millions, there is an encouraging difference. While diet gurus have a disturbing tendency to disagree with one another while skirting one basic truth (namely, that the best way to lose weight is to eat less and exercise more), their time-management counterparts are all pretty much on the same page. The key is to create systems to keep track of what you have to do and, most important, to take the time to think hard about just what it is that you actually need to do.

Not that this is easy. Doing it well requires self-discipline. Self-discipline is hard, especially when you're being bombarded by e-mails and other interruptions. "This new environment doesn't encourage stepping back and being strategic," laments Julie Morgenstern, an efficiency consultant and bestselling author. Her advice: Fight for your right to think. "People respond to the thing that's screaming the loudest. It's reactive. And being reactive isn't smart." An easy thing we can all do, she says, is declare the first hour of every workday e-mail-free. "There's nothing that can't wait 59 minutes in your in-box," she laughs. "Believe me, if it's serious, they'll call or come get you."

Funny thing is, even Microsoft technology guy Horvitz has developed a strategy along these lines. It came about when his wife, given access to his calendar to schedule family events, blocked out a two-hour window for him every Wednesday afternoon for reflective time. "I loved it!" he says, raising his hands to the heavens. "I had permission to think!"

It seems so simple: File your stuff. Just say no to your boss, or at least your e-mail, for an hour or two. Then come up with something brilliant. Okay, maybe not so simple. So here's another plan. Take whatever time you capture from your progressive HR policies, new filing system, and meeting-free Fridays and actually enjoy it. Your life, I mean. Drop me a note and let me know how it goes. But don't expect an answer before noon. I've got to sit and think.

FEEDBACK emcgirt@fortunemail.com

Five Paths to SANITY

It ain't rocket science. And these SIMPLE RULES can

help.

1. Keep your meetings rare. Surveys show that most

people find meetings a major time waster. Use them sparingly, keep to an

agenda, start and end on time. And unless someone is expecting a baby, or using

technology is a key part of the meeting, turn off all cellphones and

BlackBerries. No passing digital notes.

2. Show your technology who's boss. Most of today's

devices and software actually can be set to be less intrusive. You just need to

learn how: Switch off the ping that heralds the arrival of an e-mail, create

folders into which incoming messages are automatically shunted. When busy, let

outgoing messages alert others to when they might reasonably expect to hear

back from you.

3. Give yourself a time-out. Devote an hour to

uninterrupted thinking and planning every day. First thing in the morning is

safest, but anytime is good. No calls, no e-mail, no chitchat. "If there's

an emergency, someone will come get you," says organization expert Julie

Morgenstern. "Use this time to think strategically about your

work."

4. Say no. "Sorry" isn't the hardest

word--"no" is. But not saying it to desperate colleagues or harried

bosses is the quickest way to overload your schedule and muck up more important

goals. Focus first on meeting your stated objectives. Also, consider family and

personal time when filling your calendar: Work-centric employees are more

likely to report feeling overloaded than those who plan for their personal

lives.

5. Delete. Surveys show we waste 20% of our day on

nonproductive activities. Cut out or dele- gate anything on your to-do list

that doesn't have long-term consequences for your work. Be ruthless. And while

you're at it, don't let a stuffed e-mail in-box sap your will to live. When

reviewing each e-mail, make an on-the-spot call to delete, file, or reply to

each one--even if the response is, "I'll get back to you on this

later."