The changing workplace in the Internet age
WORK HAS CHANGED SO MUCH over the past few decades, we can't help but speculate
that working 30 years from now might be like an episode from The Jetsons. In reality,
though, it's highly unlikely we'll be commuting to the office in oxygen-equipped power
suits (thank heaven). Romantic predictions that everyone will be working from the
comfort of their own living room or deck may not even come true by then. Still, there's
no doubt that there will be unfathomable changes enabled by advances in
telecommunications, multimedia technology, ubiquitous computing and the information
economy. There will be companies providing virtual experiences (a midnight visit to Sri
Lanka from a computer screen on your bedroom wall), while others will make money
manipulating and selling huge directories of data. Future organizations will create new
services we can't even begin to imagine now (10 years ago, who would have thought we'd
go back to having our milk delivered, by something called an Internet grocer?).
CIO recently invited several prominent IT leaders to discuss the workplace of
the future. Along with Senior Writer Polly Schneider, the participants were: >Anita
Borg, researcher at Xerox PARC in Palo Alto, Calif., and president and founding
director of the Institute for Women in Technology; Paul Horn, senior vice
president and director of IBM Research in Yorktown Heights, N.Y.; Haim
Mendelson, the Theodore J. Kreps Professor of Information Systems and Management in
the Graduate School of Business at Stanford University in Palo Alto; and Jim
Sutter, senior partner at The Peer Consulting Group in Newport Beach, Calif., and
former CIO of Xerox Corp. and Rockwell International.
In this future world, the participants foresee the disappearance of multinational
conglomerates, the emergence of a global job-bartering community on the Internet, and a
leadership style that will require expertise in corporate culture and employee
motivation. And contrary to popular belief, they say, people will choose not to
do all their work at home.
CIO: How will corporations evolve over the next few decades?
Paul Horn: The changes we'll undergo are going to be quite phenomenal and
startling. The companies of 2025 will, in my opinion, not look at all like the "The
whole concept of the virtual enterprise is going to explode.-Paul Horn"companies of
today. Twenty to 30 years from now you're going to be able to buy a terabyte of data
storage for a dollar. When we invented the first disk drive in 1954, a gigabyte of
storage cost $10 million. So the whole concept of the virtuall enterprise is going to
explode. We'll have companies with little or no physical assets, with business models
that are completely intellectual-property-centric, with essentially the entire
technological infrastructure outsourced. Business models are going to be all based on
rapidly turning data that's stored digitally on these "yada-bytes" of storage into
useful corporate knowledge.
Haim Mendelson: We're going to see companies that are looser coalitions than
the companies of today. If we talk about the corporation of the past, the prototypical
successful company was a large, vertically integrated company that controlled an entire
value chain. Today, these companies essentially are breaking down into components,
where each does a piece of that value chain, and ultimately these pieces are integrated
to create a final product. I think we're going to see this process continue on a very
One type of company will specialize in development, where the focus is knowledge
work. It will be managed much the way Internet startups are managed. The second type of
company will focus on physical production, where economies of scale and managing
physical assets are important. We'll see even tighter control in these types of
companies. A third type of company [will be] in the distribution business, where you
see some integration of physical movement and of components. The closest to that is
something like Ingram today, but it's difficult to predict what exactly it will look
like because this structure is just evolving. The fourth type will be the ultimate
aggregators: people who specialize in customer relationship management. Their key
competence is going to be managing information about customers and providing high
quality service. These are very different types of companies that require different
skills, which is one of the reasons they need to be separated.
Anita Borg: I hope and think that one of the major changes in corporations
will be that we will get to the point where women have significant roles in nearly
equal numbers to men. That, in and of itself, will have a lot of interesting impacts on
what corporations look like, because it will no longer be the case that women are
exceptions or very much outnumbered. There will be a much more
relaxed sense of inclusiveness.
CIO: But will people care so much about belonging to an organization? There's a
lot of talk about the temporary company -- a specialized group of people that come
together only for the length of a project.
Jim Sutter: Years ago, you'd go off and do research, contribute ideas and
create a new product. Today, to minimize the risk, in part, and also to provide rewards
for those who take the risk, a new entity is often created -- to develop an Iridium or
whatever it might be. So I think corporations of the future will be much more built out
of pieces that kind of come and go, if you will, as alliances are created and equity is
generated. There will still be very large companies, but I think they'll be federations
of smaller businesses that can be easily reconfigured or spun out or sold.
Mendelson: On the demand side, there's the need for temporary, virtual
companies because the capabilities needed are changing so fast. You can't really form a
group of people that will satisfy next year's demand. There will be a people's
directory on the Internet, so that if you want to put together a company with a set of
given skills, you go to this global employment agency that has information about
millions of people. The agency will go and talk to candidates and try to convince
enough of them to join the new operation. They do their job, they may continue intoo a
couple of other generations of the product, and then they move on to another activity.
The problem is, if we have a product that's created by a large number of components,
what do you do if a component fails, for example? When the people have moved on to
something else, it's very difficult to figure out which component is at fault. So the
complexity of managing this type of operation is an order of magnitude higher than the
complexity of managing today's operations.
CIO: How will managers lead in these increasingly chaotic and loose structures?
Horn: I think the biggest management challenge will be creating a unified
corporate culture: pulling together something with a corporate value quickly -- a group
of people, very disparate, perhaps around the world, and then instilling some level of
value system. Business models will come and go more rapidly, so the whole thing strikes
me as being far more ephemeral.
Mendelson: Leadership skills [may] become less important in the future
because more of the decisions will be based on the rational analysis of information
that gets presented. The information makes the decision as opposed to the personality.
But the second perspective says, well, everybody's going to have more information, so
the source of competitive advantage is actually going to be those intangibles -- the
ability to get people to follow through a vision, the ability to create a vision that
cannot be supported by data, the ability to create a market that doesn't yet exist --
and we need to do that through our personality. So there are two perspectives, and I
don't know which is the right one.
CIO: What kinds of tools do you think we'll be using in the workplace?
Horn: First of all, the core underlying technologies, which are mostly
optical and semiconductor technology and displays, are going to get better
exponentially than they are today -- following something that's close to the existing
Moore's Law [stipulating that the data storage capacity of microchips doubles every 18
months]. Also, object-oriented programming and Java are going to allow people to build
applications fundamentally faster than they used to build them. In 2025, you'll be able
to pull together components that'll interoperate and build a complex solution like well-
defined little pieces. Just the way we can do it in silicon technology with circuits,
you'll be able to do it with software programs. More and more, the technology is going
to be invisible. It's going to be easier to use, and it'll be all around you. We're
already starting to see today what we call the dawn of the post-PC era. It's really
more correct to think of your digital phone as a client on the Internet than a phone,
Mendelson: The first wave of technology will be to replicate daily activities
in a virtual environment. Say we want two people to be able to speak to each other over
the network. We'll have low-cost storage so we can bring back a discussion that we had
two weeks ago and pop it up on the screen as we're talking. Then the question is, To
what extent can we replicate the different senses on the Internet -- as far as smell
and touch? In 20 years we'll have these technologies actually working in a way that
surpasses the quality of face-to-face communication today, and we won't pay a penalty
for assembling a company with people who are physically located in different places.
CIO: So will most people work out of their homes?
Borg: The Internet is in a baby stage right now, and the kind of
communication that will be enabled will certainly change the way things are structured,
although I don't believe it will eliminate offices or face-to-face work. I think that
there's something inherently rich about that, that we're not going to be willing to
give up. But it may move corporrations to an even flatter structure, with smaller pods
of people spread around. I don't think people are going to be all that happy spending
all their time working at home. If the pendulum swings toward a time when lots of
people are flocking to work at home, they're suddenly going to find out that work is 24
hours a day. I talk to senior executives who say there's this expectation that you
enter your e-mail 24 hours a day, which is bonkers.
Sutter: Virtual companies and offices will grow -- I just don't think the
result will be that will stay at home. We offered that to our people at Rockwell, and
it was surprising to me how few people were interested. People will want to go to an
office that's convenient, however. One of the things companies will have to face is
[the fact that] it's going to be increasingly difficult to define the workday. From
your workstation, you can do your financial planning, take a course, do shopping and so
on. For me, it might be that I work through the evening. But I do think people will be
just as productive, and in many cases, more
CIO: What changes might we see in the global economy?
Borg: The whole notion of a knowledge economy is one that has quite different
dynamics than an economy based on physical stuff. Stuff is finite, but knowledge is
infinite. There's no limitation to its volume or its tradability. Potentially, there's
room for a lot more people to be supported by it. I think there's going to be an
enormous growth in this knowledge layer, and if we're really lucky, it could have an
incredibly positive impact on the world economy. The problem with the imbalance in the
world economy is not a lack of resources but a lack of distribution, because the folks
on the other end don't have anything to trade. Well, in a knowledge economy, maybe they