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The economic need for large numbers of people with decent levels of self-esteem is unprecedented and represents a turning point in our evolution.
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Everyone knows that there have been major developments in the past few decades in the national and global economy. These developments have all contributed to making the need for self-esteem more urgent for all those who participate in the process of production, from the leader of an enterprise to entry-level personnel. They include:
1. The shift from a manufacturing to an information economy; the diminishing need for manual or blue-collar workers and the rapidly growing need for knowledge workers with advanced verbal, mathematical, and social skills.
2. The continuing and escalating explosion of new knowledge, new technology, and new products and services, which keep raising the requirements of economic adaptiveness.
3. The emergence of a global economy of unprecedented competitiveness, which is yet another challenge to our ingenuity and belief in ourselves.
4. The increasing demands on individuals at every level of a business enterprise, not just at the top but throughout the system, for self-management, personal responsibility, self-direction, a high level of consciousness, and a commitment to innovation and contribution as top priorities.
5. The entrepreneurial model and mentality becoming central to our thinking about economic adaptiveness.
6. The emergence of mind as the central and dominant factor in all economic activity.
Let us briefly consider each of these points.
1. The shift from a manufacturing to an information economy; the diminishing need for manual or blue-collar workers and the rapidly growing need for knowledge workers with advanced verbal, mathematical, and social skills.
We are manufacturing more goods by far than ever before in our history, but with far fewer people. In earlier decades roughly half the working population was employed in blue-collar jobs; today the figure is less than 18 percent, and estimates are that in not too many years it will be 10 percent. Manufacturing has become much less labor intensive; the cost of labor in the overall process of production has dropped and will drop further. This means, among other things, that the availability of a cheap labor supply has become increasingly irrelevant in terms of competitive advantage. In the United States, the market for unskilled labor has shrunk appallingly—appallingly, that is, for those whose lack of education, training, and basic reading, writing, and arithmetical skills leave them with little to contribute. The demand today is for people with knowledge.
This point is essential to understanding the problem of unemployment among the uneducated and untrained, the so-called underclass of our society. No longer is it enough to have only muscles or to have mastered variations on the kind of physical skills that have been known for hundreds and even thousands of years; not if one wants access to a good job. Today one needs an education. One needs formal training. Or else one needs to be extraordinarily gifted at self-education. And one needs to understand that the process can never stop, because new knowledge begins to make one’s training obsolete almost as soon as one completes it.
The situation was very different in the early days of business. Then, the boss knew everything that was necessary to run his business. He might need the assistance of a few other people to carry out the work, but not because they had mastered knowledge of which he was ignorant. As businesses grew and technology advanced, companies began to employ managers and engineers with particular areas of mastery outside the boss’s. But still, knowledge was confined to the very few.
Thinking and decision making were done at the top of the hierarchy and passed down the chain of command. (The army was the only model for a large-scale organization anyone had. Creating the first modern steel mill, Andrew Carnegie sent his second-in-command to study the organization and communication system of the Prussian military and adapted many of its principles to his industry. Previously, the largest ironworks had employed six hundred people; Carnegie’s challenge was to integrate and manage the efforts of six thousand.) A few key executives projected the goals and formulated the strategies and tactics the organization was to follow. A few bright engineers made their own contribution. Any knowledge or information about the business or about the wider economic context was the prerogative of this small group.
As to the overwhelming majority of employees in an organization, they were told what was expected of them and their sole responsibility was scrupulously to carry out instructions. An ideal employee would be one whose actions matched the consistency and reliability of machines. Frederick Winslow Taylor, pioneer of scientific management, summed up this idea to Harvard students in 1909: A worker’s job “is to find out what boss wants and give it to him exactly as he wants.” It was assumed that the worker could have nothing valuable or creative to contribute to the process of production or marketing. The system at this stage of development did not require for its operation great numbers of persons with firm self-esteem, just as it did not require a highly educated, highly skilled work force.
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Today, what we see is no longer “management” and “workers” but an integration of specialists.
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Looked at from the perspective of today, it is easy enough to criticize what is now called “classical management.” Understood in its own context, we can appreciate its logic and benefits. A man in 1912 working, say, on an assembly line, might be unable to read or write English—he might be an immigrant from the Old World—but by conscientiously carrying out the task he had been trained to do he could earn a living for himself and his family—a better and more reliable living than had ever been possible before. Frederick Taylor’s great innovation was to analyze production tasks into simple, discrete, easily mastered steps, which no one had thought of doing before, and which allowed people to work “smarter” rather than harder. Raising workers’ productivity, he raised their wages. A blue-collar employee of even modest self-esteem could learn to function effectively in an environment created for him, as it were, by those whose self-confidence and ambition were higher.
As technology evolved, the demand for more advanced levels of skill in the operation of equipment increased. But there was no demand for higher education or creative thinking or self-management—or autonomy. Such values might make a substantial personal contribution to the average individual’s life, in terms of enjoyment and satisfaction, but not in terms of income. Not in the 1950s or 1960s, at the climax of the industrial phase of our development, when the blue-collar worker was at the pinnacle of success. Then, most college-educated men and women did not earn more than a skilled machinist who was a high school dropout of very limited intellectual development. It is a very different story now, when access to decent jobs requires education and training.
Today, in a complex business organization that orchestrates the knowledge and skills of financial, marketing, and sales people, engineers, lawyers, systems analysts, mathematicians, chemists, physicists, researchers, computer specialists, designers, health care professionals, experts of every kind—what we see is no longer “management” and “workers” but an integration of specialists. Each of these specialists has knowledge and expertise not possessed by the others in the organization. Each is relied on to think, to create, to be innovative, to contribute. “Workers” become “associates” in an atmosphere that is becoming increasingly collegial rather than hierarchical.
In such a setting, interpersonal competence is a high priority. And low self-esteem tends to stand in the way of such competence.
2. The continuing and escalating explosion of new knowledge, new technology, and new products and services, which keep raising the requirements of economic adaptiveness.
In the 1990s, successful business organizations know that to remain competitive in world markets they need a steady stream of innovations in products, services, and internal systems that must be planned for as a normal part of their operations.
Conscious individuals know that if they wish to advance in their careers they cannot rest on yesterday’s knowledge and skills. An overattachment to the known and familiar has become costly and dangerous; it threatens both organizations and individuals with obsolescence.
Scientific breakthroughs and technological discoveries are pouring from our laboratories and research and development departments at an unprecedented rate. Ninety percent of the scientists who have ever lived are alive now.
Until very recently, for the hundreds of thousands of years that human beings have existed on this planet, people saw existence as essentially unchanging. They believed that the knowledge possible to humans was already known. As I observed earlier, the idea of human life as a process of advancing from knowledge to new knowledge, from discovery to discovery, is only a couple of seconds old, measured in evolutionary time.
It can be argued that this new development puts the energy of economic necessity behind our continuing evolutionary progress—compelling us to reconceive what human beings are capable of.
3. The emergence of a global economy of unprecedented competitiveness, which is yet another challenge to our ingenuity and belief in ourselves.
In the decades immediately following World War II, the United States was the undisputed industrial leader of the world. We were at the height of our economic power. With the other industrial nations struggling to recover from the wreckage of war, we had no competitors. Our workers were the highest paid. Our standard of living was beyond most of the world’s imagination, if not beyond its envy. Communist and socialist countries were promising someday to surpass us, but that was only a promise for the future, with nothing to support it in the present, although it was a promise that many American intellectuals believed and propagated.
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An overattachment to the known and familiar has become costly and dangerous; it threatens both organizations and individuals with obsolescence.
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Business itself—large business—had become heavily bureaucratic, weighted down with many levels of management. It depended more on economies of scale than on innovation to maintain economic supremacy, indulging much undetected financial waste and moving further and further away from the entrepreneurial spirit of an earlier age. (Government policies played a major role in bringing this development about, but that is another story.) Alfred Sloan, famed head of General Motors, once summed up the carmaker’s strategy by saying that “it was not necessary to lead in technical design or run the risk of untried experiments, provided that our cars were at least equal in design to the best of our competitors in a grade.”1 One of the last great innovations of the American automobile industry was the automatic transmission—introduced in 1939.
The 1950s and 1960s were the time of the “Organization Man.” Not independent thinking, but faithful compliance to the rules, was the road to success. Not to stand out, but to fit in, was the formula for those who wanted to rise. Just enough self-esteem to maintain a decent level of competence within the framework that existed—but not so much self-esteem as to challenge basic company values or policies. What the company promised in exchange was lifetime protection and security. “Be a company man and the company will take care of you” was the promise.
Self-denial for the good of the company was a value that found a ready audience, since, for thousands of years, human beings had been taught that self-denial was the essence of morality: self-denial for the tribe, for God, for king, state, country, society.2
Unions were at the height of their influence and power. Their leaders had little apprehension of the changes that lay ahead. Certainly they did not foresee that by the 1980s, with virtually all their goals achieved, they would be threatened with economic irrelevance, and, like a hemophiliac, would see an increasing percentage of their membership draining away.
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Freedom means change; the ability to manage change is at least in part a function of self-esteem.
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“American industry runs on muscle,” a union executive announced. I was sitting beside him on an airplane when he said it. The year was 1962. He began to decry the “disaster” of automation, asserting that thousands of workers would be permanently unemployed because of new machines and that “something ought to be done about it.” I answered that this was a fallacy that had been exploded often; that the introduction of new machines and new technology invariably resulted in increasing the demand for labor as well as raising the general standard of living. I remarked that automation increased the demand for skilled labor relative to unskilled labor, and that doubtless many workers would have to learn new skills; companies would have to train them. “But,” he asked indignantly, “what about the people who don’t want to learn new skills? Why should they have troubles? Aren’t they entitled to security?” This meant, I pointed out, that the ambition, the farsightedness, the drive to do better and still better, the living energies of creative individuals were to be throttled and suppressed—for the sake of those who had “thought enough” and “learned enough” and did not wish to be imposed on further or to think about what their jobs depended on. Is that what he was proposing? His response was silence. I thought: Freedom means change; the ability to manage change is at least in part a function of self-esteem. Sooner or later, all roads lead to self-esteem.
But change was coming, whether anyone’s self-esteem was ready or not.
At first, no one took the Japanese seriously. For a long time Japanese products had been associated with low quality, shoddy imitativeness, and total unreliability. It was inconceivable in the 1950s or 1960s that one day Japan would surpass the United States in automobiles, superconductors, and consumer electronics—or displace the Swiss as the number one producer of watches.
When, by 1953, Japan completed its postwar reconstruction, it embarked on an extraordinary pattern of growth that averaged 9.7 percent annually over the next twenty years. Leading this explosion was the triumph of the Japanese automobile. Between the 1950s and the 1970s, Japanese car production increased one hundred times, catching up with the United States in 1979, then rushing on to surpass it. Japan became the leading producer of radios in the 1960s and of television sets in the 1970s. In a total break with the past, Japanese products became associated with high quality and dependability, most notably in high-technology areas such as jets, machine tools, robots, semiconductors, calculators and copiers, computers and telecommunications, advanced energy systems, including nuclear power, and rocketry. Above all, it was a victory of superior management strategy—and the irony was that most of that strategy had been learned from the United States, where it was rarely practiced.
By the 1980s the United States was facing competition not only from Japan but other Pacific Rim nations as well: South Korea, Singapore, Taiwan, and Hong Kong. That was from the East. From the opposite direction there was a reborn and regenerated Europe—above all, an industrially powerful and fast-growing West Germany.
The reaction on the part of American business at first was dismay, disbelief, and denial. Global competitiveness of this intensity was a new and disorienting experience. True enough, there had been competition among the “Big Three” in the U.S. automobile industry, but General Motors, Ford, and Chrysler all played by the same rules and shared the same basic assumptions; none challenged the others to rethink their basic premises. The Japanese and the Germans did.
Global competition is a far more powerful stimulant to innovation than domestic competition. Other cultures have other perspectives, other ways of seeing things. Their ideas bring a richer mix to business thinking. But for this reason, a higher level of self-esteem—and competence—is required to play in this arena. At first, American workers and executives refused to acknowledge the Japanese might be pursuing practices worth emulating. The notion of learning from them was perceived as demeaning; instead, their initial response was to dig in their heels and cling more tenaciously to the familiar way of doing things.3 Sometimes, an addi
tional response was to denounce the Japanese and demand political protection against them. This parallels exactly what one sees in the practice of psychotherapy, when a self-doubting, insecure person blindly persists in counterproductive behavior, clings to the illusory safety of compulsive inflexibility, and blames all misfortune on someone else.
Only the shock of devastating competition from Japan and Germany awakened the U.S. automobile industry from its complacent slumber. Whether it awakened in time remains unknown. With no significant innovations of its own for decades, it resisted radial tires, disk brakes, and fuel injection, first put into production cars in Europe. Now it is fighting back, and the quality of American automobiles has greatly improved; but it still lags behind in innovation.
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Global competition is a far more powerful stimulant to innovation than domestic competition.
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Nor was this American industry unique in its slowness to grasp that the context had changed and that new policies were needed. When the Swiss were shown the first digital watches, their response was: “But this isn’t a watch; a watch has springs and gears.” When they woke up, they had lost their leadership position.
The United States is still—by far—the most powerful industrial nation on earth. With 5 percent of the world’s population, we generate 25 percent of the world’s industrial production. No knowledgeable person ever imagined that we would retain the percentage of world production that we enjoyed in the years following the Second World War, when other economies were in ruins. Nor would it have been considered desirable. We wanted other countries to resurrect themselves and helped to make it happen. Our output of goods and services, overall, is much greater than it has ever been; as a percentage of gross national product, it has remained constant for over four decades. In response to changing conditions we have already introduced major changes into our business institutions—from restructuring and “slimming down” (getting rid of superfluous layers of management, for instance) to much greater concentration on quality and customer service, to new systems of organization and management that better support innovation and adaptiveness to a fast-changing environment.
The Six Pillars of Self-Esteem Page 27
