Irving Wladawsky-Berger

A New Style of Work

About a year ago I wrote a blog on the post retirement phase of my life.  Tom Foremski, a journalist blogger and friend who reports on the business and culture of innovation in Silicon Valley Watcher, wrote an interesting comment in my blog:

“In some ways, I see your post-retirement life as being somewhat futuristic, in that it will be the way many people will be working in the future.  It's what I call an "atomic" model - collaborating with others on specific tasks/projects and then dissolving those collaborations as you work with others on different projects. In some ways, this is the way Hollywood has been working for decades.  And it's also one that I increasingly see in Silicon Valley.”

“It's a model that increases individual productivity and also organizational productivity because you bring in consultants/experts for specific tasks.  Why have them sitting around on salaries in-between projects?”

“You've retired from the old style of working and you are now pioneering the new style of working :)”

Tom himself made such a transition when in 2004 he left his position as the Silicon Valley reporter for the Financial Times to found Silicon Valley Watcher, one of the first journalists to leave a position with a major newspapers to make a living as a journalist blogger.

I have been very intrigued with this new distributed work phase of my career, where I am associated with several institutions instead of one primary one, as was the case when I worked full time at IBM until I retired in May of 2007 after 37 years with the company.  In particular, I have thought a lot about the role of the Web and related technologies as key enablers of such a distributed style of work.  

Business Problems, Trust and Values

Like many who are not fans of the kind of journalism practiced by the News Corporation in its tabloids and cable news channels, I must admit to feelings of schadenfreude at their current problems in the UK as a result of the phone hacking and related scandals.  The scandal has already derailed their planned takeover of British Sky Broadcasting, led to the shutdown of News of the World, caused the resignation of a number of senior executives and the arrest of a few present and former News Corp employees. 

Given that the formal investigations are just starting, we don’t know how the UK scandal will evolve.  It is also possible that the scandal will reach across the Atlantic, given that the FBI is now launching its own  investigation as to whether similar phone hacking incidents took place in the US.  We have to wait to see how this incident will play over time, and what its impact will be on the News Corporation and its various media holdings around the world.

But, even at this early stage, it is instructive to look at the problems News Corp is going through, - one of the world’s most successful media conglomerates run by executives who are undoubtedly among the best and brightest in their industry, - and reflect how such powerful companies get into such serious trouble.  For me this is particularly interesting, given that organizational culture is one of the topics I often discuss in my university seminars.  In addition, just last month we celebrated IBM’s Centennial, and along with the many who have written articles on the subject, I kept asking myself: “why is IBM still alive and thriving after so long?”

The Science of Complex Systems

When I look back over my long, relatively eclectic career, complex systems have been a common theme in all the activities I’ve been involved in.  It started in the 1960s, when I was an undergraduate and graduate student at the University of Chicago majoring in physics, - the study of complex natural systems.  The research for my thesis was focused on the highly complex world of atoms and molecules.  

After finishing my studies, I joined IBM Research in 1970 and switched to computer sciences.  My main research interests were centered on large computer systems, including mainframes, supercomputers and distributed systems.  In the 1990s, my work was focused on the kinds of complex systems and applications made possible by the advent of the Internet, World Wide Web and e-business. 

Then, around ten years ago, I became very interested in the applications of technology to market-facing, people oriented complex systems, especially systems involving services.  Over the past few years, I have also become increasingly interested in economic systems. 

In addition, I started to notice that a number of the concepts and principles I learned many years ago as a physics student seem to apply to these new kind of complex organizational systems I was now interested in.  Let me explain.

Fixing the US Jobs Problem

Last week, I wrote about the recent work of Michael Spence, professor of economics at NYU’s Stern School of Business, professor and dean emeritus at the Stanford Graduate School of Business, and the recipient of the 2001 Nobel Prize in economics. 

In The Evolving Structure of the American Economy and the Employment Challenge, which was published in March of this year by the Council on Foreign Relations, Professor Spence and co-author Sandile Hlatshwayo, examined the impact of globalization over the last twenty years.  They divided the economy into two segments: tradable and nontradable.  They then looked at the trends in each segment by analyzing data from 1990 to 2008 from the US Bureau of Labor Statistics and the Bureau of Economic Analysis.  Their analysis uncovered a tale of two very different economies. 

The tradable sector includes those parts of the economy most subject to global competition from foreign companies and suppliers, - e.g., manufacturing, energy, back-office services.  It significantly improved its value added per job or productivity, but had negligible incremental employment, primarily because a growing number of jobs have been moving offshore.  The nontradable sector, which includes those parts of the economy which must be produced and consumed locally, - e.g., government, health care, construction, - had virtually all the job growth during this period but significantly lower value-added.

As they wrote in the Executive Summary, the employment picture does not look good over the next several years, perhaps longer:

“Given the prospect of slowing employment growth in nontradables and rising competitive pressure on tradables, major employment problems in the near future are a certainty.  Even if the nontradable sector is able to continue to absorb the growth in the labor force, pressure on wages and salaries will be downward, and consequences for income distribution unavoidable.”

“To create jobs, contain inequality, and reduce the U.S. current-account deficit, the scope of the export sector will need to expand.  That will mean restoring and creating U.S. competitiveness in an expanded set of activities via heightened investment in human capital, technology, and hard and soft infrastructure. The challenge is how to do it most effectively.”