Online Edition - May 2000
Issue Highlight - The
The Cost Of A New Economy
--FFor most of us over 40, working for a dot-com conjures images of the ultimate 24/7 week, surrounded by 25 year olds in Doc Marten sandals and blue jeans and the IPO carrot dangling in front of us-if we can just survive. And while Allan Cohen isn't over 40, he isn't 25 either. Caught in the middle ground between aspiring "20 somethings" and "Baby Boomers," he is in a unique position to contemplate the human side of what has been termed, the "new economy."
--FCohen is senior vice president, innovation and practice development, for Zefer, a strategic Internet consulting and services firm. Zefer works with both established companies and dot-com startups to create and execute innovative strategies and adaptive new business models that thrive in the digital economy. Headquartered in Boston, Zefer believes that the real Internet revolution is about breakthrough business models that were never possible before-models with the power to fundamentally reshape business dynamics and redefine the nature of competition.
--FCohen will be a feature speaker at AQP's "People and the New Economy 2 Conference," June 26-28, San Francisco, Calif. He will be joined by Christopher Locke, co-author of the best-selling "The Cluetrain Manifesto: The End of Business as Usual," Peter Block, author of "Stewardship" and others. For information visit www.peoplenewecon.org or call 1-800-733-3310. Cohen recently spoke with News for a Change Editor Bill Brewer, who is over 40, about his company's rapid growth, agile teams and the railroad.
NFC: Zefer recently merged with Skyplane, a web design company. What challenges did Zefer face integrating these two cultures?
Cohen: We have acquired multiple firms, Skyplane is just one of them. What is interesting is that to actually create web-based business models you need multiple competencies and proficiencies working together that have never worked together before. The problems of merging companies are the same as they have always been; it challenges peoples' identities. They have identified with doing a particular type of work in a particular atmosphere and, in the case of Skyplane, it was a fairly cutting edge but small company. Each member of that firm has to come to grips with the idea that they are now going to be part of one office of a much larger company, contributing the same talent, but in a much larger context, trying to achieve something much bigger along with working with computer programmers, business strategists and project managers and a whole new crew of folks.
NFC: In August you had 300 employees?
Cohen: Correct. We have roughly gone from 60 to 600 people in 12 months. More than half of that has been organic growth, not acquisition; just people hired.
NFC: That kind of growth is very dangerous according to most business schools.
Cohen: Or it is not even possible. The usual theories about speed and time have been overturned in the new economy. Moving slow is much more dangerous than moving fast. And our clients are growing even faster than we are. They are quite accustomed to seeing us change this quick-it doesn't surprise them.
NFC: What are the costs with regard to human values?
Cohen: People have to accommodate themselves to a new level of ambiguity and a new level of pace of change. Even people hired into executive roles are told to think of their assignments as temporary. We may swap around what one executive is doing at anytime. Or we may hire some new folks that change everyone's assignments. In some ways, people find themselves being less effective than they are used to being because they are in a less stable environment, so things are less predictable.
NFC: They cannot measure themselves in the same way?
Cohen: That is right. We would look at someone and say they are an amazing high performer; they might look at themselves and say, "Geez, I don't know what I am going to be doing next week. I am not sure what I did last week and I cannot tell if I am making progress." It is harder to self evaluate in a changing environment.
NFC: Much of the web world is composed of small teams or lone rangers. Is the concept of teamwork in a dot-com very different than the concept of teamwork on a manufacturing floor?
Cohen: Some aspects of being in a team are the same. What has changed is the demand for people to be agile. The big difference is that now we expect people to be very agile and we expect groups to be very agile. A team may be working in one direction one week and a different direction another week. There is a certain amount of resiliency required. Another difference may be that it also challenges any kind of idea about very stable command and control structures. The context in which a team is operating may be different as well. Instead of being a team at the bottom of a hierarchy, the organizational structure is more amorphous and fluid even though there are still some people in charge. I think people have to let go of the idea that they are in a command and control environment. You cannot change fast enough that way.
NFC: But there is still someone determining that this team is going to go work someplace else or go work on this project?
Cohen: First of all, as teams form, they form around some sort of goal or a project; the goal may be temporal or standard. The human resource team may have a temporal goal of integrating people from these companies. A standard goal for a group of people may be on a project that is going to end, but they are still organized around some goal. In fact, you will probably be working on two or three teams simultaneously. No one will tell you how much time to spend on each team. You decide that yourself. You have to negotiate the pressures yourself. We are asking for a degree of responsibility and accountability that you didn't have to ask for in a very well-structured command and control system.
--FOn the other hand, we still have somebody with authority around who can, in a pinch, come down and say to this team, "I want you to stop doing what you are doing." And, overrule the team leader-that can occur. There are times when a team leader manages their time very hierarchally because that is all they know how to do. They may choose to lead their team in a way that they are telling everyone what to do.
NFC: Do team members resent that?
Cohen: I would agree with Peter Block when he says everyone colludes to create hierarchy. They may even request it. I like to present some of Peter's ideas in this firm. I like to tell people that if you go into your team and the first thing you ask the team leader is, "How am I going to be measured and what do you want me to do in order to be successful," that is a request for that leader to be hierarchal. It is like asking a teacher what is going to be on the test. The flipside is asking, "What is the goal and how can I contribute to it? What am I going to be responsible for?" That is a very different model.
NFC: There are web companies that have hierarchal kinds of structures.
Cohen: There are all different kinds of web companies; but the stand alone, the dot-coms tend to have some charismatic leadership. A lot of the organizational structure forms around that.
--FOne part of hierarchy is that you are in charge and another part of hierarchy is you are in control. It is the issue of control that is just not possible now. I had one client, a high-flying Internet company, the CEO said this company is a rocket ship and we are blasting into orbit and you are in or out. You are in or you are out of the rocket-if you sign up to be in, you are expected to be able to manage yourself and be on your own. If he sees that you have not signed up for the pace, then you are out. That was his way of doing it. Once you signed up you were assumed to be a good person and working hard and we'll find a way to make it go. You weren't supervised closely because he couldn't supervise anyone closely. There would be not time for it.
NFC: There is a perception out there that everyone in the new economy is working 80 hours a week all with the hopes of becoming millionaires by the time they are 30, then doing something else with their lives.
Cohen: Some of that is true. I don't know if it is 80 hours, but clearly people are working longer weeks in those dot-coms than outside of them. I am not convinced that the average person is motivated by the shot at millions, although they would like to have their shot if the guy next to them has a shot. There are two separate things, one is I think everyone accepts the kind of accountability we ask them to accept. They drive themselves to work those hours and they drive each other to do it. It is very interesting. Nobody here talks about it-all hours are self-reported. Even in a firm like this, where we sell our hours, people are pretty much on their own to manage that and the culture just emerges-a culture of personal accountability, which is a part of what goes on here.
--F I would say the reason they are motivated to be in this sector of the economy is the passion and the idea that this is where the action is. It is not necessarily that this is where the money is, but this is where the world is changing. This is it... There was a big drive for people to get into genetic engineering 10 years ago, so anyone who went near biological science went there-where the action was. It was a chance to participate in a change of the way we look at what it means to be in society. There is no doubt for people living and growing up on the web, they are really clear on that; that this change is as profound as any technological change in the last 50 years, or longer, and they want to be in it.
NFC: Do you feel these longer hours have any impact on their personal lives? What about family or friendships?
Cohen: In 1992, I was in a meeting with the guy that developed what became the Macintosh interface; he led the team at Xerox Park, created the mouse and all that stuff. He was talking about what he called, "intimate commuting." He was saying that the next thing after personal commuting is "intimate commuting." I said, "What is that?" He said, "We are going to carry our computers in our pockets. We are always going to be wired." That is sort of happening now; he was, once again, pretty clever. We all looked horrified. Everyone sort of turned white as ghosts in the room as we began to realize that he was serious and that this was really going to happen and we were all imagining it. It was horrible to us. He looked at us and said, "We are just going to have to get the hell out of the way because the generation coming in behind is going to find this very natural." That is probably where we are.
--F What is natural in human relationships? In terms of how we communicate; the telephone was a big shift and an introduction. You lose a whole lot of information when you speak by telephone, but you can pick up on other things. Since we have grown up with telephones we have learned to listen to nuances and voice and pick up a lot of things that we might have communicated non-verbally in person. There are ways in which you learn to express yourself in any medium that you get used to.
--F There is certainly a generation of people used to expressing themselves in text. It is interesting in the chat rooms they have acronyms, codes and icons for a lot of things that are emotional. There are a whole bunch of abbreviations for "I'm laughing," and for things that are difficult to communicate in text. People find ways to communicate with whatever is available. Other people have an experience where this is rather an empty kind of communication. It is shallow. It is fake and very easily, I can be someone I am not. There are a generation of kids, people in their 20's, creating relationships through the web.
NFC: You can't leave the office without your pager or cell phone. I check my e-mail when I am on the road, probably twice a day. Will people find new ways to get away from all that?
Cohen: Everyone creates their own limits. We do it to ourselves-what is comfortable and uncomfortable varies. I will not carry a beeper and I will leave my cell phone off very often, because I have a limit there. I do check my e-mail half a dozen times a day and I do check it on the weekends. Everyone sets their own limits.
NFC: You have been quoted as saying, "My grandfather told me stories about life before the automobile and I will tell my grandchildren stories about life before the Internet." How do you feel about that?
Cohen: The occurrence in the economy that is most similar to the Internet is the railroad. There are a lot of people who have made a lot of different comparisons, but it seems clear to me that the railroad created the infrastructure for the industrial age-it created the connections that enable all the business models and all the behaviors, which we associate with the industrial age. The steam engine actually required a transportation infrastructure. The steam engine was an important ingredient in the railroad, but it wasn't the railroad. The arrival of the railroad allows for consolidation of businesses, all kinds of things happen as soon as the railroad shows up. You get railroad tycoons; there is a shift in the economy. Every single industry is hit by the railroad. The Internet is clearly the transportation infrastructure, the Information Age or the Digital Age, whatever you want to call this age, it is clear that we finally have our railroad. There are, of course, Internet tycoons because there is a big shift affecting every industry. The railroad actually affected the way individuals lived, the way they worked, what value was produced, what it cost to exchange it-it affected everything. It is very clear to me that the Internet is doing the same thing.
--F The change is so big and so pervasive it is very difficult to talk about in sound bites and sentences. I know that I could begin listing the things that are already changing. What it is to imagine things, to create things, to raise children, to discover things, to dream, to plan, to acquire things, to interact, to make relationships, to express yourself-all those things are fundamentally changing. They are changing merely because we are all hooked up to each other in a new way. It is big. I do think that we are still at the beginning of the change. I will tell stories about, "Gee, before the Internet, we used to do things very differently. We will find out what those stories are in about 20 years. We will see what the real big differences are."