Thursday, April 12, 2007


Corporations Then and Now

Some thoughts looking backward

In my 43-year career, I worked for very large corporations, among them: IBM, RCA, Raytheon, Philips, and SAIC, all of which were multibillion dollar per year outfits with hundreds of thousands of employees. These employers had a range of corporate mindsets about their employees.

In IBM at the time, it was “full employment,” which meant that if you were surplus to the needs of the company at one location, you would be offered a job elsewhere. You either took that offer, or left the company. But, there were many managers that had never in their long careers fired an employee or made one truly surplus. They might be on the “Available List,” but I knew many on that list that had been there for years and years.

There was substantial downward loyalty as well, almost too much in some ways. A lot of deadwood accumulated over the years that would only be shaken out when the company sold an entire division, as they did for their Federal Systems Division.

In RCA, at least where I was, it was a cutthroat attitude, where your job strictly depended on your manager’s whim and success in the slice of business in his charge. “What have you done for me lately” was a monthly question that rapidly put behind you all the good things you had done for the organization in the past.

Good people tended to work until they dropped from exhaustion, or burned out from the pressures of their jobs. When the general manager died from a heart attack, the message became clear to all of us: you are now replaceable, highly expendable, and you’d better be on top of your job or the new manager will sweep you out in a microsecond. Loyalty downward was true, but only for long-term employees. When a layoff was forced on the company by a slump in business, it was logically the newbies that were sent out of the door first.

Raytheon was very similar in these respects to RCA, so I won’t repeat the story again.

Philips was entirely different. The Dutch system forced companies to hire with the expectation of a lifetime career for the individual. The subsidiary I was in was extremely successful, and carried a backlog of four to five years worth of business for most of the ten years I was there.

I was fortunate to work for a very progressive and energetic Sr. VP, and the research, analysis, and development division I headed up was alive and crackling with dozens of ideas and projects, most of which I had seen in the US before.

There was superior downward loyalty to all employees, backed up by the cradle-to-grave social system the Dutch government was very proud to have. I had six weeks of vacation plus nine holidays per year, and a nine-to-five job for most of the year.

The subsidiary, however, became overextended by their successes in the world market, and was suddenly faced with technical and production challenges they could not cope with in a timely manner. They were falling ever further behind in deliveries, while struggling with some intractable difficulties with their new primary radar systems.

Furthermore, they could not hire and train competent staff fast enough to work out of their difficulties, and they could not guarantee new employees ten years of work, since major customers were threatening to cancel their contracts. All attention and funding was placed on digging out of the mess, which left R&D with less and less resources. Time to move on: I had a hard time with the Dutch language anyway! So I retired from Philips.

SAIC was another, far more difficult company to work for, since it was “employee owned” and had an intense strategy of winning contracts, and growing them, or letting the people go. After a year or so with not much to show for it in proposals to the military, I transferred to a long-term project as the System Engineer, and spent the next seven years on it, before retiring once again.

There was virtually no downward loyalty from the company that I could discern. You earned your keep or you were out. Luckily, SAIC was on a very steep growth path in both personnel and revenue during my years there, and the stock options I had earned as an employee/owner provided me with a very nice addition to my other income.

So what can I say about today’s corporate world? From what I have gathered from friends and from reading, the SAIC business model seems to be the pattern of the future. High-tech, high intensity, no downward loyalty ( hence no upward loyalty either!), and practically a guarantee that you will face changing jobs to another company of the same ilk inside of five to seven years. Benefits are becoming far less generous, too.

In previous eras, a young engineer changed companies three times on the average before settling down in one company for the rest of his career. Today, it is more like the aircraft industry used to be. You find yourself following the contracts from one aerospace company to the next, doing essentially the same job over and over for years and years, until you manage to snare a higher level job and stay with a company for a longer period. You will never have the level of job security we were used to in the latter part of the 20th century, in my opinion. Even so, it was my practice to keep my lines of communication open for other positions, and to have standing offers for a job for periods of time.

Another model is that of the job shop, the personnel-for-hire crowd, where benefits, and decent retirements are problematical, but your net pay is somewhat higher. If you are disciplined, you invest the differential and govern your own future. That was very hard to do...for me, anyway.

Finally, starting your own business somewhere along the path is something to consider. I was too comfortable in my situations to strike out on my own, but at least seven of my fellow workers did over the years with huge financial and company successes. Three of them are retired and live in Potomac, Maryland, on horse farms now.

With your own company, you can institute the policies you think best for your employees and your business. You can foster upward and downward loyalty, and security for your employees, as well as giving them room to grow and succeed. I believe strongly that such policies will make a comeback in the next decade as people become totally disenchanted with the current cutthroat trends.

( Just to steer away speculation, I was sought after and hired away from each of my jobs, but one, by companies that thought I could help them. I was laid off once, because of a total downward reorganization of the divisions of the company. Nothing personal, you see...just business. Still, it was a very trying time for a month or so! The lesson was clear: always keep a job offer in your pocket, if you can.)



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