I see four significant trends impacting the future of work and I’ll describe them here, along with the implications of them for employers, workers and everyone in between.

This comes from consulting with fun and interesting clients in the US, Asia and Europe in industries from telecom and technology to performance apparel, food and other CPG products. These impact how we all do what we do. They aren’t specific to any one industry. It all matters.

Here are four trends I think you can take to the bank. We’ll figure out what to do about them below.

Democratization of technology:

What used to be the sole preserve of the IT department in large corporations is now available to anyone, anywhere. I can get a more powerful, less expensive computer myself, either online or even at retail – and increasingly, we’re expected to get our own devices.

We see research showing that people at the bottom of the global economic pyramid, subsistence level farmers and urban dwellers in east Africa, are increasingly reallocating what little disposable income they have away from food to pay for additional pre-paid minutes for their cell phones.

We see research telling us that the pervasive spread of technology and the instantly accessible, always on nature of news and social media is re-wiring how our brains work.

It’s the IT department’s job to keep up, rather than to provide. And when tablets are walking in to the enterprise, with all of their security drawbacks, this becomes a complex job.

Decline of location:

One of the causal factors springing from the democratization of technology is the decline of location as a limiting factor. The technology that has been put in our hands isn’t limited to the devices we own. The ubiquity of the Internet itself has dramatically changed how we live our lives and how we work. Similarly, the ubiquity of broadband, the wireless web, low cost videoconferencing and VOIP have all combined to give us the ability to communicate anywhere we have a device and a connection. The explosion of cloud based computing means our data is wherever we are, always up to date and at our fingertips.

Business process outsourcing, from our accounting and payroll to other back office support functions, is increasingly happening elsewhere as a result. When you don’t need to hire accounting, HR and finance people in the branch offices, do you really need “branch offices”? Increasingly, the answer is no. Companies providing office space on demand, like Regus, are exploding. Regus is now the world’s largest real estate holder as a result.

“The office” is now wherever we have a laptop, an internet connection and a good headset.

Changing nature of social glue:

We have high powered devices and instant communication: does this suggest the decline of relationships? Are we all isolated?

Ask anyone on Facebook – you have a one in seven chance of randomly finding someone on planet earth with a profile, after all – if their “relationships” have suffered. No, they haven’t. But they have changed. We now communicate better with that long lost friend from junior high school who lives half a country away than we do with the guy three cubicles away.

Our social glue has changed, the ways we communicate with our network has changed and the nature of relationships in general has changed.  I’ve got friends I’ve never met before now, some I’ve never even spoken to. This isn’t terribly unusual at this point.

Polarization:

If we all have the same powerful productivity and communication tools, location is no longer a limiting factor and the very nature of our social relationships have become more nuanced and complex, it stands to reason that automation (technology) is going to replace everything and anything it can on the low end, leaving the more nuanced and complex parts to actual humans to figure out. We see this in the contact center industry, where voice recognition, online FAQ’s and even P2P forums have taken the place of what was once entry level labor. What’s left is the stuff too complicated for simple self-service answers. This isn’t just a case of human intervention, either. It calls for highly skilled human intervention, and highly skilled humans are expensive and rare.

The war for talent starts here. Watch for increased polarization – of (forgive me, it’s a good turn of a phrase) the 1% further separating from the 99% – of labor as the low end disappears and the skilled become even more in demand.

Implications:

We have trends. What do we do about them?

For employers, we need to understand that it’s an imposition to ask smart people to drive 45 minutes to the “office” when they’ve got a phone and a computer where they are. The very smart employers amongst us are also realizing that at any given time, more than half of all their cubicles are empty. The lights and electricity and real estate costs, however, are always on. Downsizing your headquarters footprint and moving to a more flexible office arrangement – hot desking or “hoteling” – makes a whole lot of sense, particularly when the second largest fixed expense a company typically has is real estate. Increasingly, this is a case of “yes and” rather than “either or.”

Companies that are rapidly doing away with branch offices – and often headquarters space, too – need to do something to step into this sudden void in the social glue. The smart ones are creating new opportunities for face to face communication. They’re thinking about internal communications beyond the monthly newsletter. They’re creating big meetings at the Company-Plex and ensuring that teamwork stays healthy even when we’re not seeing each other face to face every day.

This also suggests that companies that have closed all the branch offices and have moved their people into Regus spaces need to take some of that considerable saved money and invest in their HQ space.

When your people are out in the marketplace and no longer sitting obediently outside your glorious office, the nature of the relationship tends to shift, as well. Let’s acknowledge that this change also sounds the death knell of the command and control management style, at least as it relates to control over people. You can still manage. You need to. But you can’t necessarily keep all your people under your thumb in one (or a few locations), because increasingly this means you’re losing out on some of the better people available to you.

If we continue this trend line outwards, beyond these two data points, does this mean we’re moving from a W2 to a 1099 world? Maybe.

The fact that location is no longer a constraint may suggest to us that there’s nothing but upside when we choose to move services and roles elsewhere to take advantage of relative cost differences. But there’s a catch. There’s still a limit to what we’re willing to live with. There’s still a “just noticeable difference” beyond which we shut down. We’ve been comfortable sending our contact centers elsewhere for some time now, but increasingly we don’t want them sent overseas. Why? We still want to do business with people like us. Particularly in the US, we want American accents. We want the comfort of knowing that our credit card information isn’t on a server somewhere on the other side of the world. Our new definitions of location may mean “not here,” but it doesn’t always mean “anywhere.”

Culturally, this new future of work suggests that old forms of recognition and reward need to shift, as well. If we’re splitting our time between a formal office location, a home office, a professional layer (like a Regus location) and the airport and hotel, what are the true trappings of success? One friend told me a story of how a new employer questioned his loyalty and commitment to the firm because he had no pictures of his family in his cubicle. Not surprisingly, the situation didn’t last long.

The new trappings of success are the things we carry with us: the iPhone, the Mac Book Pro, the headset. Once upon a time, it was the sole preserve of the C Suiters to carefully positioned their cell phones on the board room table to show off their executive jewelry. Now, everyone does this. Status is what you can walk in with and carry out with you. It’s not about the corner office anymore, or anything else like it.

For bosses who need to hire these sorts of people, the implications are that you need to have these skills too – and that you need to be able to manage these people well. That’s not easy, particularly today, because virtually no companies seem to value “management of people” as a skill set. If this is a dying art form, it’s going to come back and bite us in a tender spot, because getting people on the same page and motivating them isn’t always a given. In Silicon Valley, managing people as a discipline to be rewarded is virtually non-existent. Ask any Apple employee.

For bosses, the real skill set will be how to quickly on-board workers “in space,” keep aligned on projects and how to quickly judge whether their new hires (or existing ones) are in fact the right ones or not. Killing off the bad decisions quickly is smart and nurturing the right ones for retention is crucial.

Bosses also need to be outstanding at communication beyond the one on one. They need to be good at promoting the social glue, creating multiple ways to stay in touch, keep the professional and personal alive and meaningful, and create a sense of camaraderie particularly when the troops are miles apart.  

For workers, it’s simple. Operating “in space” is where work is heading. Minimal hand holding, fast alignment, do it yourself without a whole lot of bureaucracy and process, strive for results, crystal clear alignment and reporting. People with those skill sets will be in demand. People without them will increasingly be competing for fewer low paying roles.

Communication skills get very important when you’re not sitting face to face all day long, don’t they? You need to collaborate with lots of domain experts in far flung places all over the world. You can’t spend all day long getting people on the same page. You need to do this quickly, because time zones are painful reminders of the limitations of collaboration. The death of globalization is sleep, after all. If you don’t believe me, try organizing conference calls with Europe and India. Someone is going to be tired.

What this doesn’t mean is cowboy antics. This doesn’t mean doing whatever in the world you think you want to do without any oversight or alignment. We’ve all worked with that guy once or twice (briefly, usually). Going rogue usually ends up with you getting shot fairly quickly, for good reason.

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What do you think? Does this resonate with you? Do you see other trends on the horizon that will impact how we do what we do all day long?

Tell me what you think –

 Regards.

(This is the second in a two-part blog-exchange on brand decision-making I’m doing with Denise Lee Yohn.  I kicked things off last week with a post called “Killing Retail Giants” and today Denise answers the questions I posed to her about retail small businesses.  We’re both teaching sessions in the Marketing Profs University course, Marketing Your Small Business .  Denise’s webinar, Why Small Businesses Need Brands and How to Build Them, airs next week.  Register now and use coupon code DENNYVIP to receive $200 off!)

SD:  Technology – from QR codes to crowd sourcing/sharing/tapping to social anything – is all the rage…and yet, at least from what I’m hearing from clients and a few far enough away from the blogosphere and close enough to a real P&L, it’s the actual human contact – the face to face – that converts. What do we make of this “original, old-school social networking” called floor-level selling versus the newest and greatest socially enabled thing of the moment? Where do you put your dollars today?

Denise:  I agree with former Apple retail head and current JC Penney CEO Ron Johnson who stated in a recent interview, “Physical stores are still the primary way people acquire merchandise, and I think that will be true 50 years from now.”  And as long as stores continue to exist, so will the importance of salesmanship. 

People may use technology to do more research before they enter a store, but according to a study published in the McKinsey Quarterly last year, as many as 40% of customers remain open to persuasion.

It makes sense.  If a customer is in store these days, she’s not there to waste her time.  She wants information, engagement, discovery, entertainment, inspiration, service – something.  A lot of elements in the store will address this desire, but a salesperson still holds the key to converting browsers into buyers and skepticism into sales. 

The sales process is definitely more art than science and individual flair and style-flexing is paramount, but a good salesperson follows four basic steps: open, ask for needs, demonstrate, and close.  Technology can help in each step. 

Through social networking, salespeople can lure customers into their stores.  And we’re just moments away from making it possible for customers to be greeted personally through mobile location sensors and tracking.  Salespeople are already using tablets to show a range of solutions or to highlight usage occasions, thus facilitating a conversation about needs. 

Virtual dressing rooms and smart-phone enabled product demos make for compelling sales demonstrations.  And access to customers’ social networks, price/inventory transparency, personalized deals, and mobile checkout are technology-enabled tools to help salespeople close the deal.

So technology is facilitates the sales process but it’s the salesperson that drives it, so I’d invest in sales training and tools.

SD:  There’s an eternal, titanic struggle for control between retailers and manufacturers. We’ve seen major big box retailers literally put weak manufacturers out of business with exorbitant “vision funds” and high co-op expenses to drive in-store foot traffic. We’ve also seen relatively new powerhouses over the past few years send products into retail with literally zero margin. Where’s the balance of power now? More importantly, how does the lowly manufacturer (or lowly retailer) gain at least an equal seat at the table, let alone the semblance of an upper hand?

Denise:   The struggle is indeed eternal, and I suspect the balance of power between retailers and manufacturers will continue to fluctuate indefinitely.  But there are two approaches that create a win-win for both parties:  exclusive product and private label.  Both require tight partnerships between the two sides.

With exclusive product, manufacturers develop a unique product tailored for a specific retailer.  Right now, this is mostly happening through cosmetic differences on existing products – e.g., providing exclusive colors or sizes, or using different brand names on the same product.  This is the easiest, lowest-cost approach. 

There are bigger opportunities, though, for retailers and manufacturers to collaborate on new product development — integrating retailers’ detailed customer data into manufacturers’ product expertise to create truly tailored offerings. Years ago when I was at Sony Electronics, we developed an exclusive line of products for women at Target.  It provided differentiation and value for both Sony and Target.

Private label is another approach to consider, especially for smaller manufacturers.  By developing products to be sold under the retailer’s brand name, manufacturers exchange for brand equity for access and volume – a smart trade-off in some cases – while retailers benefit on margin.  In the past, private label may have been looked upon as the ugly step child, but according to another McKinsey study, consumers are more receptive to store brands these days.  It’s a viable solution to the eternal struggle.

Don’t Buy This Jacket.

Outdoor athletes – the real high achievers, in particular – understand Patagonia’s tagline. And Patagonia’s tagline clearly shows that they understand their core market to a remarkable degree.  That’s nice, for a change.

Outdoor enthusiasts do things that the rest of us don’t. They spend time on mountains. In winter. On purpose. They run in lousy weather and do it for longer distances than the rest of us would under any condition. They train for events with names like “The Canadian Death Race” that make everyday triathlon competitions look pale. They’re different.

They’re different people, too. Where your Under Armour athlete plays team sports and is highly competitive to the point of trying to beat you to the coffee machine, the outdoor athlete is more cooperative. More than racing the clock, or a competitor, they’re trying to best themselves. And the connection to the great outdoors overrides all. They want to leave a lighter footprint on the earth and respond to others who feel the same way.

Which brings us back to Patagonia. Don’t Buy This Jacket – unless you’re looking to buy fewer, better things; unless you understand that paying more for something of great value means it will last longer, perform at a higher level and inspire other similar minded people to do the same.

Don’t buy this jacket as a fashion statement – buy it as a personal statement, an understatement that shows a commitment to earth, culture, self and a nod to smart consumerism, much the way Scott Griffith of Zipcar described the evolving nature of consumption in my interview with him (in Killing Giants: 10 Strategies to Topple the Goliath In Your Industry).

From a psychological standpoint, it’s a great example of a strategic retreat – of arguing against your own self-interests. Don’t buy this jacket says you can trust us because we’re not out to hustle you into buying something you don’t need. It hits a clever decision trigger, particularly for this group.

It’s a smart ad because it speaks to this market. I’m not suggesting it would work for another because it probably wouldn’t.  But squint at the lesson and see how this decision trigger can work for you.

Regards.

Quick: close your eyes and describe to me what a cordless toothbrush would be like if it was designed by Apple.

What color would it be? What would the finish look like? What materials, what tactile feedback would it give? What would it feel like on your teeth? What would it sound like?

We used to do this with Sony back in the day.

In the 1990’s, when I was there, Sony was the most powerful brand on earth. You could imagine any product and describe in detail the mat black finish, the beveled edges, where the Sony logo would be, what the buttons would feel like and everything else.

Apple is what Sony was.

Which makes it hard to watch Sony ads today that have stooped so low as to require actors to wear Sony shirts just so we can figure out who makes these strange products. What was once iconic is now the joke whose punchline needs more explaining.

Sony CEO Howard Stringer hit the nail on the head recently in an interview where he bristled at the notion that Sony had slipped technologically. From an interview carried in Bloomberg:

It’s not lack of sleep, though, that irritates him when it’s suggested that Sony is not considered the innovator it once was. “Oh, f–k, we make so much more than we used to,” he said. He ticked off some of the products coming out this year, including binoculars that can record video and goggles for watching 3-D video games and movies. Don’t tell me that Sony technology isn’t great,” he said.

Goggles for watching 3D glasses? This is the company that created the Walkman.

Sony, unfortunately, is a cautionary tale in how a giant missed a key structural shift – a concept that Dr. Steven Feinberg discussed with me in his interview in Killing Giants: 10 Strategies to Topple the Goliath In Your Industry. While many would point out that the first shift the once mighty company missed was the entire idea of digital, the scond – and more damaging – mistake was missing out on The Internet.

How could this master innovator miss launching iTunes, iPods/Pads/Phones and everything else? They should have launched the Kindle. They should have launched Netflix. Hell, they could have launched Zipcar – with a Sony branded Tesla Motors – had they continued on the trajectory they were on  in 1995. Alas. Not to be.

When I was in the boardroom at the first unveiling of the competitive Diamond Rio (for those members of the class too young to know, the Diamond Rio was the first – the absolute first – digital music player), the bureaucracy ensconced at the top of Personal Audio declared, and I quote: “Digital music will never reach the technical quality of linear tape.” Somebody actually said that.

It pains me, because I truly love the company. For some strange reason, some small part of me still bleeds Sony blue. I’m not sure why, given the state of affairs, but I do.

Sony, unfortunately, gives us a cautionary tale of a former Giant felled by many Giant Killers, all of whom saw the structural shifts before Sony did.

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Key Takeaways:

How do you avoid this? I wish this was easy. It’s not. These shifts are often easier to see in the rear view mirror. But in the spirit of providing some guidance here, consider the following:

1. What has materially changed in your customers’ lives in the past year? The past 3 years? What technological, societal, socio-economic or other “structures” have shifted? Zipcar saw the collapse of the economy, the rise of smart consumerism, the desire for a lower carbon footprint, the appearance of smartphones with LBS and GPS capabilities and the comfort that consumers had with Internet-based self-service. Hertz had the Number 1 Club.

2. What do these shifts mean for your “Giant”? What could they mean to you?

3. Which of these shifts are you actively disregarding? Which ones do you dismiss with complete contempt – just like Sony did with the Rio? Ask yourself a simple question: What if you’re wrong?

4. How would you draw the spokes radiating out from the central hub of these shifts, articulating how you could take advantage of each? How would “the rise of smart consumerism,” where fewer better purchases are made and each purchase must compete with all other potential purchases, impact your offering?

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Sony’s downfall also shows what happens when a visionary leader – Akio Morita, in Sony’s case – leaves the helm. A cautionary tale for Apple, as well, isn’t it?

Regards.

Yes, that's me in 1981 at Rikkyo University, Tokyo.

We’ve read that the majority of liberal arts degree majors coming out of college will be well suited for the burgeoning barista segment of the service industry in the coming years. We’ve read that trade schools are far better uses of your educational dollars than a liberal arts BA from a 4 year school. And we’ve been bombarded with exhortations that only science and math (I’m sure engineering fits in there somewhere) are the only worthy academic pursuits. Hell, even accounting has been somehow given a bad name.

I have a different point of view than much of what’s been described in the popular press concerning the value of a liberal arts degree. To be clear, I’m a liberal arts degree holder – I got a BA in East Asian Studies in 1983, thinking I was on my way into the foreign service, when I took a hard right hand turn and chose business school instead. Understand that business schools in the late ‘80’s and early ‘90’s wanted liberal arts majors, largely for the same reason I’m going to suggest here. It’s this:

Liberal arts majors are taught to dig deep and understand what’s under the surface.

Sure, lots of degrees teach thinking. It’s just that your run of the mill liberal arts student has to do more than hold a thought or think through a problem. They have to analyze. They have to research. They have to develop competing points of view, evaluate them all, come to conclusions and then defend them to PhD’s (professors) and peers.  And they have to be able to communicate, because their medium is words, from Jacobean Tragedies to the Meiji Restoration to the Munduruku tribe of the Amazon. As for work ethic, my East Asian 400 series courses at Washington & Lee University (courtesy of Dr. Roger Jeans, perhaps the toughest and best professor of any subject I’ve ever taken) were among the most rigorous of my academic career – which included an MBA from Wharton.

What does your company do? Does it require people to understand nuance, gather large amounts of data – both qualitative and quantitative – and synthesize it? Do you have customers who have opinions, stated and unstated? Does your company use words and images to persuade and enlist support? Your liberal arts majors do this pretty well – often a damn sight better than their more quantitatively oriented peers. Actually, they are always better at this. But I’m just showing my bias here.

My BA isn’t why people hire me anymore, honestly, as it’s pretty far back in my past. But before you kick dirt on the liberal arts degree, do some research beyond the surface area. Understand the nuance, the context, the qualitative and quantitative nature of the discussion first.

Chances are that people who find the degree un-hirable are referring more to individuals than areas of expertise.

Regards.