The Future of Work in a Changing World
Interview by Maxim Jean-Louis
If you put a frog in a pot of cold water and slowly heat it, the frog adapts its body temperature to that of the water until at 100 degrees centigrade it boils alive. Charles Handy uses this story to illustrate the dangers for people who do not notice that the world is changing. People think they are clever at adapting to the changing world; however, according to Charles Handy, people must do more than just adapt to change. They must jump out of their changing world and take charge of it if they are not to be boiled alive while they sleep.
Charles Handy is Visiting Professor at the London Business School, writer, teacher, and broadcaster. His 1989 book, The Age of Unreason is an argument in favour of discontinuous change as opposed to continuous change where the future is anticipated as more of the same, only better. In these times of discontinuous change, he believes that small changes, such as changes in the way work is organized, will make the biggest differences in our lives.
He expects that in the future, people will have shorter and more careers, and they will do more part time work and volunteer work. More people will work independently in small businesses where they contract out their services to larger organizations. More workers, especially women, will work from their homes. With the move toward more self-employment and more work from the home and away from the organization, comes more choice and more responsibility, for both worker and employer. Individuals will have more freedom to shape work to fit the way they want to live instead of fitting life into a work schedule. But they also will have the freedom to do poor quality work, by cheating or by laziness. The organization will have more flexibility but can abuse that flexibility by exploiting the outsider, tightening its conditions, and reducing the rewards. Charles Handy explores the way in which the world of work is changing and what the thoughtful individual's choices and responsibilities should be.
Aurora: You have said "employment in society has overstretched itself." What do you mean by this?
Handy: I mean that we are beginning to see the end of the employee society. The idea that we can provide a job inside an organization for everyone who wants a job will no longer be possible. Statistics in Europe already show that not only are 10 per cent of people who want work not able to get it, but another one third of the work force is working outside an organization. That is, they are self-employed or working part time for temporary periods, selling their services or goods into an organization.
As a result only about half the working population is working inside an organization, and I don't think it's going to get any better. If people continue expecting to leave school or college and to go to work for 45 to 50 years in an organization, they are kidding themselves.
Aurora: Are these developments occurring in a planned fashion, or have they been brought on by economics?
Handy: This trend is being brought on by three factors: by economics, by technology, and by demographics. Firstly, we are now competing not only with our neighbours in our own countries in our own businesses, but with those outside our country. No matter how big or small a business, it has global competitors. That is the first economic problem - we are no longer living in a protected market.
The second thing is that as we move up-market and produce more expensive goods and services, we don't need as much muscle. Instead, we need brains. Machines can do more and more of the dirty, heavy, or boring work. In fact, one calculation suggests that 70 per cent of the work force in Canada, America, Europe, and Japan in the year 2000 will be using brain skills rather than muscle skills. People with brain skills don't need to have their brains working all the time. They can use them part of the time because they can put their brains, so to speak, into a machine. So we don't need as many heavy hands; instead, we need more fingers and more brains, and we don't need them so intensively.
The third factor is that, even with the birth rate falling, more people want work. Increasingly, every woman would like to have some work to do outside the home as well as looking after her family or when her family is grown up. The work force has been growing, and in spite of the fall in the birth rate it will continue growing for another 10 to 15 years. So we have fewer jobs on the whole because of economic pressures, fewer muscle jobs, and more people wanting jobs.
Aurora: What consequences do these three trends have for the organization as such?
Handy: The consequences of these trends is the growth of three kinds of organizations: the federal organization, the contractual organization, and the professional organization.
The federal organization comes about because we are realizing that not everything can be run from the centre as if it was a monarchy. We have already seen the collapse of the economies of eastern European countries and now of Russia. They are discovering not so much that their ideology is wrong, but that everything cannot be run from the centre. We're beginning to find the same thing in business organizations, hospitals, and schools. Instead of running businesses and organizations like a monarchy with one person and one small group in the centre, we' re moving to a federal model, which you in Canada will understand very well. You will understand its difficulties, too.
In a federal model, the control and power do not always reside in one place. They are spread around a bit. The centre can do some things but not all things, and the states can do some things but not all things. More businesses are giving more autonomy to the individual divisions and allowing them to do what they want, within certain boundaries.
Furthermore, we are discovering that if businesses want to grow, it is very expensive and indeed quite risky to keep buying other businesses. It is much more profitable and sensible to enter into temporary alliances or joint ventures. But in a joint venture we don't have the power to tell everyone what to do because we only own a bit of it. This is something we are not very good at in Europe because too many of our countries have been monarchies run from the centre, and we are only beginning to discover how to do it. Canada and the United States have more experience at these things. So you should be successful!
The second move is toward contractual organizations. Traditionally, organizations have directly employed all the people needed to do everything, from the cooking and the driving to the basic work of the organization. But that is very expensive. It is crazy for a business that is using rather expensive people to make rather expensive things or for a bank using highly trained people to offer financial services to give the same conditions and the same rates of pay to people who are doing less important jobs. These ancillary jobs could be contracted out to someone whose main job it is, thus eliminating responsibility for managing a huge number of people.
More and more organizations are saying that the suppliers they use are not just the people who provide the raw materials but also who provide the services. Many organizations have more people working outside them than they have inside them. In fact, one company chairman told me that of all the people who were involved in getting his product out, only 20 per cent were actually employed by his organization. Eighty per cent were employed by other organizations selling into his and helping his. It is what I call the 20-80 firm or the contractual organization.
Lastly, there's the professional organization. Organizations are now cutting down core staff to the essential people and contracting out the rest. The remaining core are the clever people, the new professionals. Not doctors, architects, lawyers, and accountants but marketing people, professionally educated managers, financiers, engineers, technocrats. These people think of themselves as pro-fessionals who are free to develop their own careers, perhaps moving from one organization to another; therefore, they have to be treated as professionals. These organizations will have to be managed as if they were partnerships of architects, collections of lawyers, or practices of doctors and dentists.
But this kind of professional organization is very difficult to run. It is much easier to run an organization when you can just tell everybody what to do and make sure they do it. You can't do that with professionals - you have to persuade them. They're independent spirits.
For instance, in a professional organization, there are only a few layers. You join as an apprentice, you get qualified, you become a senior qualified person, and then you become a partner. Or in my world, you become a full professor - before the age of 35 if you're any good. After that there is no such thing as a super-full professor; there is just an old professor or an emeritus professor, which means really a dead professor.
Workers will have to get their kicks from doing the same thing better. That's quite a shock to business organizations where success has always been rewarded by promotion. If there are only four rungs in the ladder, you soon run out of rungs. So we have to find new ways of rewarding people. That is just one aspect of the professional organization.
Another aspect of the professional organization is that professionals are individuals. They work in teams, but they want to sign their work. Increasingly in newspapers, writers sign their articles. In television now at the end of every documentary and film all the people who contributed, not just the producer and the stars, are listed. We don't need to know their names, but they need to tell us.
We have to find ways in other organizations to allow all who contribute to sign their names to their work. One firm has slips printed for its secretaries saying, "I am proud to have typed this work," which they sign when they hand it over.
Aurora: What implications do these changes have for management?
Handy: The word "leadership" is beginning to replace the word "management." We are not able to use people as human resources, as if they were forklift trucks with brains, to move around at our disposal. These new workers have minds of their own and have to be persuaded rather than told what to do. They have to be led rather than managed, and that's very difficult and very different.
When I started work in a big oil company, I was told that I had the authority to tell people what to do, and they had to do what I told them. That was the notion of authority, responsibility, and accountability. Now, I can't tell anybody what to do. I can only ask them to do things, and they will only do them if they respect me. I have to earn authority from the people over whom I will exercise that authority.
This is a very different kind of management, one which means more talking with people about what has to be done, more discussing the purpose of the organization, and less talk about obedience, command, and control.
Aurora: What implications does this have for the skills that are being taught, or that should be taught, in management studies or in administrative studies programs?
Handy: In the past, management studies have concentrated on analytic skills - analyzing the future, analyzing the market, analyzing the cost, analyzing the resources - and the idea was if the analysis was right, then plans could be put into action.
Now a new set of softer skills are needed, skills to get people committed and excited. I like to talk about the "e" factors in organizations, "e" meaning all the words that start with "e," like excitement, effervescent, enthusiasm, energy. These new skills are far more difficult to teach in classrooms. You can talk about them and describe them in classrooms, but you can't really practice them in classrooms.
Schools of management and administration are becoming more like medical schools, with a mixture of classroom teaching and tutored practice. People are coached by exper-ienced practitioners in using the skills discussed in the classroom. So we are seeing a change in the way we actually teach management as a result of the new organization.
Aurora: If you were to extend that to education in general or to what you call "education for tomorrow," what would be its key components?
Handy: Education for tomorrow will go on all the time. In the English-speaking world, we have grown up with the idea that education is something that we do at the beginning of life. That used to be true when life was more or less stable. Once you learned a set of skills, it would last you for 30 to 50 years. This is no longer true. In the future, we will all be going back, in one way or another, to the classroom throughout our life right up to our 70s or 80s.
Of course it may not be in a classroom. We learn from all the situations in which we work and live. I like the phrase incidental learning - not accidental learning - where we learn from all the incidents in life if we actually take time to think about them.
In the workplace, I suggest that all workers have the opportunity to sit down at the end of every week and reflect together on the incidents that have happened, both good and bad, and how they have been handled. That's the way professionals work. Workers in medicine, architecture, and social work bring case studies to their colleagues for discussion.
We should probably be devoting maybe 10 per cent of our time to improving ourselves throughout our working lives. Ten per cent is a figure that accountants use for determining depreciation of assets or for making financial provision to renew assets as they run down.
I don't think that it is at all odd that we should devote 10 per cent of our time to renewing our brainpower, skills, and experience. Now 10 per cent of one's time amounts to about one day every two weeks. Organizations and individuals could spend one day to renew themselves in one way or another.
Aurora: One cannot talk about learning or work without talking about leisure. What are some of the myths surrounding that concept?
Handy: The important thing to remember about leisure is that it is the other side of work. If you don't have work, you don't call it leisure when you are not working; you call it unemployment. Therefore, it is terribly important that if we want a society with real leisure time, where people can use some of their time to do that which they really want to do and to enjoy themselves, then they must also have work.
So it is very important that we don't divide life into a series of chunks in which we say, for the first 25 years you learn, then you work, and after that you have unlimited leisure, because then it won't feel like leisure.
The second thing about leisure is that increasingly leisure is going to become more active. People will get satiated with just sitting and watching, whether it is watching television or watching films or watching other people play things.
Increasingly, as societies get more affluent, people are using free time to do things. That may be playing a sport, maybe reading more rather than just watching more, maybe walking and talking with friends, maybe using food as a form of entertainment. More and more of my male friends, in Europe, are cooking, not as a chore but because they enjoy doing it.
The good news is that leisure is becoming more active, more participative, and therefore more rewarding. The bad news is that leisure is becoming unequally spread over the population. People working in the core of organizations have to work more hours, more intensely, and have less time to do anything other than work. They are the people who say, "I haven't seen my home in daylight for the last six months, and I can never remember the name of our dog." Their lives are totally dominated by their work. By the time they are ready to enjoy some leisure time, they are probably seriously ill because they have been working too hard and are under too much stress.
Then there is a large section of the population that has too much leisure, and when you have too much leisure, it doesn't feel like leisure. It feels like unemployment or underemployment. These people don't have the money for active leisure. It takes money to go skiing, to go sailing, or to play golf. They only have the money to watch television. So they lose out in all sorts of ways.
Aurora: Unions are based on fairly rigid, centralized organizations negotiating with other rigid, centralized administrations. What will happen to unions if the world of work changes as you predict?
Handy: Unions face both a problem and an opportunity. The problem, as you rightly see it, is that they are centralized bargaining organizations who like to deal with other centralized bargaining organizations, the employers. And as those employers are more decentralized, unions will have their power seriously weakened.
On the other hand, there is a great opportunity for them. Recently, a senior member of the Trade Union Congress in Britain said that the unions in this country have a great decision to make: do they continue to represent the decaying rump of the manufacturing labour force, or do they represent the work force of the next century. I said, "That's very exciting. What do you mean by the work force of the next century?"
He said, "They are all the small groups, all the independents who are outside the organization and who desperately need an association to provide a range of ancillary services, such as education, legal help, protection, and advice." Of course the question is, Which way will the unions decide to go?
And he said, "There's no doubt! They will continue to represent the dwindling rump of the manufacturing labour force because like any impoverished-thinking business, they will try and get a larger share of the declining market rather than going to the new market."
Aurora: These new developments toward decentralized professionalism seem to imply a certain degree of education and individual control, but a large part of the work force today are support staff, secretarial, clerical, labour individuals. Will they be able to partake in this new development?
Handy: I see this as the big challenge to society. Not everybody is going to enjoy the way the world of work is going, but that is the way the world of work has to go if we are going to survive economically as nations.
There will be a big problem for people who have grown up used to an employee culture where they have joined an organization which has taught them all they need to know and has almost guaranteed to keep them in that job for most of their working life. These people will be pushed outside the organization. They will have to work as individuals or in small partnerships, and they are going to find that very difficult.
People will have to learn the skills, not only of their trade, say typing or being a secretary or whatever, but they will have to learn the skills of selling because they will have to run themselves as small businesses and look after their own financial affairs. They're going to have to learn how to devote a proportion of their time to improving their skills and to learning the new skills needed as the world moves on.
The great immediate problem for society is to provide some structure and association to get them over the initial difficulty of running their own lives and businesses. It is a role that the unions could indeed fulfill, but I suspect that they are not going to. We could see new organizations growing up, a new kind of semi-employment agency which has these people on their books and for a fee gives them the kind of help that a union could provide.
In the longer term, educational values in schools and colleges must change so they are not preparing people for life in an employment institution, but for life as a self-employed, independent person. That means teaching skills of self-reliance as well as skills of basic accounting to everybody, not just to managers.
Aurora: Is it fair to say that the overarching theme in your work is the ability to cope or adapt to change? In that case, you have a rather interesting metaphor of a frog. Could you elaborate on that?
Handy: Yes, it is absolutely true that change is going to be ever present in all our lives every day. I am told, and I have never tried this out, that a frog is a very agile creature who if you drop it into a pot of boiling water, jumps out immediately, unscathed. But if you put a frog in a saucepan of cold water and slowly heat the water, the frog adapts its body temperature to the changing temperature of the water and gradually goes to sleep. In fact, it goes to sleep at 40 degree centigrade, unaware that at 100 degrees centigrade it boils alive.
This is a rather horrible story, but I use it as a metaphor to say to people that although we think we are very clever at adapting to the changing world, we don't realize that we have to jump out of that world and take charge of it, not just adapt to it. If we are not careful, we will soon go to sleep unaware that it is changing so dramatically that we could be boiled alive while we sleep. I tell organizations that it is no good just waiting for the world to change and change with it, they must move ahead of those changes and take charge of their own, destiny.
An aphorism that I quote from George Bernard Shaw, the Irish playwright, says the reasonable man sees the way the world is going and adapts himself to it. The unreasonable man tries to make the world adapt to him. Therefore all progress belongs to the unreasonable man or woman I would have to add, these days.
Aurora: Thus the age of unreason!
Handy: Thus the age of unreason, if we can measure up to it.
By M.C. Warrior in More Than Our Jobs: An Anthology.
Reprinted by permission from Arsenal Pulp Press.
Understanding Organizations. Penguin, 1976.
The Future of Work. Blackwell, 1984.
Understanding Schools as Organizations. Penguin, 1986.
The Age of Unreason. Harvard Business School Press, 1990.
Inside Organizations. BBC Books, 1990.
Waiting for the Mountain to Move. Huchinson, 1991.
Article originally published Fall 1991
Related Links:
Peter Drucker Foundation: Interview with Charles Handy
Updated March 2011
Aurora Online
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Jean-Louis Maxim. The Furture of Work in a Changing World: Charles Handy. Aurora Online: