Page 182 - Accelerating out of the Great Recession

A NEW MANAGERIAL MIND-SET

working conditions. With this trend likely to go into reverse as
politicians apply protectionist pressure and the economic equa-
tion changes, the pressure on companies to redefine the social
contract between managers and workers is likely to grow.
As we have explained, some companies came up with imagi-
native solutions during the Great Depression concerning job
protection, mobility, skills preservation, and the building of loy-
alty through the introduction of new benefits. And there was not
just a short-term payback. IBM and GE benefited for decades
afterward. For today’s companies, defining new approaches to
risk sharing and workforce relations could become a decisive
source of competitive advantage as the world enters a period of
significant demographic change—with more people poised to
leave the workforce in most developed nations (through retire-
ment) than to join it.
With a new social contract in place, it will be easier for com-
panies to manage their way through the troubled times. A col-
lateral benefit of making bold moves is that they give employees
a rallying cry. Such moves send a strong signal to the organiza-
tion and build confidence. If employees believe that manage-
ment has guts, perseverance, skill, and the right plan, they will be
willing to hang in there.

■ CHALLENGING THE ■
SHAREHOLDER-VALUE MANTRA

If politicians and workers are likely to grow in influence in the era
of slow growth, shareholders, as we discussed in Chapter 2, are
likely to undergo a lessening of their influence. This will have a
direct impact on the way executives run their companies.

■ 161 ■