A rchive Date
[ 13-08-2000 ]
Category
[ International Relations ]
sub-Categoy
[ Economics ]
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[Technoculture
America's Invisible Export
By Bernard Avishai
2000/08
Many Americans, in this age of globalization, are troubled by the thought that our country does no real good for the globe in question. After all, America was a noble idea before it was a nation: We were to be champions of civil society, rights-based individualism - the pursuit of happiness. Now we hear that our government is fronting for corporations that are cavalier about the cultural effects of their power. Hollywood blockbusters flicker on Middle Eastern screens, hamburgers fill out Chinese diets, Latin teenagers toil in laptop factories. America is enriching some, debasing most. Not good at all.
The apprehension is understandable, but wrong. It fails to grasp how knowledge actually gets into the knowledge economy. In developing countries, most of them with strong authoritarian traditions and rigidly hierarchical social structures, American companies often provide workers, at least those who are reasonably educated and somewhat skilled, their first experience of civil society in microcosm - their first chance to cultivate the skills needed to make the most of democracy, free markets, and the rule of law. Companies do so not because they have a mission other than competitive success, but because they can't help it. They build the skills of civil society because of the way they work.
Several years ago, I interviewed Chi Sun Lai, Motorola's first country manager for China. "People speak of the problems of dealing with the Chinese bureaucracy," Lai recalled, "but 90 percent of my problem was in Motorola. My team and I started to develop a comprehensive marketing and manufacturing plan that would include a range of obvious products - cell phones, and so on. I would be committing myself to Chinese officials - and then I would have to coordinate with as many as 45 Motorola executives and functional teams, negotiating with all of them to get the consensus I needed to close the deal with the government. Finally, I was blocked. I would go to the CEO and ask him to make the call. The CEO would say, 'Work it out.' I would say, 'If I could work it out, I wouldn't be here.' "
Think about the challenges confronting Lai: innovation, negotiation, coordination, commitment. Business knowledge is mostly improvised in settings like his, by people like him, in the course of dealing with problems like these. A company's "intellectual capital," its knowledge, is not embodied primarily in intellectual property, formulas, designs, or bytes of software, snapped smartly into a product development process; nor is it in research - a gene map, or a new approach to quantum tunneling - that may be acquired and commercialized. Rather, it is a process: a continuously rewoven web of ideas and transactions that are contextual, dialectical, dynamic, personal. Managing knowledge does not mean taking custody of "institutional memory" or "what Tom knows in case Tom gets hit by a truck." As if a company can know the past any better than, say, a country can - or Tom can, for that matter. As if all pasts can be reduced to some workable algorithm. Ultimately, managing knowledge means nurturing the process.
Companies are swarms of problem-solving teams whose task it is to "sense and respond," to borrow a phrase from IBM's director of strategic studies, Stephan Haeckel. Too many teams have to make too many decisions for the CEO to call the shots. Motorola's CEO couldn't tell Chi Sun Lai what to do because he couldn't possibly know. "The velocity of change requires people who can think quickly," says John Chambers, CEO of Cisco Systems, "but speed without direction or strategy or access to good information is worthless. Empowerment only works if you get access to the information that you need to make the decision. Instead of the CEO and CFO making a hundred key decisions a quarter, if you're really lucky you have a million made by your employees and you have a whole different productivity scenario."
That is, top managers know that their companies grow, and often lurch, from change to change, and that there will be no innovation where reporting managers feel unable to experiment, to enjoy the privileges of responsibility, or to trust the integrity of their conversations. Teams are custodians of a changing roster of complex projects, each with its own need for relevant knowledge, each with ongoing contracts to be filled and deadlines to be met.
And what holds companies together is negotiation. Em-ployees are continuously negotiating commitments to each other, individuals to teams, and teams to one another. There are teams that ascertain customer reactions, procure new sources of supply, secure financing - teams that conceive better ways to manage teams.
What, then, is left for senior management to do? Managing a company today is more like leading a school of thought than commanding a disciplined bureaucracy. Top managers, in Haeckel's view, need to explain the context around and the strategy behind a project, to map domains of common knowledge, to enforce agreed-upon principles, and to place bets on new projects. People say that all kinds of enterprises today, even universities and museums, are being run like corporations; the obverse is also true. The challenge of a business executive - not unlike that of a university dean or a hospital administrator - is to make transactions between mentors and newcomers more informed, make future commitments more achievable, and accelerate the circulation of valuable ideas.
Information technology is a catalyst of global learning. Internet technologies enable the sharing not only of, say, an MBA's marketing methods, but also some presentation made in Toronto that may be of use in Berlin, or news about a client's product development program. Corporate "intranets" accompany employees to all parts of the globe - they're the nerves of globalization. To make the most of them, companies must commit to what they loosely call "values" - standards for corporate glasnost. At KPMG, where I work, every employee reviews professional goals three times a year; we explain (among other things) how we have enhanced "open and honest communication," "boundarylessness," "universal involvement." Some of this may be lip service, but bonuses are at least formally tied to knowledge sharing. Companies not only emphasize values in recruiting, cultivating, and retaining talent; they also boast about them to Wall Street to defend their share price. Today, a Conference Board study suggests, some 80 percent of global companies are developing a knowledge strategy, and some 25 percent have a chief knowledge officer in place.
What does all this have to do with America's way in the world? Where advanced corporate structures once sucked the life out of civil society or buttressed an authoritarian "corporate state," now global companies prepare the ground for civil society. Forget the pyramid.
Corporate cultures are built on mini-social contracts; they have become mini-social contracts. In a company like Motorola, most workers are organized flexibly and in protean fashion into problem-solving teams. Their negotiations are for mutual benefit, and the only authority they must submit to is one that guides, monitors, and enforces their mutual obligations. They assume technological progress and continuous change, so they work together in a spirit of skepticism and tolerance. They assume basic skills - the capacity to read, write, listen - that grow in sophistication over time. Most important, they assume access to accumulated experience, information, and social opportunity. They assume the freedom to operate and exercise it to move on when they feel thwarted. (In Silicon Valley, the average job tenure is about three years.)
All this is new. We grew up, after all, with clear distinctions - between management and labor, business and school, scientific research and product development, and, for that matter, corporate interests and the public good. Behind all of this was a chilling perception that, in spite of the ways markets and industry tended to engender liberty and wealth, the ordinary experiences of working people - factory workers and office workers both - contradicted their humanity. Once a factory system became embedded, it was fixed for a generation; it favored speed-ups and greater simplicity of human motions; competition intensified not by means of innovation, but by cheaper wages or sources of supply. Adam Smith himself laid out the tragedy in The Wealth of Nations: "The man whose whole life is spent in performing a few simple operations ... naturally becomes as stupid and ignorant as it is possible for a human creature to become."
But class divisions of this kind have blurred greatly. The real social divide in the global economy is not between haves and have-nots, but knows and know-nots. Thus, the challenge for developing countries is not to keep global companies from exploiting young labor, but to induce them to expand young minds. Their first challenge, like that in the inner cities of America, is to invest enough in education and infrastructure to prepare their communities for work.
The effect of global businesses like Motorola on countries like China is more akin to Stanford University's effect on Silicon Valley than the United Fruit Company's on Guatemala. Such companies typically invest 2 to 3 percent of their income on training. But they can't make employees trainable; that is the responsibility of governments.
Businesses are more like graduate schools than elementary schools; they need public schools to prepare young people to report to work ready to learn marketing, design, and production strategies, primed to learn high technologies and quality systems. Even if (especially if) the focus of public education is democratic citizenship, children will be qualified for such a workforce - not because functioning in corporations is the goal of citizenship, but because, like political democracies, corporations need people to cultivate a scientific attitude and an empathic nature.
And when governments do make these investments, the payoff can be handsome. It is often forgotten now that more than half of Israel's population was barely literate in the 1960s, and half of its economy was in public-sector manufacturing. Since the '60s, the government has responded with massive investments in public education and, since the early 1980s, tax holidays for high-tech companies. Today, the size of Israel's economy has grown to around $100 billion, and its 50 largest technology and dot-com businesses earn more than $20 billion, directly employing more than 100,000 people.
American companies helped. Intel, Motorola, IBM, and others were critical to launching some 3,000 start-ups in Israel between 1990 and 1998 - a greater absolute number than anywhere else outside the U.S. Meanwhile, a new generation of entrepreneurs, many just out of the Israel Defense Forces, have adapted their military training - and imaging and telecom software - to serve demanding global markets. They are leading a cultural revolution, creating the wealth and social comity on which any stable peace will depend. They do not just want a peace process. They are a peace process.
There are parallel stories everywhere. Global companies come with the same information systems, management training, and values that have enabled them to succeed in the U.S. and Europe. In 1996, I sat in on Motorola University classes in Tianjin that were specifically devised to loosen up the public reticence instilled in many older Chinese employees by their experiences in the Cultural Revolution. There could be, they learned, no continual quality improvements and product releases without, in effect, a "democracy wall" in every factory and office. Indeed, nearby, in the entry to Motorola's immaculate cell phone facility, hung a huge banner. It said, roughly translated, "Speak up. We need your ideas." Could Thomas Paine have said it better?
 World Fact Book (CIA)]
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