A Company of Businesspeople

How and why managers are breaking down the traditional us-versus-them mentality of the workplace.

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Supervisor/worker. Manager/employee. The company/the union. Us/them. That's the way the workplace has been organized in the United States since the turn of the century, and until recently we have taken the system pretty much for granted. Owners and managers expect to run the corporate show; employees expect to do what they're told. Us/them.

But the marketplace has changed dramatically in the last 20 years, and now the old thinking no longer works. You can see its failure in the sorry state of so many American companies -- and in managers' frenzy to try out Employee Empowerment and Total Quality and all the other hot-off-the-presses managerial techniques.

Meanwhile, a growing number of pathbreaking managers, in large companies and small, are ignoring both the old ideas and the latest fads. Instead, they're creating a wholly different mind-set about business and a different way of organizing work -- one in which there's no room for us and them.

Whatever their differences -- and there are many -- each of those innovators is creating not a company of employees and managers but . . .

Tumultuous times spawn innovation, particularly in the Darwinian world of business. And the economic turmoil of the last 20 years has given birth to a fundamentally new kind of company, as different from what preceded it as a swallow from a pterodactyl.

These next-generation companies are sprinkled across any number of industries. Wabash National makes truck trailers. LifeUSA writes insurance, and Springfield Remanufacturing Corp. rebuilds engines. Some of the companies are big, such as Wal-Mart and Nucor and Southwest Airlines. Others are tiny, such as 18-employee James-town Advanced Products, a metal-parts maker. A few have turned up in unlikely places. The Baltimore plant of Chesapeake Packaging Co., with 145 employees, is an exemplar of this new kind of business, poised for success in the 21st century. Its parent, Chesapeake Corp., with 5,100 employees, is a conventionally managed Fortune 500 manufacturer, poised for success in the 20th.

What do the new enterprises have in common? It isn't youth, though some are pretty new. Nor is it their unusual success. (Wabash National, only eight years old, has hurtled to the top of a sluggish industry. LifeUSA has been snapping up market share while competitors bathe in red ink.) It isn't even some trendy management catechism. These companies don't all practice the tenets of Excellence or Total Quality Management or any other school of 1980s thought.

What they do share is a way of doing business -- a way of thinking about business -- that is dramatically different from everybody else's. The chief characteristic: a new conception of how people in a company work together.

That new conception has plenty of familiar elements. Profit-sharing and equity schemes. Techniques for disseminating information (open-book management, we've called it in the past). Even a few of the latest consultants' fashions, such as employee teams. But the distinguishing feature isn't the parts, it's the whole. In the mind-set created by the next-generation companies, the roles and obligations and expectations prescribed by conventional corporate pyramids go out the window. CEOs are freed up, since the responsibility for the business is no longer all at the top. Everyone else undergoes a kind of liberation, too. Managers don't have to figure out how to motivate lethargic employees. Workers don't sit around waiting for instructions (and cursing their idiot supervisors in the meantime). That elusive goal, a company in which everyone thinks like an owner, becomes part of everyday life.

The new conception has bubbled up out of the turbulence of the past two decades. It has been created not by consultants or academics but by businesspeople, mostly through trial and error. It doesn't look the same from one company to another. No one has packaged it into a blueprint or a manual. But it works. Indeed, it may be the only sure route to success in a marketplace as treacherous as today's.

To understand it -- to see how dramatically the new approach differs from the way most companies are run -- it helps to revisit the beginnings of the modern business era and to see why the organizational principles created back then suddenly quit working.

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As any business-school student can tell you, the 20th-century corporation was born in the four decades between 1890 and 1930. Large multiunit mass-production and mass-distribution companies were scarce until then. Now they were flourishing in nearly every industry. Their reach extended from the production of raw materials to the sale of finished goods.

Explorers on the uncharted frontiers of management, the new giants' executives had to invent methods of running their big, far-flung operations. They established divisions and departments, each with its own managerial hierarchy -- the familiar linked boxes of the corporate organizational chart. They created a new class of middle managers to administer and coordinate the business. Those innovations shaped the form of the corporation right down to the present.

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