New Kinds of Companies, New Ways of Working

A generation ago, Roy Lagemann would likely have spent his career working for IBM, just as Alan Singer would probably never have left Wall Street. And Jordan Dossett's clients would have been exclusively based in the D.C. area. Roy, Alan, and Jordan's stories are unusual today, but they are by no means unique. These three are pioneers of a growing movement in the American workforce, a development that confounds many traditional assumptions about the rights and responsibilities of workers, employers and the government. In today's U.S. economy, informationage business organizations are leaving behind the industrial-age system of stable, long-term employment. As a result, most American workers feel a more tenuous attachment to their employers, and growing numbers are working outside the formal employment relationship altogether.

The traditional employment contract—the implicit agreement by which workers provided loyal service to their employers, and in exchange, received job security, health insurance and pensions, and a chance for career advancement—was a product of the mid-twentieth century and the business conditions prevailing then. Over the last quarter century, a very different world has emerged. Fiercer competition, startling advances in information and communications technologies, and new management techniques have caused large firms to become far more streamlined and have brought aggressive startup companies to the center of the American economy. These new practices are more efficient than the old, and can take at least some of the credit for the productivity gains in the U.S. economy that started in the mid-1990s.

In the new system, flexibility and responsiveness are the keys to success, and having a large cadre of dedicated workers attached to an organization is in many cases no longer an asset, but a significant liability. The symptoms of the change are readily apparent—downsizing, skill shortages, the "war" for high-end talent that broke out in the late 1990s—but these problems are frequently framed in the context of the old ways and diagnosed with solutions from an earlier time.

The cases of Roy, Alan, and Jordan illustrate a new way of thinking about the emerging realities. This approach no longer focuses only on the usual suspects of the industrial era—employers and government—to provide the benefits traditionally associated with a job. Instead, the new approach draws on a rich ecology of other organizations—what we call guilds—to provide a stable home and look after the long-term needs of today's mobile workers.

A variety of entities are stepping in to fill the guild role. In some cases existing organizations—professional associations, trade unions, staffing companies—are expanding their traditional charters. In other instances, new kinds of organizations— Web-based talent brokers or consortia involving community groups, employers, unions, and government agencies—are emerging. Guilds exhibit the characteristics of information age business organizations—grounded in particular local conditions, but able to forge partnerships and tap into networks to achieve national, even global reach. The rise of guilds overturns many old assumptions about the American workplace and represents a promising solution to the problems created by the decline of the old employment contract.