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Thumbing Their Noses At Corporate America


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THUMBING THEIR NOSES AT CORPORATE AMERICA

THE NEW RULES

HOW TO SUCCEED IN TODAY'S POST-CORPORATE WORLD

By John P. Kotter

Free Press 239pp $25

It will surprise no one that the Harvard Business School's Class of 1974 is doing just fine. Most grads are senior executives or entrepreneurs. Their median income is a quarter-million dollars, and the typical class member is likely to retire with a net worth of $8 million. The vast majority express satisfaction, even enthusiasm, for both work and family.

So, fine. The world has another 800 rich, happy MBAs. The stunner is this: These captains of industry have largely abandoned Corporate America. They're relatively anonymous executives helping to run startups, or consultants behind the scenes of corporate restructurings, or investment bankers snagging their 3% fees to engineer mergers and acquisitions.

The New Rules: How to Succeed in Today's Post-Corporate World reveals and attempts to come to terms with the dramatic disaffection that these people, ostensibly the nation's best and brightest, feel for big-company careers. Harvard Professor John P. Kotter, a thinker on business leadership and corporate culture, has spent two decades tracking the careers of 115 members of the Class of '74. His findings, which mirror the competitive decline of Big Business, are disturbing.

In 1992, 18 years after graduation, just 23% of Kotter's HBS alums had jobs at companies employing 10,000 or more. Most had spurned manufacturing operations for the service sector and the overwhelming majority worked for small employers--those with 1,000 workers or less. Entrepreneurs alone accounted for more than 40% of the class.

This, as Kotter notes, from a school built and largely sustained by big companies. The buildings at Harvard bear such names as Aldrich, Kresge, Mellon, and Morgan; the pinstriped descendants of those corporate titans flood the campus every year with guest speakers and recruiters. "For decades, the press has talked about HBS MBAs as if they were captains of ocean liners or aircraft carriers," Kotter writes.

Clearly, that's no longer where the action is. By 1991, average compensation for '74 grads in small business was $450,000--nearly double that of their medium- and big-business counterparts. Moreover, small-business executives and entrepreneurs had more autonomy and relative power within their organizations, judging by the number of CEOs, COOs, and chairmen among them.

A sizable chunk of the Class of '74--36%, according to Kotter--started out in the big corporations. But many of them fled Corporate America in frustration. "I absolutely hated it," reports one alum whose first job was with IBM. "In a sense, I was a square peg, and they only had round holes." Big employers, these graduates found, were less likely to accept creative thinking and radical solutions, which stultified able managers. At the same time, buffeted by new competition in a global marketplace, such companies could no longer offer the stable, secure career track earlier generations of business grads had enjoyed.

If Kotter had stopped here, he would have had a very impressive, if unscientific, academic paper. Instead, he opted to produce a book. This was a mistake. By inflating his 20 pages of substance to The New Rules' 239, he leaps from the startling to the mundane. What begins as an intriguing, original investigation devolves into a catalog of management truisms.

Kotter attempts to turn the experience of the Class of '74 into a new catechism for business survival. To wit: "Success at work today requires capitalizing on the opportunities available in the faster-moving and more competitive business environment that is mostly the product of globalization while avoiding the many hazards inherent in such an environment."

Well, yes--but we knew that. And the other "new rules" aren't much more enlightening. Small and entrepreneurial will be more successful than big and bureaucratic, Kotter tells us. Consultants and dealmakers will do really well. Leadership will best good management. And this pearl: "Effective competition requires many things, especially high standards and a strong desire to win."

It's not that Kotter is wrong. His vision of a workplace undergoing cataclysmic change is dead-on. The dislocating effects of global competition are evidenced daily by news of restructurings and layoffs. For years, managers and their employees alike have scrambled to remain relevant; those who succeed tend to be the flexible, creative sorts who manage their careers, keep learning, and take advantage of new opportunities.

Kotter's analysis of such dynamism is extraordinarily familiar. At the same time, his portraits of these 115 very successful businesspeople are flat, lacking both detail and a human feel. It doesn't help that the alums' names are disguised. And a plea at the book's conclusion for better education in the U.S. comes out of the blue. It adds nothing.

A more important question, meanwhile, goes largely unanswered. If all of Harvard's management talent is rushing to start companies and consult, who's left minding the Big Business store? Visionless, uncreative bureaucrats? Wharton grads? Future American competitiveness will depend as much on Corporate America's ability to generate leaders as on the persistence of entrepreneurship. Perhaps the U.S. will do better with the Class of '94.BY KEITH H. HAMMONDS


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