Review: The New Ruthless Economy
During the boom years of the New Economy nineties, new technologies led to a boost in productivity and profits. But over the same period, compensation for actual workers stayed the same or even went down. In this book, Simon Head investigates the other side of technology: the way it keeps the average worker down.
Head finds that “scientific management” — the system that turned assembly lines into sweatshops in the 1880s — has expanded to conquer the service sector as well. Where old management consultants reorganized factories to deskill workers (by making them repeat mindless jobs over and over) and regulate behavior (by having overseers and stopwatches making sure they met their quotas), new management consultants reorganize call centers to deskill workers (by having them simply read scripts off a computer screen) and regulate behavior (by having their computers measure how long they spend on the phone and at lunch and in the bathroom).
But it’s not just call centers: Head finds the same technological reengineering of business in everything from factories to doctor’s offices, where HMO-enforced policies require doctors to do little more than type symptoms into a computer and prescribe the recommended treatment, with little time to investigate what might actually be wrong with the patient.
Head’s argument is much like that of David Noble in Forces of Production: we had a choice about how to use new technology. We could use it to turn employees into ever-more-skilled craftspeople, allowing them to be more effective and creative in their jobs now that they had machines to do their dirty work. Or we could use it to turn employees into faster cogs for a machine, forcing them to follow rigidly-composed scripts carefully specifying their role.
We are once again choosing the second. Only this time it may hurt companies, not just employees. At least in manufacturing jobs, you can keep some kind of quality control tracking on the final product. A Toyota may not be very good, but if everyone follows the rules at least they will all be about the same. Service industry jobs require dealing with individual customers in all their messiness. And customers don’t make good components in carefully “reengineered” machines.
The result is things like the infuriating 1-800 numbers we’re all familiar with: incompetent customer support, useless service, uninformed advice. Which means customers walk away. As management cuts costs by outsourcing their call centers to less and less skilled employees, they also cut profits by alienating their customer base. (Head cites powerful studies by Frederick Reichheld finding that tiny increases in customer retention can lead to doublings in revenue.)
Head writes clearly and plainly, although the book lacks the concision of his brilliant pieces for the New York Review of Books (which this book grew out of). And while he does do some on-the-ground reporting, especially from car factories, the book has more of an eye for acronyms than for anecdotes. This is disappointing, because the techniques at the heart of the book (the automated systems for monitoring employees) would make for gripping reading, yet Head never gives us a glimpse of what they actually look like in practice.
For those with only a little time, the key chapter (6) is available online [PDF]. For those who want to dig deeper, I can recommend two related books from the same year: Christian Parenti’s The Soft Cage goes into more detail about surveillance technologies in all areas of life while his friend Doug Henwood’s After the New Economy goes into more detail about the economic numbers behind such things.
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March 9, 2008
Aaron,
that book is waiting to be written by you.
posted by
on March 10, 2008 #
You write: “We could use it to turn employees into ever-more-skilled craftspeople, allowing them to be more effective and creative in their jobs now that they had machines to do their dirty work. Or we could use it to turn employees into faster cogs for a machine, forcing them to follow rigidly-composed scripts carefully specifying their role.”
What nonsense. It’s more “both…and” than “either…or”. And there aren’t only two alternatives.
The new technologies don’t JUST deskill us, they also reskill/overskill us among a myriad of other things.
Also it’s one of the first fields (music/art/play aside) that welcomes participation from kids without getting too pejorative about it. It also welcomes interaction with geezers and…
Better luck next time.
Love.
posted by William Loughborough
on March 10, 2008 #
How about people skill themselves? Why is it the responsibility of employers to provide their unmotivated workforce with skills?
I think these new systems are being used because they work, not because it is an evil scheme to dumb down the workforce. Anybody who doesn’t like it is free to pursue alternative careers, or found a business that uses a different technology.
posted by Björn
on March 12, 2008 #
Scientific Management has been in and out of vogue since Taylor’s The Principles of
Scientific Measurement (1910). It was low hanging fruit to many industries and in some cases still is. For instance this current article on farming in Africawhere planting crops in rows is a radical innovation!
That micromanagement isn’t an improvement in some industries is a human issue and not a political one. Everyone tinkers at the corners and successful people are imitated by others. Toyota was a bad choice of example on your part because the Japanese adopted more flexible assembly line methods that invented by an American and eventually reimported. As one of my friends puts it “Americans make great Japanese cars.”
Scientific Management has the most punishing effects at the national scale. Socialism has been a failure on everything larger than a personal size (300 Amish villagers: works, 30mil French nationals: doesn’t).
You may think this is just because the right ideas haven’t got top billing. But how do you know which ideas are right? and how can we elevate the right people to implement those ideas?
In dictatorships the people who are the most ruthless rise to the top - and not the people with the best ideas. In democracies the people who campaign best rise to the top - and not the people with the best ideas.
You want the people to want the best ideas - which happen to match your own. Now we’ve boiled it down to a people problem and as an engineer you should know that people problems are hard. Not insurmountable, but harder than technical problems. The last couple PyCons solved the hardest py3k issues at the bar than during sprints because the hardest issues were people issues.
posted by Jack Diederich
on April 27, 2008 #
The whole tone of this seems to imply that once upon a time people had skillful jobs they loved, and that we’ve now lost this pastoral idyl. Are assembly line jobs worse than working on the field? And more, what proportion of people don’t have to do either of these things anymore?
I’m almost certain that (1) the very worst jobs aren’t as bad today as they were 100 (or 200) years ago, and (2) the median job is a lot better.
The result is things like the infuriating 1-800 numbers we’re all familiar with: incompetent customer support, useless service, uninformed advice. Which means customers walk away.
I think more accurate would be to say that technology allowed companies to offer a lower level of service than had been possible before (e.g. pre-amazon, there had to be at least someone to take your money at the bookshop, and you could quiz them). So they tried this, and found it saved them money.
We all moan about poor airline service, but seldom enough not to fly with the airline. We reveal by doing so that the price we’re willing to pay for service isn’t very high at all.
As management cuts costs by outsourcing their call centers to less and less skilled employees, they also cut profits by alienating their customer base. (Head cites powerful studies by Frederick Reichheld finding that tiny increases in customer retention can lead to doublings in revenue.)
This is a bit of a blanket statement. No doubt that in some industries service really pays. That’s why little fasion botiques have such attentive (and attractive) staff. But always and everywhere? The gas station off the interstate knows you’re never coming back, and behaves accordingly.
posted by imporobable
on May 15, 2008 #
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Comments
Aaron, that book is waiting to be written by you.
posted by on March 10, 2008 #
You write: “We could use it to turn employees into ever-more-skilled craftspeople, allowing them to be more effective and creative in their jobs now that they had machines to do their dirty work. Or we could use it to turn employees into faster cogs for a machine, forcing them to follow rigidly-composed scripts carefully specifying their role.”
What nonsense. It’s more “both…and” than “either…or”. And there aren’t only two alternatives.
The new technologies don’t JUST deskill us, they also reskill/overskill us among a myriad of other things.
Also it’s one of the first fields (music/art/play aside) that welcomes participation from kids without getting too pejorative about it. It also welcomes interaction with geezers and…
Better luck next time.
Love.
posted by William Loughborough on March 10, 2008 #
How about people skill themselves? Why is it the responsibility of employers to provide their unmotivated workforce with skills?
I think these new systems are being used because they work, not because it is an evil scheme to dumb down the workforce. Anybody who doesn’t like it is free to pursue alternative careers, or found a business that uses a different technology.
posted by Björn on March 12, 2008 #
Scientific Management has been in and out of vogue since Taylor’s The Principles of Scientific Measurement (1910). It was low hanging fruit to many industries and in some cases still is. For instance this current article on farming in Africawhere planting crops in rows is a radical innovation!
That micromanagement isn’t an improvement in some industries is a human issue and not a political one. Everyone tinkers at the corners and successful people are imitated by others. Toyota was a bad choice of example on your part because the Japanese adopted more flexible assembly line methods that invented by an American and eventually reimported. As one of my friends puts it “Americans make great Japanese cars.”
Scientific Management has the most punishing effects at the national scale. Socialism has been a failure on everything larger than a personal size (300 Amish villagers: works, 30mil French nationals: doesn’t).
You may think this is just because the right ideas haven’t got top billing. But how do you know which ideas are right? and how can we elevate the right people to implement those ideas?
In dictatorships the people who are the most ruthless rise to the top - and not the people with the best ideas. In democracies the people who campaign best rise to the top - and not the people with the best ideas.
You want the people to want the best ideas - which happen to match your own. Now we’ve boiled it down to a people problem and as an engineer you should know that people problems are hard. Not insurmountable, but harder than technical problems. The last couple PyCons solved the hardest py3k issues at the bar than during sprints because the hardest issues were people issues.
posted by Jack Diederich on April 27, 2008 #
The whole tone of this seems to imply that once upon a time people had skillful jobs they loved, and that we’ve now lost this pastoral idyl. Are assembly line jobs worse than working on the field? And more, what proportion of people don’t have to do either of these things anymore?
I’m almost certain that (1) the very worst jobs aren’t as bad today as they were 100 (or 200) years ago, and (2) the median job is a lot better.
The result is things like the infuriating 1-800 numbers we’re all familiar with: incompetent customer support, useless service, uninformed advice. Which means customers walk away.
I think more accurate would be to say that technology allowed companies to offer a lower level of service than had been possible before (e.g. pre-amazon, there had to be at least someone to take your money at the bookshop, and you could quiz them). So they tried this, and found it saved them money.
We all moan about poor airline service, but seldom enough not to fly with the airline. We reveal by doing so that the price we’re willing to pay for service isn’t very high at all.
As management cuts costs by outsourcing their call centers to less and less skilled employees, they also cut profits by alienating their customer base. (Head cites powerful studies by Frederick Reichheld finding that tiny increases in customer retention can lead to doublings in revenue.)
This is a bit of a blanket statement. No doubt that in some industries service really pays. That’s why little fasion botiques have such attentive (and attractive) staff. But always and everywhere? The gas station off the interstate knows you’re never coming back, and behaves accordingly.
posted by imporobable on May 15, 2008 #
You can also send comments by email.