The Future of Success (16 page)

Wagner and Cuban were profiled in a cheery monthly magazine whose very name typifies the new economy,
Fast Company.
I’ve written for
Fast Company,
and I knew its two editors, Alan Webber and Bill Taylor, many years before they founded it. I remember talking with them about their vision for the magazine before it became a reality. They had a good idea—to target primarily executives of small, fast-growing companies, entrepreneurs, and young people with jobs in information-technology start-ups. Now the magazine is a big success, but there’s no relaxing for Alan and Bill. Neither of them ever struck me as laid-back, but I don’t think it an exaggeration to describe both these days as frenetic. All sorts of rivals and potential rivals now see what Alan and Bill have accomplished and are aiming to do the same thing, even better, online or off. “I was naive,” Alan told me over coffee recently. “I thought once we had the magazine up and running, and hit our targets, we could relax. But now we have to work even harder to stay ahead of the pack.”

Competition is intensifying at all points along the supply chain—meaning that people at all these points have to work harder to retain their customers. Recall that companies are morphing into many different nodes of expertise, connected by webs of contracts and subcontracts, linked together by the Internet. Many of the contractors and subcontractors in this system are continuously bidding for work against other contractors and subcontractors—inside electronic auctions that measure price, quality, and (as one aspect of quality) speed of delivery. Every “node” in the system—every company, every group—is under intense pressure to keep its customers by outbidding its rivals and getting the next contract.

It’s not unusual for a company to bid on a project by promising to deliver something that will be a stretch for them. Say they agree to do it a bit more cheaply than they did it before, or to meet specifications that are somewhat more advanced than what they’ve produced before, or to deliver it more quickly. Maybe they promise a software project in forty-five days when the last project took them sixty. In making the bid, they have not dissembled—they don’t dare. Their reputation (their most important asset) depends on their coming through, as they promised. But they also know that the only way to keep their customers is by staying ahead of their rivals—and they can only stay ahead by continuously stretching their capacities. They must continuously invent new ways of doing it better, faster, cheaper.

What does this mean for people on the project? They have to work harder. The deadline they faced last time around was difficult enough for them to meet; the new one is even more of a challenge. They now have to figure out ways to cut costs and improve performance more effectively than before, which was hard enough then. This requires extra hours of tinkering, experimenting, pushing themselves to the limits. There are late nights, early mornings—and as the deadline looms, even longer days. When they have a spare moment for family or friends, they may find their minds drifting to the project. They may even dream about it.

“Keeping up to speed” pressure comes in more disguised forms. Say you consider taking a month’s vacation but decide against it because there’s too much risk that your customer may need you in the interim, and you don’t want to run even the slightest chance of losing the customer to a rival. (Sometimes the rival may be sitting in the next cubicle.) Or you think about cutting back on the number of hours you put in, but you decide not to because you don’t want to be thought of as someone who’s out of the loop, who’s “second string.” If you’re not there, you may miss a critical meeting. Or you won’t learn about some new piece of software that changes the entire competitive environment. Or you’ll miss out on a new client.

The problem, in short, is that very often there are only two tracks, fast or slow. The emerging economy doesn’t offer many gradations in between. Hourly and salaried workers are still with us, of course, but more of their pay turns on how hard and how well they work. For professionals, managers, and geeks and shrinks of all kinds, keeping up to speed is now a necessity. Markets and technologies are changing so rapidly that you need to be totally involved in order to keep up. If you’re on a slow track, you fall further and further behind. You may have a difficult time ever getting back on the fast track. In many quick-moving fields, opting to work part-time is often seen as an automatic career-breaker. This is why relatively few professionals take advantage of options to take longer vacations, cut back on work time, utilize family-leave policies, or go off on “sabbatical”—even in so-called family-friendly companies. If you opt out even a little, you may be opting out for good.
²⁵

MAKING MORE MONEY

There’s a final aspect of the new economy that compels people to work harder. I’m referring to the disparities in income and wealth that have widened during the last several decades. It’s easy to see why people feel compelled to work harder if they (or their spouse or partner) have lost ground relative to where they think they should be. But the kind of compulsion I’m now talking about affects people toward the top of the widening spectrum—people who stand to make a great deal
more
money in the new economy than someone just like them could have earned in the old one. You’d think they might work less, because they’re earning so much they can afford to. Think again.

Even women whose husbands’ wages have been rising since the 1970s have streamed into paid work, and they now work as hard as, if not harder than, women who went to work because their spouses’ wages were flat or dropping. Look at married couples in which the husband has a college degree: Even though
his
pay has been rising buoyantly since 1970,
she
has been working harder, with the result that their combined increase in hours of paid work a year has been almost
twice
that of couples where the husband has no more than a high-school diploma.
²⁶
And if she has a college degree, she’s likely to be working harder still. In 1970, less than 40 percent of women college grads married to male college grads were in the workforce. Now, even though their husbands’ pay is far higher, nearly three-quarters of these women are earning a paycheck, including a higher percentage with young children.
²⁷
(No mystery, therefore, why disparities are widening in
family
incomes even faster than in individual incomes.)

Why are women who don’t have to go into paid work working so hard? Because they have more opportunities today not only for work that’s interesting and fulfilling, but also for work that pays far more than it used to. Women’s career ambitions have risen in tandem: In 1968, nearly 40 percent of women entering college said they were aiming to become schoolteachers. Just six years later, as higher-paying professions began to open their gates to women, only 10 percent of women who were entering college wanted to teach school, and the rate has remained about the same since then.
²⁸
You can see the same pattern among single parents. Those whose formal education ended with high school are working about 16 percent more than they did three decades ago; if they graduated from college (and are earning considerably more than the first group), they’re working 20 percent more.
²⁹

It stands to reason. As the income ladder lengthens, people on the upper rungs can earn far more than ever before. So a choice by them to work
less
entails a correspondingly greater financial sacrifice. Suppose you’re offered a job that pays twice what you’re now earning, but it requires that you give up two nights a week with your family. If you decide against taking the job, you’re sacrificing a great deal of money for the sake of those two family evenings. Even if you and your family don’t desperately need those extra dollars, the huge hike in pay would allow you and them to live far more comfortably and securely. Those two evenings with the family are now more “costly” to you, in the sense of money forgone.

A year or so ago one of my sons was running a big cross-country race. I was determined not to miss it. After all, I had left my job in Washington to spend more time with the boys, and nothing was going to keep me away from that race. Then I got a phone call from someone asking if I’d help work on a project in another city. The timing couldn’t have been worse. The project was to begin the same morning as the race, and it couldn’t wait. If I missed the start of it, I might as well not join up. The sum being offered in payment was generous. These kinds of offers are rare. Until I received the call, I was happily looking forward to the race. Now I was in a quandary. There was no way I could both see the race and do the project. I ended up turning down the project and going to the race, and I’m glad I did. But I wish I could tell you I had no regrets. Not a few times that Saturday I thought about what it was “costing” me to go to my son’s race. Before the offer, the cost was zero. Now it seemed a considerable sum.

My choice was hard enough, but what if the dollar stakes keep rising? In a sense, this is what has happened at the top rungs of the economic ladder. Say a family considers cutting back on work—the husband thinks about taking a different job that allows him more time to see his kids; the wife ponders working part-time in order to pursue volunteer work in the community. They figure that their cutback would result in their family income dropping from midway in the top 5 percent of all incomes to midway in the top 20 percent. Two decades ago, when the income ladder was shorter and all its rungs were closer together, that decision would have cost the family 29 percent of their family income. That’s a big sacrifice, but not nearly as large as the one they would have to make if they cut back as much today, when that drop means an income loss of about 44 percent.
³⁰
A family that might have accepted a 29 percent drop might draw the line well before they reached a 44 percent drop, and decide that the sacrifice just isn’t worth it. Since all the rungs on the new, longer economic ladder are wider apart than they were on the old ladder, any step downward takes them a longer way down than before.

Wider inequality also means, by the same token, that every step
up
the ladder takes you that much higher than before, so every additional hour of effort counts much more. This helps explain why recent college graduates tend to work harder than college grads did decades ago. It also helps explain why far more college freshmen today say they’re interested in being “well off financially” than did so three decades ago. Every year since the late sixties, a random sample of college freshmen have been asked to choose their most important personal objectives from among several alternatives, including “to be very well off financially” and “to develop a meaningful philosophy of life.” In 1968, only 41 percent listed being “very well off financially” as very important. Over time, that goal has grown in importance. By 1998, fully 74 percent of college freshmen listed it as very important. Developing a meaningful philosophy of life, on the other hand, moved in the opposite direction. In 1968, 75 percent chose it, but it steadily dropped until, by 1998, it was selected by less than 41 percent.
³¹

Today’s college students are not necessarily more materialistic than former generations of students. Other surveys, in fact, show record numbers of students volunteering to help in their communities. What’s changed is their future economic stakes. The income ladder now extends much higher, and every step up it is connected to much bigger gains than before. So the monetary penalty for seeking a “meaningful philosophy of life” over being “well off financially” has grown. When college freshmen thought about their priorities three decades ago, the best-paid 10 percent of male workers (I’ll use men because women’s opportunities were then so limited) earned only about 70 percent more than the man in the middle of the wage ladder. Today, a college freshman contemplating the future would see men in the highest-paid 10 percent earning well over twice what the man in the middle makes. Meanwhile, the distance between the top 1 percent and the middle has expanded fivefold.

Likewise, if today’s college students seem much more interested than previous generations in preprofessional courses (economics and business management now top the list of majors at most universities) and in making connections that may help them land the right job after college, it’s not necessarily because the students are greedier than those who came before them. It’s because their actions today have much weightier consequences for their future incomes. With the gap widening, even a relatively small step in an upward direction is a bigger deal, as is the failure to take it. For the same reason, if today’s parents seem more obsessed with their children getting into the “right” school or university, it’s because the stakes have risen. These institutions are seen as pathways to high-paying jobs, and high pay has grown, relative to the median wage, much higher than it used to be.

When I graduated from college in 1968, someone who aimed to become a college teacher rather than a top corporate lawyer or investment banker sacrificed some income, but assumed that the psychic rewards of college teaching would make up for the financial loss. As the third millennium commences, the pay gap between college teachers and top corporate lawyers or investment bankers has widened into a chasm. One of my former students who recently joined a New York law firm
began
at an annual salary plus signing bonuses that totaled far more than the yearly salary of the tenured fifty-three-year-old professor to whom he had bade farewell only weeks before. Had the aging professor faced similar temptations upon finishing college in 1968, he would like to think that the psychic rewards of teaching would have given him the fortitude to resist, but, to be candid, he can’t be sure.

If a young college graduate is interested in teaching in a public school rather than becoming a top lawyer or investment banker or dot-com impresario, the current structure of rewards tests his or her dedication as never before. In 1999, the average salary of a public-school teacher was $39,347. This was but a fraction of the
bonus
received by many twenty- and thirtysomethings on Wall Street that same year.