Twenty-five years ago, I edited Enterprise, an employee publication for Southwestern Bell Corp., which at that time was newly independent from the mother ship of AT&T. Ironically, years after the government split the Bell system apart, Southwestern Bell became so strong that it bought almost all the old pieces of AT&T, including AT&T, and renamed itself AT&T. That’s a story for another day, however.
At the time, Southwestern Bell, as a newly independent company, turned to a number of management experts and thought leaders for advice and counsel. One of them was a young Paul Hawken, who had just written a book called The Next Economy and had founded Smith & Hawken five years earlier. Just recently, Smith & Hawken announced it was going out of business, but it had a good run. Over the years, Hawken himself has continued to be respected as a thinker and innovator in sustainabilty and environmental responsibility.
Today I want to share some of the thoughts Hawken brought 25 years ago to Southwestern Bell. In my next post, I’ll share some of his more recent thinking. It’s interesting to see how a thought leader like Hawken can find a theme early in his professional life and then grow personally and professionally with it over the years. Here is Paul Hawken, circa 1984:
For the past 100 years, we, as a society, have been developing our motor skills. For the next 100 years, we will be putting the nerve system in place as we turn from a mass economy to an informative economy.
From 1880 to 1973-74, we experienced what I term the mass economy, in which we developed our manufacturing capabilities. During each decade of that period, we escalated our use of fossil fuel to produce goods for the masses. And we were successful.
But since 1973, the cost of energy in real terms has gone up, and wages in real terms have gone down. Therefore, we have had to make a choice – to use less energy or continue to consume. We are changing rapidly, entering what I call the informative economy.
This new economy is characterized by an emphasis on design, utility, knowledge. It is more human in that it stresses service, morale and understanding.
And it is a consumer-led change. For many years, Americans assumed their wages always would continue to go up. Their purchase patterns reflected this.
Now Americans are emulating Europeans, who have seen their economies wiped out every few decades by war. Europeans are cautious consumers. Americans are becoming much more cautious and are demanding quality. We may have less, but it will mean more to us.
This change in consumer attitudes has a big impact on an industry (like telecommunications) that is being deregulated. Your industry will have to satisfy the selectivity of the market.
One way you are doing this is the introduction of technology such as fiber optics. Such technology uses fewer resources but possesses more intelligence. This is key in the informative economy. The phone system will become a nervous system that thinks.
There are certain problems involved in this transition from the mass to the informative economy. There will be high capital costs, the liquidation and breakup of large corporations, a contraction of government and the elimination of the middle man.
But overall, the shift to the informative economy presents a tremendous opportunity for entrepreneurs who can see the change and take advantage of it.
I read Hawken’s words today and am very impressed with how much he got right. What are your thoughts?
