Welcome to Luca!globe
 The CPA Journal Online Current Issue!    Navigation Tips!
Main Menu
CPA Journal
Professional Libary
Professional Forums
Member Services
Jan 1991

Watch those tiny trickles - they soon become trends that change the way we do business. (Quality Review)

by Graham, John R.

    Abstract- There are some small trends currently underway that will significantly affect the way business is conducted in the future. Middle management is being eliminated, and the emphasis of employees will be on their competence and skill rather than security. Automation will begin to be implemented more widely in the service sector in order to control and reduce operating costs. Employee benefit packages will be reduced in response to the severe pressures being exerted on employers through the rising costs of supplying said benefits. Recycling increasingly will become accepted and implemented and will change the operations of business and the buying habits of consumers.

What often begins as insignificantly as a spring trickle high in the faraway Rockies, much later may, result in a destructive torrent of water destroying everything in its path.

This is what developing trends are all about. At first they're imperceptible. Only when then, change the wax. we live, work and do business, do we see their true impact.

Unfortunately, we tend to wait until the full force of water is coming down on us before we get the message that it's time to move. For many, it is often too late. Like the torrent of water filling the valley, once the trend reaches epoch proportions, all that's left is debris--the rubble of what has been destroyed.

Most of us like to think that we're out there somewhere on the cutting edge. we don't want to be left behind. That's why we read Time, Fortune, Business Week, and Boardroom Reports. The Tom Peters and the Harvey Mackays get us all excited. They're just far enough removed from reality to make it all enjoyable but not really threatening.

Nevertheless, there are trends that will make a difference in the way we do business. Some are still just a trickle, while with others, the wall of water is beginning to build. And still there are other trends that are about to overwhelm us.

Competence is Replacing Security in Employment

The major upheaval in American big business over the last decade is the systematic wiping-out of middle management. Middle management is all just a memory--and it won't return for many, many years if ever).

What has really been destroyed in the process of eradicating levels of middle management is job and career security in American business. Fewer and fewer job applicants are asking about benefit packages and advancement possibilities. They are beginning to stress to would-be employers how their skills and experience--their competence--can make a bottom-line difference to the company.

Security-oriented employees are going to be in trouble simply because they will stand out. It will be easy, to spot them, even while they are looking for places to hide. The irony is that they are more and more alone because others have discovered the critical importance of competence.

This discovery, of course, is a highly welcome trend in business. And the faster it overwhelms us, the better ! Service Sector Automation is the Next Big Wave

A myth has persisted that the service sector was the place to have a job because it was safe from threats of displacement by automation. Unlike manufacturing, where robotics have made dramatic work force reductions, there has been a popular notion that the service sector of the economy was highly "people dependent" and could escape the forces of automation. In other words, many people like to think that it still takes a mechanic to repair a car and a plumber to fix the leak. And, of course, offices need people! it's that simple.

Well, all bets are off. Just as manufacturers were faced with the brutal reality of cutting the cost of production in order to remain competitive, service-oriented companies have recognized the need to both control operating costs and increase efficiency.

The role of computers. PCs in particular, is obvious. But that's only the tip of the iceberg. Never has there been more labor intensive operations than McDonalds and Burger King. Faced with enormous training costs, personnel and scheduling difficulties, it was obvious that the way, on the one hand, to improve product and service and, on the other hand, to control and reduce costs, was automation.

Now you walk into a Burger King, place your order, get your burger, and fill your own drink cup! The guy at the drive-up window wears a headset and is no longer glued to one spot in order to talk into a mike. fie can do four or five tasks- while taking an order ! It has often been said that there will always be a job for a good secretary. Probably. But there won't be many jobs. A Combination of easy-to-use desktop publishing software, low-cost laser printers, optical scanners, and facsimile machines are just beginning to wreak devastation on office jobs. Once the process gets into full swing, more and more jobs will go.

The point here is that this trend is just getting underway. Anyone who believes that a safe place exists where people will always be needed is living in a dream world.

It's Bye-Bye to Employee Benefits

Even at a time when "universal-this" and "universal-that" are the subjects of seminars, speeches, and articles in both the business and popular press, the cost of providing a wide array of benefits is coming under severe pressure. The combination of rising costs and tile need to reduce costs to be competitive will eventually reduce the overall "benefits packages" offered hy most employers.

Other important factors follow this trend. Increased health awareness, changing dietary habits, and exercise becoming more and more an integral part of our lifestyle are resulting in changed perceptions about the need for health insurance and related benefits particularly. among younger workers. obviously, this is precisely the group which employers want to influence so that overall costs are reduced over 40 years of employment.

By 1960, Americans firmly believed that they should be provided for when they reached retirement age. This belief was the latent legacy of social security. In order to change this trend, due to rising costs associated with social security and other retirement programs, the IRA served as a way to turn the clock back to a time when people took care of themselves. In other words, the IRA mentality appealed to the old American ideal of self-reliance.

It appears that the costs associated with caring for ourselves will be borne, more and more, by individuals rather than either employers or the government. This does not mean returning to a pre-social security period when there were few ways to take care of oneself and one's family. Rather, there will be more and more available products designed to meet specific needs. But, the overall effect will be a dramatic reduction over the next decade in employ er-paid benefits.

Waste is Out--Forever

Not only is waste out of the picture now, it's going to be out for a long time. Probably forever. The old New England adage, "Waste not, want not," is making sense to more and more Americans who are faced with spending their financial resources to provide such utterly basic necessities of life as trash removal and clean water.

We believe this trend will have a dramatic impact on what we buy in the years to come. The "disposable" concept is about to be disposed of itself. For the past 30 years, we really came to believe that things that lasted forever were to be rejected in favor of things that didn't last very long--some of them didn't even last until we got them home ! Finally, the surge in recycling is no fad. Not this time. Our psyches have changed. We know that everything we throw away can literally come back to haunt us. Recycling is significant not only for what it accomplishes, but it forces us--consumers and business people-to physically look at our trash. we can't say we didn't know what was being thrown out. By actually handling more of our trash, we will directly feel the impact (and enormity of what's happening.

The result will be changed buying habits. Plastic containers (and the products in them) will be less and less popular. We will be buying few items, but we will think more about durability. And we may even ask ourselves the key question, "Do I really need it?"

These are just a few of the trends that are emerging. There are other tiny trickles just beginning to find their way down the mountain. And far below, there are millions of Americans feeling the impact of the dramatic changes taking place in our society. Here's just one example-- the young person without an education has no future. That's been decided. That's a fact. But the opposite is also coming true. Today, and in the years ahead, even the best education is no longer an automatic guarantee of attaining the good life.

The point should be clear: No trend can be ignored without placing ourselves in serious and even life-threatening jeopardy. The moral is simply that the times have changed, and accordingly, there are new and different rules--we not only need to work smarter, but harder than ever, too.

John R. Graham is president of Graham Communications, a marketing services and sales consulting firm at 40 Oval Road, Quincy MA 02170.

The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

©2009 The New York State Society of CPAs. Legal Notices

Visit the new cpajournal.com.