The speed with which information is processed and acted upon becomes a critical source of competitive advantage. At the heart of fast-moving competitive sectors of the knowledge economy the pace of work is in unpredictable spurts of intense activity; a far cry from the steady routine which was regarded as a great achievement of industrialised bureaucracies. This is where information technology is transforming our concept of time, hugely speeding up many processes and putting the capacity for human beings to adapt their organisation of work, and to keep up, under constant severe pressure; the computing power of silicon chips doubles every eighteen months, so engineering calculations which would have taken many years in the 1940s took two days by 1969, four hours by 1976, and a mere fifteen minutes today. That kind of speed provides extraordinary opportunities, but the competition is intense. As Klaus Schwab, President of the World Economic Forum, put it, ‘We are moving from a world in which the big eat the small to a world in which the fast eat the slow.’
For the internet bank egg, that kind of comment has been a driving principle in its short, successful history, egg is about as far from Saltfillas as one could imagine: squeezed into a basement of the great Victorian red-brick palace of Prudential Insurance in central London, it claims to be the biggest finance services provider on the internet, and one of the four most successful creations of the dot.com boom after Amazon, eBay and Yahoo. Mike Harris, who set up the company as its first Chief Executive under the wing of the Prudential, knows a lot about speed and how crucial it is for success; he also knows how it makes for a lot of hard work. He says there is simply nothing he can do about the demanding deadlines, and he recounts the dizzying pace of egg’s development:
We launched in October 1998 on an artificially set date to control the amount spent on the launch – to prevent ‘creeping sophistication’. We didn’t want an overspecified model in the marketplace, because the world will have changed by the time you get round to bringing it out. As soon as you spot a gap in the market, it has to be exploited – a lot of our success has been that we’ve seen an opportunity and we’ve got to the market quickest. That urgency is part of the culture, and it causes stress inevitably; there is nothing you can do about that, you can only manage the stress through support and resources. I’m sure we impose unnecessarily tight deadlines.
The launch of a new business is always very stressful…people were working seven days a week for three to four months prior to the launch. It’s not that we asked them to, it just gets very committed and very intense. After a big launch you can normally ease off, but for us it got even worse because of the volume of business – we reached our five-year target in the first six months, with 500,000 customers and £5 billion in deposits. Nothing worked, we didn’t have the capacity, and it put huge strain on all of us and it was crisis after crisis; some people did get very stressed, but it felt supportive, it didn’t feel too hard.
He paused and added that he’d recently been looking at a video of the egg management team made about five years ago. He admitted, ‘It was a bit of a shocker for me to see how all the management had aged in that time.’ He continued: ‘Within a few months, we switched to internet supported by phones rather than the other way around, bringing forward a strategy we had intended to implement over three years, but the internet was moving fast. By September 1999 we launched the credit card, and it was the fastest-growing internet credit card in the world; the pace was frenetic. It was the launch all over again.’ By February 2000 egg’s rate of expansion had been rapid, and it went for an IPO, Initial Public Offering, raising capital on the stock market. The following year it acquired a French internet bank. The pace hasn’t slackened.
Looking back at a distinguished business career over several decades, Harris is unequivocal: ‘The pace of work is getting worse, there’s no doubt about that. It’s the rate of change in globalisation – you’re subject to competition from people who are far bigger than you and who do things you’ve never thought of. Wherever you look you see the global competition, and you no longer have the forms of protection because of deregulation.’
Globalisation is a notoriously large piece of baggage into which all manner of phenomena can be packed, but the most significant are information technology and deregulation, and the way they interact. They put organisations under intense pressure to remain competitive, and the bigger the potential pickings, the sharper the competition. It is that need for competitiveness which becomes the cause and justification of work intensification. For example, it was trade deregulation which opened up Saltfillas’ UK market to the European company which undercut it, and egg had to fend off competitors from Europe and the United States. Transnational corporations closely measure the comparative performance of the labour forces in the different countries where they have affiliates, found the Joseph Rowntree Report on Job Insecurity and Intensification. This makes for intense intra-firm rivalry, and companies move production to cheaper labour markets.17 These factors were profoundly unsettling for British workers, because of the ease and speed with which corporations could move production from one country to another, claimed researchers David Ladipo and Frank Wilkinson.
They also found that workers were unsettled by the ‘impatience’ of dominant stakeholders, and that ‘managers and employees were conscious of the increasingly “contingent” commitment of their investors’. As Will Hutton puts it: ‘The more liquid a financial asset, the less committed the owner must be to the long-term health of the underlying investment. If the going gets tough or conditions change the investor has already made provision for his or her escape: sell the financial asset, withdraw the short-term loan, rather than share the risk of restructuring and of managing any crisis.’18
The connection between the convolutions of a company’s share price and hard work is not straightforward. Did the plummeting of Marconi’s share price in 2001 increase its employees’ workload? Or the spectacular gyrations of lastminute.com’s shares affect the hours its workers put in? The fluctuations of the stock market are one of the factors reinforcing the logic of competition and efficiency which undermine any resistance and inculcate insecurity, the survive-or-die mentality which enables managers to push through forms of work intensification and to motivate high levels of effort. Business psychologist Jock Encombe argues that the impact of the stock market is intense on private sector organisations, and can’t be overestimated: ‘The sheer pressure to deliver the numbers is systemic, because if the share price suffers, you get taken over.’
This was a theme which emerged strongly in another company I visited. Travel Inn, a budget hotel chain which made it to the Sunday Times Best Companies to Work For list, is a young, rapidly growing company in the expanding services and leisure sector, where much employment is expected to be created in the next decade. It is owned by Whitbread pic, and its workforce is young – the average age is only just over thirty. I was curious to see what made this generation work hard; they hadn’t lived through mass unemployment, so how did the ‘survive-or-die’ competition of the market bite on them?
Simon Mahon, the young general manager of Travel Inn’s newly opened 165-bed hotel in Liverpool, would be the first to admit that launches are always difficult and require long hours. He had a clear sense of the kind of hotel he wanted to run, and it was proving hard to achieve the standards he wanted. Why? Because the labour costs had been slashed in the launch budget. ‘I have to lower costs. There’s been a cost-efficiency drive on the food and beverages side. We have to get the right team ethic. There’s no slack in the system, and that gives the operator [manager] hell.’
I told him I’d noticed that there were only two people to serve in both the bar and the restaurant. As they ran from one disgruntled customer to the next, they looked panicked. Mahon, as a conscientious manager, was alarmed. So why the need for the cost efficiencies? ‘It’s corporate strategy to cut costs – it’s what makes the company more profitable and gives the shareholders benefits so they will invest more. That’s what my boss would say.’
