Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 11, 1990 TAG: 9003081361
SECTION: BUSINESS PAGE: B-1 EDITION: METRO
SOURCE: By PETER T. KILBORN THE NEW YORK TIMES
DATELINE: WASHINGTON LENGTH: Long
But today more and more of the nation's leading corporations are encouraging employees to step off the fast track, and convincing even business school graduates they can find rewards and happiness in lateral mobility.
In practice this means a 40-year-old department manager, a vice president for finance or a company biotechnologist is more likely to stay where he or she is for five or 10 years, or even for the balance of a career.
But it can also mean fewer bosses, more responsibility, more opportunity to learn other jobs and often better pay than predecessors received in the same job.
"You lose the thrill of moving up," said Frank P. Doyle, a senior vice president at General Electric who oversees personnel policies. "The tradeoff is more of a voice in your work."
The trend amounts to a shift in the culture of American companies.
In management jargon, this alternative is called "plateauing," a word that once meant dead end.
At stake, corporate executives and management consultants say, is the industrial competitiveness of companies that otherwise risk losing valued workers after spending years training them.
Companies that are moving this way are still a minority, but they include giants like Monsanto, Motorola, BellSouth, General Electric and Pacific Gas and Electric.
Two main forces are behind the trend: business pressures and demographics.
Responding to tougher global competition and the threat of being taken over, companies thinned out management ranks to become more efficient and profitable during the 1980s.
It means fewer layers of hierarchy and thus fewer rungs on the corporate ladder. Accordingly, management workers are more likely to stay on a career plateau.
At the same time, the demographic bulge of people born from the mid-1940s to the mid-1960s, including record numbers of business school graduates, have come of age and are grappling for the remaining rungs.
"This huge bunch of people is competing for a declining number of positions," said Judith A. Bardwick of La Jolla, Calif., a psychologist and consultant to Pacific Gas and Electric, BellSouth, IBM, General Foods, Exxon and the American arm of Nissan Motor, the Japanese auto maker.
"The youngest baby boomers are 26," she said, "and they're going to plateau at 40 or so, 10 years younger than their fathers did. They're not psychologically prepared for it."
Yet companies want to keep these people on board and working at peak capacity, in part because of the scarcity of post-baby-boomers.
"We're trying to get out in front of this before we have tons and tons of people who are dissatisfied," said Cheryl Smith, director of career management at PG&E in San Francisco, one of the nation's biggest utilities.
"We've grown up in a culture where up was the way to go. We're trying to tell people what plateauing is, what it is not and that it's OK. We're saying: `Wait a minute, wait a minute. It's OK to move laterally.' "
No doubt, some people who have been smitten by the lure of the fast track still see a stigma in plateauing and will find such assurances tough to swallow.
The human resources director of one company that has done more than most in rotating managers invited four to discuss their plateaued careers in interviews with a reporter.
He said all refused because they feared friends or future employers might read their remarks.
In discussing plateauing, Doyle said his company, GE, had pared 20 of 29 layers from the company hierarchy, from level 1, that of a mailroom supervisor, to level 29, the roost of John F. Welch Jr., chairman and chief executive.
As a result, he said, "Ten years into his career, a person is closer to where he started than he would have been." He added, "But if we do it right, he is also closer to the top."
And while he might never reach the top, having fewer people above him gives him a greater say in the conduct of his job.
Richard J. Mahoney, chairman and chief executive of Monsanto in St. Louis, speaks of "dual track" careers.
One track leads to the chief executive's office, and, by most standards, it will remain the winner's circle.
But the second track seems quite attractive as well for valued people, leading to high pay, frequently without management headaches.
Changes in the corporate ethos are needed, experts warn.
Otherwise, the losers in struggles for promotions often become discouraged and non-productive deadwood, or they quit and go to other companies or start businesses of their own.
"If companies don't respond, these people are going to jump ship," said David Lewin, a business professor at Columbia University.
One way to placate people who do not move up is to pay them more for jobs well done.
For years, companies that rely heavily for growth on creative people - scientists, engineers, writers, artists - have provided incentives for them to stay on.
Companies are now offering the incentives to a broader spectrum.
At Monsanto, favored scientists can climb a university-like track of associate fellow, fellow, senior fellow to distinguished fellow.
The company has 130 fellows, and they earn from $65,000 a year to well over $100,000.
Gwen Krivi, 40, is a Monsanto biochemist and a senior fellow.
"I'm working on a variety of programs involving human health care and animal nutrition," she said.
Within the company's research operations, she said she could have joined the scramble to top management.
But the fellow program provides an alternative she prefers, and she said that should she move up to distinguished fellow, she would have relinquished nothing in perks, pay or recognition to anyone on the executive ladder with the exception of the company's few senior vice presidents and Mahoney.
"My technical contributions have been recognized," she said, "and that's where I look for recognition."
"We're looking to do this all across Monsanto," said the company's vice president for human resources, Barry Blitstein.
In Monsanto's information services department, made up mostly of computer experts, people can climb from being a technologist to a senior technologist to a distinguished technologist.
And in its factories, the company has started still another track in designating 15 people as manufacturing consulting technologists.
One is Guy S. Legendra, 55, at a Monsanto chemical plant in Luling, La.
From management jobs at the plant, opportunities arose to move higher at Monsanto. But Legendra said he did not want to leave Luling and he did not like managing anyway.
Legendra, who has many years of experience manufacturing an important Monsanto product, ammonia, gave up his management job at the Luling plant, and for the same salary he was appointed to his current job.
"I have an opportunity to use my expertise," he said, "No one works for me. That's one of the nice things about it. I'm like a free lance."
Management experts put BellSouth in the forefront of companies that are trying to alter perceptions of plateauing.
Among other things, the company has overhauled a management assessment program used to determine whether a manager was qualified for promotion.
Nancy Humphries, vice president for human resources at BellSouth, said candidates would often come out saying, "I went to this one event for two or three days and did not do well, and now my career is ruined."
"As we began to look at the demographic realities and recognized that people would stay longer on one rung of the ladder," she said. "We said, `How can we help people grow at the rung where they find themselves?' "
So she said the company had abandoned the overall rating of a candidate's ability and offered instead more subtle and less conclusive assessments.
Pacific Gas and Electric has been relying on an educational process, including lectures by Bardwick and articles in its newsletters, to convince employees that plateauing is a fact of life, not a measure of personal failure.
The company has also given managers like Etta Herbach reason to believe a plateau can lead to advancement.
Herbach, 39, joined the company as an analyst seven years ago after working for the Navy as a civilian lawyer.
She made two quick moves, to senior analyst and supervisor, but two years ago decided she wanted to return to legal work.
She was demoted in shifting to the workers' compensation section and then resumed her rise, to director of the section and in August to manager of the department over the section.
Even at fast-growing companies like Motorola, a leader in the electronics industry, the business theories of paring away layers of management and dispersing authority are taking hold and reducing opportunities for jobs near the top.
"We've started educating our folks that success depends on lateral integration of the business," said Patrick J. Canavan, vice president and corporate director of human resources.
At Motorola, he said, valued experts "can stay in their functional disciplines and not manage anybody."
by CNB