Decline of Executive Power

Steve Pruneau

Today was huge.  I call it the Verizon Event. 

For a few years Daniel and I have been talking non-stop about changes in traditional employment.  We discuss the social and economic drivers behind those changes.  But not so much about corporations.  I have written about the eventual end of traditional hierarchical organizational structure in modern corporations.  But I was taking quite a long view because highly compensated executives at the top of corporate America are in no hurry to tinker with the organizational structures and mechanisms that keep them in power.  And I haven’t seen any force that would bring about change any faster than a gradual pace…. until now.

Why the sudden revision in view?  Today, Verizon retracted a two-dollar fee that was to be imposed on anyone who paid their bill through the Verizon web site.  This retraction came within 24 hours of their announcing the fee.  Public reaction to the fee was swift, clear and defiant.  After Verizon retracted their fee today, sentiment was triumphant.  And that success leads all of us to the discovery of a

Network diagram showing interlocks between var...
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new found power.

We can be sure those fees would have stuck if they had been imposed in the 1970s.  Oops, they actually did stick.  AT&T did it and people were powerless to fix it.  It took an anti-trust suit and break-up of AT&T to fix it.

So what does consumer activism have to do with employment, corporate organizational structures and executive power?  The Verizon Event has solidified public sentiment.  There is a collective public response now; “No!” What was once the exclusive decision making domain of a few executives is now conceded to customers.

We’ve been headed toward this since 2008.  No one punished executives whose financial services companies drug us into this frightening recession.  No one protected the average person from home loan modification scams.  As Jim Cramer has said, we are a government of the corporations, by the corporations and for the corporations. (Mad Money / CNBC)

Since no one is going to help us, we will help ourselves.  It starts with things like consumer rebellions against bank card fees, NetFlix price increases and the Verizon fee.  Those successes demonstrate that people are now wired together better than ever before.  For the first time in history, we are no longer thousands of powerless, separated voices.  Now we have a connected, collective voice and our response actually pushes back on those who are making the decisions.  Notice that shift in power?

It doesn’t take much of a leap for that new found collective response to shift into employment issues.  As people find alternate ways to make a living, many because they cannot get a traditional job, I predict we will begin to see similar rebellions that affect employment.  As that happens,corporate executives’ traditional power base (control) will melt away.  They will have less power over employees.

I’m not talking about strikes and labor unions.  I’m talking about major changes in the way people find work and earn a living.  As soon as those alternatives take hold, people will simply stop taking traditional jobs as employees.  When that happens en masse, we will have seen the high water mark of executive power.

What do I mean by “high water mark”?  Let’s go back to the middle ages in Europe.  At that time, a king had far more power over people than our American President has today.  And of course, the relatively weaker position of all heads of state in the modern western world, is weaker BY DESIGN because people don’t really like living under absolute authority.  They don’t really like working under absolute authority in modern corporations either.

The thing that surprised me is how public sentiment has surged suddenly and forcefully through our newly established connectedness.  People are taking power from corporations.  First as consumers, next as employees.  Eventually, executives will serve employees and not the other way around.

 

 

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Steve Pruneau leads executives and business owners to solve the gap between variable revenue and a fixed workforce. He is the first consultant at Free Agent Source. As a founder, Steve engages the broader community of corporate clients, entrepreneurs, startups and consultants. He manages company operations and lives in Los Angeles, CA.

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