Free Agent Nation
By Daniel Pink 
Warner Books, 2001 - 356 pages 

The following excerpts have been taken from the excellent and insightful book entitled Free Agent Nation by Daniel Pink.

I hope that the below comments illustrate the insights and facts that are presented in this book.  Mr. Pink’s book is an excellent read for those who wonder what it occurring today in the workforce and how it is evolving.  What do the changes say about the future of work?  If you are a person that likes to observe life as it passes by this book may cause you to observe business / advertising from a unique perspective. 

After presenting the unique insights and facts from the book I answer the following questions:

• How does this book affect my career / overall life?

• Does this book affect my company?

• What did I learn from reading it?

Consider this: 

• One in Ten American’s now works for a Fortune 500 company.  This is down from the 1960's and 1970's.

• The largest private employer in the U.S. isn’t GM, Ford, Microsoft or Amazon.com.  It is Manpower Inc, a temp agency with over 1100 agencies in the U.S.

The individual, not the organization, has become the economy’s fundamental unit.  Put more simply, we’re all going Hollywood. – page 17 – Inc Magazine – March 1995, David Freedman and Joel Kortin.

Large Organizations of the past are evolving into small, flexible networks with ever-changing collections of talent.  This is typically happening in industries where key ingredients are brain power, creativity, skill, and commitment of the people involved.

Now matter how much we dream about it, most of us prefer the security of a job and a paycheck – page 19, reference to Fortune Magazine.  I completely agree with this statement……

And people sure are changing jobs today:

• In 1998 45% of California’s adult population had worked at their current job less than 2 years. The median job tenure in the state was only 3 years, less than the average tenure of a major league baseball player.

• In 1999 U.S. News & World Report estimated that 17 million workers quit their jobs to take up other jobs, up from 6 million five years earlier.

• According to the New York Times IT professional turnover is ENORMOUS.  It is estimated that the average worker changes jobs every 6 months and the turnover rate generally hovers around 50%.

• Twenty-five years ago the temporary staffing industry had revenues less than $1 billion.  By 1990, total revenues had climbed to $20 billion.  Today, temporary staffing is a nearly $80 billion industry.

• California ’s leading job producer during the last half of the 1990s was the temporary help industry, whose 180,000 new jobs were more than software and electronics manufacturing combined.  In Silicon Valley, temp workers are twice as prevalent as in the rest of the country.

Today the tide has turned.  Technology is driving rapid changes in the economy and workforce.  As Tom Petzinger states in his 199 book THE NEW PIONEERS "digitization is reducing or eliminating the barriers to entry….technology is taking the capital out of capitalism….And it the process it is taking the organization out of the Organization Man."

• In 1965 there was one computer for every 100,000 Americans.  Today the ratio is 3 – 3.5 computers for every 5 Americans.

• The microchip in a greeting card packs as much computing power as a room-sized mainframe did in the 1950s.

• Arthur Anderson estimates that by 2004 91% of Americans will be online.

Times sure have changed as far as the standard of living goes.  

• One key element in understanding the rise of free agency is that the U.S. has experienced prosperity in the last 20 years. – 2/3 of households own the homes they live in, the highest rate in American History.  In 1940 most Americans rented their dwellings, homes didn’t have heating or A/C, 30% of homes lacked running water and more than 15% had no flush toilets.

• By 1993 more than 90% of the officially poor families had a color TV, 70% had their own washing machines, 60% had VCRS and microwaves. 

Free agency is partly a result of increasing churn at the corporate level.

• The half life or an organization is shrinking rapidly.  Netscape popped up in 1994, went public in 1995 and was bought by AOL in 1999.  Was it a company or a project?

• A University of Texas study found that between 1970 and 1992 the half-life or Texas businesses shrank by 50%.

Since people can't find long-term employment at one corporation anymore the following comments are very insightful:

• Maslow stated in 1962 that, “All human beings prefer meaningful work to meaningless work. If work is meaningless than life is close to meaningless.”

• In our new age of comfort work has taken on a larger purpose-one that many large organizations seem incapable of accommodating.

• Most people want to be held accountable for their work, provided they reap both the rewards for success and the penalties for failure.  Many who leave corporate America say that they got little blame but even less credit-and rarely had a clear sense of how they were doing.

The new employment contract is much different than in the past:

• The Organization Man’s social contract of work was security and loyalty.

• In 1950 only 4% of American’s held stock.  In 1983 only 1 in 5 or 20% of Americans held stock.  Today, more than 50% of American’s own stock. 

• More than 65 million American’s now own shares in a mutual fund – and 70% of these fund owners have annual household incomes of less than $75,000.

• For the first time in U.S. history more citizens own stock than cast a ballot for President of the United States.

How about this for uncertainty:

• In 1982, in the trough of a recession, 12% of workers feared they’d lose their jobs.  In 1999, with a 4.3% unemployment rate, 37% feared they’d lose their jobs.  Alan Greenspan has even commented, “The rapidity of change has clearly raised the level of anxiety and insecurity in the workforce.”

• In 1998 and 1999, with the unemployment rate at its lowest level in 30 years, American companies laid off 1.3 million people-nearly six times the rate of ten years earlier.  WOW! 

Logo loyalty is dead and Rolodex loyalty is essential.

• If you’re not well connected in your profession it’s harder to sharpen skills, keep up to date on trends, and find new gigs.  This helps explain why membership in professional associations (primarily based on occupation) is rising as sharply as membership in Labor Unions.

• Increasingly free agents are only as good as their last project so the project better be excellent.  Additionally, the work completed for customers increasingly reflects the pride of the craftsperson (as in the past), which is how many soloists and microbusinesses see themselves.

• Where the Organization Man might have sacrificed his duty to his family in favor of his allegiance to the company free agents often do the reverse.

• Vertical loyalty depended on a strong connection horizontal loyalty depends on multiple connections such as families, colleagues, associations, teams and friends.

• The free agent nation is about the buyer renting a person’s abilities.

Since corporate loyalty is down (due to free agency and rampant corporate reductions) dynamics are changing with employees and employers:

• According to a Families and Work Institute study, 63% of Americans say they want to work less, up from only 17% in 1994!

• In an NYU study 45% to 50% of workers (and 80% of those working more than 50 hours a week) said they would prefer to work fewer hours, and more than 25 percent said they would take a pay cut to make it happen.

• In the industrial age time had one meaning and today it has another.

• Based on a Rutgers University Work Trends survey 95% of respondents said they were concerned about spending more time with their families – page 10 

It wasn’t until the Industrial Revolution that most Americans began living in one place and earning a living in another.

• As Peter Drucker stated “This had a dramatic impact on the family.  The nuclear family had long been the unit of production.  One the farm and in the artisan’s workshop, husband, wife, and children worked together.  The factory, almost for the first time in history, took worker and work out of the home and moved them into the workplace, leaving family members behind.  

• Between the years 1960 and 1986 the amount of time parents spent with their kids shrank by 10 hours per week for white households and 12 hours per week for African-American households.

• Four out of five men in their twenties and thirties said that is was more important to them to have a schedule that permitted time with their family than it was to have a job that paid a lot or offered a professional challenge.

Since free agency is more widely accepted today people are trying to maximize their potential more than ever.  Nowadays they do it for multiple companies vs. a lifetime with one.  As a result:

• Economic advantages may be created by any person who surrounds himself with the advice, counsel, and personal cooperation of a group of men who are willing to lend him wholehearted aid, in the spirit of perfect harmony.

• Increasingly people are looking to the past and utilizes the thoughts of Napolean hill, the author of the long-lived bestseller entitled Think and Grow Rich.  Hill advocated what he called the Master Mind- a collection of people an aspiring businessman would put together to help him and his mates think and grow rich.  Perhaps you may need much more specialized knowledge than you have the ability or the inclination to acquire.  This enables people to bridge their weaknesses through the aid of others.

Trust matters more now than ever......

• Francis Fukuyama, Trust: The Social Virtues and the Creation of Capitalism (London: Hamish Hamilton, 1995), p. 14.  "One of the most important lessons we can learn from the examination of economic life is that a nation’s well-being, as well as its ability to compete, is conditioned by a single, pervasive cultural characteristic: the level of trust inherent in the society.”

• Do employees trust their bosses, do they have faith in the companies they work for that they are important, that the company will look out for them and that they won’t get outsourced for cheaper labor in India .  This is a huge issue that many are forgetting to pay attention to…..

Howard Schultz stated in his book Pour Your Heart into It “Americans are so hungry for a community that some of our customers began gathering in our stores, making appointments with friends, holding meetings, striking up conversations with other regulars.  Once we understood the powerful need for a third place, we were able to respond by building larger stores with more seating.”

Today the U.S. has the most efficient capital markets in the world, despite the recent corporate shenanigans.  Markets have adjusted accordingly based on EPS results, forecasted growth and faith in the accuracy of corporate results. 

However, as the power continues to devolve from organizations to individuals financial capital is not longer the most important resource to the economy.  Instead, the scarcest and most valuable resource today is talent. As McKinsey & Company stated in one of their reports “Talent wins.  The market for talent operates far less efficiently than the market for financing.”

When President Franklin Roosevelt signed the Social Security Act, and established sixty-five as the standard U.S. retirement age, the average American life expectancy was sixty-three.  Today, life expectancy has soared to seventy-six.  More than 80% of Americans already survive past age sixty five today and medical advances are likely to increase how long Americans live.

As the population continues to age:

• By 2040 one of four Americans will have reached be 65 years or older giving the United States the demographic profile even older than the current composition of Florida.

• Between now and 2025 Denmark and the U.K. will have zero population growth.  Italy, France, Germany, Japan and Finland will have NEGATIVE population growth-that is, they’ll have fewer people then they have today.  Italy already has more people over 60 today than 20.

Think about the implications of free agency on real estate:

• Peter Drucker said “Why would any company pay (in salary and time) to transport a 170 pound body twenty miles downtown when all it needed was the body’s three pound brain.

• Free agency turns commercial real estate upside down as businesses can now operate with multiple chairs, a few desks, some computers and high speed Internet Access.  Larger companies can own multiple lines via their employees facilities.

• At any given moment of the workday 70% of desks, offices, or workstations aren’t occupied.  Factor in weekends and holidays, and the occupancy rate of the typical office hovers around 15%.

How does this book affect my career / overall life?

1. The book clearly shows how people can survive without going the corporate America route.  I had no idea that the number of free agents was so high.

2. The book caused me to see social behavior / interaction from a different perspective.  The rise of Starbucks, the growth of Kinko's, etc are all part of the free agent infrastructure.  I hadn't thought of those stores in such a way before. 

3. The biggest thing I got from this book was great quotes / facts about the evolving workplace of today's society.  I love picking up a good fact or two but this book was full of them.   

4. Today's economy is clearly a knowledge economy.  We apply one set of knowledge to new or current businesses to improve them.  As a result, workers must be continually learning.  Those that don't continually learn find out quickly that they are obsolete because the knowledge is key to generating value for customers.  Having customers is one thing.  Keeping them happy and delivering value is a whole different ball game.

Does this book affect my company?

1. If anything it hopefully illustrates that corporations need to treat their employees with more respect.  The knowledge economy is about trust.  If employees don't trust their managers they leave.  When employees leave important business assets leave a company.

2. Bad management leads to higher turnover of up and comers because their talents are desired elsewhere.  This, in the long-term, dramatically impacts a company's results.  Greater attention needs to be paid to managing the managers.

What did I learn from reading it?

1. This book, in general, was chocked full of excellent insights on the knowledge economy and the changing workplace.  While I knew 90% of the material in the book from social observations and other books I have read I found tons of new information / facts.  Finally, this book was very easy to read and the format of each chapter was excellent.

If you found this review helpful BUY THE BOOK!

Sincerely,

Dan Ross

P.S. As always, if you have any comments / feedback you can reach me at dan@betterbizbooks.com