Silicon Insider: Changing Staffing

The death this month of Fred Hoar, one of the pioneers of high-tech public relations, was a reminder of the pivotal, yet largely forgotten, role that marketing communications — PR, advertising and branding — played in the success of the high-tech revolution.

The contributions of entrepreneurship, venture capital and R&D to the digital age are justly celebrated. But the flacks, copy hacks and marketers are mostly ignored. I suspect this is due in large part to the low regard these professionals are held by journalists, … though (and perhaps because) the average newspaper would be a mimeographed sheet without the combined efforts of these other folks.

More surprising is how many high-tech execs also hold the same low opinion.

I don't share that attitude, probably because I began my own career in public relations. That was almost 30 years ago. In those days the great companies of tech were still groping their way out of the cozy, but narrow, life of selling only to their engineering peers into the wide world of consumer sales. As with the technology, much of the innovation in this new marketing came from Silicon Valley.

Mr. Outside, Mr. Inside, and the Big Corporate Team

Within the Valley, much of this creativity came from a troika of innovators: Regis McKenna at National Semiconductor, then Intel and Apple; Fred Hoar at Fairchild, then Apple; and the Ampex squad, moved en masse to Hewlett-Packard.

Respectively, they were Mr. Outside, Mr. Inside and the Big Corporate Team. The interaction of the three, those that followed in their footsteps, and the corporate marketing executives with whom they worked, established much of the image we now hold of the digital world.

For example, the whole panoply of promotion techniques — press kits, press tours, press conferences, feature stories, etc. — that, for good or ill, dominate new product introductions today, was largely perfected by HP (with some competition from IBM). At Intel, McKenna was at the heart of Operation Crush, a marketing counterattack against Motorola that created the notion of a "complete product": not just the hardware, but its software, applications, design tools, service and support — a mainstay of modern business. Just as important, Crush was the precursor of the most successful tech branding campaign of all time: "Intel Inside."

At Apple, McKenna found a kindred spirit in Steve Jobs, and together, working with creative firms like frogdesign and Chiat/Day, they crafted the Macintosh introduction and all that followed — the zenith of high-tech branding.

Silicon Valley’s Master of Ceremonies

Hoar was at Apple too and a dozen other places, ever-defining the modern role of VP of marketing-communications as King Networker, CEO adviser, and corporate fixer. Hoar, with his square jaw, classical education and unequaled access, was in many ways, Silicon Valley's unofficial greeter and master of ceremonies.

It's no coincidences that McKenna eventually moved away from PR into marketing, searching for a way to integrate all of the communications activities of the modern corporation into a single coherent operation.

Hoar, in his last days, as a business professor at Santa Clara University, was teaching the same thing. They were, like many of their clients, true entrepreneurs — and as always, kept their eyes on that moving point where technology and the market meet. In doing so, they created a revolution as great as any of their clients.

It was marketing, after all, as much as IT, that transformed the modern corporation, and kept it healthy and competitive through the end of the last century.

The Great Challenge Ahead — External and Internal

But that was the last war. As the next boom emerges around us, the U.S. corporation is again going to be challenged, both from without and within.

The external challenge will come from companies in the growing number of industrialized and emerging nations that have learned the U.S. model well and are now turning it against its originators.

In many cases, these international companies will have key advantages tackling the biggest business opportunity of the new century: the billion new consumers arising in underdeveloped world.

But the internal threat is just as great. The nature of the American economy is changing. For the last 25 years, small firms have provided nearly all of the new job creation in this economy. That will only continue.

But now, added to this is the fundamental shift taking place in the nature of work and jobs. Besides the sizable fraction of employees who mostly work at home, we are now seeing a growing army of non-employee employees: contractors, permanent part-timers, virtual employees, and piece-work professionals.

These millions not only represent a new and powerful force in the U.S. economy, but increasingly they are assuming corporate jobs once only available to company insiders. And unlike traditional employees, these gypsies will come and go, driven by the needs of their employers and their own personal whims.

Hiring by the Minute

In one respect this is very good news. Besides increasing the general level of personal economic freedom in America, it will also allow talent to move rapidly according to need and opportunity.

It will also make U.S. companies more competitive, as they will be able to quickly change their shape and composition, and turn on a dime to meet fleeting market forces. This very adaptability is American industry's best chance to stay competitive in the new century.

But this change will also carry with it great risk for individual companies. The new corporation will be increasingly amorphous, exhibiting only a tiny core of permanent employees surrounded by a cloud of workers of various levels of career commitment to the company, coming and going, their numbers waxing and waning, according to need. Many will never see the company in person, but merely be hired by the month (or minute) off the Web.

It's a tantalizing model, but a scary one, too. The risk should be obvious to any manager. For one thing, it suggests that companies will have to remain in a permanent recruiting mode, perpetually filling 50 percent or more of their ranks with new or returning contract employees. Worse, companies, to remain competitive, must also figure out how to retain the best of the employees for the longest possible time.

Enter Human Resources. The next business war will take place in, of all places, the Personnel Department.

Personnel as Key Competitive Factor

HR has long been the sleepiest part of the modern corporation. Sure, during the dot-com boom, it got pretty exciting, especially in the tech world, where headhunters and greed played havoc with the org charts of many established companies.

But if the future I see coming is true, then every company is about to experience that kind of frenzy, all of the time. Personnel is about to become the key competitive factor. And how each HR department deals with this new reality will decide whether its company will succeed or fail.

It will take online daily newspapers and global teleconferences and spirit events in stadiums and special awards and gifts and titles and a thousand other motivational devices we can't even yet imagine to get fiercely independent and talented workers to cleave, if only temporarily, to employers. It will also take genius, and the dissemination of that genius, and a whole lot of hard work to figure out this new challenge.

And most of all, it will take a few brave and entrepreneurial HR professionals to lead the attack; the 21st century equivalents of Regis McKenna and Fred Hoar.

Is HR ready for this onslaught? No. I see no sign that anyone in that profession sees the disaster coming. Is there anyone in the field that can lead this charge? I'm sure there are — as always with entrepreneurs, they must find themselves. But first they must see the opportunity and the threat.

Will HR succeed at this daunting task? Sure it will. But the longer it fails to see and accept its destiny, the more painful it will be for American corporations to cope with this new era

So wake up, HR Department! Put on brave faces and draw your swords. You are about to lead the charge.

Michael S. Malone, once called “the Boswell of Silicon Valley,” most recently was editor-at-large of Forbes ASAP magazine. His work as the nation’s first daily high-tech reporter at the San Jose Mercury-News sparked the writing of his critically acclaimed The Big Score: The Billion Dollar Story of Silicon Valley, which went on to become a public TV series. He has written several other highly praised business books and a novel about Silicon Valley, where he was raised.