Business Book Of The Week: Gear up for the downshift

The Caterpillar Doesn't Know

by Kenneth Hey and Peter Moore

(Simon & Schuster, pounds 20)

SO MUCH has been written about the inability of businesses to engage their workforces for any significant time that the initial reaction to this book may be: "Oh, woe is me."

But that would do it a disservice. Yes, it starts with plenty of comment about how the "more, better, faster" mentality that drove the communities of wealth through decades of success has now run headlong into a personal reassessment that "enough is enough". But this is just by way of context.

The real message from Hey and Moore - the partners in the US market intelligence firm Inferential Focus - is not just that more people are apparently giving up high-flying careers in the search for "balance", but that customers of all sorts are expecting companies to behave differently.

So senior executives should introduce greater flexibility, allowing individuals to continue contributing while spending time with their families or other outside pursuits. They should view this flexible approach as the harbinger of bountiful business opportunities.

One of the most obvious examples cited as evidence of "the new reality" is how McDonald's trumpets its low cost meals while Starbuck's attracts queues for its premium-priced coffees.

One is struggling to be the low-cost provider in the old marketing game, while the other is offering "a reward, a moment of quiet, a solution in the context of a world out of control".

The book is not as touchy-feely as it sounds. Hey and Moore are asserting that companies that think they need only produce top-quality products or services risk missing the boat. The book wraps its thinking in such phrases as "discovery solutions" and "response purchase", but offers further indications of the case for responding to individuals' changing priorities.

After all, Hey and Moore point out, while people economise on transport by buying second-hand cars and keeping them longer, they are also spending heavily on such items as prepared salads. Between 1989 and 1996 this market grew from $8.2m to $1.1bn. "Consumers will pay for solutions," they say.

It is now possible to carve significant niches with specialised services or products solving problems that did not exist before, such as both parents working long hours. The mark of success is to get there before the opposition - which means anticipating consumer trends. One of the keys is to realise that consumers and employees are essentially the same people.

The book's title comes from a business rethink by Mort Meyerson, former head of EDS and Perot Systems: "The caterpillar doesn't know that he'll come out as a butterfly. All he knows is that he's alone, it's dark, and it's a little scary."