The Company of the Future

Danielle Rios, 28, has it all - a BS degree in computer science from Stanford, a great track record as a software developer for IBM, and the energy and savvy to market herself. With all that going for her, Rios could be a free-agent winner in the new economy, adding value by juggling different projects with different firms. Or she could have her pick of well-established corporate launch pads for her career.

But for the last three years, Rios has worked with Trilogy Software Inc., a small, rapidly growing software firm based in Austin, Texas. Trilogy is on the cutting edge of sales-and-marketing software, and Rios is part of a team that shows potential customers how the software can work for them.

Joe Liemandt, 30, founded Trilogy in 1989, after dropping out of Stanford only a few months before graduation. To finance the startup, Liemandt charged up 22 credit cards. If Trilogy were to go public today, analysts say, it would be valued at more than $1 billion. Four years ago, Trilogy had 100 employees; today it has almost 1,000 - and plans to add another 1,000 before the summer of 1999. But to call Trilogy workers "employees" misses the point. They're all shareholders. They're all managers. They're all partners. That's how Liemandt, Trilogy's CEO, has chosen to run his company - and that's what makes it successful.

Liemandt knows that Trilogy depends on talented people. He also knows that people can go anywhere. Which means that his biggest competitive headache isn't companies like SAP AG, Baan Co., and PeopleSoft Inc. - businesses he has to face down in the marketplace. His biggest worry is holding onto people like Rios. "There's nothing more important than recruiting and growing people," he says. "That's my number-one job."

It's a seller's market for talent. People with the right combination of savvy and ambition can afford to shop for the right boss, the right colleagues, the right environment. In the old economy, it was a buyer's market: Companies had their pick of the crop, and the question they asked was "Why hire?" Now the question is "Why join up?"

As a result, the economy is fostering new kinds of organizations with new kinds of practices and operating rules for pulling people together. These companies offer many of the advantages of free agency: flexibility in how, when, and where you work; compensation linked to what you contribute; freedom to move from project to project. But they also offer the advantages of belonging to an organization in which mutual commitment builds continuity. They are the enterprises of the future.

What makes them so different? Consider again Danielle Rios and Joe Liemandt at Trilogy. In the old economy, Rios and Liemandt would have been on opposite sides of the table: employee and employer. They'd be there for years, locked in their conflicting roles. Liemandt would want steady, reliable work from Rios. Rios would want a fair wage from Liemandt and an opportunity to move up the company ladder. In the new economy, Rios and Liemandt sit on the same side of the table. And they've joined together - for a time - to create new value.

Ask leaders what their biggest challenge is, and you get the same answer: finding, attracting, and keeping talented people. Ask talented people what their biggest career challenge is, and you'll hear the same refrain: finding good people to work with - and to work for.

For Liemandt and Rios, and for everyone in the new enterprises of the free-agent economy, the crucial questions are: What leads them to work together in the first place, and what keeps them together? Here are the six "social glues" of the company of the future.

Money Makes It Mutual

The world is awash in money. Venture capitalists are pouring funds into startups at a ferocious rate. In 1997, for example, venture-capital firms raised $10 billion. That same year, 629 companies went public, with a total valuation of more than $39 billion. The stock market has softened in recent months, but it's still way up there - making possible a previously unthinkable market for acquisitions and IPOs.

All of this money has had an unavoidable impact on the job market, where money is a powerful motivator. Freshly minted MBAs from leading business schools are commanding a premium from blue-chip consulting firms: Signing bonuses and first-year salaries often run higher than $120,000. And the pay packages that large, successful companies are putting in front of their most talented executives are critical in the rapidly escalating war to keep talent - or to steal it away. Not long ago, in the kind of deal that one usually reads about only in the sports pages, one of Wall Street's premier stock analysts landed a one-year, $25 million contract - a $15 million increase over his 1997 pay package.