Succeeding in Your Business by Cliff Ennico

At this time of year, I prepare and file a lot of corporation and limited liability company (LLC) documents with government agencies such as my state Secretary of State's office. Some clients want to dissolve their corporation or LLC right at the end of the current year, while others want to file a new corporation or LLC right at the beginning of the new year. All of them want me to get the government filings done within 24 hours after they contact me.

If I could go online and do the necessary filings electronically, it would be easy to satisfy them all.

But I can't.

In most U.S. states, the Secretary of State's office requires that corporate and LLC filings be made on paper, the old-fashioned way, and processed by a small army of clerks who do nothing but file corporate and LLC paperwork.

Now, I can hear some of you saying: "That's ridiculous! The technology to fill out paperwork and file completed forms online has been around for at least a decade. Even the IRS now requires that most tax returns be filed electronically. People make mistakes; computers do not. An online filing system would save your state government tons of money and make the filing process much more efficient. What is it with these Secretary of State's offices that they won't catch up with the times?"

Of course, you would be right. But you would neglect one very important fact: By converting to this technology, and allowing people to file their corporate and LLC paperwork electronically, the Secretary of State's office would have to fire that small army of clerks who do nothing but file corporate and LLC paperwork. Governments are extremely reluctant to fire loyal, hard-working employees — especially those that may not have other marketable skills — so many government agencies end up using outdated technology and systems that "make work" for people.

Unlike government agencies, private employers have had no problem at all adopting technological solutions as soon as they become available, and downsizing millions of middle-management employees whose jobs can now be done by computers, software and Web-based applications.

In the early 1970s, when I was a college student, I worked one summer for a Fortune 500 corporation as a clerk in the purchasing department. Basically, I was a human duplicating machine. Each morning, the office would receive computer printouts by Federal Express from each of the corporation's regional purchasing offices around the country, detailing each office's updated requirements for raw materials, equipment and supplies.

My job was to take these printouts, add the figures for each item from each office and copy the totals onto a large spreadsheet (a paper one). When I was finished, I handed the spreadsheet to a full-time corporate employee, who proofread my work for errors.

Once that was done, this employee handed the spreadsheet to a third employee, whose job was to photocopy the spreadsheet, put the copies in mailing tubes and send them via Federal Express to the various departments actually responsible for ordering the supplies. This process was repeated each day and took several hours to complete.

Today, with Microsoft Excel and e-mail, the entire job can be done in a few minutes by a single employee.

We are living in the middle of an information technology revolution, one that rivals in historical importance the Industrial Revolution of the 1800s. It began in the late 1970s, with the rollout of the first desktop computers, and continues today. If you ran a billion-dollar corporation in the 1970s, you needed hundreds, if not thousands, of middle-management employees to run the systems that made such a large business possible. Today, with the right computer equipment and software, you can run a billion-dollar corporation with fewer than 100 full-time employees and achieve the same results — sometimes a lot better, since human error and redundancy are both significantly reduced when computers do the work.

Big companies today are a lot more efficient than they were 30 years ago, but they are also a lot smaller. And those middle-management jobs — boring, technical, bureaucratic and sometimes soul-destroying as they were — will not be coming back, even when the economy improves. We should not kid ourselves about that.

With unemployment in America running at about 10 percent of the working-age population right now, there's a lot of talk in Washington about doing something to create jobs. But, short of banning computers outright, there aren't a whole lot of choices. In fact, as I see it, there are really only three realistic policy options:

1) We can create lots and lots of new small companies in cutting-edge industries that can absorb the laid-off middle-management executives and repurpose them as entrepreneurial managers;

2) We can pass laws and regulations forcing companies to operate less efficiently by requiring them (or incentivizing them via tax breaks) to hire people for the sake of putting bodies into cubicles; or

3) We can pass laws and regulations empowering unions and other employee organizations to challenge, block or slow down the process by which their employers replace their jobs with technology.

Frequent readers of this column will have little trouble guessing which solution I would vote for.

Some employers, of course, are quite comfortable operating inefficiently and placing the job security of their employees over the need to provide timely, efficient service to their customers. A state Secretary of State's office, for example.

Cliff Ennico (crennico@gmail.com) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.

COPYRIGHT 2009 CLIFFORD R. ENNICO.

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