ADVANCED PRACTICES COUNCIL (APC) JUNE 2023 MEETING HIGHLIGHTS
In 2007, Mike Lazaridis, Founder of Research in Motion and BlackBerry phones, heard a pitch from his RIM colleagues. They wanted to allow Blackberry phones to exchange encrypted messages on competitors’ devices. He said no because he was concerned that exchanging messages would cause Blackberry phones to become obsolete.
No one can be certain of the future. We know Yogi Berra’s quote: “It’s difficult to make predictions, especially about the future.”
It’s especially difficult to predict the future when that future contradicts your beliefs. According to Professor Adam Grant of the Wharton Business School: “The better you are at crunching numbers, the more spectacularly you fail at analyzing patterns that contradict your views… And being good at thinking can make you worse at rethinking.”
In contrast to Mike Lazaridis, in 2004 Steve Jobs said yes, in 2004, when his Apple colleagues pitched expanding Apple’s iPod devices to include phone capabilities. Apple customers already had 20,000 songs in their pockets. Why not put phones in their pockets at the same time? Not only was Jobs good at thinking, but also rethinking.
The June Advanced Practices Council meeting, like so many previous ones, focused on rethinking. Our researchers addressed these questions in particular:
Who is included in a company’s workforce and how do you manage that workforce?
How should a company operate (independently or with an ecosystem of external companies tied to a platform)?
How can a company identify who knows what and opportunities for improvement?
How can a company anticipate and respond to opportunities in the marketplace?
Rethinking Who is Included in a Company’s Workforce and How You Manage That Workforce
For many years, we thought of a company’s workforce as employees. According to Dr. Elizabeth Altman of University of Massachusetts Lowell, there are many others we must consider as part of the workforce, including contractors, subcontractors, professional service companies, gig workers, crowdsourced contributors, app developers, chatbots, and robots. Take Applause, a company that provides software testing services. It employs 400 people, but its community of testers is over 1 million and growing by more than 10,000 new testers per month. And from the customers’ viewpoint, all company-related people with whom they interact represent that company’s brand.
A number of workforce changes have caused this shift. Work is now more project-based, short-term, and outcome-based. Many workers prefer flexibility, choice, skill-acquisition, and free-agentry to loyal employment with one company. Software companies have supplied many technology tools to support remote and hybrid work (e.g., Zoom, Microsoft Teams, WebEx).
Managing in a workforce ecosystem is different from doing so in a company composed principally of full-time employees. Leaders must give up control without relinquishing accountability. Moreover, it entails fostering a collaborative culture without violating employment laws that specify when you may be required to pay for benefits.
There are many other implications of orchestrating workforce ecosystems. Let’s begin with technology. Novartis is creating an integrated workforce management system that brings together a range of technologies including HR systems, talent marketplaces, and learning platforms. Machines can act as employees when they work alongside human workers, sharing and in some cases doing similar work. Examples include an AI program automatically evaluating insurance claims or parts of jobs being assigned to robotic process automation bots.
Workforce planning and development must be rethought. Managers can’t resort to hierarchical processes driven entirely by an employer’s objectives and requirements. Workers’ own needs and desires must be considered in decentralized yet integrated planning processes emphasizing skills and tasks.
To access workers with the right skills for the right tasks for projects rather than merely fill job openings, some companies are experimenting with talent markets and seeking contingent workers through external digital labor platforms (e.g., Upwork, Toptal, Catalant, Freelancer). With labor platforms, organizations can easily search for, and then flexibly engage with, external individuals and teams. Orchestrating a workforce ecosystem means allowing contributors to develop in ways that may be beneficial beyond their role for a particular organization. While the employee life cycle model includes retention as its final tenet, a new interpretation focuses instead on aligning interests. Some companies offer ecosystem participants wide access to relevant training, affording them opportunities to upskill or reskill, and grow their capabilities and scope of experience. The metaphor of the career ladder is being replaced by more multidirectional, wide-ranging terms, such as portfolios and lattices. Unilever is experimenting with creating consortia of companies to facilitate employees having opportunities at multiple organizations. Many leaders believe that developing the potential of workers – whether they stay with their companies or not – will have long-term benefits for their workforce ecosystems.
Mindset considerations are the most challenging consideration. Companies are shifting from single company-centric mindsets to a more expansive view that considers not only their own workforce but also building relationships with other workforce ecosystems. Some companies are thinking beyond individual company-based credentialing to collaborate with other organizations to create proprietary credentialing systems that deliver a distinctive meaning and value to organizations within a given association. And competitors may have to expand their thinking to work together aligning their workforce ecosystems.
Rethinking How a Company Should Operate
Let’s consider yet another aspect of ecosystems: how companies operate rather than who is in their workforce. Dr. Lynda Applegate of the Harvard Business School contrasted the old way of organizing (i.e., centralized complex hierarchies) with new ways – platforms that companies create and own. Forward-thinking companies create platforms to deliver better services and products to customers/clients and then determine who may participate and how, thereby taking the lead in networked ecosystem platforms.
The founder of Kovi developed a car rental platform built to serve rideshare and delivery drivers in Brazil who couldn’t afford to buy cars. Kovi’s ecosystem consists of rental car companies that lack the purchasing power to get large volume discounts from rental car companies, original equipment manufacturers (OEMs), app drivers, and other underserved Brazilians (e.g., hairdressers, musicians).
The company installs proprietary software and third-party hardware technology in its cars. The remote system tracks and monitors vehicles and drivers in real-time, maintaining profiles of drivers, provides 24/7 assistance and security, and allows Kovi to block car usage for nonpayment.
This ecosystem platform model affords Kovi a disruptive business model that provides significant value for the multiple stakeholders in the automotive chain, such as more options of accessibility to drivers, more profitability for partners in the supply chain such as OEMS and leasing companies, and expanded driver supply for ridesharing platforms.
Rethinking How a Company Identifies Who Knows What and Opportunities for Improvement
According to Dr. Christopher Stanton of the Harvard Business School, when Yuval Gonczarowski was CTO of a software company, he recognized how difficult it was to know who knows whom and who knows what in a company. He was frustrated because he wanted to move things faster in his small company and realized how much more frustrated managers must be in large companies. He recognized that the data to solve this knowledge management dilemma existed in companies. But the data sat dormant in messaging systems, ticketing apps, and other widely used software. No one was tapping into these sources for insights.
He founded Akooda to mine the text of real-workflow digital data to reveal where knowledge resides with a company – who are the experts on specific topics, customers, or projects and who is working with whom. Akooda tools also help managers identify what is getting attention in practice and then compare how well that aligns with company priorities – those projects and customers most critical for impact. Insights gleaned from Akooda enable clients to optimize processes to increase efficiency and drive greater impact.
Other software companies are and will sell such tools in the future. How do employees feel about managers having such tools? Will they experience these tools as infringing on their privacy? What will be the implications for how managers’ jobs will be impacted?
Rethinking How a Company Anticipates and Responds to Opportunities in the Marketplace
In 2014, executives of ING NL realized that they were not prepared to address customers’ rapidly changing needs quickly enough. These executives recognized that other financial services companies were developing digital ecosystems to operate in a “omni-channel” rather than “multi-channel” way. They rethought organizational arrangements and envisioned an open platform where customers could go not only for their financial needs but also for services and offers from third parties beyond traditional banking. This meant that ING’s digital systems had to seamlessly integrate into other ecosystems so that ING could be present anytime and anywhere its customers spent time online. ING’s goal was to shorten time to market, improve customer experience, and enhance operational excellence and digital banking capabilities.
The traditional way of undertaking such a major organizational change would have been step-by-step. In fact, most organization consultants would advise a gradual process that is well orchestrated and controlled.
Having executed according to this advice previously, ING executives realized that it resulted in only limited impact. Therefore, they rethought this traditional approach and opted, instead, for a “big bang” approach. They announced a radical transformation of the Dutch organization intended to shorten time to market, improve customer experience, and enhance operational excellence and digital banking capabilities. Their initial communication centered on why the transformation was needed and what direction it would take. Later messages shifted to the how, with more information about the new way of working, including breaking down internal silos, realigning organizational structure, reducing handovers, and increasing engagement and the pace of innovation.
Everyone, beginning with the leadership layer directly below the ING NL management team was “fired” and asked to apply for positions. They started at the very top. This process then filtered down by layers. The selection process itself was rethought: candidates for new agile positions had to pass two interviews: one on knowledge and experience and the other on cultural and behavioral aspects. The hiring teams looked for people who could thrive in the new working context and, believing that cultural change was critical for the success of the transformation, all selected employees had to attend an extensive one-week onboarding program. Twenty-five percent of employees were not rehired. Executives changed the physical working environment to glass walls, open spaces, colorful couches, and rooms with several whiteboards to foster creativity and enable teams to work together in an agile way. The fundamental unit in ING’s agile organization was the squad – a self-steering, autonomous team responsible end-to-end for their own specific customer-related purpose. Squads were built around different disciplines, areas of expertise, and backgrounds. A tribe was a collection of squads with an interconnected purpose. The quarterly business review process was ING’s key mechanism to increase transparency and manage dependencies and alignment across the tribes.
Results indicate that even with a 25% reduction in the workforce, ING’s velocity of output increased thanks to the efficiency gains realized with the new setup.
Let’s end by modifying Yogi Berra’s statement. It may be difficult to make predictions, especially about the future, but in many ways the future is unfolding in front of us if we are open to rethinking. And Advanced Practices Council members explored four dimensions of that future with our researchers. Cutting to the chase, it’s ecosystems (for orchestrating talent and partnerships) and platforms (for updating business models and gaining competitive advantage).