The future of enterprise – 3 – Redefining talent

ParisTech Review / Editors / 2014-10-29

It is foreseeable that in coming years, the rising costs of raw materials, competition from emerging countries, the obsession with cost reduction, and technological innovation will have a yet heavier impact on companies than they do at present. The challenge, for the latter, is as follows: to manage to do more with less, in all areas. Labor, naturally, is going to be first in line to bear the brunt of changes of such magnitude. However, for ambitious employees, there are some good news. In a context marked by a severe shortage of advanced skills, that has been especially visible in recent years in high-growth Asian countries but also in the West, companies are to essentially become bodies of talent management, according to the definition provided to this word by Jeffrey Joerres, CEO of Manpower: “talent isn’t just people, it’s people with the specific skills, behavior and the way of operating, for example, in a chaotic, global environment, that fits the needs of an organization.” While these abilities have always been appreciated, one has to expect them to become indispensable, essential and sought after. Not only because they will determine the quality of the company and its performance, but also, its survival.

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This article is the third of a series which will be published within the next three months.

The early twentieth century witnessed a large-scale rationalization of human work, spelled out ​​with mathematical accuracy by Frederick Winslow Taylor. And even though the Taylorist vision has been improved and refined over time, taking into account aspects such as motivation, personal contribution or the creativity of employees, in essence, it has not radically changed. Let us nevertheless go over recent trends.

Skills and autonomy

The main change, as noted by different authors in the 1990s, is probably the gradual transition from qualifications (which are objective, verifiable, and define a job or an occupation) to skills (which are personal, harder to measure and to validate, and cross-cutting). Whereas it started off as an executive and manager exception, it is now the whole workforce which is described and managed in such manner. The notion of skills has allowed for a better understanding, taking into account the share of learning, adaptation, and responsiveness which is now central to most activities.

One can imagine that this vision should remain prevalent in the business world in the coming decades, allowing to recruit, evaluate and manage company employees. Yet the unifying value of such a vision must not blot out the profound disjunction which tends to operate, sometimes within the same job, between prescribed work and self-assigned tasks. Prescribed work is for example that of the employees of call centers, who recite scripts they are not allowed to deviate from. Or the work inside the gigantic warehouse of online commerce, where the very paths of employees are measured in the tightest possible way, in a universe even more Taylorist than the production lines of old ever were. Autonomous work, in contrast, requires choices. In a 2002 study for the French Department of Labor, Sylvie Hamon-Cholet and Nouara Yahou analyzed the results of the Working Conditions Survey conducted in 1998 by DARES, the French Directorate for Research, Studies, and Statistics: they observed a trend towards the development of employee autonomy. “Concerning people that deal with imposed operating methods, follow strict guidelines or have to resort to someone else in case of an incident, or who cannot vary the schedules set for them, they are fewer in 1998 than they were in 1991, and they were already less in 1991 than in 1984. Therefore a slow but real rise can be observed in procedural autonomy and self-initiative, in social strata that were not traditionally enjoying it, namely among employees and unskilled workers, whose working methods are among the most rigid. Certain categories of employees, less subject to prescribed tasking, also experienced a downward trend: postal workers, grocery employees, personal care workers, drivers and transportation workers. The gap has narrowed between the industry and the service sector, as prescribed tasking has decreased significantly in the former.”

This trend is likely to gather momentum, particularly with the gradual automation of a number of activities (see our series on robotics) which has led many operators to monitor machines and show initiative when these fail. More broadly, in the same way that customers (see the second article in the current series) are now integrated into business processes (either through the data and feedback they provide, or by their own work, such as when we assemble some Ikea furniture or interact with a voice server), employees are less and less confined within the walls of a service or department. They are increasingly involved in cross-functional projects, and every day they partake in an exchange network that foregrounds a range of interpersonal skills: the ability to understand and to be understood, to cooperate, to spot the relevant signals in a complex environment…

With such an evolution of human work, the qualities expected in a collaborator are changing. Let’s look at the very tip of this evolution, in which what is implemented is not only a skill anymore, but a talent. The term, used and abused for thirty years by corporate communication, was hitherto basically a fancy way to describe performance. In the coming decades, it may very well find new meaning, closer to the unique and highly personal qualities it originally designated.

A redefinition of talent

With the rapid advances in information technology, a new approach to knowledge is emerging which changes the very idea of skillfulness: what employees know matters less than what they are able to find, and, more relevantly, what they are able to share. Working alone creates less value than teamwork. Hierarchies tend to fade out, while collaboration becomes paramount. In these circumstances, the employees cease to be seen only as a productivity lever. Their personal performance continues to count, but now companies are also interested, and perhaps even more, in their ability to enter a dynamic and to nurture it. The employees can be valued for their creativity, capacity to innovate, their empathy and their intellectual curiosity.

These intangible qualities will become all the more necessary given that the methods of work implementation are going to evolve. In the future, the “focused” work model will disappear in favor of dispersed work. Several factors contribute to this profound change. First, information technology and communication make it possible to work remotely. Secondly, environmental constraints should challenge the trend towards ever longer commuting, which is attributable to urbanization. Economy of movement will be given priority. The outsourcing and offshoring of certain productions is also going to contribute to said dispersion of work. And thus, coordinating such scattered labor is going to require entirely new talents.

This primarily concerns managers: for several decades already, credit has been given to the idea of ​​a “facilitator” manager, capable of mobilizing a team and not just to have it show up at work. This figure is becoming pivotal in the more and more common case of work taking place in project mode, with collaborators sitting at different hierarchical levels, in different departments and in different geographical locations. Good interpersonal skills, somewhere between charisma and an attention for weak signals, are becoming central to the activity of a manager. However, this evolution affects all trades and all hierarchical levels to a greater or lesser extent.

Flows of intelligence

During the second half of the twentieth century, workers were generally paid for their attendance at the workplace, more than for their actual accomplishments. It made sense because their duties were set out to the last detail and their function was like a very calibrated cog within a system whose chief role, provided by a “scientific” management was to achieve economies of scale. To understand the ongoing revolution and the changes ahead, it may be useful to reread, with tongue in cheek, the ironic definition of traditional work proposed in 2011 by Michael Chui, a researcher from the McKinsey Global Institute: “Exclusive and full-time work relationships, where employees are paid according to the time they spend at work is the best way to showcase human talent. Such relationships must be organized within a framework of stable hierarchies where employees are evaluated primarily by their superiors and where their duties and functions are predetermined.”

The pillars of this logic are all disappearing. Today, an increasing share of the work is carried out collectively, in particular through software platforms that allow users to participate in a project without necessarily receiving financial compensation. And customers, in this new world, are taking care of an ever growing share of the work, by providing data that, through marketing, flows back and actually quite upstream of design and manufacturing processes. Exaggerating only slightly, one could say that a billion people “work” for free for Facebook. The dynamics of crowdsourcing, in the world of freeware or finance, are merely formalizing this dilution of the boundaries of labor.

The latter also plays out within the organizations themselves. Today, even in offline businesses, managers are paying more and more attention to how employees participate in informal work groups or communities of practice. The ability to experiment with knowledge and to follow through becomes decisive in situations that are constantly changing: “When one doesn’t know in advance what is going to work, it is essential to track the evolution of things that do work, and to understand how to strengthen and amplify them,” says Michael Chui. Here, technology is no longer about to ensuring compliance, but quite the contrary, about increasing liberty and participation.

The co-production that takes place on networks is one that companies are actively trying to foster in-house. Companies wishing to spur innovative intra-preneurs are starting to organize competitions to bring out new ideas and to benefit from “community” knowledge, an osmosis that is indispensable in the era of exploded knowledge. Such a mutated access to knowledge is having an impact on hierarchies. In order not to interrupt this flow of intelligence, traditional pyramids will increasingly become horizontal and key employees will be those capable of connecting the company to outside networks, especially where expertise is missing in-house, to compensate. The “720 °” employee evaluation concept, which has been very popular since 2010, reflects the need to seek the advice of stakeholders within the sphere of the “extended company.”

Creativity and empathy
A white paper published in 2011 by the Aspen Institute, The Future of Work – What it means for individuals, businesses, markets and governments, remains, to date, as one of the most insightful analyses of what labor is to become. Here are some of its findings.

The traditional physical notion of work is increasingly out of touch with the needs of businesses, of which a great many have been virtual and global since day one and within which the links between management, task execution and marketing are purely virtual. At a minimum, employees will have to part with the “silo mentality” typical of Fordist companies and will have to understand their own contribution to the value chain, as well as the end purpose of the product they helped build. No longer will work be confined to specific schedules and locations, and the notions of a “workplace” and working hours will probably become blurred in favor of a skilled performance. In a disruption with the work/private life sequence, the dominant norm will be that one shall be enrolling his or her whole personality at work. Dispersion, thus, is on the menu, but so is commitment.

Tens of millions of people currently work from home or in virtual enterprises made ​​up of individuals scattered across the globe. According to Thomas Malone, director of the  MIT Center for Collective Intelligence, the decentralization of work patterns of and the increasing freedom that it entails will bring about revolutions as important for businesses as the advent of political democracy. Universal access to information will enable an increasing portion of employees to make informed decisions, sometimes rendering instructions from the hierarchy useless, or even spotting them as counter-productive. And those employees that are “in touch” with the market and with customers will be pivotal cogwheels that will shape the course of the company. One crucial implication of this development is that the larger scale (which is efficient) and the smaller scale (which is motivating, creative and flexible) will now be able to coexist and to reinforce each other.

The Aspen Institute report also stresses the psychological or even neurological aspects brought about by this metamorphosis of labor, with a greater emphasis on creativity, and both our emotional and relational intelligence. John Seely Brown, co-chairman of the Deloitte Center for the Edge, points out that beyond cognitive intelligence, “real high added value work has imagination as a chief component: it’s in my sleep, in my subconscious, that an impressive part of my work is carried out.” The brain thus becomes a working tool in itself. Knowing oneself, being able to self-manage, to connect with others and to display empathy; in short, being able to be a team player, to negotiate and address conflicts, becomes a key factor of success. Thus, a more independent, more accountable “salaried employee” fitting that model will express new individual requirements regarding personal growth and pay. It is possible, too, that employees may assert their needs more markedly, in terms of values ​​and meaning, for example by foregrounding collective priorities related to sustainable development.

Labor sociologists believe that the salary itself could lose importance within the pay scheme, in favor of other forms of income derived from sharing added value in the company. Michel Lallement is Professor of the Chair of Sociological Analysis of Labor at the CNAM – the French National Conservatory of Arts and Crafts. In his book Le Travail sous tension (Work under tension), he analyses: “Employees are put in the position of players that are accountable for their productive actions, with all the stress that this implies, in the race for differentiation. They are granted greater autonomy, with for example remuneration policies and work time policies that are individualized, not as collectively standardized as they used to be, but with an intensification of work, and greater control over said work.”

A new form of commitment

The fragmentation of the working body will also cause its share of harmful side effects. Some employees may be tempted by “mercenary” or passive behaviors within the company, with which they may feel no particular kinship. The rise of short-term actions and certain corporate behaviors (relocations, restructuring, redundancy plans) can contribute in this respect, snowballing into some form of disengagement. Truth be told, this potential disengagement from the company must be distinguished from a disengagement vis-à-vis labor itself. The famous “Generation Y” in particular raises concern among managers on the grounds that it would supposedly be more utilitarian in its relation to work. In reality, what this generation clearly values is ​​investment in well-identified professional projects. And, more than a thirst for recognition, it demonstrates a need for meaning and feedback.

Employees of the future, who will have long gotten over the myth of lifetime employment, are likely to adopt a professional and rational approach to their commitment to business. They will change companies when they deem there are better opportunities to be found elsewhere, and may be critical vis-à-vis their superiors if the latter fail to meet their expectations. Their loyalty will take new shapes, adapting to and reflecting the increased leverage of networks and the relative erasure of the company’s personality. Regarding the latter, they will have a relatively decompartmentalized vision, and not anymore strictly vertical. The company will become a hub for social interaction, which brings together mobile employees around a common project. Loyalty and the sense of belonging will therefore primarily go to a body of collaborators, often of a temporary nature, and in the mode of a project, more than to an institution. This is yet another area where keeping the company in line will necessitate “enriched management.”

Multi-jobbing, that is to say, the coexistence, for one same individual, of different jobs for different purposes, will become an allowed option, possibly even advisable. An income-generating activity, probably the chief one, will coexist with another activity that may well be some kind of volunteering in civil society, but may as well take other fulfilling forms. Some organizations realize the potential of “unfocused time” and give themselves the means to provide some to their employees. Google is has put in place a “20% time” program that gives its engineers one day a week to develop their own projects, in which Google occasionally invests, as was the case for the Gmail and Adsense projects, two huge global Google successes. And companies as diverse as the Maddock Douglas innovation consultancy or the software manufacturer Atlassian have similar programs. In the new paradigm, since creativity is the crucial ingredient both for employability and satisfaction, these “gifts” are actually investments.

Among the practical implications of new labor modes, we’ll see a proliferation of different types of contracts between businesses, employees and suppliers, as the boundary between these last two categories is to become increasingly blurred. The social contract will change as well, as the “subordination against protection” pattern of wage society will in turn become less relevant. Subordination, which is unattractive for “knowledge workers”, will give way to a logic of prescription and influence where processes will matter more than hierarchies. It is around these prescribed instructions, which define the direction and objectives of work, that management shall organize.