People & Strategy Summer 2017 Vol. 40 Issue 3 - 12
Marcus Aurelius) or that flexibility in
work will serve a tangential purpose
(consider, for example, caregivers looking for part-time work during set hours).
But for most workers, it is unclear how
the ODE will fulfill the human sense of
purpose and connectedness that comes
from being part of an organization whose
mission exceeds the sum of its tasks.
The automation of
knowledge work and
the growth of the
is very real, yet the
science of human
behavior suggests that
the impact of these
changes will not be so
The second problem is the assertion
that the IOP will create "opportunities
for growth and security," isn't supported
by the data. In fact, the opposite seems
to be true. While participation in ODE
is up in America, income inequality
is at the worst it has been since 1923.
Moreover, 68 percent of ODE employees
surveyed feel they do not have the same
financial safety net as full-time workers.
Elsewhere in the world, things don't
look much better. Despite advances in
the IoP, the top 10 percent of best paid
employees still take 25.5 percent of total
wages in Europe, 35 percent in Brazil,
42.7 percent in India.
The third problem with this narrative
affects employers. While the short-term
cost savings for a firm in an IoP world
are clear, less clear are the longer-term
strategic implications of employee decoupling. Here's why: One of the crucial
insights from Michael Porter's work on
strategy is that competitive advantage
derives from the unique combination
of activities that allow a firm to deliver
a distinctive value proposition. Like any
high-performing team, firms therefore
depend upon a diversity of talent that
work together as a team for their success, not on crowdsourcing tasks to the
lowest qualified bidder. (It's also interesting to note that in the same Future of
PEOPLE + STRATEGY
Work initiative cited above, 58 percent of
employers surveyed said full-time hires
are better for their company, despite the
costs, because they provide more value
over the long term.) The IoP model
might be cost saving for non-essential
tasks, but it seems unlikely to replace the
organization as the "home" for a team
of high-performing talent determined to
compete, and win, in a hyper-competitive world.
So, now what?
Rather that decouple workers from
their firms, advancements in technology
might instead create the opportunities-
and incentives-for firms to invest in
developing deep man-machine partnerships at the enterprise level, and at scale.
In many places this is already happening.
As Gideon Lewis-Kraus recently noted,
"The most important thing happening in
Silicon Valley right now is not disruption.
Rather, it's institution-building-and the
consolidation of power-on a scale and
at a pace that are both probably unprecedented in human history."
Peter Mulford is chief innovation officer at
BTS. He can be reached at peter.mulford@
Is This the End as
We Know It?
Not So Fast
By Uri Ort, Reece Akhtar,
"We tend to overestimate the effect
of a technology in the short run and
underestimate the effect in the long
run." As futurist Roy Amara explains
people disregard important lessons
from the past, and take a narrow view to
the latest new and exciting innovations,
making it difficult to understand the
present and even more difficult to predict the future. The freelance economy
is no exception.
More than two-thousand years ago,
Plato first described the gig economy
when he said, "All things are produced
more plentifully and easily and of a
better quality when one man does one
thing which is natural to him and does
it at the right time." Adam Smith, in his
famous book The Wealth of Nations, and
later, Fredrick W. Taylor, with his principles of scientific management, continued to promote the efficient subdivision
of labor, leading many to believe it
would forever change the world of work.
Yet the traditional organization we have
known for a long time has persisted.
Why is this? Humans derive many benefits from belonging to organizations. As
the Hawthorne studies and Hackman
and Oldham's Job Characteristics Model
showed, meeting the psychological
needs of employees through a well-designed employer-employee relationship
is critical for employee well-being and
motivation, and ultimately, organizational performance.
Wide-ranging predictions of the
future are often askew because they
focus on technological innovations which
evolve at a much faster pace than human
behavior. According to Robert Hogan,
three fundamental needs explain human
motivation: the need to get ahead (i.e.
competition, status and dominance);
the need to get along (i.e. relationships,
cooperation and altruism); and the need
to find meaning (i.e. purpose, identity
and life satisfaction). The satisfaction of
these needs is provided for, in large part,
by the traditional employer-employee
relationship. At traditional organizations,
employees often feel a strong sense of
belonging to their organizations, derive
meaning and purpose from the organizational mission, and build a valuable social
life with their colleagues. Additionally,
many organizations invest in their fulltime staff, providing development and
guidance to help them progress in their
career with the intent of building longterm bench and capability.
In contrast, freelancing is lonely, and
often lacks meaning and higher purpose for employees. Gig workers have
fewer opportunities to see the impact
of their work and may not be able to
connect to the broader organizational
mission, which is critical for engagement, motivation, and performance.
Beyond the tangible benefits of health
insurance and support, the psychological payback that traditional organizations provide to their employees will
remain key to employee well-being and
organizational performance, long after