The rise of the gig economy means CLOs should assess their personal and organizational fitness for an increasingly volatile, uncertain, complex and ambiguous environment.
September 19, 2017
Developments in such diverse fields as artificial intelligence, nanotechnology, 3-D printing, biotechnology, robotics, machine learning and genetics are all building on each other and creating a volatile, uncertain, complex and ambiguous environment, VUCA for short.
For CLOs, it has become a business imperative to develop agility and capability to meet the talent needs of organizations that are rapidly changing in such a turbulent environment. A particularly significant challenge for CLOs has been the accelerating growth of the gig economy.
A Bit of History
The gig economy is typically characterized by people who engage in contingent work or alternative employment arrangements rather than full-time employment by a single organization. Although Airbnb and Uber garner most of the media’s attention, the gig economy is impacting all sectors.
In 2006, The U.S. Bureau of Labor Statistics official count of contingent workers was 42.6 million, about 30 percent of the total U.S. workforce. A 2016 survey by the Freelancers Union estimated the number of U.S. freelancers hit 55 million, about 35 percent of the U.S. workforce.
A 2016 McKinsey Global Institute report estimated freelancers comprise 20 to 30 percent of all workers in the U.S. and European Union. In their book, “Lead the Work,” University of Southern California professor John Boudreau and colleagues argue that leaders should refocus on how work gets done in the gig economy versus traditional full-time jobs.
Technology-enabled talent platforms are accelerating the disruption of the workforce status quo. Talent platforms such as Tongal, Topcoder and Mechanical Turk allow people to have more control over how and where they work.
This growth of the gig economy and associated talent platforms has blurred the legal definitions of the terms “employee” and “employer” in ways that were unimaginable when employment regulations like the Wagner Act of 1935 and the Fair Labor Standards Act of 1938 were written. Those laws operate on the assumption that employers have most of the control and power in the relationship but that is changing with the growth of talent platforms. There is a growing public policy debate over how to regulate and measure new labor models given the growth of the gig economy.
From an employee development perspective, how prepared are CLOs to demonstrate the agility to lead the change in culture, programs, processes and policies that were originally designed for full-time employees to an expanded talent portfolio increasingly represented by contingent workers?
The Imperative for CLO Agility
CLOs have the opportunity to take the lead in developing their personal agility and the agility of others in their organization to more effectively compete in a VUCA world. Typical barriers that CLOs will confront in building agility fitness range from HR processes to organizational culture. Existing processes for recruiting, onboarding, engagement and talent management primarily focus on full-time employees with limited consideration for contingent workers as part of the organization’s talent portfolio.
As the need for key talent increases along with global access to it, the demand for a better way to plan for and manage the entire talent portfolio requires a broader view of talent that includes full-time employees, consultants and other partners, independent on-demand workers, workforce agency or temporary workers and specialized consultants.
Since 2010, there have been more than 500 articles, white papers, videos, conferences, seminars and books on the topic of leadership agility or adaptability in a VUCA world. Leadership development and executive coaching programs will need to emphasize the new challenges of leading in a gig economy. It is more challenging to lead a talent portfolio composed of a coalition of employees, contractors and consultants than it is to lead a team of full-time employees working for the same organization.
Developing Agility Fitness
The amount, volume, velocity and intensity of change that learning organizations encounter demands agility. Agility fitness can be thought of as a framework that encourages a balance of five key capability drivers:
- Anticipate change: Interpret the potential impact of business turbulence and trends along with the implications to the enterprise.
- Generate confidence: Create a culture of confidence and engagement of all associates into effective and collaborative teams.
- Initiate action: Provide the fuel and systems to make things happen proactively and responsively at all levels of the organization.
- Liberate thinking: Create the climate and conditions for fresh solutions by empowering, encouraging and teaching innovation.
- Evaluate results: Keep focus and manage knowledge to learn and improve from actions.
Agility fitness is not another change management methodology nor an agile software technique such as SCRUM. As with the concept of total fitness, agility fitness is more than flexibility or speed but a combination of factors. It is also more than resilience or change management since it also requires the capability of anticipatory or pre-emptive action.
CLOs can complete a self-assessment to get a baseline of agility fitness. The results of the assessment serve as the pre-workout physical for a CLO’s agility fitness plan. Just as with a regular physical, no single measure such as weight, heart rate, cholesterol level or blood pressure will provide a comprehensive view of physical fitness. It takes multiple tests interpreted with the aid of a trained physician and personal trainer to help create a fitness plan.
Agility fitness level is based on a combination of scores. The highest fitness level is level 5 where all of the five agility drivers are strengths. (For a sample assessment, visit CLOmedia.com/agilityfitness.)
Building Fitness in the Organization
From a departmental perspective, anticipate change resulting from the gig economy by conducting a modified version of an HR agility audit.
As a starting point, CLOs and CHROs will need to shift their reliance on job analysis to focus on work analysis in order to disaggregate the tasks involved in accomplishing the work, regardless of whether the worker is a full-time employee or a contingent worker. Consult with internal client functions to determine what work is best accomplished by full-time employees, such as tasks involving sensitive intellectual property, and work that can be accomplished by contingent workers.
CLOs can help leaders become more agile in working with a broader talent portfolio and identify vital skills and the source of talent for those skills, whether full-time employees or contingent workers.
Next, generate confidence in organizational leaders to identify and develop their talent portfolio. Equip managers with training and coaching to effectively lead in a gig economy where functional and project teams include contingent workers, consultants and full-time employees. An important element of the management training includes the updated process for conducting talent reviews for high potentials
Then initiate action to disaggregate work so that it can be accomplished by the most effective and efficient means, whether that means full-time employees or using contingent workers. Process maps are useful to analyze work and identify current and future tasks in each work process. Core tasks should be completed internally by full-time employees and noncore tasks could be performed by contingent workers. This step informs learning design for full-time employees and contingent workers.
Liberate thinking by integrating scenario planning with the talent review process in order to build a talent management review process that is characterized by agility. Here are some concrete ways to do that:
- Identify the talent portfolio, including both full-time and contingent workers.
- Collaborate with internal organizational leaders to determine the talent portfolio demanded under a number of scenarios.
- Modify current HR programs, processes or policies to adjust and adapt to the demands of the gig economy and other aspects of the volatile, uncertain, complex and ambiguous business environment.
- Select and develop high-potential talent regardless of whether a full-time employee or contingent worker.
- Build project management agility into the core competencies of leaders and workers.
A comprehensive talent portfolio review process applies scenario planning with contingent workers so that the organization’s entire talent portfolio can be identified, reviewed and developed. The best talent mix will vary depending upon the business scenario.
Then you can evaluate results to determine what impact the transformation had on key performance indicators. KPIs such as productivity, internal client feedback, retention, HR-to-worker ratio and cost of services to value can be tracked and monitored to determine if the learning agility initiatives are having the desired impact on the organization.
CLOs have the opportunity to take the lead in developing agility for themselves and their learning organizations to more effectively compete in the gig economy. An assessment of agility fitness is good preparation for the continuing challenges of our VUCA world.
Nicholas F. Horney is an author and founder of Agility Consulting and Training. Comment below or email editor@CLOmedia.com.