This article is an end-of-the-year reflection about the future of organisations and the future labour market. I wish everyone who reads this the very best for 2018, a year that will be disruptive.
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The Future of Work is Hybrid and Agile.
The ideal career
Not so long ago the ideal career was stable, with a fixed employment contract. Leaving an organisation was something that people should avoid at all cost. Changing a career orientation is something that was not done either.
Because changing jobs is a risk. And risks were considered to be bad. Why throw away the certainty and comfort of a job and risk an adventure? The psychology of loss is so powerful in career decisions.
Inspire of all the fuzz about new forms of employment, to most people this is still the most preferred employment status.
An Industrial Definition of Work and Organisation
This model of work started in the early industrial era, when people left the countryside to go work in the factories in the cities. They gave up their status of independent (home) worker to become salaried. By doing this they gained certainty and lost the responsibility to “hunt” for work.
The organisation became bureaucratic: hierarchy, top-down decisions, division of labour, command-and-control. And it has worked reasonably for a long time. Why? Because the environment was reasonably stable and predictable. Technological evolution was linearly progressive and took long. There were no surprises.
But there was a downside to this kind of organization. These organisations dehumanised work. People needed to adapt to the work and fit in. And moreover they needed to follow the lines others set out for them. People were seen as one of the input factors, Human Resources. And once the input and throughput were under control, output was guaranteed.
Times are a-changing: the World is VUCA-D.
Today many organisations, not to say most, still follow that model. But the context has changed dramatically. Demographic shifts (longevity, migration, talent scarcity) and Digital Disruption change the way we need to look at work.
Today organisations cannot offer any certainty. The world has become VUCA-D, volatile, uncertain, complex, ambiguous and digital. Organisations cannot know what will happen tomorrow or the day after tomorrow. They can assume, they can guess, they can think in scenarios. But in general, we are very bad at predicting the future.
Yet, organisations need to be prepared for the unpreparable. And a long-term employment relationship does not provide the right answer to that versatility: not for organisations, and not for people either. People tend to fall asleep in a long-term employment relationship. The pampering by organisations stops them from thinking about their future, their plan B.
I always ask people what their plan B is, even when they just start. And the problem is often that they do have a plan B, that is fixed employment, but they do not have a plan A. Sometimes potential needs a push.
The Assignment Economy: A Matter of Exploitation?
We are moving towards an assignment economy. Sometimes this is called the gig-economy. Like musicians go from concert (gig) to concert, workers of the future might go from assignment to assignment. The sequence of assignments might occur within an organization or between organisations. To some this reeks of exploitation because people might not acquire any rights and might find themselves in a precarious situation.
That of course is the challenge. When Uber, Deliveroo and others enter a market, they challenge the status quo. They operate outside established rules and gain a competitive advantage because they have freed themselves from the burden of legacy rules, many of which are simply bad habits.
It’s not because they challenge the rules that they are wrong or right. The good thing is that when they challenge the status quo, a discussion can take place. A new framework can come out of the friction between old and new. And it’s up to us to decide how we can construct that new framework: what kind of flexibility and what kind of protection should we install? That is a discussion on the level of the whole society. The design of a new labour market that enables individuals, organisations and industries to remain or become competitive and that enables sufficient protection for those who are without assignment, that is the real challenge.
The design of a new labour market that enables individuals, organisations and industries to remain or become competitive and that enables sufficient protection for those who are without assignment, that is the real challenge.
The Assignment Economy: A Matter of Empowerment
So the changing nature of our economy and the changing nature of our organizations has an impact on employment and work. There will be a growing number of people who have no fixed relationship with an organization. And also within organisations the relationship with employees is changing.
As organisations need to be more agile (speed, flexibility), employees need to become agile too. And the way to do that is to give people more autonomy, a sense of purpose and the competencies to cope with that uncertainty. Empowerment not only mean giving people more freedom, it also means giving people more energy and a framework that both leaves space to take decisions and gives enough support to have a sense of direction. Empowerment entails also responsibilities!
The Next Organisation
Next organisations will have a small core of employed people (who might own the company too), enlarged by a talent cloud, a group of independent professionals that can help an organization to achieve its purpose. There are different kinds of relationships from fixed, to long-term flexible, to short-term with people that form the talent base. The talent cloud is quite diverse and enables organisations to shift gears fast and accomplish flexible goals.
There might be parts of that organisation that still are in factory mode and governed the industrial way. But this ambidexterity is extremely difficult to organise, so companies with different speeds within, will tend to split up.
And organisations will not stand alone. They will be networked, not around a supply chain, but around a customer and a purpose. And so will people. The traditional hierarchy will probably not disappear completely, but will change and become less dominant. A different kind of leadership will be needed, one that allows for people to take decisions autonomously. I have called that sustainable leadership in my book.
The battle between trust and control
It’s clear that these organisations will have to develop a sense of purpose, but also a sense of trust. Without trust these organisations cannot succeed. Today there is a lot of discussion about self-organisation, autonomous teams, empowerment and the liberated or empowered enterprise.
And at the same time we have never had so many control mechanisms in place. Discipline, authority, compliance, CCTV … it’s all there. There’s a battle going on between control (cost to reduce risk), and trust (a risk that enhances agility). There is never 0% control and never 100% trust. But 0% trust and 100% control would be at least as catastrophic. Of course it should not be a battle, but a quest for balance as trust and control are not mutually exclusive as long as the control is meaningful to those who are subjected to it.
New Organisational Practices
These are the organizational practices that need to be reviewed:
- How will we decide? Top-down or more participative? This is the question about autonomy, empowerment and distribution of decisional power.
- How will we coordinate? Centrally or decentrally? This is the question about steering, follow-up, hierarchy.
- Who determines what we do and how it’s done? Who determines goals? How will we evaluate? This is again a question about empowerment whereas people who are close to the customer will define how the business is run.
- How will we motivate people in both the core and the talent cloud? How will we unite them around the common purpose? This is the question about identification even when people are working on assignments. This is the challenge of building rapid trust within temporary teams.
- To what extent can someone take decisions about how a job is done? This is the question of customisation.
One way to tackle the future challenges in that new labour market is to customize work. In 2011 I said that we’d need a kind of iHR, an HR policy that takes individual characteristics as starting point, instead of taking rules and procedures as framework.
Of course we need to do both. But customisation is about adapting the work (context) to the individual. By doing that we will enable people to work longer and with more motivation. And through customisation, organisations can become agile.
Don’t forget that the essence of HR is to make sure that people are able and willing to perform sustainably. And as careers become more hybrid and flexible, other solutions are needed to lake sure that this happens. The old way of dealing with people within organisations will no longer suffice.
The Return of Ethics
In all this, ethics will become more important. Ethics is about dealing with others according to some values. These values steer behaviour. And so if we could build organisations that inspire to act ethically, we are half way. Ethical behaviour reduces the need for control, supports decision-making, reduces the risk of fraud, allows people to do the right thing, …
A new Labour Market: from exploitation to empowerment?
To many the new labour market seems a return to the past, when home-workers had to find their assignments and where the customer decided whether or not to pay for the work done. The direct and individual relationship between worker and customer lead to a relationship based on reputation, quality of work. This gave rise to exploitation, precarity and aleatory decisions.
The best way to avoid precarity is to work on both the individual level and on the regulation of the labour market.
The Next Labour Market
The current labour market has many defects too. It is in itself imperfect as it is not as inclusive as we would like it to be, or because there is too much distance between the world of work and the world of education.
So if we talk about the labour market of the day after tomorrow, we are still faced with the situation of today that needs to be resolved.
There will be fixed employment. Yes. But that fixed employment will be limited in the time, either because the contract says so, or because the employer will need different skills, or because the employee wants a change. So we need to prepare for that.
I strongly believe that the idea of flexicurity as guiding principle could work. We give people not the job security they want, but the employment security. By focussing on sustainable employability we can make people less dependent from the dynamics of the labour market.
The Next Individual
The concept of sustainable employability must be guiding for how we approach the individual. Sustainable employability means that a person is prepared (willing and able) to work in the future. Being employable is good for the organisation, for the employee and for society. Whatever the employment status (employee, freelance, self-employed), it’s important for everyone to develop one’s own employability. Only then, the assignment economy and the related labour market will not be a problem.
But given the current imperfections of the labour market, we still need to take steps to develop this notion and to integrate all stakeholders in an active approach of sustainable employability: the education system, the employers, the employees, the unions, the government, …
The assignment economy does not have to become a problem. If we are able to build the next labour market, next organisations and help the next individual to rise.
Thank you for reading until the end. If you appreciate this free content, please like and share it. It’s my way of giving back what I have learned to my own network