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CHAPTER 1

Disrupting the Talent Operating Model

Once we rid ourselves of traditional thinking, we can get on with creating the future.

—James Bertrand

WHAT IS A TALENT OPERATING MODEL DESIGNED TO DO?

HOW OFTEN DO YOU THINK OF THE OPERATING model your company is built on? You might think about your car’s operating system more than you do about how work flows and gets done—especially when the “check engine” light comes on. Let’s begin by discussing current operating models and then open the door to our ideas about what change is possible and even imminent in the way work is done.

Organizations are built on operating models and systems designed to deliver value to their customers and shareholders. An operating model links strategy, organization design and execution. While many operating model designs can be found in various books and articles, for our purposes we have adopted the one shown in Figure 1.1 Operating Model.

Figure 1.1 Operating Model

Marcia Blenko, Eric Garton and Ludovico Mottura, “Winning Operating Models That Convert Strategy to Results,” Bain & Company, December 10, 2014, www.bain.com/insights/winning-operating-models-that-convert-strategy-to-results.

In this model, strategy and values are defined by an organization’s leadership team; they provide the foundation upon which a company operates. The first three areas of the operating model—structure, accountabilities and governance—are owned by the executive leadership team. Structure refers to the high-level organization chart that sets out how a company organizes itself to take advantage of scale and expertise. It provides an understanding of how resources are organized and coordinated—functional lines of business versus matrixed structures; global centers of operation or distributed authority to regions. Accountabilities delineate the roles and responsibilities for the organization’s primary entities, including where accountability for performance (profit-and-loss ownership) lies. Governance refers to how processes and activities that cut across structures are managed or regulated, particularly as related to information flow and decision-making. It describes the management processes or operating committees that participate in making decisions on business priorities, including how resources are allocated and how organizational performance is measured and managed.

The ways of working address four people-related processes:

1.Organization culture

2.Leadership behaviors that support the business strategy

3.Decision-making styles and processes

4.Organization design to optimize performance across the company

Finally, the capabilities of a company (people, processes and technology) focus on areas that are also usually within the realm of HR, but not exclusively. Capabilities involve defining the type of talent or resources that are needed and how to focus their efforts; the processes that specify how a company attracts, manages and rewards its employees; and the technology that’s adopted to ensure organizational productivity.

Figure 1.1 Operating Model is a visual representation of how an organization operates. In this book, when we refer to a talent operating model, we are focusing on the ways of working and the capabilities that an organization cultivates to execute its strategy and goals. This chapter offers a broad description of the talent operating model that underpins a new way of working—the Inside Gig—and how this model differs from traditional talent operating models.

TYPES OF TALENT OPERATING MODELS

Traditional Talent Operating Models

Traditional talent operating models generally define the ways of working and capabilities that support the organization in achieving its goals. While aspects of culture and leadership behaviors are unique to each company, most organizations have decision-making styles and an organization design that support a hierarchical management style. Command-and-control systems are the epitome of traditional talent operating models; however, some organizations, while still hierarchical, have adopted collaborative approaches to work. In these organizations, decision-making styles and organization design might encourage collaboration, but important decisions are still made at the top. The capabilities these companies develop mirror this relatively stable work ecosystem.

In a traditional talent operating model, candidates interview for a specific job because they have a defined set of skills that meet the requirements for that role. Candidates are provided with a job description that details the day-to-day responsibilities of the role and the skills needed to be successful in it. This specificity helps the organization hire the right person for the right role. The traditional model assumes that jobs are well defined, and while employees with similar positions have similar job descriptions, this model defines the unique set of tasks each role serves in the company.

Employees are expected to work on tasks or projects that require the skill set for which they were hired. The traditional model generally ignores other skills the candidate or employee might have that are irrelevant to the job at hand. Employees are supervised by a manager in their function (e.g., finance, HR, legal, engineering) and most if not all of their direction comes from within their function. Employees’ upward mobility is generally perceived to be within their specific team or, possibly, function. Typically, career progression is viewed as a promotion up a career ladder.

Standard progression is up a career ladder within a certain sub-function is because it is often difficult for an employee to transfer across sub-functions (e.g., moving within the finance department from financial planning and analysis to tax or treasury; or in HR, from benefits to compensation), unless they are directly supported by a manager who pushes for this type of move. Part of the reason employees get so tied to their sub-specialties is a narrow task focus within the organization. Work is typically performed within the silo in which the employee executes their day-to-day responsibilities. While many employees would argue that their job descriptions quickly become outdated and that they’re asked to do tasks outside their job descriptions, they nevertheless remain stuck and are forced to rely on the skills or capabilities for which they were hired. Over time, employees often find this tiresome and they become a flight risk.

Innovation-Focused Talent Operating Models

Some companies that are more innovation-focused have adopted a slightly different talent operating model. We’ll call it an innovation-focused talent operating model. In this model, employees spend 80 percent or more of their time performing the responsibilities outlined in their job descriptions, and they may devote 15 percent to 20 percent of their time to work on innovation projects of their choosing. Employees may define their own innovation projects and recruit others to participate, or they may take part in projects started by others. While 3M has been operating under this model successfully since its inception in 1902 (Post-it Notes were invented using “15 percent time”), Google popularized the notion of “20 percent time.” Whether it’s 15 percent or 20 percent time, it’s all about giving employees permission to work on a passion project that may have nothing to do with current business goals or objectives. According to 3M’s Karen B. Paul, “Fifteen percent time is not a timesheet issue or corporate policy, it’s a philosophy. It could be 5 percent of someone’s time or it could be closer to 100 percent for some special projects. The idea is about giving employees space to work on projects they are passionate about.”¹

Anecdotally, we have learned from several sources that rather than their jobs being 80 percent core job responsibilities and 20 percent innovation time, their positions are 120 percent. Time allocated to working on innovation projects is added onto a 100 percent time commitment to their “real” jobs. But their additional innovation time gives them permission to work on projects of their own choosing with a self-selected group of people. This isn’t part of working on the regular business needs of the company—serving customers, addressing pressing product issues—it’s about discovering or inventing something new that isn’t currently a product or service offered by the company.

For these organizations, the culture and leadership behaviors support the notion that allowing employees to have time to work on projects of their own choosing serves the company well. For example, Laszlo Bock, in his book Work Rules!, shares a core tenet of the Google culture: “If you give people freedom, they will amaze you.”² Similarly, William McKnight, the president (1929–49) and chairman (1949–69) of 3M, said: “If you put fences around people, you get sheep. Give the people the room they need.”³

These organizations have structures and decision-making processes that support innovation work and define how innovation projects get presented to governing bodies to turn them into company-funded projects. While most of the capabilities for these organizations roughly mirror a traditional talent operating model, their reward structures provide incentives to individuals who make important discoveries or create valuable new products for their companies.

So, in companies that use an innovation-focused talent operating model, while employees get some choice and diversity in the projects they work on because they can opt in to special ventures, they’re still responsible for accomplishing the day-to-day responsibilities for the roles they were hired to do. The organization plays no role in directing people to work on projects based on their knowledge, skills, abilities or past work experiences. Employees are able to choose projects to work on.

Career progression in the innovation-focused talent operating model may be more fluid than in the traditional model, because of relationships formed while working on innovation projects. However, it remains a challenge to find opportunities outside a team or department, which usually inhibits these types of moves as an organizational norm.

Inside Gig Talent Operating Models

The operating model for the Inside Gig is different from both traditional and innovation-based talent operating models. The Inside Gig model is based on the premise that the time allocated to work on projects outside the regular scope of an employee’s day-to-day job is (a) integrated into the employee’s regular workweek and not specifically identified as innovation time or added on to an already challenging work schedule; and (b) centered on the mission-critical work that the company has to do. It is our fundamental belief that employees have far more capability than their workplace acknowledges and uses, when it comes to solving current business challenges. For example, developing products defined in an organization’s current product development road map, resolving a customer service problem, or improving a current process that isn’t performing to expectations. This is what the Inside Gig model is all about; it’s not about investing an employee’s resources in blue-sky activities.

However, a positive side-effect of the Inside Gig model is that it can spark innovation. This is an important benefit for any manager to understand. Innovation is a direct consequence of people working together from different parts of a business (e.g., marketing, sales and engineering), each of whom may bring a different perspective to the project. It also helps to generate more empathy and understanding of how work is accomplished in different parts of the business, because people share what they need to do to achieve the team’s goals. Naturally, the more sharing and relationship building that occurs, the greater the likelihood that new ideas will emerge.

The Inside Gig talent operating model leverages the talent a company has to solve current business challenges. It gives employees opportunities to contribute skills they don’t use in their day-to-day jobs and gain new skills while getting real work done.

You would be right to think that sharing talent across organizational boundaries requires managers and their team members to negotiate what aspects of team members’ current roles can be automated, outsourced or given up completely because they’re not value-added. Alternatively, there may well be aspects of a specific role that could be outsourced or assigned to someone else in order to allow an employee to learn something new or use a skill that is underutilized in their current position. This makes room for a portion of the employee’s time to be allocated to work on projects outside their current job description. It could be 15 percent or 20 percent of the employee’s time on an ongoing basis, or up to 100 percent of an employee’s time for a short duration. With this time, employees can choose to volunteer for projects that let them utilize skills they have but are not putting to use in their current job. They can also learn new skills that will make them more valuable to the company, or simply work on projects that are aligned with their passions or interests.

The matching of skills and interests to opportunities is accomplished using artificial intelligence; in other words, through computers that find the best match of employee skills to the skills needed for specific projects. This gives employees equal access to new experiences in different parts of the business that they previously had no means of finding out about. It also supports diversity and inclusion by eliminating inadvertent human bias as employees seek access to new opportunities to enhance their skills.

Working on cross-functional projects enables employees to construct broader networks within the company to facilitate internal moves that align with their career aspirations. It also increases employees’ understanding of the business, not just what happens within their teams. Career progression in the Inside Gig model offers a mosaic of experiences that advances employees via exposure to different opportunities that build breadth and depth, making them increasingly valuable to the organization and more marketable to other companies. We’ll go into the specifics in more detail in Part Three: How to Make It Work.

KEY TAKEAWAYS

•Traditional talent operating models are designed so that organizations can hire individuals to fill prescribed roles that fit their knowledge, skills and experiences. Employees are expected to devote 100 percent of their time to deliver on the tasks and responsibilities of their jobs.

•Innovation-focused talent operating models provide employees with implicit permission to devote some of their time at work (generally 15 percent to 20 percent) to projects that suit their personal interests and passions. While these projects need to advance the business in some manner, they’re not related to any current ongoing venture the company is dedicated to pursuing. Because employees are still responsible for getting their day-to-day jobs done, this often equates to 120 percent time.

•The Inside Gig talent operating model differs from innovation-focused talent operating models in that the percentage of time individuals take away from their day-to-day responsibilities is used to positively contribute to ongoing business projects. Employees work with their managers to reallocate tasks and responsibilities to make room for different work, which lets them leverage skills and abilities they have but don’t use in their day-to-day jobs, work in areas they want to learn and grow in professionally, or simply explore work they’re deeply interested in doing. The use of technology to match skills and interests to opportunities gives employees equal-opportunity access to projects.

REFLECTION POINTS

What problems are you and your team trying to solve that are proving difficult and could benefit from alternative perspectives?

Do people outside your department come to mind that you would like to bring to the table?

Is there any flexibility built into your company’s talent operating model that can stretch people’s skills to facilitate learning and make new connections? If not, do you think there is an opportunity for a trial venture?