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INTRODUCTION

Change can be frightening, and the temptation is often to resist it. But change almost always provides opportunities—to learn new things, to rethink tired processes, and to improve the way we work.

—Klaus Schwab

A NEW WAY OF OPERATING

AMYRIAD OF BOOKS DESCRIBE WHY, WHAT AND HOW work is being disrupted. Yet many companies are held captive by out-of-date tools, policies and practices that won’t get them through this disruptive change. It is time to break the cycle.

We are passionate about helping organizations change in ways that will improve both organizational performance and employee experience. For four years, we worked with more than 70 chief human resource officers (CHROs) and HR thought leaders on the CHREATE Project: The Global Consortium to Reimagine HR, Employment Alternatives, Talent and the Enterprise.¹ Our collaboration over this time has informed our views about how the world of work is changing and how we need to alter the way we work in response. Specifically, we’ve realized that organization models need to evolve to be more responsive to the rapid shifts in skills, technology and business models. Our leadership roles in the CHREATE project gave us the opportunity to discuss these issues with forward-thinking HR leaders and test the ideas with business leaders of all types.

Since the CHREATE project, we have developed our own ideas about how to build a new talent operating model to help organizations apply the concept of the gig economy inside their firms. This model allows companies to share talent across boundaries by dynamically matching and deploying skills to work. We call it the Inside Gig. It creates competitive advantage through an employee experience that democratizes work, facilitates learning and unleashes internal capacity. We have put our ideas to the test within several organizations across different industries, and we have practical knowledge of how to make this change happen.

This book shares our ideas and experiences to help organizations understand how to move from traditional structures and ways of working into a new paradigm—one that better fits this rapidly shifting, dynamic business environment. It is also a playbook of ideas turned into actions to deploy a new talent operating model to address the needs and pace of work today and tomorrow. This playbook is based on six core principles that lay a foundation for operating in a new way, a way we believe will lead to increased productivity and greater levels of innovation.

THE INTERNAL NETWORK

In today’s competitive landscape, companies need to develop fresh approaches to managing talent by leveraging new technologies and responding to changing business models that redefine employment relationships. It is no longer enough to have the most appealing employer brand, or the best university relations programs or even a best-in-class workspace, because it has become less clear how we define the workforce.

When new methods for competing for human resources via “talent on demand” gave rise to platforms such as Topcoder and Upwork, the idea of a workforce made up of both employees and temporary talent began to make a lot of sense. However, the rise of machine automation and the Internet of Things (IoT) has fundamentally transformed not only the nature of work but the speed at which it’s necessary to learn and deploy new skills that are often in higher demand than supply. This remains true no matter how an organization plans to source talent. We must challenge what we thought was novel in talent management as recently as two to three years ago. Now it’s a race to acquire skills. And just when everything seems under control, another emerging skill domain becomes both critical and scarce. Without a crystal ball, today’s CEOs and CHROs are managing their most valuable competitive resource in the dark.

Enter a new era of competitive talent deployment via the internal gig network. Rather than acquire new skills by hiring from outside, the new and quite disruptive reality is that competitive advantage is now based on the ability to rapidly develop and better leverage the talent supply within a company. So, instead of focusing on competing for hot or in-demand skills that are in short supply and high demand, we suggest concentrating on what you have the power to control:

1.Bring visibility to the internal skills you have and any gaps there are (supply).

2.Learn to accurately predict what skills you might need (demand).

3.Address the speed at which you can upskill current talent for new or critical skill domains.

4.Use digital horsepower—through human-machine collaboration via predictive analytics, machine learning (ML), and automation—to accurately and efficiently match and deploy that talent to the right work, at the right time, at the right cost.

MORE THAN A JOB TITLE

It’s often overlooked that before taking up their current positions, people had other roles, industry experiences, skills and interests. Most human capital management (HCM) systems categorize employees by job titles, not skills, though many systems link static job descriptions with requisite skills for those job titles. Even this simple organizing system is flawed because quite often employees can customize their job titles for niches they’re in, thus making common jobs difficult to compare from a systems perspective. For example, a sales manager becomes a “fine wines sales manager,” and a software developer becomes a “hacker” or “QuickBooks guru.”

This difficulty aside, most employees are much more than their job titles. They bring past experiences and current passions that reflect different skills and abilities they can contribute to their organizations, even if those skills aren’t applicable in their current role. For instance, to determine how many web designers a company might have, you would have to get beyond those individuals with “web designer” in their job titles. Some people are self-taught web designers and design websites as a hobby or for personal projects. To answer this question, you would need to survey the skills of these employees to know what talents they possess, regardless of the positions they have today.

Another common example is an employee, let’s call her Kathy, who has a degree in engineering. Kathy’s first job out of school was as a product marketing engineer. She realized she had a knack for understanding the importance of product features and benefits and communicating them to others. As a result, she followed a marketing path rather than an engineering one. However, at Kathy’s core is her love of engineering; it was just that the opportunities in marketing at the time were interesting and challenging. She could have uniquely contributed to projects based on both her engineering and marketing expertise. But as her time with the company progressed, she remained a marketer, and no one considered asking her to participate in a project that required engineering abilities. Consequently, Kathy now feels that her skills are underutilized by her employer. She is more than her current job title and could offer far more to her employer if the organization thought of her as a whole person.

MAKING TALENT VISIBLE

If employees are more than their job titles, how do you improve the visibility of your company’s talents and what can you do with this increased visibility? What can you learn from the gig economy and how can you apply some of that knowledge to your company? Most gig workers find their work on talent platforms (Upwork, Toptal, Guru, Fiverr, etc.) where those looking to hire an individual search a database of people who have specific skills for certain projects. The gig workers on the platform enter their skills and interests into the database. The talent platform then matches gig workers with opportunity providers. By mirroring such a system internally, organizations can gain greater visibility into their own talent.

In today’s constantly changing business environment, organizations need to gain an in-depth understanding of the talent they have to both leverage the skills inside their companies and create strategies to transition employees to new kinds of work. Let’s start with the first goal—better leveraging the talent you already have. Chapter 1 presents a new talent operating model; we expand on this model in Part Three: How to Make It Work. The new talent operating model is a way for organizations to identify and analyze talent based on skills, not job titles. This gives more insight into the complete set of capabilities within the organization beyond the bounds of job titles or résumés.

If Kathy’s organization were to reduce its investment in marketing and shift more resources into innovation through its engineering team, her company could possibly avoid laying her off and she could pivot to an engineering role. Or a short-term project might arise that requires her engineering talent, when most of the existing engineering staff are overcommitted already. Kathy might enjoy a short-term, part-time project to use her engineering skills in addition to furthering the marketing expertise she gains in her current role.

Now let’s address the need for strategies to transition employees to new kinds of work. Every day we’re inundated with articles addressing the shifting business landscape and the quandary many organizations face of what to do with their current workforces when, because of technological advancements in the workplace, existing skills become obsolete and new skills are needed. When a company is undergoing significant strategic shifts, it is particularly important to gain greater insight into all of the skills in the company.

For example, in 2015 John Chambers, at the time CEO of Cisco Systems, wrote about his company’s shift from routers and switches to cloud computing and the IoT.² In February 2017, we interviewed Ian Bailie, who was then senior director, talent acquisition and people planning operations, at Cisco. He spoke about the importance of gaining visibility of the company’s talent during its transition to the IoT. Bailie told us: “We needed to gain a better idea of the skills, knowledge and expertise of our employees. Cisco is going through a big transformation, and we are moving away from our core expertise. When we look at the external labor market, there are not enough of the skills we need to succeed in our move toward the Internet of Things. The idea of laying off people with the old skills and hiring people with the new skills we need is not really a viable option. We needed to minimize laying off talent by reskilling people for the future of work.” Gaining visibility into the skills Cisco currently had gave the company insight into who might be able to make the transition to the newly required skill sets, and thus whom the company should focus on first for reskilling to grow the talent needed within the organization.

Cisco is a specific example of a company moving away from its core expertise to a new area of focus. But it is more and more common for organizations to experience shifting technologies, platforms and areas of attention based on evolving business needs and new strategic priorities. Many employees’ future roles haven’t been invented yet, an indication of how quickly the workplace is evolving. Companies can’t assume they can lay off employees who possess an old set of skills and then hire employees with the necessary new skills. There are not enough people with those hot, in-demand skill sets available to satisfy all companies as they move to big-data analytics, virtual reality, artificial intelligence (AI) and so on.

Given this talent shortage, firms need to figure out how to build their own talent. Furthermore, reskilling the company’s employees for the future of work is one tangible example of the Business Roundtable’s redefinition of the purpose of a corporation, which expands the definition beyond serving only shareholders to also include serving customers, employees, suppliers and communities. Investing in employees and the communities a business serves is critical to its long-term success. When skills become visible, any organization can then manage both its supply as well as the demand for such talent through requests on projects or open requisitions. Armed with this information, an organization can create talent strategies to close the supply-demand gap and prepare for future strategic shifts.

By gaining visibility into the hidden skills, capabilities and aspirations of their employees, organizations can more rapidly and cost-effectively match the right talent to solve real-time business challenges. They can also tap into discretionary effort from a highly engaged workforce by allowing employees to work on those projects that best match their skills and interests. The future is about connecting people with opportunities for micro-learning, personal growth and fully leveraging all of their capabilities so that they can lead more fulfilling careers and companies can maximize their investment in talent.

DIVERSITY AND CHOICE

It is often said that it is much easier to get a new job in a different company than it is to transfer to another department within the same organization. Employees today want new and different experiences. Yet most jobs are so specialized that people get stuck doing the same work over and over again, which leads to boredom and disengagement. Opportunities to work with different colleagues on different projects are exactly the type of dynamic learning experiences today’s employees seek. When employees are exposed to new leaders, work with new team members or are able to use their skills in a different context, there are constant opportunities for learning and growth. Not only are new challenges presented in those work teams, but employees also learn from different leadership styles and from their coworkers’ knowledge, skills and experiences.

Traditional job rotation programs have been around for a long time. Their main benefit is exposure to new managers, new teams and different types of work; they are a way of rapidly expanding an employee’s set of experiences in a relatively brief time. To gain the same amount of learning in a traditional role-based assignment would take many more years. Given that today’s millennials demonstrate impatience with the speed of learning in a traditional job trajectory, some organizations have turned to job rotations to provide employees with new experiences. But with recently developed technological capabilities, there are new ways to provide diversity and choice in work rather than rely on traditional job rotation programs.

When Tata Communications, an Indian telecommunications company, surveyed its eight thousand employees, more than 50 percent said they were interested in changing their roles.³ However, the organization’s internal job rotation program could only handle about four hundred rotations per year. Tata Communications also found that most of its departments had a lot of programs and projects they needed to complete; however, they didn’t necessarily have the skills on hand to get them done. This realization gave rise to the Tata Communications Project Marketplace, an internal opportunity platform. The company built its own system to capture the skills of current employees, then had managers post jobs in the marketplace that its employees could apply for.

Now, when employees finish projects in the marketplace, they get rated on their skills, much like the rating systems used by talent platforms such as Upwork, Fiverr and Wonolo. That way employees can shape their internal reputations around specific skills. Employees who take on projects do so on their own time, since they don’t get released from any of their primary work responsibilities. Participation in the marketplace is strictly voluntary, and Tata Communications believes that only employees who can invest extra time in personal development choose to take part. The company also uses this program to familiarize managers with hiring for project-based work. The intention is to train managers through experience to consider what work should be a project and what work needs full-time dedicated employees.

As organizations build new people practices, they need to consider what the employee or manager expects from those practices. When it comes to what attracts new employees to a company, the research is very clear: career advancement opportunities, challenging work and opportunities to learn new skills.⁴ So an ability to provide employees with a diverse set of experiences in which they can craft their own paths will likely attract the best talent. With the barriers to free-agent or contingent work being low and talent demanding more diverse work, greater choice and the opportunity to rapidly acquire new skills, there is pressure to create an employee experience like that of a free agent inside an organization.

By participating in short-term, part-time projects (much like a task-force committee assignment), employees get to learn while doing real and important work for their organizations. We are strong promoters of the idea that 70 percent of learning should come from on-the-job experiences. We just use the term job a little bit more loosely. When employees are allowed to opt in to projects where they can learn a new skill set, use a currently underutilized skill, or simply work in an area they’re passionate about, they’ll exert more discretionary effort because the work is based on their own personal interests.

THE CORE PRINCIPLES

In Part Three: How to Make It Work, we describe more fully this new talent operating model and the technology that enables the process. This new way of working is based on six core principles, which are elaborated on in Part Two; to be successful at implementing the new talent operating model, it is important to master each of them. These principles are briefly introduced here. At the end of each chapter in Part Two: The Core Principles, we’ve included a section called Perspectives from the Inside Gig that outlines how to put the principles into action from the perspective of the employee, manager or company.

Principle No. 1: You Get What You Give

Most members of the Generation X and baby boomer cohorts have grown up with a management style that focuses on owning and controlling employees on their teams or in their functions. For them, talent sharing across departments or functions is an uncomfortable concept. Allowing greater sharing of talent across organizational boundaries (talent mobility) can create abundance rather than scarcity of resources in an organization. Managers give away some of the time employees work to other departments; they can also get help from employees from different departments. Over time, this swapping of talent should equal out. The talent that managers are able to access this way might have a critical skill set not available from their current team members, but they don’t need to bring in an external contractor or consultant or open a position requisition to hire a new employee for a skill that is not regularly needed. “You get what you give” is one of the most challenging mindset shifts necessary to embrace the new talent operating model.

Principle No. 2: Know What You Have

It’s a common problem for companies not to be aware of the skills their employees bring to their organizations. At best, they know all of their employees’ job titles. And companies don’t take advantage of existing technology to monitor skill gaps and encourage employees to acquire new skills that are important to the company. Human capital management systems have traditionally been matched to an old infrastructure that emphasizes jobs and doesn’t easily illustrate an inventory of skills. An ability to clearly identify the full range of skills within an organization allows talent acquisition and deployment to be optimized by focusing on filling strategic gaps for work that has to be performed today while planning effectively for skills that will be needed in the future.

The talent supply chain is an application of traditional inventory supply-chain management to talent. Supply-chain management is the optimization of product inventory and supplies so that those items can arrive on time and to the right destination. Similarly, a talent supply chain is based on skills inventories and knowing how much to have “in stock” to ensure that supply matches demand. Organizations that deploy those right skills at the right time will be well positioned when emerging skill domains (such as artificial intelligence) reach higher demand than supply. Failure to manage supply of skills efficiently could lead to loss of market share and profits, and ultimately, if a company doesn’t have the skills that are crucial to pursue their strategic goals, failure to thrive.

Principle No. 3: Create a Learning Organization

Given that the half-life of skills is now only five years, employees must constantly update their learning. Millennials have a reputation for wanting continual career advancement. However, when we dig deeper to understand what that means, it is really a desire for nonstop learning and career growth. Being able to further their learning is an important incentive for employees in today’s relentlessly evolving business environment because, without continuous learning, skills easily become irrelevant. However, organizations have a difficult time keeping up with employee demands for personalized, dynamic, ongoing learning and development opportunities, which require exposure to different experiences that build new skills. Gaining access to micro-learning opportunities facilitates skill acquisition and career growth more quickly than yesterday’s approaches. Bite-size on-the-job learning and online learning have become the new normal for rapid skill development.

Principle No. 4: Democratize the Work

Millennials bring to the workforce a new set of values and expectations along with an inclination to be more entrepreneurial in nature and more in control of how, when and where they work. This drives a need for a more consumer-like experience, not unlike the ways employees experience their personal lives. They get to choose, for example, which airline to fly and when they want to go to fit their individual needs. When employees are allowed more freedom and choice in how they contribute in the workplace, they can select work that suits them. This flexibility helps employees get unstuck from narrowly defined roles and the boredom that comes with doing the same set of tasks day after day. They are able to use the full breadth of skills they can contribute to their organizations. Using technology and artificial intelligence, companies can automatically match employees to potential opportunities, which opens up possibilities beyond the old boys’ network, which only gives access to new projects to those who are politically connected within the company.

Principle No. 5: Create an Agile Organization

A move away from a traditional hierarchy toward more project-based teams can increase a company’s responsiveness to changing business dynamics. Historically, organizations have been built to be efficient and effective, which was appropriate in a time of predictability. Organizational hierarchy was a natural outgrowth of this desire to be efficient. But the resulting business models created strong silos that discourage cross-boundary collaboration (e.g., sharing information across marketing and engineering). In today’s era of unpredictability and constant business model disruption, organizations must be designed for speed, agility and adaptability to respond to evolving business priorities and customer demands. Part of designing for adaptability is a shift away from hierarchical structures toward models where work is accomplished in teams. Using self-managed work teams and providing appropriate support structures, the management and the workforce become more fluid and responsive to business needs while remaining focused on the goals the teams are designed to achieve.

Principle No. 6: Bust the Functional Silos

Breaking down organizational silos allows for cross-functional collaboration within the company to foster innovation. The resulting cross-pollination of ideas ensures that the product or service is representative of customers in a diverse marketplace. Individuals from different disciplines look at business challenges in different ways. When teams that represent a variety of disciplines focus on the same problem, diverse ideas can be generated and then combined to achieve novel solutions. One of the greatest benefits of cross-functional collaboration is that employees are exposed to a different part of the business and thus gain greater insight into how the company operates as a whole.

A NEW TALENT OPERATING MODEL THAT LEVERAGES TECHNOLOGY TO IMPROVE AGILITY

Now is the time to disrupt the existing 20th-century operating models and create a new talent operating model that helps companies optimize their internal resources. With the advances made in artificial intelligence and machine learning, there are new and effective tools to deploy talent within organizations. But the technology only enables the process.

We believe the new talent operating model is the most critical component of the Inside Gig. It is about changing the way a company operates to best use and reskill the talent it currently has. To employ talent in a different and more dynamic way, modifications are needed in all areas of the talent operating model: culture, leadership, ways of working, HR programs and processes, team development processes and so on. However, you can’t simply flip the switch and change to a new talent operating model overnight. Our approach lays out a 10-year road map detailing how an organization can build on smaller modifications to shift to the future of work.

Former U.S. president Barack Obama once said: “Change in the abstract is easy.”⁵ Truer words have seldom been spoken. In Part Four: The Inside Gig in Action, we lay out our recommendations for making a successful transition to a new talent operating model. We share case studies from two organizations—HERE Technologies and Tata Communications—that have made this transition, so you can learn from their experiences of successful implementations.

We believe the future of work will look very different than it does today. Organizations must adapt to become more agile as they shift and change based on new technologies, new skills and new business competitors. This book is a guide to one path to take in, as we like to say, “tiptoeing into the future of work.” You can follow this path to create companies that are more productive and more innovative, while offering employee experiences that drive high levels of engagement and organizational performance.