Monthly Archives: February 2016

The Power of Why

I am reading, or more accurately, listening to the book Start with Why by Simon Siner which is about how great leaders inspire people to action. https://www.startwithwhy.com/About.aspx

In one section sets up the framework of “The Golden Circle”, a derivative of the  golden ratio.The golden ratio is the fibonnaci number sequence that underscores balance and progression in everything from the angles in the columns of the Acropolis to the petals on a lilly. The Golden Circle, Siner suggests, is a similar balance relationship that is a necessary component in great leaders, where concentric circles of how and what build up to an interior focus of why. Why is the essence of everything and he goes on to support that premise. Apple, of course is the poster child for his thesis; customers buy Apple products because they believe Apple thinks differently; they believe in the why.

A far more provocative read is  one of my Favorites, A More Beautiful Question, by Warren Berger.  http://amorebeautifulquestion.com/book-on-questioning-by-warren-berger/  As Berger so rightly points out, we all want answers, but it is hard to get the best answer if you aren’t asking the right questions.  He explains why it is that despite the fact that we were question machines between the ages of 3-6, we lose that ability to inquire.  The loss is partly frustrated parents who get tired of the why questions, an education system that values answers over questions, and work environments where the”right answer” is all that matters.

He offers some easy ways for us to improve our own inquiry skills such as adding why to a question, (something Siner would no doubt endorse) or softening potentially confrontational questions.  Another technique that I particularly liked was the idea of punctuating a questions  series with 8 or 9 why questions.  By the end of the sequence, you may be discussing a different issue entirely.  For example consider this hypothetical for Company ABC:

Why are sales down? Product line x missed its targets  Why? the targets may have been too aggressive  Why? We had bad data for same store sales last year.  Why? There were issues capturing the right product IDs in the warehouse.  Why? Because we were understaffed for most of the year.  Why? We can’t find the right workers at our warehouse locations.  Why? We can’t compete with our salary packages.  Why? .Because we don’t pay enough to attract skilled workers.

Chances are, after this exercise, Company ABC may  focus more on changing its warehouse salary structure or even relocating the facilities than they would have without this line of inquiry.

A Gig Economy Downside No one Mentions

I saw a blog post today from DCR Workforce announcing that there will finally be a "reckoning " of the gig economy.  http://blog.dcrworkforce.com/finally-official-reckoning-gig-economy Like most people who question the value of the gig economy, the author's concerns were about the  lack of a safety net for the workers.  There was also apparent relief that perhaps, in this reckoning, we would also "weed out cases where employees are being misclassified as independent contractors by businesses."  

I too think it would be valuable to have such an accounting  for what is becoming an ever-growing proportion of the labor force.   I too recognize that may of these workers are not doing gigs by choice but out of necessity.

That said,though, so many pundits and economists often overlook the fact that for so many the further maturation of this marketplace is not pernicious but empowering.  Many professionals have self selected into this gig economy labor force, because they can; they have the expertise that will command a market rate that will support their lifestyle.  And now, with the increasing sophistication of search algorithms, the ability to parlay that expertise to the market place is so much  more efficient.

It is not a free market, though, because legal obstacles especially in employment law around independent contractors and employees frustrate the free flow of talent. Yes, some players may inappropriately classify workers, but the flip side is true as well. Many companies are so worried about the employee independent contractor issue, that they refuse to engage anyone who is paid on a 1099, the tax form used to report non wage income.  It is not illegal to work on a 1099 basis, yet many consultants have been forced to change the way they do business to deal with this heightened risk profile. I should know, in 1992, I started a firm, Collabrus,  to employ consultants  for the duration of a consulting project, if  the nature of the work or a risk averse client required it. Similarly, many senior level consultants are forced to work through master vendor arrangements, where they become the employee of someone in order to complete a consulting project.

So the downside that many never seem to mention, for what is albeit the upper end of the gig economy labor pool,  are the marketplace inefficiencies  that institutionalize risk and increase costs to practitioners  who are forced to operate differently with  different clients.

So my question is this --  when the reckoning of the gig economy is done, will they also identify those workers who were misclassified as a temporary employee, when they could have operated as a 1099?  It seems only fair.

The Freelance Marketplace Platform Race

Now that I have embarked on my research for the next book on the high-end of the on demand expertise marketplace, I am having a lot of deja vu moments.  Certainly, there is the fact, that though I have been gone from my old firm for several years, things have not changed that much. Tremendous, credentialed  expertise of just about any type is available on demand. Companies continue to avail themselves of this resource in new ways, and new competitors continue to arrive touting different points of differentiation.

It is this last area where the deja vu comes in, because the new platform competitors appear to be cropping up everywhere.  My twitter feed is cluttered with entreaties from one firm to beta test a new platform that "won't suck." (I couldn't help but wonder if they shouldn't get a free

ipo-flops3-1

The Pets.com sock puppet

lance copy writer to come up with a better ask...) Quite frankly, I am reminded a bit of the frothy days of the internet when pets .com  became the 4th ( yes 4th) online pet supply store.  Despite the fact that dog food is not a high value shipping product, the firm had an amazing IPO valuing it at close to $100 million  in 2000 and was out of business 9 months later.

 

I am not suggesting that the online freelance marketplaces are headed for the same fate.  Indeed, I think technology is creating the platform to enable a market to be made in talent, in the true economic sense of the word market. I look forward to better understanding these business models to see how differentiated they really are.  Certainly, some are defined by the type of talent they seek to attract; the sites working with copy writer won't appeal to CFO's, but dancers will do... Interestingly, one in the UK, combines a totally automated service with consultant mixers, so freelancers can gather together.   I can't help but wonder if freelancers will subscribe to all that operate in their area of expertise, or if they will  choose just one.  If it were me, I'd definitely go for the one with the mixers...I am a sucker for cocktails...

 

 

The “Gig Economy” and the employment data problem

A recent news item little noticed apart from gig economy wonks like me was the fact that  the government is planning to get data on how many workers actually populate the "gig economy."  Labor Secretary, Thomas Perez, announced at the end of January that the department would team up with the Census Bureau and  restore the Contingent Worker's Supplement  as part of the May 2017 Current Population Survey.

It is being restored because in 2005, in the infinite wisdom of governmental agencies, the decision was made to discontinue data collection in this area. The Supplement had only been published 5 times and in fairness, it had its share of critics.  A major failing, was the fact that  it aggregated all contingent work arrangements, from  senior management consultants to security guards to cab drivers.  As such, drawing conclusions about income trends, potential wage and hour infractions or economic security was difficult.  Similarly, no attempt was made to try reconcile the differences between the self employed - a broad category which  consultants, architects and dry cleaners - and 1099 tax filers.

Now that the gig economy appears to be fundamentally redesigning work and income structures in the US economy, the Labor Department  wants to try to get a handle on the phenomenon in large part to better inform policy decisions. They do acknowledge that it will be difficult, since just the definition of what qualifies as contingent work is controversial. Additionally, one would hope that they will make strides to refine the data to be able to draw more meaningful conclusions.    That said, we should not get too excited, since this  there won't be data until early 2018 at best.

What is ironic to me, as someone who has been involved in the  high-end of the contingent work force for nearly 30 years,especially now in this political season is the constant emphasis on jobs creation as a metric of economic success.  When you consider 53 million people, according to The Solo Project, have chosen to define  themselves as  independent consultants , free agents or free lancers, the magnitude of the data problem becomes apparent.  These people do not want traditional jobs. What labor statistics are capturing this? Lets hope Perez can fix the data problems inherent in the Contingent Workforce Supplement, because the world of work is being redefined quickly and the government needs to catch up.

The gig economy goes skiing

I don’t always flunk retirement, which explains who I am doing a mini mid week ski trip with another former CEO. At Northstar in Tahoe we took advantage of the opportunity to spend a few hours with a mountain guide, all for free. (Vail Resorts, what a nice touch…) Imagine my surprise, when as we did the requisite introductions on the first chair lift, I discovered our guide, Dave,  was also an interim CFO.

The interim world is, of course,  the upper echelon of the gig economy. These individuals walk into situations where typically, as Dave asserted, they should have been called into months  before.  “We play fireman”, he says, and because of that, the job can be stressful. The good news  though is its only a 3 ( or maybe 4 or 6 …) month gig. So when Dave needs to decompress, he heads to his other life in the wonderful world of ski resorts.

Apparently, Vail Resorts is very flexible with Dave. They have developed a specialized software system which enables seasonal employees, like Dave,  to choose scheduling options that work with the other parts of their lives. It’s a tremendous outcome; Dave gets to blend the rigor and economics of his interim CFO life with the serenity of the mountain, Vail gets an employee who is grateful for his role and not so much over qualified as other qualified for the job, and the customers get a wonderful tour of the mountain enlivened by fascinating conversation about the future of work. Is this a great country or what..

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