Author Archives: Marion McGovern

The Value of Non-Profit Board Service

As the Chair of ReSurge International I attended a great event this week called Board Match put on by The Volunteer Center. http://thevolunteercenter.net/?The_Board_Match_NPO The event brings together not for profit organizations looking to add board members and individuals interested in joining a board.  There was one moment in the evening where I surveyed the scene, looking out on a trade show like assembly replete with animated conversations and thought how lucky we are for the wonderful spirit of service there is in America.

Well...yes and no...We were lucky and spoke to several qualified candidates who had done their homework on our organization and truly wanted to see how they might add value to our Board and help advance our mission.  Although I don't know how many of these folks will follow-up and proceed through our board vetting process, I am confident that our time was well spent.

On the other hand, there were several candidates who responded when asked why they wanted to join a board, that " it was the right move for them in their career". As I used to tell my students at USF, if you only take one thing from  the class, take this -- serving on a non-profit board is not about you. Rather it is about 4 things -- to make it easy to remember, it is about the PEGS.

P  is the fact that you need to be passionate about the mission.  ReSurge transforms lives by providing free reconstructive surgery and medical training, so it is very inspirational, and it was easy for me to feel passionate about the mission.  Alternatively, I served on the Board of the American Liver Foundation, a very laudable organization that funds research for liver disease.   Having no personal connection to liver disease, it was hard to be a great ambassador for the cause.  When I contrast the two Boards,my role and my engagement level,  being passionate about the mission makes all the difference.

E is about extrapolating from your experience.  As I said in a Ted Talk at my Haas Business School reunion, with the great training we get in our MBA program, we can offer so much to the non profit sector. But your expertise could come from other areas beyond business, including your own volunteer activities.  We all have many gifts to offer.

G is for the fact that not only do we offer our expertise, but we gain learnings as well.  My first board role was with an emergency homeless shelter for families. Since I was in the human capital space I volunteered to provide some guidance on HR policies and employee benefits.  Based on my private sector experience, I was quick to point out that their sick leave allowance was way too generous.  I was informed that given all the sicknesses the residents, especially the children, were bringing with them, staff really needed all those sick days.  It was a great learning not just about the different workplace cultures, but also how best to make observations - now I ask why first.

S is for supporting governance.  It is an adjustment for some new board members to understand that a board governs, it does not manage.  The staff runs the place, not the board.  The board provides strategic guidance, fiduciary oversight, and supports, selects and evaluates the CEO.  Good governance is like the lighting in a museum; you couldn't see the art without the lights, and when its bad, you notice.  When it is good it is effective, effortless and elegant.

So if you are considering board service, think of the PEGS and be sure your peg fits the opportunity.

Hollywood and the Future of Work

Stephen Kasriel the CEO of Upwork just wrote an article in Fast Company called "Why the Future of Work will Look a lot like Hollywood."   I agree wholeheartedly and in fact wrote a similar piece years ago on the movie model. I pointed out that It is no surprise, that  in the business analog, the first players  to become independent were the stars,  just like in the movie model. Back in 1988  ( before the internet...ouch!) it took me no time to build up a strong network of consultants numbering in the 1000s.  Independent expertise of the most credentialed sort  has been around for decades, well before the advent of what people typically think of as the gig economy,  i.e. the uber drivers or free-lance workers on the  Upwork platform. It's the stars, the highly accomplished independent consultants and interim managers,  who wanted to to take control of their careers and make choices about how they would use their talents.

 

But there are two salient  but potentially related differences  between the movie world and the high end of the gig economy.  The first is that no one seems to take issue with the movie model.  The fact that talents of all sorts, from cinematographers to actors to musicians, come together for a one year gig  to make a movie and then disband is not derided as a dangerous model. This gig economy is accepted for what it is - the best way to complete a large scale cinematic project. However the other key difference is the fact that  Hollywood is a land of unions. The  writers, composers, actors and directors are all in a union or guild.  Additionally, the agents who represent them are also union members.  Is it this labor affiliation that spares the movie model from criticism?

Just today, the AFL CIO declared that gig workers should be employees.  They implied but did not suggest outright that therefore they should be union employees.

I can't speak to the low level roles in the gig economy, but I can speak to those who represent the most skilled, the consultants who have gone independent by choice.  One once told me she never wanted to be an employee ever again.  I will extrapolate that she wouldn't want a union card either...

 

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..

Expertise 15 years later

Expertise and the Independent Consultant

I recently reread my book, A New Brand of Expertise, published in 2001. It was a book about, as the tag line said, how ” free agents, independent consultants and interim managers are transforming the world of work.”

bookIt was an odd experience, after all of these years to read the words. Perhaps more prolific authors are used to it, but for me it was very strange. I was surprised at the passages I didn’t recall at all, (really, I wrote that?) including some rather remarkable anecdotes. I had to laugh at the few (and luckily there were only a few) references that didn’t hold up at all; for example, my advice to new consultants to build a personal brand offered Martha Stewart as the role model. Obviously this was written before her prison sentence. My opening chapter referenced the Donna Reed show, because her husband, ” the company man” was becoming an anachronism. My guess is there isn’t a millennial around who could relate to that TV reference. (Oops, I am dating myself, but I only saw the show in reruns as a very young child…)

What dismayed me was one aspect of the forecast I made 15 years ago about what would happen to this nascent independent marketplace in the years ahead. I had suggested that on the horizon there could be some simplification of the legal ambiguity that was a threat to the dynamic growth of an independent talent market. I offered hope that U.S. 344, the Independent Contractor Simplification Act, authored by then Senator Kit Bond of Missouri would pass. I was overly optimistic. Not only did it not pass, it never made it to the floor — It died in committee the following year.

And now, the independent contractor issue is in the limelight again as the “gig ” economy has been caught up in the ambiguous regulatory environment, as firms like Uber, Handy and Instacart try to maneuver in the anachronistic definition of employment today. . In the meantime, the free agent and interim management part of the gig economy has only continued to grow. Perhaps the sharing economy, led by the Uber driver lawsuit, will help bring much needed clarity to this issue. Isn’t it about time?

Imagine what the #Xfiles and #Resurge International have in common

Perhaps it was not so surprising to have an "out of body" experience when watching the premiere of the new X Files mini-series.  At one point, Dr. Dana Scully is reviewing  patient photos for an upcoming procedure on a child with microtia, a condition where the external ear does not form.  Given the subject matter of the show, the child's head, devoid of ears, looked  like an alien head, reminiscent of alleged images of aliens who landed in Roswell New Mexico in the 50's.

The plot line and alien innuendo aside, kudo's to the X files for shining a light on a condition that is known to very few outside of the world of reconstructive plastic surgery. Microtia is a very real congenital condition that affects people around the world. In certain cultures, these children born without an external ear structure, are shunned because of this deformity.  In some cases their families are shunned, and some parents may suffer from unfounded emotional guilt, feeling responsible for the disfigurement that plagues their child.

Just before watching the show, I had been at a Board meeting for ReSurge International http://www.resurge.org/home/home.cfm, where we talked about microtia. At ReSurge International , we not only provide surgeries to remedy the condition, but through our Global Training Program, we  teach surgeons in  developing countries how to handle this type of reconstructive plastic surgery.  In fact, in October of 2015 we  convened our first program to train plastic surgeons in Vietnam on the proper way to handle an ear reconstruction.  At one Board meeting, our Consulting Medical Officer, shared photo's from the session, where the attendees were practicing fashioning external ears from potatoes.  Once they mastered that, they would do the same with cartilage.  The results were amazing.

As a result of that training, these surgeons will be able to provide a surgery that will eliminate this deformity for their patients, and in so doing transform their lives.  No longer will they be shunned, no longer will they look like aliens.  That is the power of reconstructive surgery.

David Bowie Bonds and the Future of Work

David-BowieDavid Bowie was an innovator of so many things including  in 1997 the first securitization of music royalties which came to be known as David Bowie bonds.  In my book, A New Brand of Expertise  published 15 years ago, I posited that Bowie was the first to create a human capital bond, since he was in essence creating a security from the creative works of a brilliant mind — his own.  In my final chapter discussing the future of work, I asked this question: Why couldn’t there be similar bonds created in the human capital marketplace, synthetic instruments which could pool the revenue streams of thousands of the top independent consultants, protecting against down time, slow periods or any other cash flow disruption? A consultant bond, I argued, would place a value on knowledge much as companies value their intellectual property assets.

Now fast forward 15 years, the Bowie bonds, made David a cool $50 million but were not such a windfall for his investors given the industry economic disruption caused by the onset of music streaming.  For more on this see http://money.cnn.com/2016/01/11/media/bowie-bonds-royalties/.

Although the music royalty bond notion may have fallen from favor, the consultant bond has more legs than when I originally described it.  The weaknesses to my early argument, to be completely candid, was in the issuer.  I suggested that the consultants collectively would be the issuer.  Although I knew that was an unwieldy structure, it was thought provoking when discussing the future of work.  What is different now, though is the human cloud.

Whereas my firm, M Squared,  was one of the first to provide on demand expertise 28 years ago, now there are all sorts of intermediaries parsing work into everything from looking up addresses to  writing code to managing corporate operations.  These firms  source, place and pay their resources in the cloud, and many rank them there as well.  So my year 2000 notion of taking the top 500 consultants in an area was aspirational, but now there  could be ways to do it through the yelp like data being collected on consulting purveyors.  Human cloud companies could be the issuers.  Investors would be buying into the knowledge and talent market, with prices fluctuating with demand and supply.

I know it still sounds a bit far fetched.  But in the words of the inimitable Davide Bowie,

“Turn and face the strange, ch – ch- changes.”

 

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