Tag Archives: M Squared

International Women’s Day and the Gig Economy

On this International Women's Day, I thought a good post would be to talk about women in the Gig Economy. In the recent McKinsey Global Institute Report, "Independent Work: Choice Necessity and the Gig Economy", http://www.mckinsey.com/global-themes/employment-and-growth/independent-work-choice-necessity-and-the-gig-economy, they report that women comprise 51% of the alternative work force in the United States.  In fact in the six developed economies profiled in the report, women were  not the majority in only Germany and France, where they represented 48% and 45% respectively.

As someone who was in the gig economy before anyone ever called it that, it has always been clear that women were a major component of the alternative workforce.  When I started M Squared Consulting in 1988 one of my prime observations were that credentialed women were leaving traditional corporate  environments in droves.  Whether it was the management consulting world where I was, advertising, consumer products or financial services,  the need to balance competing demands in life trumped for many women the need to break the glass ceiling.

I am dating myself here, but before the advent of email and the internet, balancing family obligations was much harder. I remember several nights at Booz Allen where I would leave at 5:30 pm to the incredulity of my ( male)  peers, head home to feed and bathe my newborn baby, put her to bed and then drive back to the office at 9 to work until midnight or 1 a.m., and roll into bed an hour later.  I'd get up again at 6a.m. to feed the baby and spend some time with her before heading back to the office that morning.  That grueling schedule was not sustainable and helped awaken my entrepreneurial streak to figure out a better way to work.

Over the years, I discovered that so many people, not just women wanted more control over time.  Whether it was to write the great American novel, support an aging parent, or salsa dance competitively, consultants chose  the independent path to make their entire  life work, not just the career part. Don't get me wrong, many also chose this path because they felt that could make more money on an independent basis and have greater intellectual challenges. But flexibility for many is a key factor.

MBO Partners has done a study on independent workers in America for the past six years and notes, as McKinsey did, the roughly equivalent level of male and female participation.  In  their most recent  study, The State of Independence in America, https://www.mbopartners.com/state-of-independence, MBO Partners noted that men and women have different concerns and goals. For women, flexibility is more important than money.  For men, control by virtue of being your own boss was more important.

But women are not just a part of  the gig economy as workers, they are also part of the eco-system that supports the participants. From apps that provide effective time reporting, to platforms for liability insurance, entrepreneurs are seeing that this is a trend that is not going to sunset anytime soon.  One part of the eco system is co-working space.  WeWork, the giant in the segment is now the 4th largest real estate firm in the country.  But in their shadow, some women in The Bay Area decided they wanted to figure out a new way to co-work.  The Hivery, https://www.thehivery.com, a co-working space in Mill Valley,  a suburb of San Francisco, is a specialized networking space just for women. They offer all sorts of events to members, like writer’s workshops, entrepreneur circles and meditation Mondays, all intended to build a sense of community, the kind of community designed for women.

So on this International Women's Day, I salute all the independent women and entrepreneurs who have been able to design their work to support their life and their spirit rather than the other way around.

 

The Academy Awards and the Gig Economy

Since its Academy Award season, I thought  it would be appropriate to compare the Gig Economy to Hollywood.  Stephen Kasriel the CEO of Upwork  wrote an article in Fast Company last year 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  parallels with the movie industry. I elaborated on that idea in my new book, Thriving in the Gig Economy.  Here is a brief excerpt.

"The movie industry  had been a freelance marketplace, since the 1940’s.  From its origins in the 1920’s, it was vertically integrated; actors, directors, writers and technical staff worked for the studios, and the studios owned the cinemas. The time period, referred to as either the studio system years or the Golden Age of Hollywood, was known for formula movies, with actors playing very similar roles in similar stories, because the business formula was to utilize the talent that was on the payroll at the studio. (Think about all those old  Fred Astaire and Ginger Rogers movies…)  The change came in 1948 when a Supreme Court ruling  required  the studio to divest themselves of their distribution operations. At the same time, a threat appeared from another corner, as  technological advances resulted in a new media form -  television.

As the studio system broke down, the talent began to take control of their own careers.  Talent agencies emerged as the market makers in talent, and unions arose to protect various specialties.  In fact, many have pointed to this parallel as a reason why Gig Economy workers may need to unionize. In the movie business today, people come together in all the disciplines, writers, actors, set designers, assistant directors and key grips, to name just a few, to create a film. Once it is over, the various players disband and go on to the next gig."

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 take control of their careers and make choices about how they would use their talents.

 

In the meantime, digital platforms and traditional intermediaries are making it easier for talented independent workers to find that next gig.  One firm, Tongal, which touts its innovative approach to content creation, works with companies and brands to produce TV commercials, digital advertising, and social media videos in crowd sourced competitions with the creative talent on its platforms.  Since 2014, it has held and annual Tongie Award celebration https://tongal.com/tongies to recognize the amazing talents in its network and the just as impressive content they have created.  A 2016 winner, "Children are Children", a video  for the Ad Council and the No Different From Us Refugee Project was very moving.

So when you watch the Academy Awards and think of all those glamorous stars, remember, they have already moved on to their next gig.

 

Yet Another Research Report on the Gig Economy

Albert Einstein once said, "If we knew what we were doing we wouldn't call it research." How fitting in this case.  Yet another report came out this week estimating the size of the gig economy. Pymnts.com released their research http://www.pymnts.com/gig-economy/2016/gig-economy-growing/ done in conjunction with Hyperwallet, which attempts to define the the size of the independent work marketplace.

This is on the heels  of the recent McKinsey Global Institute  (MGI) study, "Independent Work: Choice Necessity and the Gig Economy."http://www.mckinsey.com/global-themes/employment-and-growth/independent-work-choice-necessity-and-the-gig-economy.  In that comprehensive report, the authors had a significant disclaimer about the problem of data collection in this area. The annual contingent labor study done by the Department of Labor was discontinued in 2005, so thee are no government statistics about participation. Various entities,including companies in the space, academics and think tanks, have launched efforts  to explore the subject.  So there is no dearth of data about the gig economy, the problem is each study has been  done with a slightly different approach. In fact the MGI study even included a great graph comparing the size estimates emerging from these disparate research projects. It tried to isolate the specific industry segment which was being addressed by the researchers.  For example, it  listed 5 different studies, including their own,  that sized the independent workforce in the US as a percentage of the working population.  The results were broad ranging,  from as little as 16% to as high as 27%

So given that the numbers don't quite jive, who is right? Since I am working on my new book, Thriving in the Gig Economy, I have been wrestling with this issue quite a bit.  I have decided that  potentially they are all right; you just need to be cognizant of how they have framed the question. MBO Partners, for example , provides the best ( and only) historical perspective, having issued its report on the State of Independence in America  for each of the last 6 years. https://www.mbopartners.com/state-of-independence/mbo-partners-state-of-independence-in-america-2016 They focus on independent consultants in the professional services space and estimate the market size at just south of 40 million participants. They define 3 primary categories of independents: full time, part time and occasional.  MGI, on the other hand, has a higher size estimate based on four categories of workers, including two groups, who are working in this way out of financial pressure rather than personal choice. They include some categories of workers, like doctors and therapists, who may or may not be captured in the MBO Partners data.

One area that has very limited data available is the use of digital talent platforms by gig workers.  The new PYMNTS report is targeted specifically at this.  In fact, they specifically don't include the group of "freelancers" who may get their work from intermediaries, like M Squared Consulting http://www.msquared.com or Business Talent Group. https://businesstalentgroup.com/business-strategy-consulting-google/?gclid=CLLwv-vy-c8CFUKTfgod6t8HGA.  Given the exclusion of this key population, the graph which showed the type of professional services procured through the digital talent marketplaces was telling.  The professional service in the highest demand was photography. The senior level independent consultants do not appear to be represented.  I have yet to comprehensively go through this report, so I can't speak to conclusions the authors may have reached.  Perhaps there will be more to come on this in the future.  At the very least, there may be more to come in my book.

 

 

The Entrepreneur’s Organization in San Francisco Turns 25

Entrepeneurs Organisation Celebrates 25 Years!

The Entrepreneur’s Organization, (EO) had a celebration last week to celebrate the start

Veteran Entrepreneurs Organization Reunion

Veteran EO Members at the Palace of the Legion of Honor

of its San Francisco chapter 25 years ago.  I was one of the intrepid founding members of what was then called the Young Entrepreneur;s Organization,  or YEO.

(As an aside, I was 7 months pregnant when I joined EO.  I remember the other  mostly single young members being shocked when they politely asked me if it was my first child, and I replied, “no, it is my third.”)

Back in 1991, you had to have sales of $1mil before you were 35,and you were kicked out of the organization at 40. Many members went on the the Young President’s Organization, (YPO), once they hit their 40s.  As one of my kids once said, who would want to be in the Old Entrepreneur’s Organization?

About 10 years ago, they got rid of the Young in the title and just branded the association as the Entrepreneur’s Organization (EO).  As one of those folks who made the transition to YPO, I have to say that EO was different YPO remains a wonderful organization for me and I am proud to be an active member, but it was not the same as EO.  In YPO, you could have members who were hired guns, presidents recruited to grow, turn around or manage an existing enterprise.  Similarly, there was the “lucky sperm” cohort, of those presidents who stepped in to a family business.

In EO, everyone was a founder.  Everyone had that experience of  having that kernel of an idea in your mind.  You kick it around, you nourish it, and ultimately you get it growing. As a female entrepreneur, I liken it to being pregnant.For awhile when you are pregnant, only you know what is happening inside your body  Chances are, your husband doesn’t even know for a few days anyway .  But slowly it becomes apparent to others.  At some point, i.e. the birth, to continue the metaphor, you let some others into the tent.  Still, you are very careful how it grows.  Over time more people become involved, but you  remain the one most involved with shaping the future of this enterprise.

As the business grows, your entrepreneurial role is akin to  parenting.  Gradually, other people begin to influence the development of the company.  At some point, you realize you are no longer in total control, and then there is the moment when the company is growing in ways that you had never envisioned. Hopefully you imbued it with the right core values to ensure that this maturation is true to your original vision.

EO was a great support while making this journey.  Sharing concerns, opportunities and problems with a like minded group of peers was a tremendous learning experience.  I grew in ways in those years that I did not appreciate at the time. Along with MIT and Inc. Magazine, EO put on the Birthing of Giants Program.  This was an amazing  program for a cohort of 40 young entrepreneurs.  We would spend a week together each spring for 3 years. In the intervening years, many things would happen to the fortunes of these young firms and their founders. Companies, went public and bankrupt, firms were merged, rolled up or sold. And through it all, we learned lessons from each other that would stay with us through the years.

So I was grateful to be able to attend the wonderful 25 year celebration at the Palace of the Legion of Honor last week.  The EO chapter put on a terrific program with 4 different speakers, all of whom were inspiring and provocative. One lesson EO taught me is we can never stop learning, so it was wonderful to continue my education at this event.  Thanks EO.

The Name Game in the Gig Economy

Catalants and the Gig Economy

I love to be right.  A few months back I blogged about my amusing experience applying to join the Hourly Nerd  digital talent platform.  I asked the question, "$22 million in funding and they couldn't come up with a better name?"  This week they announced a new name -- "Catalant".

I have been involved as a client in several corporate naming exercises.  With only good thoughts for my old friends at Landor Associates, I just love the whole explanation about why a certain combination of letters will be a good new name.  Now that owning the URL is paramount, most existing English language words are taken, as are well-known Latin or foreign terms.  (My son who was a Classics major could be a source of some good ancient Greek phrases though...)

So Catalant is a combination of catalyst, talent and brilliant, or so they say.  The name change theoretically ushers in a new future for the well-funded digital talent platform  where they tout the new world where " companies can instantly access the precise talent they need  when they need it." The video is lovely, despite its obvious overstatement.

The world they describe is not that new.  I am fairly sure I had virtually that same verbiage in the marketing  materials of my company, M Squared,  25 years ago.  Similarly, other firms that have been around a while, like The Business Talent Group (BTG) and Cerius Executives are demonstrating how companies are using on demand expertise.  Maybe this model is new for Catalant, but it is not so new for the world.

In an article in BostInno, the founders mention that the original intention was to go after small businesses but now they see that big companies can use them as a source of flexible talent. Their algorithms are key to that value to large companies. Their platform can index all skills and find the right person.  That may be so. For me, it is all about trust.

My former company -  and BTG and Cerius for that matter -  provide  our big company clients more than algorithms; we provide trust and judgement.  If I told a client he really should talk to Harry for a sensitive, strategic project even though Harry may not seem on point, they did it because they trusted me and my understanding of the consultants, the gig and their environment. Perhaps algorithms may get there, but as someone in the Hourly Nerd, excuse me, Catalant network, I have yet to be matched with a project appropriate to my skills. As such, I am still a bit of a skeptic about the perfection of the algorithm.

And by the way, I learned from the Bostinno article, Hourly Nerd isn't going away entirely.  It will be the product offering to the small business marketplace So big companies get brilliant talent and little companies get nerds...go figure...

Adventures in the Gig Economy

Thriving in the Gig Economy and the Hourly Nerd

So I am working on a new book, "Thriving in the Gig Economy", a subject I happen to know a lot about from my experience at M Squared Consulting.  That said, though, there are many new players since the days when I ran M Squared.  As fodder for my book, I am walking the  talk and exploring new platforms and using gig economy resources along the way.

I have registered as an expert at a number of sites.  The most remarkable experience was with Hourly Nerd.  (Really, they thought that was a good name, but I digress.) The Hourly Nerd pitch is that the consultants or "nerds"  on their platform come from only select business schools.  To underscore this, they ask that all potential consultants sign up using their business school email.

Now there is the rub.  When I went to business school, email had not yet been invented.  I know I date myself, but that doesn't make me any less qualified as a consultant.  I must say, to Hourly Nerd's credit, they responded immediately  when I pointed out that I did not have a Haas Business School email since that would have been impossible in 1985,  and  since I knew that they were not intending to discriminate against older MBAs,  there had to be another way for me to apply.  Needless to say I was vetted rather quickly after that.

In my 3 weeks of  being in the nerd ranks, I have received 2 inquiries, neither of which was really appropriate for me.  Since I chair a not for profit humanitarian NGO, I received a request to do research for another non-profit in a totally different field.  Clearly they need to work out the difference between functional expertise and industry expertise in their algorithm.  The second was a bit more on point, looking at employee utilization in consulting firms.  However, since the consulting firm I ran was a hybrid firm, providing independent consultants, gig folks or nerds in their parlance ,  to projects my expertise was not quite on point.  As they say, three is a charm, so I wonder what might come next...

In the meantime, I am securing some programming talent in this gig economy as well as research time from some other platforms.  I am intrigued to experience the customer side...I will keep you posted.

 

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.”

 

3 M Squared wanna be’s

M Squared was/is a great business, although not everyone saw that at the time. Deploying a network of independent consultants in a just in time management approach was radical in 1988; there was an evangelical dimension to our sales pitch back in the day.  But over time, the world caught up with this innovative work model.  Now the gig economy is all over the press.  I laugh when I read that people think the issue of Uber drivers being contractors is new; we were dealing with that problem 20 year ago.

So I found it curious earlier this year when three different business groups wanted my insights about  new business propositions in the human capital networking space. One wanted to become the “common app” in recruiting, eliminating human intervention as much as possible.  Another wanted to create a staffing supply network on the African continent to facilitate oil exploration and the employment demands that go along with it.

The one I spent the most time with, though, was a VC led exploration of a “mom” network.  An M Squared for credentialed MBA moms who wanted to get back into the workforce.  The irony here, is that this value proposition was the inspiration for M Squared.  The exponential term initially stood for “Mother Managers”, but my partner Paula Reynolds, and I lost that early on.  You see many female professionals don’t want to be labeled as Mom’s.  Moreover, as one Genetech scientist said, I “I will measure your professionalism by my peer group, and there are no other women in my peer group.”

So I spent several days over several months with the VC led team,  who were amazing technology strategists who wanted to “disrupt” the human capital marketplace and find some “white space” with this new mom offering. That said, none of them had any staffing, recruiting or even professional services backgrounds, so my expertise did fill a void for them.  Since they were still looking for that “killer app” we discussed many different models for a new business.  As we discussed various options, either offshoots of the mom core business, or new directions entirely, I came to see some opportunities in this very crowded space.  These are the opportunities I am exploring now.

 

 

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