The Future of Work

In the 20th Century, here's how most work was organized, according to Michael Chui of McKinsey & Co.:

The best way to harness human talent is through full-time, exclusive employment relationships where people are paid for the amount of time they spend at a common location.  They should be organized in stable hierarchies where they are evaluated primarily through the judgment of their superiors, and what and how they do their jobs is prescribed.

This familiar model is now being radically revamped in the networked environment, at least for jobs that require some levels of independent human judgment.  The Taylorite schemes of top-down administered work and business organization tend to be less effective, moot or counterproductive these days.  As McKinsey & Co. consultant Jacques Bughin put it (along with two co-authors of an essay):

Transaction costs have tumbled in this wired world, and nearly ubiquitous connectivity has made new and unexpected ties with customers, talent and suppliers not only possible, but also easy.  Digitization has changed the economics of creating and distributing products, services and content across a growing number of categories.  It has the potential to revolutionize business, managerial and organizational models.

The report describes how the traditional large business firm is ill-equipped to compete in the networked world because its centralized hierarchies and command-and-control management systems are not adaptive.  They are in fact incapable of meeting the myriad needs and structural realities of our time.  Yet can the large firm adapt?  Many participants were skeptical.  It’s just so difficult to change a corporate culture. 

(I believe that many of the same lessons apply to large nonprofits and advocacy organizations.  They are often too entrenched in old categories of political thought, policy and fundraising to recognize that fluid new communities of serious action are self-organizing themselves online – and that these people regard the Washington public-interest proxies as stodgy and uninspiring, if not regressive.) 

If the firm of the 20th Century was about orchestrating diverse production activities, the new firm of the 21st century is likely to be about talent management and risk management.  But here again, there is a question how far management can bend to accommodate employee freedom and interests, while still serving the implacable interests of shareholders.  Kim Taipale of the Stilwell Center for Advanced Studies in Science and Technology Policy made an interesting point:  “The firm is essentially moving to a platform.  The firm is moving to become an enabling environment in an ecosystem” and then “capturing some part of that value stream.” 

One point, not extensively discussed at the conference, was whether firms will see merit in trying to compete in a networked environment, or whether they would simply rather try to use their lobbying and their market power to thwart a more open marketplace that threatens them (e.g., the music and film industries). 

For myself, I wonder if the commons (in certain circumstances) will have a competitive advantage over the firm in creating and capturing value.  After all, not only can the commons generate serious economic value without the huge cost-overhead of traditional corporations, it can often do so in socially satisfying, equitable and flexible ways.  On the other hand, commons generally do not have much access to capital…..and while they don’t need much to function in the online environment (lightweight infrastructure will do!), even small pots of capital could go a long way to fortifying the commons alternative.  Then there's the perennial problem of successful commons being coopted or bought out by market players.  For that, I recommend a little more commons consciousness.  But that would be another conference entirely.