By Gary Swart
In the last decade, we’ve seen massive disruption in the world of work — in fact, I would argue that we haven’t seen changes of this scale since the Industrial Revolution. This has generated lots of discussion, with everyone from economists and futurists to university deans and thought leaders and of course professional themselves weighing in.
What’s more, our discussions are threaded with emotion. Change can be anxiety-provoking, especially when we’re still in the midst of it. But this is not a solitary concern — we are all in this together as we figure out how to adapt.
As a result, there are three main discussions that need to happen. We need to better understand:
What the future of work will look like
How companies should respond
How professionals should respond as well
The last question — how professionals can position themselves to be successful in the future — warrants a post of its own (coming up soon).
But I’d like to dive into the first two questions here. In fact, last week I had the honor of really digging into what this future will look like, along with Maynard Webb, R Ray Wang, Gene Zaino and Devin Fidler, while on a panel, “The Future of Work: Evolve or Go Extinct,” at SXSW V2V.
What does the future of work look like?
Combining our perspectives, we identified 3 changes that are reshaping work:
1. The organization now serves a different purpose
When Ronald Coase wrote “The Nature of the Firm” in 1937, the business landscape looked very different. It made sense to organize operations into a company structure, to maximize efficiencies and minimize transaction costs by sharing resources across the firm. Today, we no longer need to access resources in an ‘all-or-nothing’ way, with on-demand services quickly becoming the de facto way to access resources. As Devin Fidler of Institute for the Future noted, “traditional organizations can be thought of as a legacy technology for getting things done. Now, we have more and more new alternatives to this way of organizing things.”
2. The structure of the workforce is shifting due to new career expectations
Along with the rethinking of what a typical company should look like, we’re also seeing a change in what the workforce — and the typical career — looks like. A growing number of people are not only requesting flexibility, autonomy and impact in their careers, but prioritizing it — leading to a surge in freelancing and entrepreneurship. This is only going to get more pronounced, as freedom-seeking Millennials start to represent more and more of the workforce (75% of the workforce by the year 2025). MBO Partners CEO Gene Zaino pointed out on the panel that four-fifths of the millions of independent professionals in the U.S. right now quit their day jobs to work independently, and 83% say they won’t go back. An oDesk study from this spring found a similar trend — 72% of freelancers surveyed who are still at “regular” jobs want to quit entirely, and 61% said they are likely to quit within two years. These statistics show that independent careers are a choice people are moving towards. For more context on why, this recent post from fellow LinkedIn Influencer Shane Snow provides six reasons why “half of us may soon be freelancers.”
3. This is only possible because of the transparency the Internet has unlocked
The monumental shifts in the world of work are largely because points #1 and #2 dovetail so well. But the only way this phenomenon has been made possible is because of advances in Internet technology, and particularly the transparency and trust that Internet-based services have unlocked. Peer ratings, social media profiles, online work portfolios, private feedback systems, etc. are providing more information than ever before to guide our choices — whether it’s deciding to hire a freelancer or feeling confident about an Uber driver.
As Constellation Research CEO R. Ray Wang noted on the panel:
How should companies respond?
Given these changes, companies need to evolve in order to thrive in this new environment. In particular, the panel discussed two areas in which companies need to evolve:
1. Rethink how to create effective organizations
With the shifting structure of the workforce and even of companies, it’s more important than ever to think about engagement, company culture and retention of the many resources being pulled in from beyond traditional corporate offices (including not only remote employees, but also agency teams, freelancers, partner organizations, etc.). Culture and motivation become more difficult to manage when team members aren’t in one location, and considering that many of these resources have multiple different work relationships at once, the stakes are high for keeping your star players happy and on board. So how do you replicate the water-cooler culture and positive impact of spontaneous collaboration when you have virtual team members? That will be one of the biggest questions of the next few years.
2. Reinvent what it means to be a great manager
Similarly, effective management of tomorrow’s teams will require a different skill set than we’ve seen before. Managers will need to be adept at integrating team members — whether they’re in the office or across the world, full time or freelancing, serving as a niche consultant or in a more general role. In many ways the new management style will just amplify existing skills (most notably, clear and frequent communication and expectation-setting), but in some cases there will be new skills — like building camaraderie among people who have never met face to face and effectively assembling teams of specialized experts.
What changes have you seen in the world of work?
Gary Swart is the CEO of oDesk, the world’s largest online workplace.