Archive for category Business
The Mesh Model
Posted by admin in Business, Improvement, Vision on October 7, 2010
So if you have been following this week I’ve discussed the new problem in business plaguing creative employees. As a result of this new problem creative employees are creating a new business paradigm by forgoing traditional employment and focusing more on independent work. This obviously has a big impact on business today and I would like to finish this series exploring that impact.
History Repeats
First off this is not the first time this sort of creative exodus has happened. As @pstrack pointed out yesterday in the comments his current business was a result of a similar movement. Us creative people tend to periodically throw a fit together and create movements. This has happened several times throughout history and this is nothing completely unique. History in business as well as everything else has a tendency to repeat itself. Such is the case here.
What was old is new
While this is a bit of a reoccurring theme and can quickly be dismissed as the same old movement, there is something different about this one. People are extremely connected, more so than ever before. In this new flat world it is essential to include this factor because it is very significant. Before when people left a business to go alone they would work hard, hire people under them, and eventually create a new small business of their own.
The mesh model
Connectivity changes everything. Now instead of having to go and hire employees, which is the biggest business risk of all, people can form connections with other people who possess the talents they need. I am going to step out on a limb here and suggest we could see a whole new business model arise from this new paradigm.
I call it the mesh business model. You suddenly have an abundance of highly connected independent workers who can form very loose alliances with each other. The business structure becomes very horizontal with each person operating independently while at the same time supporting each other. In this structure it is in everyone’s best interest to do the best job possible because they themselves are essentially the owner responsible for their independent company.
The vertical
The basic problem is vertical companies are dying and fast. In a vertical company the Peter Principle takes place often. You see people rise in a company until they are no longer competent for their position and that is where they stay. This is an old business model that cannot continue to survive in an increasingly creative business world.
In the vertical workers are motivated by respect and pay. Often respect is either not given because of a boss’s inability to understand the necessity of respect, or because the boss does not understand the contribution of the worker.
This leaves pay as the typical motivator. Pay is a business risk, companies hold out on paying more until it is more risky not to pay. In a good economy you worry about an employee leaving so to retain them you pay the more. As I showed in the first blog of this series companies have the upper hand and therefore do not have to continue to pay to retain. In fact the average company has decreased their pay to creative workers over the past 2 years.
The new business
So what does this mean for businesses moving forward? Actually I believe this will be a positive step for businesses that can embrace the change. Companies can lower their overall operational cost by contracting with creative individuals rather than having them on staff. They also are able to get higher quality work by utilizing people with specific talents required by the job.
For creative individuals this means having the ability to take control of your own success. You become paid and reworded based on the quality and frequency of the work. This improves overall worker moral, which also increases quality of work.
Overall for business I think this model combined with the changes in insurance coverage going on is going to lead to a shrinking workforce for companies. Inside companies structure becomes more horizontal. The factory style organizational structure becomes less viable and companies holding on to this structure will quickly lose their market share to companies tapping into a mesh business model.
Thanks for checking out this blog series. I hope to explore a mesh business model more in the future. Please let me know what you thoughts are and I will be sure to incorporate it into future post.
The New Paradigm
Yesterday I introduced what I see as the problem plaguing creative employees. I’ll admit the reality of it is a little dire. As a lover of history I’ve seen that whenever any situation arises that causes power to shift disproportionally to one side a paradigm change will occur in the situation to cause things to balance out.
The (un)employee
Such is the present case. You have highly talented employees who have become unemployed, disenfranchised or un-respected. As we explored previously in this situation employers hold all of the power. In this situation creative employees are taking the most logical step they can think of to correct the imbalance of power. They no longer become employees.
This crazy idea is taking off. Just this past week alone I’ve had 3 friends just outright quit. One of them said “I am just tired of working day in and day out to please someone who ultimately cares nothing about me.” A good friend @amybhole recently shared a similar experience:
“I’ve always been frustrated by how American workers are treated and the psychology that makes us think more hours in the office = a better work product. It’s especially bad in this economy, as employers act like lords who demand unending loyalty from their vassals in return for a measly wage that quite often only pays for a roof over our heads and a meal in our bellies.”
The New Model
Creative workers are taking control of their employment. Most of the creative types I talk to either have already started to branch out on their own or are thinking seriously about it. Most however are not burning bridges with their former employers. They are maintaining that relationship and taking on a portion of their previous work.
This idea is going well with organizations too. Now they are able to reduce cost by not paying for employee overhead or idle time. They can also break apart creative jobs and utilize individuals with specific talents. So for example one friend who branched off recently is retaining the former company’s website design and allowing them to outsource some of the areas that were not his strength.
As you can imagine, this new paradigm is not perfect and causes some issues. In the next post I will explore what the implications are for businesses and employees moving forward using this new model.
The Problem
So apparently I failed miserably at Barcamp Jonesboro by not making it. Truth is I said all along my making it was contingent on a handful of factors, but none the less I failed. I can assure all of you that I will make this up in some way soon. I will however take some time to share with everyone the things I planned to talk about there. This will be a 3 part blog series and I hope you all will take some time in the comments to share your thoughts along the way.
The problem
Generations are defined by large life shaping events. The great depression, WWII, Cold War and Vietnam are examples of events that have shaped the generations before us. I remember walking out of class on September 11, 2001 standing in a courtyard at OBU thinking this was our generational defining event.
Little did I know that September 11, while defining for sure, would not even begin to have the impact on our world as the event that followed. Fast forward a few years to my second real job of my career. I was sitting in my boss’ office 2 years ago this week and we watched the stock market begin a freefall that would last all week.
In the 2 years that have followed we have seen unemployment higher than any time since the great depression. Many companies have gone under and starting a new business has become harder due to stricter loan reviews.
Supply vs demand
You are in the middle of all of this, the talented and hard working employee. Before the current economic downfall good employees were hard to find. Organizations recognized their best and tried to keep them. At the same time other organizations desired them and tried to obtain them. Supply of good employees was low, demand was high. It was the perfect situation. You could work hard, do a good job and get rewarded.
Now we have high unemployment. Everyone is busting their ass to do the best job possible just to keep things going. Bad employees are becoming better, good employees have become rock stars. A good portion of those good and rock star employees have still been unfortunate and find themselves without a job. This means there is way more talent to go around than there is jobs desiring them.
Recently we ran a job posting for an entry level data analyst. Of those who had applied we had former CEOs, people with PhDs and all sorts of highly over qualified workers. All of these people were applying for a $32k job.
Upper hand to the employer
This situation has given employers the upper hand. They can be more picky about who they hire, offer them less money, and let them go far easier than before. The supply has become extremely high and the demand extremely low.
As an employee you have to do your best to hold on. You have to work as hard as you can, as fast as you can and try not to piss anyone off doing it. Employers recognize this and can treat you however they want without the fear of having to retain a talented employee that they had before. This has created a situation where a lot of jobs have become a lot worse and as an employee there is little you can do about it.
This may sound a little dire, and I’ll admit it is not exactly the rosiest scenario to be in as an employee. However I think this situation is showing a change in business mindset happening across the nation. Next post I will talk about this new paradigm shift and finish with the last post of the series talking about the implications this has for business in the future.
Wonder
I was thinking back the other day to when I graduated college. The president and I had become good friends at the time and it was special for him as well because it would be his last graduation ceremony as the sitting president of the university. It was a December graduation and in the May graduation he would as part of the ceremony introduce the new president of Ouachita Baptist University. He had already accepted a job as president of Samford in Birmingham, AL.
I had a lot of fond memories of visiting with Andy Westmoreland, but it was something more than that going through my head. Andy had been working for the previous year to help me get the job I wanted, working with CJRW in Little Rock. It all broke down shortly after graduation but for that moment when I shook Andy’s hand and accepted my college degree I had a very special feeling that I’ve rarely felt since that moment.
Wonder
Wonder about the opportunities that lay before me.
Wonder about the path that my life would take from that pivotal point.
Wonder about the great things that I could accomplish if I set my mind to it.
A few weeks later the job I had at the time was acquired by another company and moved to Florida, the last hope of going on with CJRW fell apart, and I became faced with the reality that the wedding I had planned for the summer would have to be put on hold because neither of us had a job.
Suddenly the wonder disappeared.
Over the next almost 5 years I’ve found that life has a way of sucking the wonder out of you. You stop dreaming and start struggling through tough decisions and let downs.
Then the other day it hit me out of nowhere. The struggles were reaching an all time high with work, grad school and everyday life.
For no apparent reason I stood in awe of the world before me and realized that I still have the opportunity to do something remarkable. I don’t have to struggle; I’ve got a chance to be more than what I am today. I can take the skills I’ve learned in the past 5 years, much like the ones I learned in the 4 years of college, and apply them to do amazing work.
One closed door cannot stop me, neither can 100. I have the chance to prove myself and make things happen, not wait for them to.
I started thinking about my jobs and businesses I’ve worked for and with. How sometimes we lose our sense of wonder. We get lost in the day today business of just getting to the next and we fail to imagine the things we can do if we just try.
Maybe when companies stop dreaming and get caught up in today things go wrong. They start producing more of the same products until someone from China does it cheaper. They start thinking about producing cars cheaper instead of better. They start spending more on drilling additional wells and spending less on safety. They want to make as much money as they can while things are going well, and when they are not it will be someone else’s mess.
Maybe that is what has gone wrong.
Just a thought
Reworked
Posted by admin in Business, Improvement on August 27, 2010
I can’t shake the overwhelming feeling that there is something wrong with business today. Grant it I have been reading books like Linchpin and Rework, but they have been confirming my thoughts rather than introducing radical new concepts. The amount of excess and waste is astonishing and entirely ineffective.
A Story.
An organization I recently did some work with had 5 people in the office. This seems like a fairly waste free office on the surface right? Expect when you start going position by position. You had 2 low pay position, one a financial and one an analyst, a mid range marketing/communications person, a high paid operations person, and director.
Simple.
Except the analyst and marketing person each had about half a job to do, and worked closely with each other. The financial person and the operations person were the same way. The director did next to nothing. 5 positions could have easily become 2. So when I asked this organization why they had 5 the answer was because they had funding for 5, so they may as well use it.
Idiotic.
As a good friend of mine likes to say, just because you can do something doesn’t mean you should. Fast forward a year or so later and that same organization is looking at a financial issue. It seems their budget projections no longer match their requirements. Their solution is to add more people to the organization in hopes of generating more money. They want to shift product offerings and gradually abandon the things that have given them a strong market share to something that has yet to find an audience.
Cart before horse.
This seems to be a common problem I see. Companies get into a pinch and they decide to make radical changes. The first thing they decide is that whatever service or product that got them to this point must be wrong and needs to be dumped for something new. What new offerings do they choose? What they are interested in obviously. They fail to take the step to see if their customers want this new offering.
Man in the mirror.
The next step is to do one of two things, either grow rapidly hoping that more people = more money or remove people hoping that less salary = more money. The problem is that growth is rarely the solution, and the people you remove are typically (not always) not the problem. Sometimes it is that high paid employee who contributes nothing to the organization other than supervision. Bees can still live without the queen, but they starve without the workers.
What if?
What if you had an organization that had a solid product and worked each day on making it better? If that organization hired just what they needed and got the most out of each person, including the CEO/Owner? If before making a move, even small, they asked why, and is this needed? If this organization focused on making work beneficial to everyone (workers, owners, customers) would you want to be a part of it?
The Future of Work
Last week another example of how quickly and collaboratively ideas move thanks to the power of social networking, I unexpectedly found myself in the process of starting up a co-working location for Little Rock. To me this concept reflects where the future of work is heading. This is why I am interested in this project, and excited about the possibilities it brings to Little Rock.
To understand where we are going we have to, as often is the case, understand where we have come from. The idea of working for a large company in a big office building is a new concept in the history of the world, yet it is the only mass way of work that any of us know. However you only have to look as far as the late 19th and even early 20th century to see how this has not always been the case.
Historically people were independent workers. Individuals had various skills that they would sell out or trade other individuals in the community or general area. More successful independent workers would have a small business with a handful of wage workers under them, but by and large the corporate system that we understand today did not exist.
This all changed of course with the factory system, suddenly hundreds and thousands of people worked for the elite few who distributed wages and owned the company. The skilled independent worker became an unskilled factory line employee. You all know the story.
The factory system spread to ever area of our workforce. Sitting here now in my office I am a factory worker. True, I manage marketing and communications, but that is my widget that I build for the corporate structure. However if you are to believe Seth Godin in his book Linchpin, which I personally do, this system is about to change.
I believe the new system will look a lot like the old and forgotten skilled independent worker of the past. Instead of taking our skills to our neighbors however we will take them back to the companies we broke free from. Companies will essentially employ fewer and fewer workers, until all that is left are the people who own and run the place. We will work on contract, and we will be on contract for multiple companies at once. This system, I believe, works in the benefit of all. Companies assume less risk for workers, and workers will be less controlled by the fear of layoffs, firings and corporate bankruptcy.
The system will happen very slowly, for certain there will be bumps in the road, but more than likely we will never realize the transformation until we reflect back on the changes. In a sense it is already happening. I recently visited a company where they certainly do not use these terms, but it is exactly what they are doing. They review regularly how well the employee fits, how well they fit the employee and then they continue or discontinue the services. What really made it feel like this new system however was not the structure but the actual work environment. It looked very much like co-working.
The office was an open area where people worked on sometimes common tables. Most were working on different projects, but they would frequently discuss with others around them ideas on how to make each other’s projects better. This is the heart of co-working. See we realized something in working with others in a factory system. When a problem came up or new ideas were needed it was helpful to be in close connection with others to share ideas and brainstorm how to solve problems. This is the one thing that the previous system lacked.
My idea for co-working is just that. A friend of mine @Arlton has started a co-working location in Conway and looks to be very successful. I think this idea can be expanded on to serve more than just coders and designers, but any independent worker. With various types of course comes various needs, so what this will look like is still a bit of an unknown. But I am willing to figure that out.
If you are interested in keeping up with the initial exploration of a co-working site in Little Rock or want to get on the list to be a part of the interest meetings please follow @LRcowork.