How to Lead the Blended Workforce

Liquidity Services helps companies to maximize the value of surplus assets.   Thousands of client organizations around the world depend on Liquidity’s experts as advisors and strategists. In turn, they depend on technology experts from the outside to keep their online marketplaces at world-class levels.

Liquidity Services isn’t alone; its just one of many examples of a profound new trend we call Agile Talent: the increasing dependence of organizations on external expertise. Deloitte estimates that 30-40% of FTE’s are part time, project or contract based gigsters, consultants, advisors and other externals sought for their particular expertise. Our research found that over 50% of global companies plan to increase their use of agile talent. Cost and staffing concerns are not the primary driving factors. As the chart below points out, expertise, flexibility, speed, and access to new ideas drive this trend:

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While organizations depend more on freelancers to assist, not all organizations are evolving in the same way.   In fact, there are three distinct strategies:

Traditional: In this approach, leaders of traditionally structured and managed organizations take advantage of freelancers and other external talent on an exception basis where their skills are strategically important. A significant majority of work will continue to be performed by full-time permanent employees.

Transformational: In this approach, the largest segment of the workforce is contingent, coming together on a project basis and disbanding when the project is completed. Industries such as entertainment, financial services, software development and motion pictures offer a glimpse of how transformed companies will rely on agile talent in the future.

Surgical: This third category describes organizations that take a more selective approach and focus its agile talent on complementing and augmenting areas of strategic capability. Agile talent is in this case as a methodology to accelerate capability development or respond more quickly to strategic change or competitive threat.

In a recent Asian workshop with HR executives sponsored by the Hong Kong Institute of HR Management, over 50% described their organizations as moving from a traditional approach to a more surgical agile talent focus.   Similarly, a recent European workshop with sales executives of a global logistics leader pointed out that global logistics clients were looking to agile talent for new ways to increase innovation in areas like sustainability as well as cost savings.

What does it take for managers to get agile talent relationships right? Leaders from Rolls Royce to Burberry describe four factors that enable them to get the most from a relationship with external experts:

Strategic alignment. Is the organization disciplined and rigorous in identifying areas where agile talent is required? Are external experts used well, doing work that is important to the organization and meaningful to the individual?   Has the organization effectively defined the role, relationship and scope of work addressed by agile talent so that goals and roles are clear? Does the work have the right level of sponsorship? Are timing, budget and resourcing consistent with a successful outcome? When the scope changes, is the work plan and budget revised?

Performance alignment. How well does the organization convert a plan or initiative into well-defined, S.M.A.R.T. objectives and timelines?   Are performance expectations clearly defined, established and communicated so that accountabilities are clear to both agile talent and the internal colleagues with whom they work? How often is performance assessed and feedback provided?   Is the feedback balanced or focused primarily on problems and mistakes? Does the organization take responsibility for its part, or tend to “dump” on the external? What metrics are used, and are they reasonable? When performance problems arise, how promptly and effectively does the organization take the required action?

Relationship alignment. Does the organization incorporate cultural fit as well as technical expertise in the choice of external talent? Are agile talent thrown into the task or given a solid orientation to the organization and the people with whom they will work?   How promptly and effectively are conflicts resolved? Are externals engaged and involved, kept informed appropriately, and treated with the consideration and respect that any professional would expect?   Or, as the expression goes, are they treated like mushrooms, and kept in the dark?

Administrative alignment. Is the organization set up to work well with agile talent, or are they treated with suspicion, as a necessary evil?   Does the organization respond bureaucratically in dealing with externals’ concerns, for example is the contractual process benign or difficult and excessively time consuming? Are pertinent rules and policies communicated appropriately and early? Are externals paid promptly? Is the orientation of the organization one that views external talent as interlopers or as welcome colleagues?

These four factors – we think of them as alignment drivers – certainly imply system and procedure changes at an organizational level; for example, invoicing procedures and payment terms. But, no less important is the behavioral model set by executives, and the skills and actions of individual managers.  Unless leaders embrace the opportunity and tactics of greater talent agility and actively sponsor the shift, employees and lower-level managers will be resistant, and agile talent will not deliver the benefits.

Where are managers missing the opportunity to more effectively manage agile talent?  Based on our research, we are finding that performance alignment is an area where managers can and must place greater emphasis.

On a recent trip to Kyoto, we learned about a unique sixteenth century security system at Nijo Castle. Called the nightingale floor it was designed to “chirp” when walked upon, alerting guards to an intruder. The defensive orientation of the nightingale floor is a fitting metaphor for how leaders and organizations are inclined to see agile talent in us versus them terms. Rather than treat agile talent as a valued extension or reinforcement of internal capability, organizations too often view external talent as a “necessary evil”.

With this attitude, the organization is disadvantaged in multiple ways: less fully engaged agile talent wastes the time and effort of both the externals and the internal staff working with it or depending on it. The often-costly investment of working with external talent is sub-optimized. And over time, the organization may develop a reputation for establishing poor working relations with external talent, with consequent problems for attracting top external expertise as well as relationship difficulties.

How can managers support agile talent work in the best possible way? An obvious starting point is on boarding: how the external expert is oriented to the organization and understands the context of their work. Driscoll’s, the global food company, provides a particularly good example. In this case, Kevin Murphy, CEO of Driscoll’s understood the practical importance and symbolism of spending time with a team of external experts talking about the vision, mission and values of the company as a starting point to a major change initiative.   By investing the time to provide context on the importance of the work –a major investment in leadership development – Murphy and his team made a powerful impression on both the agile talent and the internal leaders working with them. Not surprisingly, the onboarding led one external expert to say, “We’ve been given the challenge of making a significant contribution to a business that takes us and our work very seriously. Let’s deliver ‘amazing’”.

National City Corporation, a super regional bank now merged with PNC, demonstrates how smart managers invest in internal-external team building. Shelley Seifert, chief administrative officer of NCC, made it a point to bring external experts and their internal counterparts together in shared office space as a way of encouraging collaboration. Moreover, frequent updates prepared jointly by agile talent and internal staff reinforced the quality of teamwork.  As a result, NCC was able to increase the payoff of work involving multiple external firms and over 100 internal employees.

Third, assigning the right internal staff to coordinate agile talent obviously influences success.   A few years ago Duke Energy undertook a far-reaching transformation of their HR function.   Executive vice president Marc Manley, the sponsor of this work, directed a relatively young executive, Shawn Heath, to coordinate between the external team and executive management. It was an inspired choice. Heath did an excellent job of facilitating the success of the project, and by doing so established himself as a high potential within the organization and has gone on to a number of more senior executive roles within the energy giant.

By contrast, a recent experience shows the difference between an effective and ineffective leader in agile talent. We were asked to undertake a ‘work out’ initiative for a leading U.S. property insurer; the goal was to eliminate unessential work following a significant layoff. We found that the divisions run by executives who actively encouraged collaboration with agile talent produced meaningful results, while executives who resisted engagement with external experts were not able to make equivalent progress.

We have reviewed the rise of agile talent and how the actions and skills of leaders have a significant impact on its effectiveness. Leaders who play a strategic role can shape the future for how their organizations utilize agile talent as well as providing the necessary sponsorship for success. Executors clear the path for implementation and make sure that what is intended to happen during the collaboration process with internals and externals is effective. Doing this provides an environment of inclusion that attracts and retains agile talent—whether the talent is there for a gig, a project, or a career.

The results of our work suggest that the skills required by leaders who wish to make the most of agile talent resourcing are often well in place. This is good news. Many executives report positively on their organization’s efforts to set appropriate goals, anticipate potential problems and difficulties, establish relationships between internal staff and external talent, and provide helpful feedback and communication updates. We also found that consistently between 25 and 35 percent of executives are less fulsome in their assessments, are more critical of their organization’s handling of external resources, and asserted that their organizations had both the opportunity and the need to improve. Fixing this gap may be one of the more important challenges facing the future of your organization.

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