Dear friends! This week I write about the theory of workforce ecosystems as a modern way to deliver value though networks. I’m a proponent of randomness concept popularized by Nassim N. Taleb. It means that we should have strategies, plans, but also we should be ready to leverage avenues of opportunity that will occur during our journey. To comprehend and seize the opportunity we would need to be agile, and agility is a natural result of organizing into ecosystems.
Of course workforce ecosystems are aimed to create much more value and respond to various challenges, they aren’t limited to dealing with uncertainty. Fast paced world, however, is one of the factors why traditional workforce management is becoming insufficient in the end of 2023.
What Is a Workforce Ecosystem?
Workforce ecosystem is often referred as the complete population of employees, contingent workers, external collaborators, infrastructure, bots, robots, and so on. It may vary considerably from one organization to another, but is has above mentioned characteristics in common.
However, my ambition is to present it from the context of intrapreneurship and how it supports agility of organizational practices such as people analytics. Workforce ecosystem may refer to the whole workforce of a company, or to the scope of particular divisions. I stretch the term to include also the organizational practice.
Elisabeth J. Altman, Jeff Schwartz, David Kiron, Robin Jones, and Diana Kearns-Manolatos in their report Workforce Ecosystems – A New Strategic Approach to the Future of Work, define workforce ecosystems as follows:
We define a workforce ecosystem as a structure focused on value creation for an organization that consists of complementarities and interdependencies. This structure encompasses actors, from within the organization and beyond, working to pursue both individual and collective goals.
In this context, workforce ecosystem is an array which contains actors such as employees, contractors, gig workers, service providers, external IT developers, and crowdsourced contributors. Additionally, it might contain software robots, physical robots, and other types of resources and infrastructure.
Obviously, this concept in action creates new challenges for the organization and for leaders who will have to have utterly different ways of working than before. This creates challenges for both CEO and CHRO, who usually are responsible for the workforce strategy.
Culture of Intrapreneurship
Let’s abandon the big picture for a moment and let’s try to interpret the workforce ecosystem concept on an organizational practice level. However, before we go there, let’s focus for a moment on the goals many organizations have. We live in times where innovation and change are rapidly fast. The technology development is faster than ever before. Hardware, cloud computing, cloud storage, machine learning, and many more are advancing faster than we realize. The scale of technological progress happening right now is above our comprehension. Currently, the software and practical applications of innovations are lagging behind the technology. And we constantly develop new things.
The regulators and legislators aren’t passive either. Challenges regarding climate change, health, and global economy are becoming manageable objectives and responsibilities of societies, government, and business. Multiple generations with very different expectations and values are active on the job market. Add to this instable geopolitical situation. This is overwhelming. Companies have to adjust their ways of working to respond to these challenges. And they do that.
The concepts regarding agile and efficient approach to business development are well known for years. One of them is lean startup.
Designed and described by Eric Ries, lean startup was initially dedicated to startups, because 10-15 years ago, small newly established companies were facing disturbances that currently are common also for large organizations. The rapid cycle of build-measure-learn was introduced to spark innovation, reduce market risk, and constantly align products with real consumer needs. It sounds familiar, because it is what we all do for years. No matter the company size.
- Core proposition
- Minimum Viable Product (MVP)
- Measuring impact on the market
- Learning on the outcome
- Iterate, or pivot accordingly.
Large corporations, despite their size and inability to manoeuvre quickly, find value in embracing lean startup method.
Then, lean startup was followed by another concept – intrapreneurship, which refers to the practice of empowering employees to act as entrepreneurs within a large corporate environment.
Intrapreneurship is a manifestation of the lean startup culture within a large corporation framework. It encourages employees to take ownership of new ideas, rapidly prototype, test, and iterate, ensuring a constant cycle of innovation that aligns with market demands. Because of its natural agility, it requires blending substantial resources to the extent that haven’t been seen before. Do you already see the analogy to the workforce ecosystem?
“If you’re really going to drive creativity and innovation, you have to engage everyone. You have to engage people across the diversity spectrum. Having a diversity angle to what the future of the workforce looks like is really, really important.”
Both lean startup and intrapreneurship promote a culture of innovation and experimentation, which is important in times where market, environmental, and legislative dynamics shift rapidly. By fostering an environment where teams can rapidly test ideas and learn from failures without severe repercussions, large enterprises can significantly accelerate their innovation pipelines. Moreover, by embracing a lean approach, these corporations can achieve better resource optimization. The focus on developing MVPs ensures that significant resources are not sunk into products or features before validating their market fit, thus potentially saving millions in misdirected investment. Additionally, the lean startup methodology encourages a customer-centric approach which can lead to better market alignment and ultimately, more successful products.
Ecosystem in the Elephant House
By integrating these approaches, large firms can navigate the tumultuous waters of today’s market dynamics with a compass of agility and customer-centricity, ensuring they remain not just relevant but leaders in their respective domains.
However, to get there companies need structure which will encompass actors from the organization to pursue both individual and collective goals.
Workforce ecosystem is a structure focused on value creation for an organization that consist of complementarities and interdependencies, which ware described by the authors of the Workforce Ecosystems report as follows:
By complementarities, we mean that some members of the system (workers or organizations) work independently yet together offer value for their mutual customers. By interdependencies, we mean that some members rely upon one another for their shared success (or failure); they win or lose together.
This is the fun part. To succeed in complex environment, where progress is at high pace, traditional hierarchical organization and organizational structure become insufficient. We all do love hierarchies where N-x status being perceived as the metric of importance, and where dealing with too high span of control boosts our ego, doesn’t we?
However, workforce ecosystem recognize that flat hierarchy, cross-functional teams, networking, and collaboration are doping more, and more significant work. Again, let’s look at the analogy with startups:
Launchpad’s Popper says that filling vital roles externally has long been routine for startups. With limited resources, a startup might not be able to afford a full-time CFO, for instance, but it might have someone come in once a week to act as CFO. Popper has noticed that these days, more established companies are functioning this way too. “Can you use another resource to accomplish something that is better done by somebody other than your full-time employees? It’s easier, and it’s more high quality, to do it that way now than it was in the past,” she says.
If you’re an intrapreneur, similar to startup owner, you cannot afford having only full time roles in your team or organization to trigger rapid cycle of build-measure-learn, or to test another hypothesis. Hiring, onboarding, and getting up to speed with the newcomers take time. Today, you might need a data scientist, but after another pivot you will need behavioural scientist. What then? Do you still hire for a job description or do you tend to pull specific skills which are made-to-measure for the work to be done?
Switching to the ecosystem mindset, using internal talent marketplace which enables employees to move easily among products and projects will help your organization to meet the emerging demands. If no employee is available, bringing external talent could be a solution.
Ask yourself a question: what is it you’re trying to achieve? And when you know: what are the core elements of work, and which of those elements should be done my staff who work for me, and which by other members of the workforce ecosystem?
It’s important to consider that in the ecosystem we’re not limiting ourselves to the specialists from our field, but also we rely on those on who we have interdependencies. Legal, communications, IT – they all play key roles. The sooner we foster the culture where we all aim for the shared success, the bigger will be our competitive advantage. However, this require collective evolution of mindset, which would allow to understand the shared purpose, and bring all people together, under the umbrella of one ecosystem.
Purpose, Flexibility, and Personalized Experience
Technology is transforming everything. It changed the products and services. It sets the expectations of the customers and their experience. Eventually, it will change how organizations are engaging and managing their workforces.
In short, workforce ecosystem consists among other: employees, contingent workers, external collaborators, partners, infrastructure, and other resources. Whereas these other resources are for example bots (like co-pilots), software robots, and physical manufacturing robots.
Beyond providing the infrastructure that is powering workforce ecosystems, technology — both hardware and software — can also be a “worker” itself, performing or assisting with tasks. Amazon has 200,000 physical robots working among its human warehouse workers. This is also the case at NASA. “At NASA, the space agency has virtual bots that can be thought of in some ways as employees,” Skytland says. “To integrate with our IT systems, bots are given unique IDs when issued virtual employee badges.”
Workforce ecosystems may vary considerably from one organization to another. They might look differently for one organizational practice than for another. However, they all have several characteristics in common:
- Integrated structures that create value
- Complementarities that strengthen workforce ecosystems
- Interdependencies which link successes within workforce ecosystems
Workforce ecosystems enable organizations to create value by coordinating workers of all types. They build communities including workers interacting with the organization and with one another.
Essential for the workforce ecosystems are complementarities. They represent how distinct actors can work independently while together creating mutual value.
Last but not least - interdependencies. The entities within the ecosystem rely upon others to get the work done and accomplish shared objectives. Their results of work hinge upon their ability to collaborate effectively.
Carmelo Cennamo, professor of strategy and entrepreneurship at Copenhagen Business School, explains, “We tend to see the workforce as a top down process. We set strategy; we have goals. Then it comes down to operations: ‘We need these resources, and human capital is one. Do we have these people? No, let’s hire them.’ But the other way around — bottom up — will be that the resources you have might actually push you to explore other directions. Some of this pool might be seen as a way to leverage innovation opportunities or strategic directions for the company itself.”
Are There Any Risks?
As well as benefits, workforce ecosystems bring challenges. Organizational culture and established practices can act as barriers. Legal and regulatory – especially in companies with global presence – issues complex hurdles.
Companies will need to overcome issues such as HR technologies that are aligned with an employee life cycle approach tracking only internal employees, and geographic, legal, and privacy constraints that prohibit certain types of data from being shared.
If we reach out for workers externally, additional risks will occur. Culturally, you treat all your workers like employees, but from legal perspective they would be different. Quality, brand, and intellectual property represent another vulnerabilities.
Those factors are hindering transformation of large firms but none of them are real showstoppers.
People Analytics Ecosystem
When you work on your analytics project, ask yourself these questions:
- What is it you’re trying to achieve?
- What are the core elements of work, and which of those elements should be done my staff who work for me, and which by other members of the workforce ecosystem?
Then apply your people analytics ecosystem in practice.
In your ecosystem you include, but are not limited to, following actors:
- Your People Analytics Centre of Excellence people with skills like statistical modelling, data science, data analysis, storytelling, data visualization, etc.
- Subject Matter Experts who know the data or the business context.
- Your HR or business sponsors for who came to you with an inquiry.
- Your IT department who maintains and develops your data layer.
- Information Owners who own the data in the core systems.
- Legal, and data protection people, so you remain compliant.
- Communications to spread the word, run data literacy initiatives, support information distribution.
- Your data governance folks who safeguard data quality, and proper functioning of processes in which data is collected.
- Your IT Security for information classification, authorization policies, security directives, etc.
All these actors have complementarities and people analytics have interdependencies with them. Now, it is becoming crucial that successful people analytics leaders through their leadership can foster culture of networking, collaboration, set the purpose, and pursue collective goals. We all win or lose together. Shift your management practices today.
“The first principle is that you must not fool yourself — and you are the easiest person to fool.” – Richard Feynman
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