Winning by Sharing

Ki work: A platform for fractional work

Michael Wolff has been explaining what ki work is for many years.  This is perhaps one of the best explanations because he's set it in context so well. In a recent email thread written in response to a query from an interim management firm Michael says;

people4business.com is a neatly structured freelance marketplace, primarily serving buyers and professionals in the UK. it is one of about a hundred “me-too” businesses that have followed the original models developed by elance and guru. apart from UK focus, it has very little to differentiate itself from the other 100 service providers in this market.

The underlying assumption of all elance look-alikes is that the fundamental organisational principle in all business is that demonstrated by the “firm”* or modern corporation. buyers are some kind of corporation, however small, and sellers are employed contractors to these corporations. the underlying reason is that hitherto it has been more sustainable and cost effective for businesses to be organised in this way, rather than a situation where the economy consisting exclusively of a multitude of independent, self-employed people who contract with one another. this model of business was classically explained by ronald coase in 1937 in his famous article: the nature of the firm.

However ki work is truly part of the online work revolution. we see the emergence of a new organisational model that is structured in such a way that “a multitude of independent, self-employed people who contract with one another” are able to complete transactions as reliably, but more cost-effectively, than the conventional firm. this organisational model has been pioneered within the open source development environment (http://sourceforce.org) and described in Yochai Benkler’s seminal work: coase’s penguin, or linux and the nature of the firm.

ki work takes the organisational concepts of sourceforge (where open source projects are organised on a free basis) and translates them into a model where multiple online work projects can be executed with remuneration for the suppliers. just as sourceforge is a utility enabling virtual open projects, so is ki work the utility for paid virtual projects.

Hence ki work’s main differentiator from the elance model: an organisational structure comprised of category marketplaces, which are  co-ordinated by category leaders and experts. this forms the basis for the creation of virtually outsourced projects, executed by “a multitude of independent, self-employed people who contract with one another”.

What relevance does this have in the interim management market? until you surfaced we did not include “interim management” as a category. our perception is that interim managers focus primarily on getting work in conventional businesses as a form of temporary employment (rather like elance), and as such, are not generally attuned to becoming leading players in the emergent virtual outsourcing market. however, I suspect that a small percentage (maybe 20%) of interim managers would be interested in the emergent opportunities, and I see our “interim management” category as being an alternative to “project management”.

So regarding people4business.com and all the other ones like them, I do not see these as a threat but as a valuable channel for creating awareness in the marketplace. the elance model, now 10 years old, is due to be superseded by the virtual organisational model. ki work is leading the way.

These models are starting to emerge in the creative industries.  Andy Law of St Luke's has created a worldwide network of partners at The LAW Firm, Citizen Agency started as a network of advertising, marketing and web 2,0 professionals, and John Caswell's GroupPartners' expert network delivers most of the value to its clients.  So when will we see Agency.com, AKQA, BBH and others adopt these fractional models of work and start leveraging these platforms to make their biggest cost (people) variable rather than fixed?

Outsourcing relationships

Michael Wolff of ki work sent me a quick round up of 'news from the front' surrounding LinkedIn's recent valuation.  He says;

• Linkedin raises another $53m valuing the company at around $1 billion.
• About 23 million people in 150 countries have set up profiles on Linkedin so far, with another 1.2 million members signing up each month (growth rate 5.2% per month compared to facebook 12.5% per month)
• Ning currently valued at $500 million.
• On recent series C funding for oDesk of $15m, I suspect this would be on a valuation of $100m +

So, pretty hot area for investors.

It occurred to me a long time ago that companies are outsourcing their relationships to LinkedIn.  One area where this is having a profound impact is in recruitment, where the relationships recruiters form with prospective candidates are managed outside company boundaries and on other platforms.  Small, smart recruiters like Fred do all their candidate generation on Facebook, Twitter (the 140 charcater CV) and LinkedIn.

Large corporations who have not woken up to the demands of Generation Y, and the innate need for people to form groups and communities of practice, are missing an opportunity to create organisations as productive as the open source community.  Years ago there was an active community of Air India pilots on CommunityZero because the company just couldn't (and probably still doesn't) provide an online environment for its people to exchange professional experiences.  Large programmes of change taking place in big companies to this day do not even consider building collaborative, social architectures of participation on which they can execute change. 

Thnk about this for a moment.  LinkedIN and a number of other business networks could conduct an analysis on their data to derive a social graph of a large percentage of people from a single organisation.  The graph would show the frequency and strength of inter-relationships and identitfy Influencers and connectors, in real time. 

Maybe this unintentional transparency is a good thing? Maybe knowing what these inter-relationships are is worth much more than $1 billion?

ki work. They don't live for work ... they work to live

ki work launches a platform for matching freelancers to sources of work that enables individuals to create and maintain virtual companies (or rather trusted groups), and buyers of professional services access to a virtual work force.  Hat tip to founder Michael Wolff and the formidable team he's assembled that have dedicated the past five years meticulously refining the execution of collaborative work and self-organisation, described more recently by Clay Shirky in his book Here comes everybody.

I sense this may attract Generation Y people as much as it does established freelancers judging by the recent article in The Guardian entitled They don't live for work ... they work to live.  At the risk of boasting, I made this quite clear in 2004;

"The internet has caused a fundamental change in attitude towards work and the realisation that a 'career' has ceased to be a feasible way to organise working life. People now view work as an instrument of self-development and personal autonomy and entrepreneurship not as a status symbol, but as an attitude - an attitude that everyone is going to need."

Interestingly BusinessWeek recently published an article Beyond Blogs that aptly captures the shift in the nature of work in Western economies under a sub-heading  - THE 140-CHARACTER RESUME.  ki work's members recognise how profoundly the nature of work is changing which over the next decade will take most people by surprise.

The business impact of social networks

I wrote the first version of this diagram in 2005.  It describes the role of a new function that should be created by HR.  I've been talking recently to Jonathan Winter of Career Innovation.  He's been conducting ground breaking research on behalf of large corporates in the field of talent acquisition, social networks  and their impact on a wide range of strategic issues.  It's just as relevant to small companies (or networks?) as it to large ones.  It needs some explanatory text which I've not had a chance to write, but when CEOs and their boards ask questions about the value of social networks;  What's the point, where does all of this take us, what's the business value? 

Download network_ops.jpg

Some of the answers to these questions can be found in this diagram.  There are two key outcomes;

Creating and measuring the value of intangible assets, so called good will - a significant proportion of a company's market capitalisation is based on good will, except no one knows how to measure it (at least accurately).

Creating a capability to source and manage people on demand.  A CEO I worked with at BT a few years ago said "I could manage this company with 5,000 people (rather than the 90,000 on the payroll), if I could derive resources on demand in the same way as I can supply bandwidth on demand".  BT will see 25% of its intellectual capital retire in the next five years.  This talent is irreplaceable - apparently.  But why not create a platform for these people to continue to work for BT except on their own terms, in a fractional way?

The key message in this diagram is a call for a 'function' that is responsible for delivering these two outcomes on a continuous basis.  It doesn't matter what you call the role of the leader of that function - Communities Director, Network Leader, Chief Social Officer, if HR doesn't take responsibility for it, they will become irrelevant.

And just to remind you what some of the benefits are, here's a table we devised at Ecademy in 2003 for various companies curious about the impact of social networks to their "bottom line".

Download biz_benefits.JPG

Generation Y

There's been a lot of debate about the way enterprises are preparing for Generation Y employees.  These people were born between 1982-1997 having enjoyed the luxuries of digital technology their entire lives, so called digital residents or digital natives. 

Two years ago when web 2.0 was entering mainstream media and culture I remember reading an article arguing for an overhaul of the user experience provided by enterprise applications.  It predicted that companies will only be able to attract the best people by providing devices and applications that are as well designed as iPods and Facebook.

The Journal of Quebec has a different view, as it were!

Talent? What talent?

Image via Wikipedia

"Community building talent is the most precious resource in the modern world". Peter Drucker, RIP.

Blog deflation

There's a meme emerging on the commoditisation of blog content.  The central thrust is that blogs now only have value when aggregated for search and discovery.  In the same way music downloads have cannibalised record label profits, bloggers' carefully nurtured content is being  devalued.   How can bloggers respond?

I agree with this trend suggest that blogs can only become destinations when functionality rather than content is syndicated.  So if I'm a travel writer with an audience I can embed Expedia's booking engine on my blog, such that the booking experience resides entirely within my blog pages.  I get a commission for sales (and I'm transparent about this).

Actually,  when you think about it anyone can be an intermediary (or agent, or broker). By combining services (or widgets, as they are called) from Cloud operators and web service brokers, they can build entirely new businesses, albeit with niche audiences.  Wine buffs with mass followings can sign up new members to Virgin Wine Club - take a a margin.  You get the point.  Incalculable number of permutations and combinations of services and intermediaries.

The academics were right several years ago when they said that far from the web dis-intermediating it will actually  create hypermediation giving rise to what they call cybermediaries.  In the social network space groups will be syndicated and embedded on the web sites and blogs of the members.  A 2,000 member group could be on 200 different web sites with a join button. Many brands don't get the point.  It isn't about creating destinations.  It's about 'being everywhere'.

"A word to the wise.  Decentralise".

Workstreamr. Fractional work for corporations

Stowe Boyd has started talking about his new venture, WorkStreamr. If this platform, especially when used by corporations, can "tell me something or somebody, I didn't think I needed to know", then it could quite easily become a de facto means by which companies execute all their projects.  Furthermore, if it's able to identify available resources to work on projects both inside an outside the company, then it can enable fractional work or the next small thing!  That is, people on demand. The value to companies of all sizes is almost incalculable because it can dramatically reduce the salary bill - making it kind of 'just in time" - a variable cost, rather than a fixed cost.

Shift happens

The content of this video from Karl Fisch is simultaneously chilling and exciting;

• China will soon be the number one English speaking country in the world
• The US is the 20th in the world for broadband penetration (Luxembourg just passed it)
• Due to the rate of change and the doubling of information flows for students studying a four year college degree, half of what they learn will be outdated before their third year of study
• The U.S. Department of Labor estimates that today’s learner will have 10-14 jobs . . .by the age of 38
• The 25% of the population in China with the highest IQ’s . . Is greater than the total population of North America. In India, it’s the top 28%.
• The top 10 in-demand jobs in 2010 didn’t exist in 2004.
• We are currently preparing students for jobs that don’t yet exist

The career, as an institution, is in unavoidable decline.  Unfortunately, UK public policy is still based on the assumption that careers are the most desirable form of employment, and that they can be offered to more and more of us. 

So why do our 'business leaders' and politicians keep pretending otherwise?  Why do they not as Robert Lion states "Let us dream: A politician takes the side of talking to us about the world as it is, as it risks becoming; he or she forecasts not sweat and tears, but difficult tomorrows; she or he proposes that we talk about it, as responsible citizens, and allows us to perceive robust paths along which to advance, with a smile, towards the era of less ... A less that will consequently take on the character of better"

What's that coming over the hill?

From the best accountants and lawyers to the smartest derivatives traders to teachers and lecturers, many of today's most prestigious jobs could, thanks to globalisation and improved communications technology, just as easily be done more cheaply in places such as India and China.

The result, he predicts, is that between 30 million and 40 million US jobs could go within the next generation. Bear in mind that this is around a quarter of the US workforce, and that on that basis the comparable number in the UK could be as much as eight million (all major Anglo-Saxon economies will be affected).  See The Telegraph story here.

Just to remind you of some empirical stats;

1. 60 million PhD's in India by 2015 - more likley this number in the entire region
2. $1.9 trillion SG&A is 'outsourceable' - only 3% currently outsourced - according to IBM

As an aside, IBM now employs 50,000 people in India which now has the largest number of employees outside the US.  For the first time ever, the global head of procurement lives in, and is based out of China.

Winning by Sharing™  is a collection of true stories combined with market research and analysis about the future of work, how profoundly it will affect people in the next decade, and how this will take most people by surprise. Conceived in 2001, written in 2004.