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Posted: February 04, 2011

The end of business as we know it: Part 1

It's about matching talent with projects

Thomas Frey

(Editor's note: this is the first of two parts.)

The average person that turns 30 years old in the U.S. today has worked 11 different jobs. In just 10 years, the average person who turns 30 will have worked 200-300 different projects.
Business is becoming very fluid in how it operates, and the driving force behind this liquefaction is a digital network that connects buyers with sellers faster and more efficiently than ever in the past.

But the effect of our flowing digital business world does not stop with how transactions are performed. Instead, it has begun to morph and change virtually every aspect of how business is conducted including the duration and permanency of work assignments, the employer-employee relationship, and the organizing principals around which work assignments and talent coalesce.
At the heart of the coming work revolution will be a new kind of business structure serving as an organizational magnet for work projects and the free-agent talent needed to complete the work. This new structure is what I have conceptualized as a business colony.

Business Colonies Defined

Business colonies are an evolving new kind of organizational structure designed around matching talent with pending work projects. The operation will revolve around some combination of resident people based in a physical facility and a non-resident virtual workforce. Some will forgo the cost of the physical facility completely, opting instead to form around an entirely virtual communications structure.

Most will be organized around a topical area best suited for the talent base of the core team. As an example, a team of photonics engineers will attract projects best suited for that kind of talent. Likewise, a working group of programmers specializing in computer gaming applications will serve as a magnet for new gaming projects.

In some instances, large corporations will launch their own business colonies as a way to expand capability without adding to their headcount. Staffed with a few project managers, the company will use the colony as a proving ground for experimental assignments best performed outside of the cultural bounds of existing workflow.

Colonies will develop their own standard operating procedures with consistent agreements, payment processes, legal structures, management software, and methods for resolving disputes. Over time they will be rated on their ability to complete tasks with specific ratings on efficiency, quality of work, and how well they treat the talent.

The Driving Forces

The driving forces behind business colonies are more than the fact that it is a good idea. Rather, it is being driven by a combination of technology, emerging culture, and governmental systems that make it the logical next step in the evolution of work.

Businesses have an obligation to their owners and to their own people to hire the fewest number of people they can get by with. And while they have an obligation to treat their employees well, they have a competing obligation to not over-pay any of them.

Employment law in the U.S. is making it increasingly expensive to hire people. Each new-hire comes with the additional burden of managing benefits, payroll accounting, withholdings, human resource compliance, and a wide assortment of other issues.

Every time a new "jobs" bill makes its way through Congress, any new decision points adds to the overall complexity of being an employer, and causes the burden of compliance to escalate.
As a result, companies are looking for ways to circumvent the escalating costs of adding staff, and project-based work becomes a logical option.

Additionally, technology is making it increasingly easy to match talent with waiting work assignments. Companies like Elance, RentACoder, Guru, and CrowdSpring are job bidding sites designed to connect global talent with work assignments. Even though they've built a solid base of operation, they tend to be a poor match for seasoned professionals who are not interested in competing on price.

Sometimes Colonies Make Sense, Sometimes They Don't

Not all business situations lend themselves to a "colonized" workforce. Here are a few situations where business colonies are not a good fit.

• Customer-Facing Jobs - Most customer-facing jobs such as retail sales and cashiers will probably not go away anytime soon.
• Timing-Dependent Jobs - Timing-dependent jobs such as manufacturing, where one person's task is closely timed with the completion of another person's task, will not lend itself well to colony-based work.
• High Institutional Knowledge Work - Any project that requires a deep understanding of a company's history, culture, and methodologies may also be a poor match.
• Sensitive Issues and Trade Secret Work - Whenever a project involves proprietary information, sensitive issues, or a company's trade secrets, the work is best left in-house.
• High Accountability Positions - Any position involving the handling of money, personnel records, or any senior management positions will require the work to be performed by loyal personnel.

While not every position will lend itself to the transformative nature of project work, managers around the world are about to embark upon a lengthy period of experimentation as they probe time and again to see what works and what doesn't.
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Thomas Frey is the executive director and senior futurist at the DaVinci Institute and currently Google’s top-rated futurist speaker.  At the Institute, he has developed original research studies, enabling him to speak on unusual topics, translating trends into unique opportunities. Tom continually pushes the envelope of understanding, creating fascinating images of the world to come.  His talks on futurist topics have captivated people ranging from high level of government officials to executives in Fortune 500 companies including NASA, IBM, AT&T, Hewlett-Packard, Unilever, GE, Blackmont Capital, Lucent Technologies, First Data, Boeing, Ford Motor Company, Qwest, Allied Signal, Hunter Douglas, Direct TV, Capital One, National Association of Federal Credit Unions, STAMATS, Bell Canada, American Chemical Society, Times of India, Leaders in Dubai, and many more. Before launching the DaVinci Institute, Tom spent 15 years at IBM as an engineer and designer where he received over 270 awards, more than any other IBM engineer.

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