A New Age for Human Capital

How businesses will need to embrace new modes of work, and new types of workers

By Don Peppers

Technology empowers employees today to work whenever and wherever they need, and to switch careers just as quickly. It enables customers, too, to shift loyalties and interact with companies at their convenience. Don Peppers, a leading authority on customer-focused relationship management strategies, argues that in order to survive in the future, business leaders will need to strengthen a company culture that's increasingly challenged by the dispersion of workers and the shortening attention spans of customers.

“If you don’t come in on Saturday, don’t even bother coming in on Sunday.” This was the advice we gave new hires at Peppers & Rogers Group in 1999, when we first began hiring consultants and analysts hand over fist. We were joking, of course. Sort of.

Today, the notion that all employees must “come in” to do their jobs blows my mind. In a technology-driven world, employee productivity has never been higher, processes have never been more efficient and identifying and solving customer problems 24/7 — from just about anywhere in the world — has never been easier.

But for all the benefits that technology’s blizzard of new capabilities is generating (and there are plenty more to come), managers everywhere face a perfect storm of workplace challenges:

  • Workers increasingly work remotely. Look at IBM: 40 percent of its employees don’t go to the office to work.
  • Workers increasingly are their own bosses. By 2020, about half of all non-governmental workers in the United States will be contract workers — not permanent, full-time employees.
  • Workers increasingly generate enormous value in smaller numbers. For example, when Facebook earlier this year signed a $19 billion deal to buy WhatsApp, the hugely popular texting service counted 55 employees.

Behind these workplace shifts is the fact that individuals are empowered in ways never seen before. The same technology that allows a customer to compare prices, consult friends and transact business at the frictionless speed of a smartphone app also liberates employees. Even the most junior-level worker can leap tall hierarchies in a single click. And managers of all ranks can work equally well in the office, at home or over coffee at the local Starbucks.

For workers and business leaders alike, the impact of these freedoms is profound. Where workers once spent their careers logging 40-hour weeks at one, two or perhaps a half-dozen companies, today they’re always on the move, always on the clock and always thinking about their own personal “brands.” Faced with an increasingly transient workforce, business leaders must rethink how they organize, equip, motivate and compensate their workers. Starting now.

 

A return to hunting and gathering

The employee diaspora at IBM and other companies has been in the making for more than two decades. In our 1993 book, “The One to One Future,” Martha Rogers and I predicted a day when jobs required some people “to be there — somewhere — while others will be able to work mostly from their homes, without having to be anywhere.” We called them “theres” and “there nots.” We didn’t know then how the “there” and “there not” split would develop, but I feel certain today that “there nots” will be the rule, not the exception, in the workplace of the future.

The 'there nots' will be the rule, not the exception, in the workplace of the future.

To a certain extent, our vision paralleled ancient history. Humans were all foragers once, before the rise of agriculture split us into two basic camps: owners and workers. Today, technology is rapidly blurring this dividing line as many workers return to a hunting-and-gathering existence. This time, however, humans are not foraging for meat and berries; we’re searching for ideas, content and services — in essence, anything that can be monetized. And instead of eating only what the landowner lets us keep or what the manufacturer pays by the hour, foragers today directly enjoy whatever value or wealth we create.

3 emerging worker types

Three distinct types of foragers will dominate the workforce of the future. The first, and the largest, category comprises “contingent workers.” These are freelancers, contractors, part-timers and temps who forage for work from task to task, employer to employer. They tend to set their own hours and can work for multiple employers at once. Contingent workers already account for 30 percent of the U.S. workforce.

And they create their own wealth. Joe Pulizzi, founder of the Content Marketing Institute, marvels at the vast numbers of people who are building careers off of web services like Instagram, now part of Facebook:

“Some of those people freelanced, or contracted, directly with the company, helping to build their own businesses. Others wrote and sold books. Others used their knowledge of Instagram to help companies manage how to use the tool effectively. Others found opportunities in technology enhancements, or security, around the tool. Yes, just 13 jobs were created, but thousands of people directly generated revenue because Instagram or WhatsApp or Tumblr or [fill in the startup] succeeded.”

The no-holds-barred entrepreneur

Another class of forager will coexist with contingent workers: the entrepreneur. Many people feel compelled to create, innovate and explore, especially as the supply of full-time jobs diminishes in the age of automation. One recent global survey of 12,000 people found that more than two-thirds of young adults aspire to start their own businesses. A separate survey of U.S. adults found that workers up to the age of 64 also aspire to start their own businesses.

For businesses, the quantity of creative, innovative energy now at their disposal is intriguing and frightening. As technology continues to accelerate the rate of change, every business needs to think about harnessing this energy to reinvent itself again and again.

The personal brand manager

A third category of forager poses serious challenges for today’s business leader. For all the entrepreneurial energy out there, the demand for skilled workers far outstrips the supply. Galloping automation has generated a big surplus of low-wage, low-skill workers, but many companies (even the most innovative ones) face a critical shortage of high-value, high-skill workers. I’m talking about workers whose jobs demand creativity, wisdom, judgment and empathy. To compete, businesses must teach their workers new skills. Continuously.

 

For today’s business leader, overcoming this talent shortage is complicated by the fact that full-time employees are foraging for their own opportunities in their spare time — and it’s never been easier to do. Senior and middle managers now promote their own “brands” as experts, leaders, movers and shakers whose added value transcends their current job. LinkedIn already connects these managers and information workers to new opportunities at competitive firms, client companies, suppliers and other partners. Most workers consider themselves “in the market” for a new job virtually all the time.

Inevitably, competition for top talent will spike, but higher salaries alone won’t win out. Skilled workers increasingly want to buttress their skills and capabilities in order to continue maximizing their foraging opportunities. In response, business leaders will have to rely more on intrinsic motivations such as autonomy, challenge, mastery, recognition, camaraderie and a unifying sense of purpose.

The business leader’s challenge: Unifying them all

In “Built to Last,” Jerry Porras and Jim Collins found that perennially successful companies that have nothing in common share one key attribute: They all have pronounced and highly influential corporate cultures that infuse employees with a sense of purpose beyond profits or shareholder value. Collins and Porras described the cultures at these long-lasting companies as “almost cult-like” — so strong that a new employee who doesn’t fit is “rejected like a virus.”

The most important task for any business leader going forward is to cultivate, strengthen and enliven company culture.

But when the workforce is largely nomadic, the glue that culture provides can come apart. When a workforce becomes a revolving door, the sense of “us” that is so vital to success is at risk, and so is the company’s future. In a tech-driven world, the late Peter Drucker’s famous proclamation that “Culture eats strategy for breakfast” will prove immutable.

The most important task for any business leader going forward is to cultivate, strengthen and enliven company culture. As work becomes increasingly dispersed in time and space, and as individual customers and employees become more connected and empowered by technology, it will become more vital — and, yet, more difficult — to engage employees with a socially developed, common sense of purpose.

 

Technology alone can’t fix the culture challenge, but it can help. Many companies use internal social networks to create and sustain a customer-oriented culture. They double, too, as the equivalent of the 20th century water cooler, a place where employees can swap stories, ideas and values. Frequent chats between the CEO and rank-and-file employees on these services about problems or suggested improvements further reinforce a sense of shared mission. The CEO who doesn’t actively participate, personally, in his or her own company’s employee social media discussions will soon be, quite simply, yesterday’s CEO.

The future workplace calls for an entirely new breed of business leader — one whose first task each morning is to think hard about the company’s mission, adapt it as needed and communicate it to a workforce whose face changes daily.

Don Peppers, founding partner of Peppers & Rogers Group, is a best-selling author, sought after keynote speaker, blogger and key INfluencer. His latest book with co-author Martha Rogers, "Extreme Trust: Honesty as a Competitive Advantage," addresses the need for companies to build customer trust, proactively, in order to compete in a world with heightened customer expectations caused by social networks and rapidly increasing transparency. "The One to One Future" (1993) is consider by many as the bible of the CRM revolution and "Return on Customer" (2005) redefined how we measure customer value. Peppers continues to support many of the worlds’ leading global brands, working with executives to develop a customer-centric strategy and culture within their organizations.