Category

Future of work

Nov 09
0
outsourcing can be a good thing

Outsourcing and its Alter ego (hint: Frugal Innovation)

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Perhaps one of the leading misconceptions about outsourcing is that a company that outsources needs to cut the jobs of current employees. For sure, there are instances where we see that happening. But that is a result of a flawed mindset deriving from an early stage of outsourcing history where increasing the margins (for the sake of profit) was the only purpose. It works, but it’s short-sighted.

Outsourcing done right has a lot to do with frugal innovation. Navi Radjou coined the term and defined it as a mindset exhibited by individuals and organizations that strive to do more and better, with less. Most managers will translate this: “Ah, I need to cut costs while keeping the same revenues level.” Contrary to this understanding, frugal innovation rather translates to “How can I maintain my current level of expenditure while increasing the efficiency of output and revenues?” In other words, how can I increase value to my customers, while at the same time not spending more towards that purpose?

Outsourcing is undergoing a shift in mindset

This switches the angle from which managers look at outsourcing: it becomes a strategic decision (i.e. from cost-cutting to cost saving). The outsourcing partner comes in to complement an existing organization, and act as an extension of its teams in order to tackle larger projects or peaks in demand. Besides bringing in raw capacity, the outsourcing partner will contribute (if selected well) with a strong focus on end results, since their business with that organization depends on it.

stark-lightbulb

But let’s take a step back and think through the model of frugal innovation. Without any doubt, it’s quite easy to find a solution by spending a lot of capital (especially if it’s available and this seems like a good cause, right?!). However easy that may be, it actually drives down innovation and creativity (since most likely an existing solution will be chosen, one that can be bought off the shelf). While taking the decision to outsource is a step forward, it’s hardly the only one you need to take. The other critical step in reaching higher levels of value is the innovation process through which old practices and processes are entirely re-thought or upgraded. That puts the outsourcing partner (and whether they like it or not, the organization as well) in a tight spot that doesn’t allow for any status quo such as using piles of cash as a safety net. As Renault-Nissan Group CEO Carlos Ghosn once said “In the West, when we face huge problems and we lack resources, we tend to give up (too) easily. Frugal Innovation is about never giving up!”

The lesson from emerging markets

Although frugal innovation has been associated more than often with emerging markets (and for good reasons), more and more organizations in developed economies are considering this mindset because of the rising consciousness that resources are limited (i.e. see the Skills Gap for human resources or fossil fuels). The last economic crisis that swept many western markets off their feet has contributed towards that same consciousness.

stark-grinder

Outsourcing based on that mindset is probably one of the soundest decisions that an organization can make (where applicable, see the organization’s core or niche specialty capabilities that represent its trade secret), especially because of its sometimes harsh but healthy side effect: it enables that same organization to innovate faster, better, and cheaper (without giving up on any of the three). All of which are quintessential to success in the New Economy where capital takes the back seat, while talent drives.

Here’s a challenge that takes you out of the comfort zone, out of a profit-only or damage control mindset. What will you do?

Oct 05
0
Threat or opportunity

Skills gap | Threat or Opportunity?

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Even in a world flooded with information accessed at a distance of a “click” – one that fuels a competitive and constantly changing global economy – the workforce market is faced with a widespread challenge: the lack of skills required to tackle today’s business environment. How do we go about solving this issue?

The global competition demands a different skill set

Technology has changed the way the world is connected. Competition is global and it doesn’t matter where you are located on the map: Romania, India, US, etc. because you have lots of competitors for the same market share and talent. As a result, there is a constant need for skills in the market. Employers have high expectations and want to see a strong mix of a positive attitude towards work, technical knowledge, proactivity, solving issues in a timely manner, entrepreneurial skills, and social skills. Young graduates have fewer chances to get hired, as their current skills (or lack of them) don’t fit employers’ reality.

Studies show that around 80% of graduates work in a different field than the one they have graduated from. Still, they invest energy, time and money to graduate from a University and obtain a degree that they thought would be key to enter the marketplace.

And that raises the question: “Where is the disconnect?”

How do young graduates get a dream job when organizations don’t give them a chance?

The idea is simple – employers don’t want to invest in graduates if they don’t have the required experience. The reason? The risk for new hires changing their jobs right after having been trained is significant, especially with so many available jobs on the market. This pushes employers right back to square one.

Why not change the Educational System?

Young people go to universities with the hope that after getting their degree they can enter the workforce right away and bring value to it with their fresh enthusiasm. Disappointment sets in quite rapidly when they face reality: the market does not accept them unless they are properly prepared. All starts from the ground-up: the Education System, which offers too much theory and insufficient practice.

Now what?

To begin thinking about a solution there are 3 key matters that need our attention:

(1) restoring communication between universities and organizations in the marketplace, thus offering students the chance to get prepared for what the marketplace actually needs;

(2) keeping the information always accurate and in accordance with the demand;

(3) offering them practical training while still in school, by implementing a strategy in which internships are a significant part of the grading system, right from their first year of studies.

Both companies and young graduates would benefit from this.

There is a significant amount of change that needs to be done if we want to see graduates find jobs that they can bring value to from day one. It boils down to teaching students what they really need to thrive in a global market, and focus their educational process on pragmatic skills (i.e. problem-solving, creative collaboration, effective communication, thinking out of the box), not just theory. That can only be achieved with the help of organizations that need to transfer back into education the very skills that they wish to see in graduates.

Let’s get to work!

Oct 05
0

Will Talent make or Break the Future of your Organization?

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The concept of Talentism has been coined down by Charles Schwab (founder of the World Economic Forum) back in 2012 as being the only logical era to replace capitalism. Capital has been one of the key drivers for the industrial era, fueling technology innovations as well as the development of private companies to carry out the entire process from product creation to market delivery as opposed to being state-owned and state-driven. This improved productivity and enabled consequent competitive advantages that stood for a few decades.

The New Economy is not fueled by capital, but rather by talent.

Whereas capital is important, it is no longer the presence of it that significantly influences the potential to succeed of an organization. It was capital that made it possible for the main technologies to taken certain industries from zero to one: i.e. the steam engine which multiplied the potential of many industries tenfold. Information technology plays a significant role as well being among the revolutionary advances (i.e. 3D printing – which leads the democratization and digitization of manufacturing), being considered by some economists as one of the general purpose technologies along the telegraph and the steam engine.

In the era of Talentism, talent becomes the driver for many of the advances that revolutionize industries (i.e. Uber, Airbnb, Tesla). We can see its impact when creativity, combined with the proper skills, tools, and information technology creates tremendous organizations (i.e. see Google, Microsoft, Apple, etc.) These no longer find themselves in the areas of activity that they initially started but have become organizations with a mission to change the world (see Google that started as a search engine trying to take the lead on autonomous cars, or Facebook – a social media platform – trying to take the Internet to everyone on the planet, just to mention a few).

None of these companies lack the capital. In fact, they have a significant amount of cash available on their hands. However, by far, they are in a group for themselves (although some consider them to be monopolies), which exist by the sheer advantage that their talent has given them. A competitive advantage that took them by an order of magnitude in technology beyond their competitors.

Talent and the future of work

Now that organizations have understood the importance of talent they are faced with the challenge of the skills gap. It has pushed them to find new ways to source talent, primarily by giving up on geographical limitations, switching to a remote work relationship (either from home or through outsourcing to vendors operating in nearshore or offshore models). That opens up a whole new way of working, bringing up other quasi-challenges such as finding the right communication means (i.e. phone, text chat, conference meetings), switching to cloud software platforms, adjusting for cultural variations, or time-zone differences. Other solutions may be found through freelancers or collaborative workspaces/hubs.

Never before was the future of work so interconnected with the past. Social media platforms provide a network of information, organizations, and individuals who can easily be accessed to locate the right talent, vet them through references and even carry out background checks.

The future of work also calls for professionals to consider that an education is not an insurance that guarantees a successful career throughout their lives. On the contrary, professionals need to be open to life-long learning alternatives (i.e. certifications or online course platforms) and developing an alternate primary skill. This gives way to varied work opportunities and increases their flexibility to switch from one project to another.

Talentism is changing the face of businesses around the world as they strive to become and stay competitive in the New Economy. How will you take advantage of the vast array of talent available across the world?

I would love to hear your experience about capital versus talent. How have both shaped your strategy in the past 5 years? How about the next 5-10 years?

Leave your comments below, and don’t hesitate to contact SourceMatch about how we can help you leverage talent for your organization.

Oct 05
0

Why Should any Service Provider care About your Business?

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1. You don’t like outsourcing providers, here’s why

In today’s marketplace outsourcing has lost its attractiveness and benefits as a strategic decision. That is mainly due to a lack of business fit between the client and the provider of services. Not only those expectations are rarely met, but apathy becomes the status quo throughout the delivery of each process. Providers are merely fulfilling a job description which significantly shakes the client’s interest in a long terms relationship.

2. They’re missing the point

The key to this uncomfortable and unfortunately costly situation is neither a tighter legal framework, tighter control, more experts on the provider’s side, or revamped performance metrics. It all comes down to the provider’s understanding of the client’s vision, mission, objectives, values, and organizational culture. This can only occur when both the client and provider invest effort into more than a buy-sell relationship: a partnership.

3. Walking the extra mile is not old-fashioned

In such a context, the provider steps into a role of responsibility focused on acting as an extension of the client’s team. This role requires to care for more than what’s agreed within the service level agreement: walking the extra mile. That means taking initiative in building the success of the client’s activities, collaborating with genuine interest, and consistently delivering quality and performance despite business complexities.

4. Seeing the big picture without leaving the premises

At the same time, the provider ought to carefully and objectively analyze the client’s processes, as a result of their constant focus on added value. Within the lifetime of such a partnership, changes will occur in the client’s processes and tools with results such as increased standardization, automation of certain service stages, higher autonomy on non-recurrent projects, and deeper knowledge of products/services.

5. Start with the right tactical steps

Either you are already scaling up or just beginning to think about growth, outsourcing is a strategic decision that can give you the required boost, and doesn’t need to be a nightmare. Clear cut expectations, strategies, and degree of communication will help you lay out the essential platform to a successful outsourcing partnership.

What are your thoughts about outsourcing? What has been your experience? What was it that made your outsourcing relationship work?

Oct 05
0

Creativity and your Bottom line

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You need creativity more than you think

In our last post we looked at two important concepts: the New Economy and Talentism. Both of them have a lot to do with Creativity, which is as we’ll see “a catalyst for” and “a result of” innovation.

With every advancement, technology has reached into almost all areas of life, starting from communication, to cooking and driving. And as we’re well accustomed, iterations of each product amplify the pressure over the consumer to comprehend all its new features and how to use them. We’re bombarded with so many new things that reach out into our brain for our attention as well as our capacity to learn and adapt. Such complexity is what pushes us to transition towards new technologies and the realities that ensue (i.e. 3D printing, hyper-connectedness, robotics and automation, the new paradigms of work). The paradox is how the same innovators strive to showcase all of these complexities in a light of simplicity and thus alleviate any resistance, enhance the product’s market acceptance and rate of adoption.

stark-innovationThus, creativity acts as a catalyst for innovation through its sheer usefulness in the problem-solving process (i.e. answering a need in the market). Simultaneously, it succeeds innovation by demystifying new technologies for their intended audience.
This is why organizations that want to stay on top of their game in the New Economy need to breathe creativity. But how does that relate to Talent(ism)?

What drives creativity?

Access to resources – take for instance artists that have created art as they had access to various tools, materials, fine wood, paint, silver, gold, etc. The same principle applies today when you consider easy access to information, software, hardware, knowledge, training, and continuous education. How would high-end engineers be capable to innovate without a proper workbench, laboratory and state-of-the-art technology at their fingertips? How do you expect your teams to improve your business processes without the proper understanding of the principles of quality management methodologies such as Six Sigma and Lean?

Thinking outside the box or allowing yourself to be disrupted from your standard line of thought – we all like status quo, who doesn’t? It’s comfortable and cozy. If we want to create, we should put ourselves out there where we’re being challenged to think differently. Read books that are out of your usual knowledge areas, take on projects that just seem like you’re taking a big leap of faith and work towards shortening the gap of knowledge/experience, meet with people that do things differently or are labeled as outliers in your industry and learn from them what it takes to go through uncharted paths, or in two words: Be curious!

An environment that encourages ideas out of the ordinary and idiosyncrasies – this asks for high tolerance to failure and a quasi-safety net (note: not risk aversion) in the form of preventive actions for new and unconventional initiatives. Nowadays, especially with the tech startup scene the later seems to be rarer (to my surprise) since all of the great innovations had strong prior planning. What would change your organization, product, service or whatever you’re involved in by a few orders of magnitude?

stark-math

Exposure to as many interactions in the work environment as possible (open to listening, helping, being empathetic) is quintessential to creativity. The advantage of collaborative teams, spaces, organizations is by far their diversity giving way to creative problem-solving. This is also an indication for organizations to focus on socio-cultural diversity that enables divergent thoughts and decision processes. Take the classic example of coffee shops – why are they such a great place to come up with ideas? They encourage bohemian interaction and collaboration, as well as the allure of frugal creativity. Basically, it gives anyone the liberty to dream at no additional cost – everything is possible! Are our organizations creating this kind of environments?

The pivotal factor

Beyond a much longer list of drivers for creativity, people have a critical role, and especially decision makers in organizations who need to be responsible for facilitating creativity. Although the traditional model of a boss-run organization is extremely spread, it has become clear that it’s not a sustainable one. And seriously, who wants to rely on just one person to grow and develop an organization? It’s about time that leaders and managers would stand behind their teams encouraging them to think for themselves and to switch from an employee mindset towards an owner mindset. A reversed model of tapping into everyone’s talent, skills and experience so as to stir a sense of ownership for breakthrough ideas and initiatives, taking them from “aha” moments, to debates, to chiseled project plans, and down to bottom line impact.

Practical ideas

  1. Leaders educating their organizations about the cause-effect relationship between creativity and financial bottom line using concrete examples, and how that can contribute to their own well-being. Leaders and key decision makers need to realize that growing profits without a direct benefit to those who drive them isn’t sustainable (Dare I say: it’s even destructive?).
  2. An informal team commitment to personal development, while members hold each other accountable (i.e. reading books, listening to podcasts). Same as organizations, people need to “upgrade” themselves and to continuously learn. Does it help the organization? Probably it does, but in the end, it’s an investment in themselves, which they take further wherever they go (Disclaimer: I’m not saying that people should not stay with your organization forever)
  3. An informal coaching environment in which people will teach one another using a quasi-structure of information and knowledge, starting from their own expertise. This process may appear to be simple – it’s not. It puts people in a position in which they need to find the best means to transfer their knowledge onto others who might not interact with it on a regular basis. And it boils down to one question: how do you take your knowledge and reduce it down to an essence that your teammates can gather in max 30 minutes?

I’m convinced that this post just scratches the surface about the subject of creativity, and you’re encouraged to contribute with your own experience, observations and questions.