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Entrepreneurability Vlog

Company of Owners – Entrepreneurability Vlog #1

Vandaag maakte het CBS bekend dat er meer bedrijven zijn in Nederland maar minder kleine bedrijven (2-9 medewerkers). Dat vinden wij logisch, in deze vlog vertellen wij waarom en wat een nieuw alternatief kan zijn.

Bronnen:

CBS

Blog

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Entrepreneurability Vlog

What is Entrepreneurability about (video)

The entrepreneurial abilities to optimize the utilization of the production factors is entrepreneurship (or entrepreneurability). This involves four elements:

  • Taking initiative – Action oriented and driven by forward motion
  • Strategic business decision making – Based on a clear vision and strategy being able to make decisions
  • Innovation – Exploring and experimenting
  • Bearing risk – taking the consequences of the previous three elements regardless the outcome.

Since the industrial revolution we have been trying to optimize our production processes. We have created an impressive number of ways to govern it. In the past couple of decades we introduced Projects and Project management frameworks like Prince2, to optimize our productivity we introduced Lean and to facilitate in creative environments we introduced Agile values and principles along with numerous frameworks and practices. All to optimize our labor resources. Capital resources are nowadays heavily regulated and controlled (for obvious reasons) and we try to be more careful in using our natural resources by focussing on circularity.

Applying and optimizing these three factors alone, won’t make your organization a successful organization in these times. Adding entrepreneurship to your mix might do the trick. Here are the key ingredients.

Read the blog here

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Entrepreneurability

My first year being an entrepreneur

Last week I celebrated my first birthday being an official entrepreneur! To clarify, I celebrated being an official entrepreneur, because I have been an entrepreneur my entire work life disguised as an employee. When the company limited me in executing my entrepreneurial abilities, I left. Last year I decided to start my own business. in this post, I will share my learnings, beliefs and experiences so far.

“I am only present when I believe I can add value”

This was one of the first beliefs I implemented when designing partnerships with my clients. My clients cannot hire me for more than 3 days per week and I will not be present when there is no value to be added. Both of us do not benefit from me being on site for 40 hours a week. Especially in The ‘part-time paradise’ Netherlands, not many people are in the office on Fridays or Wednesdays. And when there are no people around, then there is no value for me being there. This has been one my greatest frustrations working for consultancy firms. Payment by the hours means making as many hours a possible first, looking at value added second. That didn’t feel right! So, my first order of business being my own business was to prevent that from happening.

When there is no real value for me to add, I am not going to sit behind my PC and do things I can easily do at home in my own time. My hourly rate is somewhat at the higher end of the market, but clients only pay me when I am there. And when I am, things are happening!

How to determine I need to be on site? Experience, gut feel and most of all continuously being aligned with my client to know what is happening (or about to happen). My type of work doesn’t require me to be around all the time. It is even better that I am not. Every intervention I do needs some time to digest for companies so sometimes you need to close the oven door to get some real heat.

“Collaborate only with true partners!”

I have gained some great partnerships throughout this previous year and I have declined collaborating even more! Being an independent professional is great, but the risk is that you end up stuck in a status quo bubble. You need to continuously find new insights, conversations and collaborations, which I did. I have created some great partnerships together with WannaflexCapgemini Academy and Incentro last year. With each of these organizations I have experienced true partnership where we help each other out, create new services and product together and trust each other we both operate for the interest of our clients. For example, when a new training course is still needs to get some traction for a class to completely fill up but we both invested in getting it up and running, we deviated for our initial price agreements to make both parties have at least a healthy margin. That is being partners! I have had many conversations last year where I would end up being ‘that Scrum guy’ in a customer-supplier relationship. Even though the monetary rewards would be great, I turned down all those offers.

“When you are open to it, it happens”

This is one of the biggest fears for each entrepreneur. The uncertainty of not having a customer. We have all been there, so have I. Last December, when I looked at my agenda from February onwards, it was empty! Strangely enough, I wasn’t scared or panicking at all. I thought, something will come up, I just have to keep my eyes open to these opportunities. Over the last year, I have experienced that every time I started to get a little worried about new assignments, every time with a couple of hours or days, a new opportunity would arise from…. well from anywhere. I learned that when you love what you are doing, you are good at what you do, people will find you! It’s like when you bought something new, like a car, you see that same car driving everywhere. They have always been there, but now that you are open to it, you see it!

“Starting a second business”

I like being an entrepreneur so much, that I have even started a second business this year! Together with Susanne van Dijk, I have founded Entrepreneurability. We see many organisations, mostly rapidly expanding organisations, struggling with transferring the entrepreneurial mind-set and behaviour of the owner(s) and first generation of employees. Companies unsuccessful in doing this are struggling with attracting new employees and engaging existing ones. This can have many sources but primarily you find some contradicting elements in the governance model, product portfolio and skills set (entrepreneurial ability) of the organisations. This is where we are can help with proper coaching and training of the owner and the employees. A great new adventure we are in and I believe in the next couple of months you will hear more about it.

“Entrepreneur in disguise”

The decision I took a little over a year ago was one of the best decision I made in my life! I am doing the thing I love, which is causing as many powerful, fundamental learning moments as possible, bringing about sustainable growth in humans. I can do this in my own pace with my quality standard with people and organisations I want to work with. And I earn money doing that…. isn’t that just awesome?

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Bearing risk Business Decision Making

Are you an entrepreneur or just minding the shop?

Recently, I was listening to an item on the Dutch radio on research about employment and management. It stated that companies fear a lot of people will leave their company and look for a new challenge. With the economy back on track this is nothing new. However, politicians and unions are screaming for raises! Research states that this is not the primary reason why people leave a company. According to the research done by Berenschot and ADP; It is management. Here are some contemplations based on my personal experience.

Mind the Shop

After years of little or no raise, a better outlook of the economy, raising salaries seems like a no-brainer. Politicians and unions are screaming for this to happen to prevent people from leaving companies/industries. It seems that management is ruining the engagement of employees. Is it on purpose? Probably not, it’s never the intent of management to scare people off. If it is, then something is seriously wrong with that company. So let’s assume this is not the case.

It is my personal experience that most company cultures and management behaviour have nothing to do with being an entrepreneur, with running a business. All the mechanisms like multi year strategic plans, proper micromanagement, annuals departmental budgets etc, are all  in place to mind the shop. Look after the place until the next person comes to mind the shop. As long as at the end of the year we didn’t exceed our budget, we’ll be just fine. It has nothing to do with entrepreneurship, by employing innovation, taking risk and most of all taking initiative.

It is the responsibility of leadership and management to give opportunities and put demands on people which enable them to grow as human beings in their work environment.

 Sir John Harvey-Jones

Training already sold

One of the reasons for me to become an independent professional was lack of entrepreneurship from management. I wasn’t allowed to do a training course that exceeded my personal development budget. I just received a plain and simple ‘no’ as a reply to my request. The rules stated it was not allowed. And there’s no use arguing with the rules that help ‘minding the shop’, right? Well no, wrong! Because there was a very plausible reason to break the rules: paying customers. The course would certify me to provide courses myself and before I attended the training I had three potential clients willing to pay for such a course. It still was a ‘no’.

To me, that is a simple sign of minding the shop and lack of entrepreneurability. This internal rule was created to prevent employees from attending courses that do not bring any value to the company. However, this course would almost immediately earn a profit to the company. So, deviating from the internal rules were valued over servicing clients, investing in employees’ knowledge and earn a profit. Explaining this to the management team a couple of times from various angles couldn’t make them to change their mind. They said: “We understand the situation, however, these are the rules of our company.”

The Monitor

Another example, a few years back, I ran a proof of concept with an international team. One of the team members was a designer and requested an IPS monitor (or something like that) to be able to deliver quality in her work. After a request and even an escalation to upper management, I received a ‘no’. The designer would have to settle for a regular monitor just like everyone else. Budget wasn’t the problem, some IT hardware configuration restraining jacket was. Again, I was held back by management that did not want to deviate from internal policies and see the benefits of the request. This is not where the story ends.

The Entrepreneurial Manager

Ultimately, I found one entrepreneurial manager who said, you just get the monitor, I have some part of my budget which covers special expenses which still has some room left. Just hand me the receipt and I will take care of it! So, I went to the local electronics store to buy this monitor and have the designer deliver quality! That is the kind of behaviour I am looking for in management. Them using the internal rules and procedures as guidelines but keeping in mind the reason the organisation is in business. And when people, proactively, offer solutions to increase the impact of the organisation. Not only for their own gain but for a greater good and then supporting them.

That’s what we need. Servant leaders! The last manager is one I want to work for, a person who sees past current boundaries and restrictions and sees the potential value in new or different ideas. They have the guts to get it done and get it done!

The only companies that innovate are those who believe that innovation is vital for their future.

 Sir John Harvey-Jones

So ask yourself, are you an entrepreneur or are you just minding the shop? If you are an entrepreneur I bet you employees love to work for you! If you mind the shop, then you need help! Your employees might already be looking for a different job, it’s not the money you offer them. It’s how you facilitate them to be a professional, to let them contribute to your success. Leave a comment with your thoughts!

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Business Decision Making Entrepreneurability

3 tips for fast growing companies

‘You are likely to get management approval for a 500 dollar expense…..but you can call a 1-hr meeting with 20 people and no one notices’.

Some time ago, I saw this statement in an image on LinkedIn. I could not help to grin a little and I bet for most of you this is very recognisable. Throughout the last couple of years I have had first hand experience of fast growing companies that struggle with fast growth. This growth puts pressure on the ability of these organisation to stay as responsive as they were when they were still small. Below you find three tips on what to keep in mind when facing rapid or exponential growth.

1. Quality is the foundation of growth

I have seen this at every company I have worked with over the last couple of years. They have a great business proposition which after a brief period gets traction in the market place. This creates rapid growth for the organisation putting pressure on internal communication, recruitment, processes and procedures. This usually is scalable until a company reaches 80-150 people. Then things get tricky.

A company this size is almost impossible to manage as a single owner and the management team will get larger. There is no fault in this. However, having scaled the leadership of the organisation requires some alignment and a shared vision on how to lead the company. So the management team retreats to a nice off site location to contemplate on a vision and strategy for the coming years and this is where I have seen things so wrong.

To give you an example, one organisation came with a strategy containing 10 principles to guide the organizations to even bigger achievements. 9 of these points were related to safeguard culture, improve quality and facilitate for improvement. The last point stated:

“In 5 years we will have 500 employees in 5 countries”

And that is a dangerous statement. This is what stuck to everybody throughout the organisation. A machine was created to bring in as many people possible to meet this ambitious statement and the quality of the people brought in was a little below the company standard. This single focus on growth affected the quality focus that made the company achieve their initial success. Every completely lost focus on the first 9 statements of the strategy. Not until customers started complaining or even walking away.

Focus on growth in number and results will not help your achieve growth. Growth is a result from the quality you deliver as company. The other way around does not work!

2. Trust your professionals, do not over-regulate!

Especially in an organisation where you focus on hiring true professionals beware of applying a 19th century management style. Management of professionals has shifted dramatically from telling people what task to perform to enabling professional to use their skills and knowledge to maximize the value they create. This sounds nice and is a well researched and documented as in Daniel H. Pink’s book ‘Drive – the surprising truth about what really motivates people’.

However, such behaviour, for those who most of the time are still held accountable for results, is extremely difficult to sustain when operating under pressure of timelines, budgets etc. The natural tendency when pressure is high is to fall ‘back’ into a command-and-control mode. Such behaviour is killing the motivation of professionals who will either leave at some point or will become numb to contributing their knowledge or experience.

Think of this phenomenon with the following metaphor of carrots, eggs and coffee beans. In most organizations where people have the energy to contribute and have the feeling their efforts are appreciated you see coffee beans all over. However when such initiatives are turned down again and again you end up with a group of people behaving like a bunch of cooked carrots.

Working with professionals requires a manager to enable them to optimally spent their time and talents. Steering on the clear boundary conditions is the only this a manager should do. How to manoeuvre within these boundaries is up to the professional. This is how you create environments where people can optimally perform. More on creating such an environment? Check out this video:

[vimeo width=”75%” height=”75%” autoplay=”false”]https://vimeo.com/121517508[/vimeo]

3. Hire on attitude & potential

In highly skilled working environments it is all about the people working there. However, finding those people with all the knowledge and experience you wish is almost impossible. Hiring good professionals boils down to attitude and potential. Learning people the content and context they are working in is relatively easy comparing it to crafting the right attitude. Fast learning and highly energetic professionals usually show more potential than those seasoned workers who have ‘seen it all’.

In organisations with highly skilled professionals, culture is key and embedding those professionals in your organisation can be a challenge.  When on boarding newly hired professionals starts with imprinting your corporate DNA in theirs. Drowning them in hours and hours of rich of content training courses is only half as effective as telling them the (undoubtedly) interesting history and cultural values of your organisations. Teaching them the common language you speak within your organisation and what you vision is on the services or products you are delivering is extremely powerful in fast on boarding of highly energetic people. I have experienced such on boarding programs twice in my career as well as a few less successful ones and those two organisations I still hold close to heart.

So if your organisation is in the luxury position of rapid growth please focus on keeping the focus on quality, enabling your professionals and hire on attitude and potential.

What’s your struggle?

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Entrepreneurability

What is Entrepreneurability about?

Traditionally to make a product or provide service you need three primary factors. First, we need resources: like land, water or wind. Let’s call these resources.  Secondly we need time and money, starting or scaling capital.  For the sake of simplicity  let’s referred to this as the monetary component. Third, we need labor resources, or human resources: people.  to create it. Now, these three primary needs: resources, money and people together we  call them input factors. By connecting them we can create. The input factor will indeed make creation possible is the fourth one: entrepreneurial ability.  And this factor is becoming the differentiating factor in our current economy. In this article we will explain what entrepreneurial ability (in short Entrepreneurability) is and how we can plant its seeds, cultivate and grow from it.

Stick and stones

In the first human labor practices we used primarily natural resources like sticks and stones, nature provided us to fulfill our primary needs. As we developed into tribes and later smaller communities, we started to specialize and focus on a particular product (farming, blacksmith etc.) doing so people we no longer able to fulfill in their basic needs by themselves. They would withdraw from consuming to produce their product, in order to do so they would need capital to bridge this gap hence we were introduced to an economy in a smaller scale.To accommodate this withdrawal we created financial institutions like banks to facilitate the exchange of products and service. This resulted in an enormous growth in productivity and wealth (for some).

This worked well for smaller communities, however we were unable to scale to larger groups of people. Until the industrials revolution. This is where we began utilizing the potential of the combined efforts of machine and labor forces. This led to significant economies of scale and enabled organisations to reach a global market. At that point, those who were able to control and utilize these three primary factors were successful. Large corporations dominating the markets because competitors are unable to obtain the natural, monetary and labor resources and to maximize these rewards we adopted numerous ways to optimize them.

Optimizing the primary factors

Since the industrial revolution we have been trying to optimize our production processes. We have created an impressive number of ways to govern it. In the past couple of decades we introduced Projects and Project management frameworks like Prince2, to optimize our productivity we introduced Lean and to facilitate in creative environments we introduced Agile values and principles along with numerous frameworks and practices. All to optimize our labor resources. Capital resources are nowadays heavily regulated and controlled (for obvious reasons) and we try to be more careful in using our natural resources by focussing on circularity.

Applying and optimizing these three factors alone, won’t make your organization a successful organization in these times. Adding entrepreneurship to your mix might do the trick. Here are the key ingredients.

Entrepreneurability

The ability to optimize the utilization of the production factors is entrepreneurship. This involves four elements:

  • Taking initiative – Action oriented and driven by forward motion
  • Strategic business decision making – Based on a clear vision and strategy being able to make decisions
  • Innovation – Exploring and experimenting
  • Bearing risk – taking the consequences of the previous three elements regardless the outcome.

In future posts, we will elaborate on these factors. These four elements determine if a product or service produced will actually come to life. Go to market needs these skills. Improvements to keep going and arriving at a market need this way of thinking. And  with an increase in the number of independent professionals, the purpose economy and a generation entering the workforce that is raised with Entrepreneurability, so the skill are already available too. This might explain why more and more organizations are exploring concepts like ‘ Lean startup’ and organize hackathons to facilitate in Entrepreneurability.

What hasn’t evolved though is the organisational structures of companies and the rewards and compensation structures. So if we need these skills to work, how we will adjust our organisation formats? And maybe more important, how will we rewards people if we expect entrepreneurial behaviour from them. Will we get away with just paying them a monthly salary?

Where the three primary factors generate income through rental income (natural resources), interest (capital) and wages (labor). The fourth factor , Entrepreneurability, is compensated through profit and loss. Owning a company you only earn when profit is made, if not, you get nothing. With the rise of Entrepreneurability in our labour force we need to radically rethink our organisational structures and rewarding and compensation structures.

In practice

Entrepreneurability  is already happening. There are several companies already experimenting with elements of Entrepreneurability.

RYSST

A small student startup RYSST (Rent Your Student Scrum Team) founded by two software engineering student as part of a school assignment. They identified the need for companies to early bind talented engineers and students wanted to have a meaningful job to build experience and earns some money as well. A great combination and continuation for companies since students are available to work at night and during holidays. You rent a team of students and when they graduate you get first pick in hiring them. Onboarding is a piece of cake since they are already familiar with the product. A completely new concept using the rise of popularity of the Scrum Framework and a shortage of software engineers. Within a year they employ over 30 students and starting a new branch in another university city.

ITM Group

A machine manufacturer for among others the tobacco industry. A highly competitive market where ITM is able to do things differently. Self-organising production teams are responsible for the development, assembly and aftercare of a production line. This organisation’s leader took a conscious choice to delegate a portion of the entrepreneurial abilities to their employees.  There is no innovation department.“I honor  personal initiatives from the work floor by challenging my employees to work on innovative projects. They will also be inspired to take responsibility of the future of the customer relations though.” Of course that requires a special kind of leadership.(source)

Incentro

This IT company is only steering on happiness. They believe that when their employees are happy, they make their customers happy. Having a no-policies-policy and teaching people to balance both the personal, company and customers’ interest has resulted in more and sustainable growth in profit and headcount since 2012. While continuously experimenting with stock options for employees (that is not really creative of course) or having employees dividing the budget for raises themselves and where people are encouraged to start new services and adopt new technologies they have expanded their portfolio in various directions. Starting and stopping services when needed and continuously looking for new interesting opportunities, not by a sales team or innovation team but by its own employees. Teaching them to act as an entrepreneur.

Netvlies

An internet bureau with more than 50 internet professionals, with clients like Dick Bruna’s Nijntje, NautaDutilh and Karcher Netherlands. Their bureau does not employ a single manager. Each and every one of their employees applies Entrepreneurability and takes it to a next level. If you are selected to be their client, the work to be done is posted on the intranet, for all employees to look at, who has the most interest, the best fit. When a team has been formed, the client has an official place in the team.

Since teams apply the Scrum framework, each client becomes a Product Owner. Being part of the team, part of the process and always aligned with what’s being created. Often Netvlies adds value to their clients’ teams because they not only deliver the requested product or service, but also a way of working, insights in how to work with high performance teams and maintaining the power of collaboration, while honoring individual talents too.

Challenges

As all these four companies acknowledge that enabling Entrepreneurability is necessary, a great way to work and of course all of them are struggling too. Experimenting to find  the ideal culture and governance structures. We want to help them and inspire them to find formats, models and ideas to enable Entrepreneurability.

We are curious whether you have other examples of organizations experimenting with Entrepreneurability (or elements of it). Please leave a comment.

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Entrepreneurability Vlog

3 TED reasons you want to work in a Company of Owners

The Company of Owners. An idea of what the future company will look like. Nobody will be on the payroll, everybody will be an owner of the company exposed to the same risks and benefits of running your own business. People no longer just work for their pay checks, they work because they want to create something, to fulfil a certain purpose or because they like to be in a creative environment. Why not crowdsource your ideas, not by asking for money, but by asking for knowledge and skills? This may seem some distant future scenario, but the idea isn’t that far-fetched and there a plenty of signs that put you in this direction. We have selected three inspiring (and sometimes funny) TED videos tapping into your hidden need to work in a company of owners.

You don’t like your job!

Maybe it is not that bad, but most likely there is a (large for some) part of your job that you do not like? Why do you do it. “It is part of the job”, people often say. However, I come across many people who drag themselves to work. It reminds of the opening scene of the movie ‘Office Space’. Why do you do what you do? What drives you, what motivates you, why are you here? If I ask people this question, most of the time silence is the answer. We have forced ourselves to move away from that question. As long as we get our pay check at the end of the month, it was all worth it. Is it, really?

As Barry Schwartz states in the movie:

How is it that we allow the majority of people on the planet to do work that is monotonous, meaningless and soul-deadening?

I have seen many highly educated people working at a large organisation following a step by step sequence of actions. Day in, day out. A terrible waste but the organisations thrive by it. So what if you are able to do the part of your job you actually like all day long and still make money? Many people have this dream to ‘one day, start their own business’. Here is the good news, the circumstances to do this have never been better. You can start your own company today! It doesn’t cost you any money, all you need is an idea and maybe people with a similar drive who are willing to contribute to your idea.

You are worth it

This next video from Casey Brown start uplifting:

“No one will ever pay you what you’re worth.”

And it is true! That is the entire scheme of organisations. We don’t share equally what we earned. Those who make you do the work that creates the value, earn the most. That is a strange mechanism! We pay people based on their attendance at work, the experience and education they have and the supply and demand of people. There are many other factors but none have a direct link to the actual performance of the company. Yes, we have a bonus system, so if the company makes a lot more money, you get a bit extra. And we have performance reviews, annually. We look back and based on the compensation model the company has you make a small step, big step or no step. Recently, I heard someone describe their performance review at a bank.

This person had a great year, contributed tremendously, gained more knowledge and experience like no one had ever seen before within that organisation. What happened? Worker gets a grade on a 1-5 scale where 1 is very bad (if you have three strikes you’re out), and 5 meaning you were amazing! So you’d expect this person to get a 5, but what did the manager say: We don’t give 5’s in this company otherwise your salary will no longer reflects the work you are doing and you no longer fit in the model.

This blew my mind, so we stick to a system of compensation based on everything except the company performance. Does this scenario sound familiar? Do you think it is only fair to be compensated just a good as anyone else in the company who contributed to it’s results? Then consider contributing to a company of owners.

You are wasting your time at work

It can be that you like you job a lot, however, most likely you are often disturbed or unable to do it since your time is wasted on company stuff, like filling in timesheet in three different systems, responding to mass CC emails and meetings! Meetings, meetings and more meetings.

No more meetings, ever? No of course not, but you can control it! There are many ways to facilitate collaboration like simple practices as described in this video or adopting frameworks like sociocracy 3.0 or…well you figure it out. Let’s focus on the work and organize us around it to maximize your contribution.

So if you don’t like how you talent is used, feel under valued or are unable to do the thing you like doing. Please look into the concept of the company of owners and let us know you thoughts below.

 

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Entrepreneurability Generations on the workfloor

How Millennials, labor market dynamics and the purpose economy will disrupt employment!

In a few years time, you will no longer work for a company. You will own it! In fact, we bet you will own over 20 companies! Why? Because the way companies and employees work together is about to get disrupted. Here’s a way to organize companies that fits this transformed way of employment.

Entrepreneurability: skill to be an entrepreneur in company formats

Ideas need skills, talent and expertise to come to life. If a company no longer has employees, but employees with those skills, talents and expertise, own the company, the ideas become the asset base of all involved. The ideas can then be realized by a set of owners that have the fitted skills and knowledge for the idea and an equal benefit to get the best possible value out of it. In exchange for their contribution, these contributors become co-owner of the company with equal shares. Regardless of the amount of effort invested. If the product or service provided is valuable to the market targeted, everybody benefits. If not, no harm done you only spent a few hove it’s already happening and it will become a common way of doing business. Here’s why:

Purpose economy

Why do you do what you do? Why do you do this type of work, what makes you get out of bed in the morning and get to work? Let’s look at the four generations that we have in our labor force now and their drive to work. The baby boomers were looking for a job for life, making sure their families were able to survive, generation X was working on their work-life-balance and they are motivated by the ability to do so within a career and generation Y (also known as Millennials) rather work for a purpose and they need to be flexible and free. Their focus is to work with a company not for a company. So gradually the prehistoric driver of work to earn the money to buy food, living and education (eg.survival), to a profit maximization will disappear. And in it’s place we find: having a purpose for the work that you do. Not just our personal purpose, doing the things we love, picking up new challenges and expressing ourselves. Also a purpose that includes a contribution to others and to the world around us. Making money and doing this is widely accepted as the new way of working.

The purpose economy is mostly a primary driver for Millennials. “While many generations have sought out purpose, Millennials make it a greater priority than ever before, in everything from their consumption to their work to their communities to their relationships” says Aaron Hurst in his book The Purpose Economy, Expanded and Updated: How Your Desire for Impact, Personal Growth and Community Is Changing the World Paperback (2016).The purpose economy is a new context and a set of ways in which people and organizations are focused on creating value, and it defines the organizing principle for innovation and growth. (1)

Over 76% of people participating in the Great Place to Work surveys acknowledge they feel good about the contribution to society they make as a company.(2) It is an important factor in people’s choice to join an organization.

Trend number 1: Entrepreneurial abilities facilitate maximizing purpose. Not only does this work-life-model provide you with the freedom to choose which ideas create value or meaning to you and thus identify you. You have control over the amount of time spent and which benefits it generates.

Labor market development

change_work_population Millennials are tough to manage! Says Simon Sinek.(3) The generation that was raised with the ‘anything-is-possible-concept’ needs a different approach to those raised with limits or with working conditions as the baby Boomers or generation X. Millennials use technology as a mean – not as a purpose – to connect to each other and to anything that maximizes the purpose as mentioned before.  Combined with an enormous amount of information accessible and the ability to change industries by intelligent utilization of technological developments, makes this group very skilled disruptors, even without them realizing it, mostly.  They enter the labor force from a different starting point.

These dynamics change the labor force. And with the baby boomer generation leaving the in the upcoming years, it puts a challenge on how we do our work. The number of jobs keeps on growing while the number of members of the workforce decline.(4) So not only do we have a changed labor force, we also have a lot of pressure on its efficiency and effectiveness.

Trend number 2: Entrepreneurs skill create an opportunity for professionals to more be more efficient and effective in the utilization of their skills and knowledge by adding value to multiple organizations instead of being part of a single organization.

The Gig Economy – Independent Professionals  

iprofs_leaving_companiesThe trend of approaching the markets has already been set. The way employment is organized is changing already.  Younger people do not tend to stick around too long at a single company any longer. We all know that’ lifetime employment’ is a thing of the past. In the 1980’s over 50% of American employees were in their job over 10 years. (5)

The Generation X thrived on the ‘job hopping’ phenomena covering on average 7 jobs throughout their career, Millennials are expect to stay at an organization for less than 3 years.(6) But next to switching jobs there is an even more disruptive change happening..

The number of independent professionals (iPros) has been growing rapidly over the past couple of years.  Where in 1996 roughly 5% of the workforce  in The Netherlands where self employed, in 2014 this was already roughly 10 percent. Although the trend is flattening out (7), more and more highly educated professionals are still making this transition. Research done by Intuit states that in 2020 40% of the workforce will be work on a freelance basis.(8) Why do people take this step? What makes them move away from a sense of security, stability? Especially now the economy is recovering?  

From the Zelfstandigen Enquete Arbeid 2015 three reasons for starting to work as an iPro stand out:

  • Looking for a new challenge (34,4% of total respondents),
  • Autonomy. Making your own decision when and how much you want to work. (25,7% of total respondents)
  • No longer willing to work for a boss (20% of total respondents)(9)

This trend is being referred to as the Gig economy.(10) In this approach to economy temporary positions are very common and organizations collaborate with independent professionals for short engagement.(11) This tendency is the third trend on which Entrepreneurial concepts are built.

It already happens in the current concept of the flexible layer of independent professionals which many organisations use. This benefits both the organizations – who can use skills and knowledge as they need it, and the independent professionals, that can work for multiple companies.

The biggest risk organisations encounter in this rapid changing world, dominated by small start-ups, is employing people. Mitigating this risk by employing people on a need-basis is extremely tempting. You pay for what you use. For the independent professional benefits are rich as well. They are able to share and develop their expertise by applying it in different environments, only adding value when being present and charge accordingly. Like a playing a gig!

Trend number 3:

  • As an idea owner in the a Company of Owners, one of the formats in which to optimize effectiveness, you host gigs for people who can contribute, without the risk of having to employ them on a fulltime basis. You can pull knowledge and skills from a large pool of professionals in the subject area;
  • And as an independent professional you are facilitated in your need to show your purpose and skill in any challenging area and add value without having to work for a boss. You are in control how much and when you will invest your time.

Liberty?

One more thing: why the equal share? Isn’t that a bit too socialistic in the way you’d like to work the market liberation? It certainly looks like it and might be a bit new. Like the story on the right (12). It has it’s roots in the value added base of rewards. Where in marketing it’s fully accepted to have value based pricing, somehow within awarding people’s skills we still value them differently. We base this reward on experience, education, location and some personality aspects but do not take into account the value added to the idea. Anyone contributing to the result is perceived to add value and without their contribution the value will assumably be less.

companies_billing

On the contrary, the current compensation scheme used in organisations is out of balance as well. Over the last couple of decades the compensation of top management has grown completely out of proportion compared to the average production worker. In between 1978 and 2014, inflation-adjusted CEO pay increased by almost 1.000%. Meanwhile, typical workers in the U.S. saw a pay raise of just 11% during that same period.(13)  This has been heavily debated in several countries and attempts are made to regulate this. In addition, more companies look into decoupling the performance review and the any raise in pay. Organisations are discovering new ways to tap into compensation.(14) A Dutch IT company, Incentro, let’s their own employees determine their raises among their peers.(15) These experiments and trends in HR shows that organizations and professionals are ready to reopen the discussion on compensation.

What about the amount of time involved? What if the contributors have a difference in the amount of time they put in. So what? We think it’s up to contributors to organize their way of working. Bottom line is: the result is what counts. And that will be addressed by the idea-holder and the rest of the team. It doesn’t matter if you spent 5 minutes adding value or 5 days. If the idea cannot be created without those 5 minutes of expertise the 5 days invested is useless, same goes the other way around. Think for a minute about the effect it has. What if you organize your work exactly the way you’d like and put in the amount of time and effort you think is necessary, within a time frame that you have influence on as well? How does that make you feel? Exactly: it’s means the liberty to do things your way! Ask Daniel H. Pink, the author of Drive. What motivates people more than anything? The autonomy to do things how they’d like to, develop mastery over their work tasks and do them with a purpose.

Trend 4: So to bring back balance in the rewarding of labor. The Company of Owners values the input of all contributors alike and therefore gives equal shares of awards to the input and skills. This way the process provides a very strong motivator for all – also alike: autonomy.  Furthermore it takes away the discussion about giving a raise based on performance. Performance in The Company of Owners-format is determined by value added of the whole team.

Entrepreneurability: concluding remarks

The above demographic and labor market trends combined, as well as the readiness for disruption for the labor markets thus gives us reasons to believe we are well on our way to optimize Entrepreneurability. This model provides instant feedback on the anticipated added value to the market by facilitating in maximizing purpose. It provides the freedom to choose which ideas to create value or meaning for independent professionals as well as employees that would rather work with a company instead of for a company.  Additionally it gives flexibility over the amount of time spent on each idea or value creation. This makes it more efficient and effective in the utilization of skills and knowledge for both the idea-holder (company) and the professional contributors (owners). The latter get to add value to multiple organizations instead of being part of a single organization and the first are able to realize more ideas. It values the input of all contributors alike and therefore gives equal shares of awards to the input and skills. This way the process provides a very strong motivator for all alike: autonomy. Furthermore it takes away the discussion about giving a raise based on performance. Performance in the format of The Company of Owners is determined by value added of the whole team. And it has a low threshold to contribute or start-up. If you have an idea but no funding or you have a little time to spare you can easily apply this model.  The format of the Company of Owners host gigs for people who contribute, without the risks of employment on a fulltime basis. You can pull knowledge and skills from a large pool of professionals in the subject area. And independent professionals are facilitated the need to work for a purpose and use their skills in a challenging area, staying flexible and developing skills and knowledge along the way.

Sources:

  1. The Purpose Economy, Expanded and Updated – Aaron Hurst
  2. https://agconnect.nl/artikel/it-bedrijven-behoren-tot-de-beste-werkgevers
  3. https://www.youtube.com/watch?v=QXWNChoIluo
  4. https://futurehrtrends.eiu.com/report-2015/profile-of-the-global-workforce-present-and-future/
  5. https://www.fastcompany.com/1802731/four-year-career
  6. https://www.forbes.com/sites/jeannemeister/2012/08/14/the-future-of-work-job-hopping-is-the-new-normal-for-millennials/#2e7078ed13b8
  7. https://www.cbs.nl/nl-nl/nieuws/2016/46/toename-aantal-zzp-ers-stokt
  8. https://http-download.intuit.com/http.intuit/CMO/intuit/futureofsmallbusiness/intuit_2020_report.pdf
  9. Zelfstandigen Enquete Arbeid 2015, ministerie van Sociale Zaken en Werkgelegenheid, TNO, CBS (2015), http://www.monitorarbeid.tno.nl/databronnen/zea
  10. https://youtu.be/bhm2fdQg_Aw
  11. https://whatis.techtarget.com/definition/gig-economy
  12. https://www.smithsonianmag.com/history/charles-proteus-steinmetz-the-wizard-of-schenectady-51912022/
  13. https://fortune.com/2015/06/22/ceo-vs-worker-pay/
  14. https://hbr.org/2015/09/why-more-and-more-companies-are-ditching-performance-ratings
  15. https://www.mt.nl/business/zo-bepalen-incentro-medewerkers-hun-eigen-loon/87810 – Dutch
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Business Decision Making Take initiative

The autonomy and alignment experiment

Recently, we hosted a small event on ‘self organisation’. This was an informal and highly interactive session. We kick started with an experiment which I think is worth sharing.

Goal of this experiment is to see how people react when given a simple task with a combination of high or low autonomy and alignment. How does this make them feel? And how do they experience this? The outcome was great! In this post I would like to share how you can re-enact this experiment.

This experiment is inspired by a small fragment from the movie about the Spotify Engineering Culture part 1. We wanted, before showing this to the audience, to have them experience what it means to have low autonomy and low alignment but still have a result expected. This is how the experiment works:

Step 1 – The event starts before it starts

Before the event officially started, even before we welcomed everybody we divided the group into 4 smaller groups. S no welcome, no explanation that we are doing an exercise. Just. “Welcome, we need you to split up in groups of four.”

Step 2 – Handing out the assignment

Each group gets an assignment written on a post-it handed over by the facilitator of the autonomy experiment.

Group 1 – Low autonomy, Low alignment

Welcome, on behalf of Prowareness welcome to this Mastery in Scrum event. Tonight we will be talking about the self organisations in scrum teams. Enjoy your evening, we will start in 10 minutes.

Group 2 – Low Alignment, High Autonomy

Welcome to Mastery in Scrum on self organisation. Feel free as a group to get to know each other and the other groups in the next 10 minutes.

Group 3 – High Alignment, low autonomy

Welcome to Mastery in Scrum. Heres your assignment for you:

First group : Learn all the participants (so also other groups) their names

Second group: Learn all participants (so also other groups) their current role in an organisation

Third group: Learn all participants (so also other groups) the biggest challenge working with teams

Fourth group: Learn all participants (so also other groups) their experience with Scrum in years.

If you are with >4 groups choose one of four tasks.

You have 10 minutes

Group 4 – High Alignment and High Autonomy

This group gets the following assignment.

Welcome to Mastery in Scrum. We would like to get to know what people’s expectations are for this workshop. You have 10 minutes.

Step 3 – Chaos begins

Right after the assignments had been handed out, everybody started to execute their assignment where some are perfectly executing their task assigned and others where looking puzzled by the fact people approached them with certain questions.

Step 4 – The Question

After 10 minutes we asked everybody to get to their seats and we asked them;

For each group we would like to hear what you found out what people’s expectations are for this workshop.

Some teams were able to elaborate a little on the topic, some had no idea this was the purpose of the assignment they received.

Step 5 – Debrief

After this we did a debrief on the autonomy experiment asking the following questions.

  • Discuss what the groups thinks what this was all about?
  • Discuss how each group experienced this exercise?
  • Showing the movie on Spotify engineering culture
  • How does this reflect to their situation, their work and what is the relationship with self organisation ? (fishbowl – 1 chair per quadrant)

This was a great way to kickstart the event and a discussion on how to achieve self organisation because every participant experienced the impact on this. So please feel free to replicate this experiment and let me know what you think of it and how it can be improved.