What opportunities are there in the flexible workforce?
Hockey-stick graphs are a favorite of venture capitalists, but not in the way we’ve been seeing them lately: surges in coronavirus cases, skyrocketing layoffs, soaring hospitalizations. We all know where this leads, and it isn’t good…businesses closing their doors, families in financial and emotional distress, and a massive toll on our collective systems and psyches.
Thinking about growth at a time like this seems, admittedly, almost foolish. I hesitated to write this post, knowing that plenty of business owners and company leaders out there—friends and colleagues among them—are hunkering down, focused on simply trying to outlive the crisis. (This singular goal is laudable, of course, and isn’t actually all that simple.)
But there’s a difference between businesses that are truly in dire straits, and those that now have an opportunity to double down on what they do best. If you’re in the latter group, it’s time to get your chips on the table. This is a moment for industry transformation, as companies must reconsider what’s working and shed what isn’t.
Designing teams for maximum agility
Today’s managers need teams whose expertise can morph to suit evolving business needs. This was just as true on January 1, 2020 and also, by the way, in June of 2019. There may be greater emphasis on this point now, but agility has been the watchword across industries. Companies might be shifting priorities and processes on a dime, redirecting their attention to specific markets or looking to expand one aspect of their services or product lines over others. (Some SMBs have taken particularly creative approaches to survive, and in some cases, even thrive.)
OK, fine, we can’t all pivot to something like curbside pickup. But this kind of thinking could spark intriguing ideas.
Reaching a healthy ‘new normal’ from a business perspective will require taking a short and long-term structural view. Organizational leaders who look toward decentralizing the decision-making process embody this perspective: they’re enabling organizations to move forward faster, executing and problem-solving without the lag from bureaucratic approval processes. (It’s possible with platforms that enable it, and is one of the major reasons why we built Stoke.)
Companies that are in the business of immediacy—that is, providing near-immediate results or responses—would be wise to adopt a decentralized model in order to avoid delays. The graphic below from Harvard Business Review displays alignment of desired approaches with company goals.
For example, Johnson & Johnson has over 200 units within it that function autonomously. At Amazon, employees are empowered to make the majority of ‘Type 2’ decisions: those that the organization can easily reverse and course-correct as needed.
At the same time, we have to acknowledge that no matter the comfort level with flexibility, any major business change will (naturally) have an impact on internal teams. As decisions are made and priorities shift, new specializations may be required to take on highly specific tasks. In such cases, a freelance workforce could augment existing skill sets and represent a significant competitive advantage—when they’re effectively managed.
If you’ve already had to make the difficult decision to part with some team members, you also know how tough the people aspect of a crisis can be. Some companies are finding that they’re short on the talent side, and are investing in skilled on-demand workers as a helpful alternative. Others have transformed their models so that they reflect their businesses: for some, project-based work calls for a project-based workforce.
As more teams are embracing on-demand workers, freelancers, contractors and consultants—whatever nomenclature they ultimately use—the result is greater flexibility and opportunity to scale up quickly when needed.
Embracing long-term thinking in an immediate crisis
Where does that leave us now? I won’t pretend that we aren’t firmly entrenched in a global recession and a formidable health crisis. Much of what is happening is outside of our control, and this goes for Stoke as well. 2020 has thrown a wrench into everyone’s well-laid plans.
Make no mistake, though: the decisions we make now to mitigate any issues in the short-term will have long-term ramifications.
That begs another question: can managers and company leaders afford to balance short- and long-term thinking in their decision-making?
Reducing operating costs will help many businesses in the near term. Going remote will save you on office space and associated expenses, and in many places, it’s mandatory. Keep in mind that a reduction in costs (whether tied to facilities, other overhead, or talent) will only get you some of the way. How can you ensure that you’re still spending the right amount in order to achieve business goals and execution needs, and how quickly can you realistically scale up or down?
Here’s my take: leaders must force themselves to balance these short-term savings to drive efficiencies while taking a hard, long-term look at how they foresee the world, the economy and business behaving post-pandemic—both after the first wave, and then overall. One of those shifts might be instituting a more flexible workforce, given that the majority of us are still working from home.
But you don’t have to take my word for it. Thirty-two other platform CEOS recently explained why they think remote work in particular is a powerful driver for freelancing in a Forbes article. Here are two quotes that stuck out to me:
- Emma El Karout, CEO of One Circle HR, cited the immediate shifts from the coronavirus. “This pandemic activated attitudinal shifts needed years ago. Permanent employees working remote are a gateway to broader acceptance of flexible work in general, improving acceptance of freelancers. This is fast-tracking changes our business model was built upon.”
- Scott Galit, CEO of Payoneer, added that for them, “…the shift into remote has been pretty seamless. Our clients realize they can operate effectively with a remote workforce and are more open to expanding their talent pool remotely. This drives demand for skilled freelancers.”
Now’s the time to set the strategy. This crisis will pass, whether it takes 12 or 24 months. The real question is: how do you arrive there best suited to maximize growth?
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Shifting your mindset from ‘What If?’ to ‘Why Not?’
Is scaling a business for growth during difficult times wishful thinking? Horribly misguided? Or could there be some worthwhile strategy behind it?
History has shown us that difficult times are fruitful ground for growth. That is, as long as you take a hard look at your business, do things differently and alter how you measure success.
For example, in the last four downturns, an average 14% of companies were able to increase both sales and EBIT margin (by almost 9% and 3%, respectively) in the face of challenging circumstances.
“Those aren’t great odds,” you might be thinking. Consider, though, that this is the percentage of companies that were able to do this because they strategized and they tried. There may have been a bigger pie that others couldn’t dig into because they weren’t able to see through to the other side of the downturn.
Now is the time that you could be focusing on your product, strengthening relationships with your customers, business ecosystem and broader community. This offers a great advantage to those who dare to think past the crisis and imagine a brand-new world of opportunities. If you do so, you have a first mover advantage. When everyone else is in the proverbial bunker, go and grab some market share. A flexible mindset and a flexible workforce
I’ll leave you with just a few ideas:
- Might you be able to acquire a competitor?
- Unveil a new category-leading product feature?
- Find niches where customers aren’t being served?
- Pivot your offerings based on projected market needs?
- Enable an improved, frictionless e-commerce experience?
- Lay the groundwork for a more nimble, fast-executing organization?
Do any of these appeal to you? The next step would be to consider whether or not your current team is able to accomplish this on their own. If your company doesn’t have those capabilities in-house, consider how you can bring in external experts perhaps on a part-time or freelance basis. (And if you’re inspired to run with one of the above, I’d be interested to hear the result.)