How Silicon Valley is reinventing the Future of Work
End of November, I joined a group of nexxworks customers to investigate the Future of Work in San Francisco. What followed was a week of overwhelming experiences and insights about...
Though many riveting themes were discussed during the tour (among which company culture, lifelong learning, OKRs, coworking, tools enhancing the employee experience, education), I decided to focus on these four themes that spoke the most to me and which fit nicely together into a coherent whole:
- The rise of systems thinking
- The freelance economy
- A new type of leadership
- Solving the world's BIG problems
Relations over individual parts
A lot of traditional management theories and HR approaches are typically based on the individual parts of the company’s system, more specifically on the individual ‘worker’. But that is changing rapidly. A lot of the ‘Work in Progress’ speakers – among which Adam Gazalley (Akili), Brian Rivera (AGLX), April Rinne, Carl Edward Sanders (Adeption) and Max Shkud (Microsoft) – were strikingly adressing systems, and holistic thinking. The reason is, of course, because the separate parts inside companies – its people - have a high level of interconnectivity and interdependency which means that the whole cannot be understood without a clear grasp of the relationships between the parts.
The discourse of these systems-oriented speakers reminded me of some of the cultural characteristics that are so typical of eastern cultures, like China, which has known such a boost in (technological) innovation: where people think in relationships and in terms of the bigger whole, rather than the separate parts. It should really make us think long and hard about Europe - which is still a lot more focussed on reductionism (focussing on the parts rather than the entire system) - when the world’s biggest innovation hubs are clearly obsessing about understanding systems.
In fact, the exact reason why Silicon Valley is one of the most innovative hubs in the world, is exactly because it has always been so much focussed on relationships, rather than on genius individuals alone. It’s reflected in Hewlett-Packard’s rules of the garage, as Peter Hinssen described in his opening keynote of the tour: “Believe that together we can do anything.” And this type of thinking also flows through 3 of the 4 forces which he claimed to be the foundation of Silicon Valley’s innovation energy: the happy interaction between premium education systems like Stanford, smart funding players like Andreessen Horrowitz and the experience infrastructure like Y Combinator.
Listening to Brian Rivera (AGLX), this correlation between innovation and systems thinking makes perfect sense: he explained that the uncertain, complex, sometimes even chaotic environment of innovation (as opposed to routine operations) necessitates non-linear - or ecological - thinking and works best with closely knit teams with a high degree of interdependency and that keep trying out different hypothesis to find out what works best. That’s a very different type of approach than in more obvious and predictable routine environments - like accounting – that are focussed on linear thinking, and where individuals can perfectly function on their own. In other words: it's very hard to innovate with a systems approach.
Max Shkud (Microsoft), too, told us that we need to lead change inside our companies like an organizational acupuncturist would, by which he meant "in the most holistic of manners". Inspired by Carol Sanford, he told us about the five worldviews that have dominated/still dominate the world of business today and of which the regenerative approach is the most effective and lasting way to achieve long-term durable outcomes:
- The aristocracy worldview from the days of kings – where the wisest and most powerful have control over ownership of assets;
- The mechanist worldview issued from the era of machines and their metaphoric application to humans in the industrial revolution – where people are perceived as cogs in mechanical processes;
- The behaviourism worldview issued from the study of rats as applied to humans – where human behaviour is controlled by external conditioning;
- The humanist worldview issued from the human potential movement – where people are perceived as having free will and they can develop the capability to move and develop themselves;
- The regenerative paradigm, worldview, and practices, which is drawn from the study of living systems – where people serve the viability and evolution of larger systems in which they are nested.
The freelance economy
Another word that kept popping up time and again during nexxworks' ‘Work in Progress Tour’ was ‘freelancer’. April Rinne showed us how we are steadily evolving “from (fixed) jobs to work” through the exponential rise of independent workers, freelancers and on-demand talent from platforms like Upwork. Because of a convergence of many different reasons - the accelerating speed of change and thus fast changing needs of skills within companies, the war for talent, the rise of on-demand platforms like Upwork or a younger generation that finds independence a lot more important - the number of freelancers is growing three times as fast as the rest of the workforce, and by 2027 they will represent over half of the U.S. workforce. It’s safe to say that in a few years the average career will no longer take place within the fixed boundaries of one company (and maybe even not at all in a company).
April showed us some very striking statistics about the rise of freelancers in America:
The tragic part is that, as often, the education systems seem to be lagging into adapting to this evolution as there are very few institutions that prepare their students for a freelance career, as April told us.
The growth of the freelance economy obviously makes perfect sense in the light of the rise of the systems paradigm as described above. All this talk about freelancers actually reminded me of the three types of systems that exist in thermodynamics: open, closed, and isolated. For those who need a reminder of the difference between the three, I’ll use this clear description from the Kahn academy:
- An open system can exchange both energy and matter with its surroundings. The stovetop example would be an open system, because heat and water vapor can be lost to the air.
- A closed system, on the other hand, can exchange only energy with its surroundings, not matter. If we put a very tightly fitting lid on the pot from the previous example, it would approximate a closed system.
- An isolated system is one that cannot exchange either matter or energy with its surroundings. A perfect isolated system is hard to come by, but an insulated drink cooler with a lid is conceptually similar to a true isolated system. The items inside can exchange energy with each other, which is why the drinks get cold and the ice melts a little, but they exchange very little energy (heat) with the outside environment.
Now, if we extrapolate this to the world of organizations: traditional companies used to exchange little or no matter (people) and energy (ideas). They were pretty isolated systems with fixed employees and very little sharing of ideas. Most current companies are closed systems: they exchange very little people with their surroundings - they still mostly have a fixed workforce – but they are increasingly open to the exchange of ideas (energy). And we are steadily moving into the era of companies as open systems with an abundance of freelancers, where both ideas (energy) are shared as well as employees (the matter).
A growing number of companies are investigating how they can incorporate this trend in a structural manner and at scale. April told us that for instance PWC realized a while back that they needed to figure out how to adapt to the growing freelance economy, both for their consulting work but also for their own talent pool. So they established the marketplace “Talent Exchange”, which is an online platform for freelance consulting professionals. The talent on the marketplace is not an employee of PWC, but they partner with them and work on a freelance basis within on projects. And that's been wildly successful already. It’s probably time that you too ask yourself how you are going to adapt your company to this workplace evolution; like PWC did.
But be aware of the fact that integrating the freelance workforce structurally and at scale within your company takes a very different approach than working with fixed employees. There are many, many things to consider like liability, engagement, information sharing, learning. This will take an entirely different systems approach. I never realized how much this would entail for companies, until I heard Microsoft’s Matthew Mottola – who developed Microsoft's 365 Freelance Toolkit - talk about the curated tools, templates, and best practices that would help enterprises to launch and scale freelance programs. For him, there were 4 key areas to carefully consider for those who want to scale their freelance programs:
- Communication & awareness;
- Collaboration: how do you work with freelancers and fulltime employees;
- Data analytics to track and monitor business success;
- And workflow automation
It will definitely take a village to adapt the fixed thinking-fixed working mindset into the one of an open system with freelance nodes that enter and leave according to the needs of the company.
Leading like an alchemist
A different type of open and highly connected system, one that responds well in VUCA environments, needs a different type of leader, of course. So it was a delight to have Carl Sanders Edwards from Adeption guide us through David Rooke and William R. Torbert seven levels of leadership, with the most “enlightened” version being the “Alchemist” who - from the seven different levels - unsurprisingly is the most focussed on the system, unity and interconnectedness:
The most advanced level of leadership, the alchemists are excellent Janusian thinkers: able to see every person, company and situation from different - seemingly opposite - angles at the same time without ever losing sight of the whole, the system. They have an extraordinary capacity to deal simultaneously with many situations at multiple levels. They can deal with immediate priorities yet never lose sight of long-term goals. It is because of this that they have a great ability to renew or even reinvent themselves and their organizations in historically significant ways. That is why they are often able to generate big social transformations and even lead society-wide change (like Nelson Mandela, who is a quintessential Alchemist).
Solving the BIG problems
If we view organizations as systems, we cannot just look at them from a pure business point of view, of course. Organizations are part of and influenced by their environment, which they in turn influence through their own actions. Companies continuously interact with society, economy, the environment, other countries and continents. For too long, companies refused to face this simple truth, and with quite disastrous consequences.
So it was encouraging to hear many of the Work in Progress speakers talk about the huge world problems that all of us are facing today: from poverty and homelessness – which is one of the worst epidemics in San Francisco (in part because of the astronomical property prices) – to global warming, (mental) health problems, the education crisis and many more.
These are the types of problem that are so interconnected, and so interdependent that every change in the system, will have an impact on other parts that are linked to that change. I wrote a piece about these wicked problems last week, if you care to learn more about them:
So in view of these huge and highly interconnected wicked problems, it is very disheartening to see that – although the most innovative companies seem to understand the systems approach – most of our governments do not. Peter Hinssen talked about the G-Zero world - coined by political scientists Ian Bremmer and David F. Gordon – which refers to an emerging vacuum of power in international politics created by a decline of Western influence and the domestic focus of the governments of developing states: in other words, they are focussing on the parts, instead of the whole of the system. G-Zero aims to explain a world in which there is no single country or group of countries that has ability and will, economically and politically, to drive a truly global agenda:
So, we still have a very long way to go. Though it’s also encouraging that companies (more than governments) are slowly moving towards the right holistic mindshift of looking at these problems. It’s good to see for instance that Salesforce chairman and co-CEO Marc Benioff dedicates a lot of energy, and money, to the homeless crisis in his hometown of San Francisco. He for instance recently pledged $30 million to create a new program at the University of California San Francisco focused on studying causes of and possible solutions to homelessness across the country. And this comes on top of about $30 million donated to other housing projects, such as $6.1 million last November to lease a renovated hotel.
I was also very much intrigued by neuroscientist Adam Gazzaley’s take on the matter. He too, discussed problems like mental health and human cognition - "half a billion people suffer debilitating effects of anxiety, depression, attention and memory tests" – as well as climate change, water shortage, energy, infectious disease, etc. He firmly believes that we will never be able to deal with complex, time delayed crises like climate change if we cannot evolve how we think and make more sustained, focused decisions that are more compassionate to others. Now this is of course perfectly coherent with the type of intelligence- and focus-enhancing ‘digital medication’ games that his company Akili is selling, but he does have a point. Like he said: “It is almost impossible to wrap your head around problems like that with information alone. We have enough data to tell us what's going on. That's not where the weakness lies.” That’s quite a fresh view in the information-addicted society that we are currently living in, where data, patterns and AI tend to be described as God-like solution-providing entities.
I, for one, am very curious as to what will help us out of mess that the world is currently residing in. Will it be by enhancing human intelligence: through the digital medication of Akili, brain computer interfaces like the ones of neuralink or maybe even through the use of CRISPR to change our DNA and make us a race of geniuses? Or will the exponential growth of AI come to the rescue (the problem not being enough data and information, but what we do with it).
Whatever the answer, if we do not start to think of our environment and society as a system – in which every last human, company, country and continent has an impact on the rest - we will never be able to solve the interconnected wicked problems.