You’re the leader of a marketing agency that wants to start offering TikTok services to clients. Unfortunately, senior leaders in your company have never used the app. You consider hiring someone, but then you realize that several of your freelance and contract workers — people who are already part of your broader workforce ecosystem —- are TikTok aficionados.
By partnering them with more established personnel in your organization, your agency can suddenly provide a valuable new service to clients.
As guest editor for the MIT Sloan Management Review Future of the Workforce Big Ideas research initiative, Assoc. Prof. of Management Elizabeth Altman heard such a story while interviewing a marketing executive about workforce ecosystems.
“That’s when it clicked for me that this truly is a different way of thinking about strategy,” says Altman, who teaches strategy and organizational theory in undergraduate, MBA and doctoral programs in the Manning School of Business.
Altman’s work, a joint multiyear research initiative with Deloitte Consulting, has produced a research article and two reports — 2021’s “Workforce Ecosystems” and this year’s “Orchestrating Workforce Ecosystems” — and spawned a book that’s due out in the spring, “Workforce Ecosystems: Reaching Strategic Goals with People, Partners, and Technologies” (MIT Press).
The research, Altman says, aims to help executives who seek an integrated approach to managing an increasingly unintegrated workforce — thanks to technology that’s enabling new ways of working and roles that are becoming more project- and outcome-based.
An engineer by training who spent nine years as a vice president at Motorola, Altman was invited to serve as guest editor by David Kiron, editorial director of MIT Sloan Management Review and program lead for its Big Ideas research initiatives.
“It’s amazing to get to work on a research topic that combines my background in technology, strategy, innovation and platforms, and be part of a conversation that is resonating in the world,” says Altman, who was shortlisted for the Breakthrough Idea Award in 2021 by Thinkers50, a global ranking of management thinkers.
Altman sat down recently to discuss the workforce ecosystems research, which involved surveying thousands of managers and interviewing dozens of thought leaders and industry experts from around the world, including executives from Amazon, Walmart, Unilever, the Mayo Clinic and NASA.
Q: What is a workforce ecosystem and how is it different from the workforce?
A: A workforce ecosystem includes full-time and part-time employees, as well as contractors, subcontractors, freelancers and gig workers, from within the organization and beyond. They work toward individual and collective goals, with interdependencies and complementarities among them, to create value for an organization. For example, if someone drives up to your house to deliver an Amazon package, even if they’re in an Amazon truck wearing an Amazon uniform, they probably don’t work for Amazon. They could work for a small mom-and-pop transportation company that Amazon has subcontracted. Lots of companies use subcontractors, and there’s a whole world around outsourcing.
And then there are also companies often referred to as complementors, which may be, for example, app developers or accessory providers. For instance, Apple’s App Store lets you put Spotify on your phone. The people who built the Spotify app don’t work for Apple, yet they did a lot of coding that makes Apple’s product better. So traditionally, they wouldn’t be considered part of Apple’s workforce. But we would say they are part of the workforce ecosystem because they’re creating value for Apple’s products.
And then we see a wide-ranging discussion about robotics, automation, software bots and other technologies. Is that part of the workforce? Traditionally, we’d say no. But we say it’s part of a workforce ecosystem. We interviewed a gentleman from NASA who said they give their software bots employee ID numbers because that’s the only way for them to access the data they need. They don’t issue them employee badges, but essentially, they’re in the database.
Q: How do workforce ecosystems play into business strategy?
A: Traditionally, business strategy comes first, and then managers figure out who and what they need to achieve their goals. With workforce ecosystem thinking, one can flip the script and say, “Given that we have access to these people, skills and technologies, what types of business strategies can we embark on?” It is becoming more integral to business strategy discussions, and people are becoming acutely aware that for a given business strategy, you need to think hard about how you are going to accomplish it. What should your workforce look like? It should not be assumed that you will mostly hire full-time employees to reach your objectives. Conversely, we are not presuming that contracting or outsourcing is better. We are saying leaders need to be smart about figuring out who should be doing the work, and via what relationships.
Q: Your 2022 report is called “Orchestrating Workforce Ecosystems.” What are the challenges for businesses trying to orchestrate a workforce ecosystem?
A: The first thing to recognize is that workforce ecosystems are often large and complex. And workers have their own individual goals, which need to be balanced with the goals of the company. If the organization only focuses on its goals and never thinks about the goals of these participants, that becomes unsustainable over time; they will go work for other companies. And while this notion of interdependencies and complementarities is a more academic way of looking at ecosystems, it is what makes it an ecosystem. We are not using the term “ecosystem” just because it’s a trendy word; it’s an ecosystem because of the interdependencies and complementarities between all the contributors, because they have mutual goals — and connections and relationships among them that matter.
Q: You started this work in March of 2020, at the beginning of the pandemic. How has the pandemic affected workforce ecosystems?
A: The trends toward workforce ecosystems were in play well before the pandemic and I think will remain well after. There are other forces outside of the pandemic, like expansion of technologies and changing worker preferences, that are driving this. With that said, there is no doubt that the pandemic changed the way people view work and the way organizations think about who is working for them, where they are working and how they are working.
But in some ways, the move to remote and hybrid work muddies the water a little bit, because when I say, “Workforce ecosystems are the future of the workforce,” everyone assumes we are talking about remote or hybrid. But this is not about geographic location; you could have a contractor working from home or a contractor working within a building. On the other hand, people’s notion of where, how, when and why people do work has become much more of a current topic, and that is good for someone who is doing research on workforce ecosystems.
Q: Are there risks that organizations need to be aware of when adopting a workforce ecosystem approach?
A: In our book, we have a wide-ranging discussion about ethics and social responsibility and moral responsibilities. There is a broad set of questions that workforce ecosystems highlight about diversity, equity and inclusion, about power dynamics between workers and employers, and questions about benefits, families, health care, child care and elder care. It is different in different geographies; the way this plays out in the U.S. may be different than in countries where they have socialized medicine or different labor laws for contractors. But workforce ecosystems raise some interesting policy questions.