Rethinking traditional management in workforce ecosystems: Four areas for strategic change

Ask today’s business leaders to define their workforce, and you’ll get a different answer from each one. But many of them will point to a common story evolving in the business world: The makeup of their workforce is changing in ways that are challenging long-held approaches to workforce management. The standard employee life cycle model of attracting, developing, and retaining employees—and with it, the assumption that full-time employees are the most predominant and important contributors—is falling short as organizations increasingly depend on contingent workers and other partners to do business.

In the third annual MIT SMR—Deloitte Future of the Workforce global study, roughly half of the organizations surveyed reported that at least 30% of their work was produced by external workers.¹ In some sectors—like the tech industry—it’s not uncommon for contingent workers to make up 40% to 50% of an organization’s workforce.² What does this growing reliance on external contributors—long- and short-term contractors, gig workers, partners, and technologies—mean for management models? As the makeup of the modern workforce becomes increasingly diverse, new functional relationships and leadership approaches are necessary.

Based on three years of research, involving multiple global cross-industry surveys yielding more than 13,000 responses and over 50 individual executive interviews, we developed a framework to help leaders move from managing their workforce to orchestrating their workforce. The notion of orchestration—or bringing together disparate elements in a harmonious way—is an analogy for leaders working in concert to coordinate workforce ecosystem members.³ While traditional management generally implies exerting control, orchestrating reflects that while contributors have their own agency or autonomy, an organization can intentionally coordinate participants in an aligned effort toward reaching individual and shared strategic and operational objectives.

This framework focuses on four key areas where strategic change can lead to more effective workforce ecosystem orchestration:

• Shifting management practices: As organizations transition toward intentionally orchestrating workforce ecosystems, many previously effective management practices need to shift to accommodate new organizational structures and employment/engagement models.
• Tapping into tech enablers: A wide range of technologies shape, support, and also participate in workforce ecosystems. In many cases, however, leaders find that their existing tech suite doesn’t do a good job of connecting internal and external contributors—and, hence, is a priority area for transformation.
• Integrating workforce architectures: Workforce ecosystems are complex: they include individuals, organizations, and technologies; they span internal functions and business units; they encompass relationships that are both long-term (could be decades) and short-term (could be hours, or even minutes). Effectively orchestrating these ecosystems requires that leaders overcome both internal and external integration challenges.
• Adopting new leadership mindsets: In networked, boundary-spanning structures like workforce ecosystems, many leaders are finding that traditional, hierarchical, command-and-control leadership approaches are far less (or not at all) effective. New approaches to leadership are critical to effective workforce orchestration.

Workforce discussions often focus on how an organization can acquire and deploy the resources necessary to achieve strategic goals and objectives. With a framework that enables a workforce ecosystems approach, new strategic options become possible, and the process of discovering these options also changes. As one executive in the study said, “True competitive differentiation comes from understanding the total workforce.” That understanding is not easily achieved. It requires transformational shifts in management practices, technology enablers, integration architectures, and leadership approaches.

To learn more about this framework for workforce orchestration and how to implement it in your organization, read the full article at sloanreview.mit.edu.