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How Many People Work For Your Organisation?

12.30.2012
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You might think that a rather obvious question.  After all, most organisations have a pretty good idea how many people are working for them.  Is that a good thing?  This article will explain firstly why it might not be, and then explore how some organisations have created a workforce that they can turn on or off as demand dictates.

Why a rigid workforce might be bad

The principle of heijunka is a central part of the Toyota Production System, and by proxy  many other car manufacturing systems.  In English it translates to production levelling and is a process whereby parts and components are produced at a constant rate, so therefore other parts of the value chain can also produce with consistency.

The rationale is that if you take a more flexible approach, you will inevitably produce waste (or muda) in the form of idol employee time, as there will be periods of extreme effort (during high demand), and then periods of minimal effort (during low demand).  Levelling out production means you have a constant level of effort.

That's fine, except often the real world doesn't work like that.  It often demands a flexible approach that gives us the power to respond immediately to the changing environment.

A cloud based workforce

Utilising the cloud is an easy way to build such a flexible workforce.  Companies as diverse as Aegon and Zappos are making use of the so called human cloud that gives them access to talent when they need it.  It's a form of talent marketplace at its purest, with buyers and sellers coming together solely when demand dictates.

Suffice to say that there have been many predictions that the future of work will see us all operating as freelancers, hawking our talents to the highest bidder in just such a marketplace.  Whilst things like crowdsourcing and microsourcing have been utilised in the last decade, they remain at the fringes of how companies recruit talent.  They have failed to cross the chasm into the mainstream largely due to the difficulties inherent in handling largescale projects in this manner.

Building capacityI'm sure many of us can empathise with project managers who fear delegating work to people they've had little experience with, and who they can only contact via virtual means.  It's a leap of faith for many managers.  The result has seen many such projects only being deployed for low risk endeavours without a fixed deadline.  It's not an ideal scenario for either side of the equation.The bigger concern however is one of scale.  When projects require interconnected tasks and multiple skillsets, microsourcing doesn't provide as good a solution.  To overcome this problem, four approaches are being adopted by the industry.The four types of human cloud
  1. Facilitiation - In this approach, transparency is key.  Suppliers cannot trade under the cape of anonymity, with ratings and feedback providing buyers with a degree of security.  Sites like Elance and oDesk typify this approach.  These sites are also beginning to offer project management tools, with status updates and payments linked to milestones.
  2. Competition- This approach is providing help to projects of a more unstructured nature.  This kind of work is typically wrapped up into a competition, with the winning solution given a cash prize, but the competitors free to adopt any approach they wish to try and win.  InnoCentive is the most established such site.
  3. Aggregation - Sometimes tasks can exist in isolation within a project.  For instance the identification of galaxies in Galaxy Zoo requires astronomers to do their thing without co-ordinating their efforts with others.  This approach typically has a large number of suppliers, each doing a small number of tasks.  Mechanical Turk is arguably the most well known.
  4. Co-ordination - What each of the previous three approaches lack is project management and co-ordination functions.  In an attempt to win more enterprise work, platforms are emerging that offer this functionality.  These are typically a combination of human project managers and algorithms, and they perform tasks such as assigning tasks, co-ordinating completion and ensuring that everything happens in sequence.  TopCoder is the most prominent example of this kind of approach, as they break each part of the software development process into a series of competitions, which make up the project plan.  The TopCoder project manager then acts as the go-between of the buyer and the community.

How to tap into the human cloud

Lets say you wanted to try utilising the human cloud for your own projects, what steps should you take?  Sourcing talent in this way is in many ways similar to traditional outsourcing, so that should provide some guidance.  Nevertheless, there are some stages you should go through to ensure the project goes smoothly.

  1. Design your project - At this stage you want to think of things such as the number of suppliers, how interdependent they need to be and the expertise you require.  Your answer to these three questions will determine which approach is the best one for you.  For example, if you have a complex problem, you might want to utilise a competition, as this will enable multiple suppliers to have a crack at solving it.  If you require minimal supplier expertise however, MechanicalTurk might do the job better.
  2. Engage your suppliers - Next you need to engage with your suppliers and establish terms and conditions of work.  Each model mentioned above has a different approach to this.  With Elance for instance you choose suppliers based upon their online profiles and reputation.  In the co-ordinated approach though you choose the platform, and they choose the suppliers.
  3. Get to work - With talent sourced and terms agreed, the next stage is to manage the work itself.  Just as with other employee relationships, it's important that buyers manage the process.  Just because your work is being outsourced to the cloud does not mean you can source and forget.  Whilst some platforms will do much of this co-ordination for you, others will require you pick up that task.
  4. Quality control - As with any project, as the buyer you are responsible for ensuring you're happy with the work you receive.  Platforms such as MechanicalTurk provide tools to help you evaluate the quality of a large number of tasks.  Other platforms allow you to clearly define the deliverables you expect, and hold suppliers accountable for meeting those.

Of course this trend is in relative infancy still, but there are clear signs that it is growing in popularity.  As you can imagine, early adopters such as the science and information technology industries are leading the way with talent sourcing from the cloud, but other areas are beginning to show interest.

It is also likely that large outsourcing companies will beging to muscle in on this growing industry, with a consolidation between these traditional behemoths and the pure-play cloud sourcing companies very likely.  As these changes occur it is likely that the industry will become more atuned to the specific needs of buyers and talent alike, with improvements likely to come in areas such as task decomposition and social governance.  In a knowledge economy where access to talent seperates the good from the great, it is an exciting time indeed.