Free Agent Nation: The future of working for yourself
Why, you might ask, is Extensor reviewing a book about self-employment when virtually everything else we do is about the employment of others? The answer is that Free Agent Nation is not so much about self-employment per se as much as about the trend towards greater self-employment in the workforce overall.
For a long time I thought that the small village where I live in Hertfordshire was unusual in that a huge proportion of the residents are either self-employed or owner-managers of small businesses. But in the last few years I have come to realise that it is not unusual, it is simply reflecting changes in work patterns that are occurring in the economy as a whole.
In 2001 the legendary business guru Peter Drucker said; “The corporation as we know it, which is now 120 years old, is not likely to survive the next 25 years. Legally and financially yes, but not structurally and economically.” It is my belief that what Drucker was referring to was a move away from the convention of firms recruiting people as full-time employees and instead working more as what we would today term virtual companies.
My favourite example of a virtual company is Woodworm, the makers of the cricket bats preferred by players such as Kevin Pietersen and Andrew Flintoff. They began their business using a virtual model with everything except the core elements of differentiation and corporate services contracted out. The result is a growing company that has taken a significant share of the UK cricket bat market but which employs just 10 people.
As an example of a larger and more established company that is embracing this new business model, the Brazilian manufacturing company Semco encourages employees in non-core areas of its business to leave, set up their own businesses and sell their services back to Semco. The benefit is that as independent companies they are then able to achieve better economies of scale by selling their services to Semco’s competitors, and Semco benefit in that they no longer have to devote management time and attention to non-core areas of their business.
So what has all this to do with Dan Pink’s book?
In Free Agent Nation, Pink identifies trends in the market that are driving more and more people to turn their back on conventional contracts of employment and instead start their own businesses. Perhaps foremost amongst these is the fact that we have all become so well off during the last few decades that we are reaching the upper levels of Abraham Maslow’s “Hierarchy of Needs”. Maslow postulated that at the lowest level our need is for food, water, warmth and oxygen. But, once these basic requirements are met we seek things such as security, love and self-esteem. At the highest level is the desire for self-actualisation, and this, Pink argues, is the point at which many people have arrived in many Western economies. In other words, they have sufficient wealth and confidence in the future to be able to say to themselves ‘I do not want to work purely to earn money, I want to work for a bigger purpose’, and it is generally a lot easier to feel that you are working for a greater purpose when you work for yourself than when you work for someone else.
Pink argues that it is women who are leading this trend. They possibly started it as a way of balancing the responsibilities they felt to their children with the need or desire to have a job. As Pink says, the traditional “industrial economy separated work and family." While "the free agent economy is rejoining them."
But far from the free agent model being limited to a means of balancing a person’s home and work life, it is redefining the employment landscape with more and more firms using interim managers, temps, contract employees and outsourcing as a means to achieving their goals.
As the instigators of this new model, Pink argues that women will replace the "Old Boy Network" and rule the landscape of a new economy because they are better suited to a model based on community and sharing rather than the old male "conquer and topple" model.
For organisations the message is clear. In a rapidly changing and highly competitive world we need to focus less on the process of work and more on the purpose of work. Moreover, if we want to retain our best employees, we need to make the work meaningful for them in the context of Maslow’s ‘need for self-actualisation’.
For Government and the legislators, the message is that labour markets need to be made more flexible and that the tax and benefit system needs to treat the employed and the self-employed the same.
Free Agent Nation is a well researched and well written book that offers many interesting facts and thoughts as to how the employment landscape might change into the future. It is on this basis that I would recommend it to senior strategists and HR professionals alike.
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