ownership) lies. Governance refers to how processes and activities that cut across structures are managed or regulated, particularly as related to information flow and decision-making. It describes the management processes or operating committees that participate in making decisions on business priorities, including how resources are allocated and how organizational performance is measured and managed.
The ways of working address four people-related processes:
1.Organization culture
2.Leadership behaviors that support the business strategy
3.Decision-making styles and processes
4.Organization design to optimize performance across the company
Finally, the capabilities of a company (people, processes and technology) focus on areas that are also usually within the realm of HR, but not exclusively. Capabilities involve defining the type of talent or resources that are needed and how to focus their efforts; the processes that specify how a company attracts, manages and rewards its employees; and the technology that’s adopted to ensure organizational productivity.
Figure 1.1 Operating Model is a visual representation of how an organization operates. In this book, when we refer to a talent operating model, we are focusing on the ways of working and the capabilities that an organization cultivates to execute its strategy and goals. This chapter offers a broad description of the talent operating model that underpins a new way of working—the Inside Gig—and how this model differs from traditional talent operating models.
TYPES OF TALENT OPERATING MODELS
Traditional Talent Operating Models
Traditional talent operating models generally define the ways of working and capabilities that support the organization in achieving its goals. While aspects of culture and leadership behaviors are unique to each company, most organizations have decision-making styles and an organization design that support a hierarchical management style. Command-and-control systems are the epitome of traditional talent operating models; however, some organizations, while still hierarchical, have adopted collaborative approaches to work. In these organizations, decision-making styles and organization design might encourage collaboration, but important decisions are still made at the top. The capabilities these companies develop mirror this relatively stable work ecosystem.
In a traditional talent operating model, candidates interview for a specific job because they have a defined set of skills that meet the requirements for that role. Candidates are provided with a job description that details the day-to-day responsibilities of the role and the skills needed to be successful in it. This specificity helps the organization hire the right person for the right role. The traditional model assumes that jobs are well defined, and while employees with similar positions have similar job descriptions, this model defines the unique set of tasks each role serves in the company.
Employees are expected to work on tasks or projects that require the skill set for which they were hired. The traditional model generally ignores other skills the candidate or employee might have that are irrelevant to the job at hand. Employees are supervised by a manager in their function (e.g., finance, HR, legal, engineering) and most if not all of their direction comes from within their function. Employees’ upward mobility is generally perceived to be within their specific team or, possibly, function. Typically, career progression is viewed as a promotion up a career ladder.
Standard progression is up a career ladder within a certain sub-function is because it is often difficult for an employee to transfer across sub-functions (e.g., moving within the finance department from financial planning and analysis to tax or treasury; or in HR, from benefits to compensation), unless they are directly supported by a manager who pushes for this type of move. Part of the reason employees get so tied to their sub-specialties is a narrow task focus within the organization. Work is typically performed within the silo in which the employee executes their day-to-day responsibilities. While many employees would argue that their job descriptions quickly become outdated and that they’re asked to do tasks outside their job descriptions, they nevertheless remain stuck and are forced to rely on the skills or capabilities for which they were hired. Over time, employees often find this tiresome and they become a flight risk.
Innovation-Focused Talent Operating Models
Some companies that are more innovation-focused have adopted a slightly different talent operating model. We’ll call it an innovation-focused talent operating model. In this model, employees spend 80 percent or more of their time performing the responsibilities outlined in their job descriptions, and they may devote 15 percent to 20 percent of their time to work on innovation projects of their choosing. Employees may define their own innovation projects and recruit others to participate, or they may take part in projects started by others. While 3M has been operating under this model successfully since its inception in 1902 (Post-it Notes were invented using “15 percent time”), Google popularized the notion of “20 percent time.” Whether it’s 15 percent or 20 percent time, it’s all about giving employees permission to work on a passion project that may have nothing to do with current business goals or objectives. According to 3M’s Karen B. Paul, “Fifteen percent time is not a timesheet issue or corporate policy, it’s a philosophy. It could be 5 percent of someone’s time or it could be closer to 100 percent for some special projects. The idea is about giving employees space to work on projects they are passionate about.”1
Anecdotally, we have learned from several sources that rather than their jobs being 80 percent core job responsibilities and 20 percent innovation time, their positions are 120 percent. Time allocated to working on innovation projects is added onto a 100 percent time commitment to their “real” jobs. But their additional innovation time gives them permission to work on projects of their own choosing with a self-selected group of people. This isn’t part of working on the regular business needs of the company—serving customers, addressing pressing product issues—it’s about discovering or inventing something new that isn’t currently a product or service offered by the company.
For these organizations, the culture and leadership behaviors support the notion that allowing employees to have time to work on projects of their own choosing serves the company well. For example, Laszlo Bock, in his book Work Rules!, shares a core tenet of the Google culture: “If you give people freedom, they will amaze you.”2 Similarly, William McKnight, the president (1929–49) and chairman (1949–69) of 3M, said: “If you put fences around people, you get sheep. Give the people the room they need.”3
These organizations have structures and decision-making processes that support innovation work and define how innovation projects get presented to governing bodies to turn them into company-funded projects. While most of the capabilities for these organizations roughly mirror a traditional talent operating model, their reward structures provide incentives to individuals who make important discoveries or create valuable new products for their companies.
So, in companies that use an innovation-focused talent operating model, while employees get some choice and diversity in the projects they work on because they can opt in to special ventures, they’re still responsible for accomplishing the day-to-day responsibilities for the roles they were hired to do. The organization plays no role in directing people to work on projects based on their knowledge, skills, abilities or past work experiences. Employees are able to choose projects to work on.
Career progression in the innovation-focused talent operating model may be more fluid than in the traditional model, because of relationships formed while working on innovation projects. However, it remains a challenge to find opportunities outside a team or department,
