Category: Organization in the Collaborative Age

How the Project Economy Has Finally Arrived

It has always be my conviction that economic activity would be increasingly driven as a multitude of temporary projects – thus my main activity around project management. This is finally recognized in this HBR piece ‘The Project Economy Has Arrived‘.

“Quietly but powerfully, projects have displaced operations as the economic engine of our times. That shift has been a long time coming.” “In Germany, for example, projects have been rising steadily as a percentage of GDP since at least 2009, and in 2019 they accounted for as much as 41% of the total. Precise data is hard to come by for other countries, but similar percentages are likely to apply in most other Western economies. The percentages are probably even higher in China and other leading Asian economies, where project-based work has long been an important source of growth.”

“This transformation to a project economy will have profound organizational and cultural consequences. The problem is, many leaders still don’t appreciate the value of projects and write them off as a waste of time.“

The author has been very active in the Project Management Institute and can thus slightly partial to the subject. However the reality is here and many leaders do not necessarily understand the implications of this shift in terms of work organisation and leadership. The image in this post is one of a turbulent flow, which is how I see the organization of the future: a number of projects (the vortices) that appear and disappear in the flow like projects with a limited time span.

Leaders must now account for the fact that probably a majority of value-creating endeavors is project-based. This must lead to significant shifts in organization and competencies to deal with those projects effectively.

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How Splitting Megaprojects in Smaller, Shorter Projects Brings Huge Benefits

Following up from our posts ‘How Infrastructure Projects Cost Has Increased Dramatically in Developed Countries‘ and ‘How to Increase the Effectiveness of Infrastructure Projects in Developed Countries‘, this HBR article by Pr Bent Flyvbjerg provides some answers: ‘Make Megaprojects More Modular’

Bent Flyvbjerg is a Danish university professor that has been studying public infrastructure projects for a long time and is now professor at Oxford. He has written numerous articles showing that public infrastructure projects always have their cost underestimated and their benefits overestimated at investment decision, mainly for political reasons.

Anyway in this article, he explains the benefits of having smaller projects that also benefit from some series effect learning curve rather than going for very large, very long and one-of-a-kind projects that are necessarily going to suffer overruns and generate disappointments. “Two factors play a critical role in determining whether an organization will meet with success or failure: replicable modularity in design and speed in iteration. If a project can be delivered fast and in a modular manner, enabling experimentation and learning along the way, it is likely to succeed. If it is undertaken on a massive scale with one-off, highly integrated components, it is likely to be troubled or fail.”

Bent Flyvbjerg continues by explaining why speed is essential for megaprojects, because of our inability to predict the future beyond a few months or years. Iteration is also essential to improve, while picking existing and proven technology is also a major success factor.

There is a definite trend towards smaller infrastructure including series effect. Still, all projects cannot be made in a short time and using only proven technology. However, those are projects where we should accept a measure of cost and schedule overrun; most infrastructure projects can certainly be done using proven technology and on a smaller scale. The question of keeping consistency of a programme combining several smaller, shorter projects is also a challenge.

Still, to tackle excessive cost and delays of large infrastructure projects, splitting large projects into smaller, shorter projects using proven technology is certainly a way to go.

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How Third Workplaces Become a Trend

‘Third Workplaces’ are alternative working environments, close to home but within a dedicated working space, co-working with other people. According to this article ‘The rise of “third workplaces”‘, they are clearly on the rise. “People aren’t working from the office, but they’re not working from home either.”

Third workplaces allow to work outside of home constraints, concentrate on work in an environment that provides the possibility of such focus, coffee and sustainable, and (optionally) exchange informally with other people doing the same.

In my working environment, I have observed how this is really needed for people that don’t have the space at home to have a working desk, or have small children and can’t concentrate on their work.

According to the article, there are even startups created to benefit from the trend, not to mention older startups created around the concept of co-working spaces.

I have been working in my consulting company for 10 years not having any other office than a home office, being mostly in client’s offices and otherwise meeting people in coffees. I welcome such ‘third workplaces’ concepts and I firmly believe this will be a strong trend in the years to come.

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How The Covid Crisis Is Leading to a Historical Shift in Employment

The future of the workplace is one of the big question marks at this time. Plenty of people write and contribute on this topic. In a series of posts we will explore some of those thoughts. First, on the basis of this Capitalogix blog post ‘The Rise Of Remote Work‘, let’s just observe how prevalent remote work is becoming.

This post – based on US data – shows that after the pandemic-driven transformation, remote work is appreciated by people and particularly in some industries, software & IT being of course the main adopter.

The shift in how people work is translating in what is called “the great resignation” with many people moving out of more traditional employment and changing industry. This excellent Atlantic article dated October 2021 ‘The Great Resignation Is Accelerating‘ provides data on this historical migration and changes in worker expectations. This affects in particular the hospitality industry (hotels and restaurants), but also many other industries.

I love however the conclusion of the post: “The culture of work is in a massive period of transformation. Regardless of where your specific company or industry ends up, all businesses will have to increase the amount of employee care they provide. Just as the heart of AI is still human, so is the heart of our businesses.” The point is that employee expectations about life quality has risen, and organizations have to adapt.

The Covid crisis has unexpected effects on the employment market. It is certainly only an acceleration of existing trends. Still, it will require a lot of adaptation capability for organizations.

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How to Increase the Effectiveness of Infrastructure Projects in Developed Countries

Following up from our previous post ‘How Infrastructure Projects Cost Has Increased Dramatically in Developed Countries‘, what can be done to make those projets more effective, quicker and less costly? I believe that new approaches to authorization process, construction and project execution could be a response.

Societal requirements and expectations will continue to make it harder to settle land claims and manage stakeholder input into very large projects, which will always have their share of opponents. However, while still maintaining the rights of stakeholders, it should still be possible to accelerate the regulatory authorization process, in particular by accelerating and remove some layers of legal recourse. It has been done in France for example for offshore wind farms after the previous regulatory framework was found to create excessive delays before the project could start.

At the same time, construction approaches should be reviewed. It makes increasingly more sense in development countries to modularise projects instead of looking for stick-and-build approaches or any approach with high manual work. For example for piping, replacing large quantities of on-site welding with pre-fabrication including of modules that could then be poured in the reinforced concrete structures.

In any case, the delays and hurdles to build infrastructure projects hurt the economy and create substantial delays before the infrastructure we need is actually contributing to our well-being. Innovative and creative solutions must be developed and implemented – we can’t continue on the current trend.

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How Robot Chefs Start Selling Food To Go

In this excellent post ‘The New Top Chef‘ Alex Tabarrok explains how “During the pandemic a pasta restaurant launched on UberEats in Paris. Cala quickly attracted a top 1% rating for it’s high quality to price ratio. Only now has it been revealed that the chef is a robot“.

This was actually a startup hidden behind the storefront, conducting a real blind experiment to prove its concept. This saves a bit on labour and also mainly on real estate as mentioned in this article: ““With three metres squared, we can serve 1.2k meals an hour,” says Richard. “A traditional McDonald’s restaurant is 125m2, and usually they can serve 550 meals an hour.”

This gives a glimpse of a future where the preparation of common food will increasingly be automated to support delivery or on-the-spot consumption, while competition between restaurants will be increasingly on fancy food and great atmosphere. The price gap between various options can be expected increase, while labour will move from burger-flipping to service and delivery.

The advent of robot-chefs is just a visible change that automatization will bring to our daily lives. Are you ready for it?

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How Amazon is Becoming a Very Significant Private Employer

Amazon is expanding and hiring worldwide – and is now employing a sizeable share of the workforce, as underlined in this post ‘Amazon now employs almost 1 million people in the U.S. — or 1 in every 169 workers‘. And actually, global hiring at Amazon continues in an exponential curve.

Distribution businesses have always been very significant employers (such as for example, supermarket chains) because of the labor-intensive nature of their trade. Amazon in the US (1.3 million employees or direct contractors) is on the way to overtake Walmart the first employer (1.6 million).

Those numbers mean that we can expect in the next few years some unionization of the relationships between employees and Amazon (and potentially some struggles too), and also that any decision taken by Amazon HR regarding general policies will have far-ranging effects on local economies. Amazon also certainly is developing its political influence where unemployment is a major local issue.

Amazon will probably soon become the first employer in many countries. This will necessarily change the nature of its social relationships both inside and outside the company.

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How Many Unicorn Founders are Actually Repeat-Entrepreneurs

We discover in this interesting post ‘The Founders of Clubhouse, Spotify, Stripe, and 42% of Unicorns Have One Thing in Common‘ that most highly successful entrepreneurs are actually serial entrepreneurs.

It shows that unicorn founders are quite likely to be founders with a history of small scale success and having exited from previous ventures.

“Among the founders of billion-dollar startups, almost 60% were not first-time founders. In a randomly selected group of startups that had raised a minimum of $3 million in venture capital funding but didn’t reach unicorn status — the typical picture for a seed-funded startup — about 40% were not first-time founders. The statistic shows that repeat founders were more likely to start a billion-dollar company.”

Thus, “It turns out that the best preparation for starting a wildly successful company is founding a startup. If you have never started a company, the best preparation for doing so is to start something, maybe a club, a side hustle, or simply selling something online.”

From those considerations we can infer interesting observations for the business angel that I am: repeat entrepreneurs with a history of growing and selling their startups are interesting candidates for investment. I am aware that this statement reverses in terms of causality the simple observation of the paper, but at the same it demonstrates the possibility of overcoming an emotional attachment to a venture, as well as experience through the entire lifecycle of a startup, and hence this inspires greater confidence in the new project.

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How We Should Not Be Fooled by Greenwashing

In this interesting Fast Company article ‘Don’t be fooled by brands that do one good ethical thing, say economists‘, the issue of a particular form of company greenwashing is exposed. All companies want to highlight some ethical action or initiative, but sometimes this hides a whole set of quite inappropriate behaviors.

Greenwashing is a new term: “a form of marketing spin in which green PR (green values) and green marketing are deceptively used to persuade the public that an organization’s products, aims and policies are environmentally friendly.” (Wikipedia). And this seems to be quite widespread, at least more or less consciously.

Still, studies show that “A company touting its One Ethical Behavior will likely manipulate you into a purchase“. This is linked to a psychological aspect: “Understanding our minds’ tendency to accept one positive behavior is essential. It’s commonly used across advertising and politics to mask significant ethical issues.”

Be wary about greenwashing and the good deeds that are communicated by organizations and companies, it is quite essential to understand whether it is just superficial chatter or the reflect of a deep culture. And if that is the case, those organizations may be those that communicate the least!

Greenwashing is an issue nowadays and let’s not be fooled by superficial communication on good deeds, rather examine if ethical behavior is deeply rooted in the organization!

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How Leaders Influence Organisations

In this interesting article ‘Party supporters shift views to match partisan stances‘ a Danish scientific paper is mentioned that studies how the opinion of political party members changed after the leadership of the party changed. They found that opinions could change significantly to match the leader’s.

“Supporters of a political party change their policy views “immediately and substantially” after that party switches its position on an issue, new research suggests, a sign that political elites could be shaping the opinions of the voters whos views they are supposed to represent“

In general, this is aligned with my experience in (business) organisations: I am always amazed how quickly it is shaped by the leader, and this is particularly visible in good or worse when the leader changes. However it was for me less obvious in the case of a looser setting like a political party.

And indeed it is an interesting question in this case as the political party is supposed to represent the views of its members. Or is it really? Is not more a way to align over a number of main positions to seek power? This certainly provides interesting food for thought about the operation of modern democracies.

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How Instability of Income and Occupation is not New

In the interesting book ‘Hedge‘ by Nicolas Colin, the issue of career in the new Collaborative Age (which he calls ‘Entrepreneurial Age’) is addressed. “The mark of the Entrepreneurial Age is greater instability at every level . It leads to permanent fluctuations in households ’ sources of income . Today’s workers alternate overlapping periods of training , wage – earning , starting a business , looking for a job , working as a freelancer.”

This obviously seems a significant departure from the Industrial Age stable wage-earning model that would require substantial changes in the setup of our social security nets, and in our psychology.

But is that really such a big change compared to the current situation? I observe a lot of my friends that went into more conventional careers being now retrenched or otherwise deemed redundant and who actually feel a bit lost because they were not prepared to this instability. The fact that people are made redundant when they reach 45+, in particular in management roles, is not new, but it is often underestimated or not talked about. However it has always existed due to the pyramidal organisation of the corporation. It has just maybe been accelerated in the later years due to more frequent restructuring, mergers and acquisitions. Thus, although it accelerates, this instability is not new. It is just that we are not psychologically prepared for it by society.

I find from my experience that it is actually all in the psychology. I have started my own consulting company at 40, instead of continuing a conventional career in the management of established companies. It has taken me some years to get used to the ups and downs, adjusting my personal system to have sufficient reserves in case of crisis, and it is now not a problem any more (even with Covid-19!).

Thus, be prepared for instability of income and occupation. But that is not new, and it is just that we need to be more prepared for it psychologically than what is usually recognized.

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How the Right Start-Up Ideas Are About Making What People Want

In this interesting post ‘Billionaires Build‘, Paul Graham of Y Combinator explains what should be the most important criterion for selecting promising start-ups: producing what people want. And, Paul Graham adds, as it means also selecting future billionaires, it should also be the criterion for that selection.

His point is that exploiting people is not a sustainable proposition. Proposing something that people want is. And this needs to be demonstrable: “The crucial feature of the initial market is that it exist. That may seem like an obvious point, but the lack of it is the biggest flaw in most startup ideas. There have to be some people who want what you’re building right now, and want it so urgently that they’re willing to use it, bugs and all, even though you’re a small company they’ve never heard of. There don’t have to be many, but there have to be some.”

In addition, Paul Graham mentions it is important to be interested into what is getting built (which avoids getting out too early), and have a thorough understanding of future users (even better if you are using your proper service first).

Based on my experience what is really important is to have demonstrated that people are ready to pay for the service even if it is just a Proof of Concept with limited capabilities. That it solves someone’s problem by making life easier. If only all start-up founders could take this as a principle!

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