Small and Mighty: the future state of work fits like a glove for SMEs

Disrupt or be disrupted

By design or by default, the pressure for businesses to transform and adjust to new realities is intense. Massive organizations built around hierarchical structures, linear processes, and owning and controlling assets, information and talent are ripe for disruption. Plus, the expectations of members, clients or consumers are intensifying; they are demanding value in the services or products they need, want, or require and in the way they want to experience and use them. And of course, enabling technologies are accelerating everyone’s access to information with intelligent platforms that provide relevant and real-time solutions.

Let’s consider what has already changed. Accessible and mobile-friendly options have disrupted many industries, including:

• The hotel industry with the emergence of Airbnb.
• The banking industry with the world’s largest mobile money platform M-Pesa.
• The entertainment industry with Netflix and other on-demand media services impacting movie theatres.

In this climate of disruption to business models that have held strong for years, small and medium sized-enterprises (SMEs) are well-positioned to leapfrog large companies into the future state of work as they are already under significant pressure to think and organize differently. Creatively leveraging alternate business models, adopting accelerating technologies and organizing into unconventional workplaces is not just an opportunity — it’s becoming a necessity. In contrast, SMEs that are hanging onto old structures and business models replicated from big companies — with fewer resources — are at risk of becoming irrelevant. It is this context that presents opportunities for bold organizations and threatens those digging in their heels and conforming to past models.

What is driving change?

Technology

Certainly, the surge of Software as a Service (SaaS) platforms are increasingly automating business processes — but these platforms are also being designed to work in smaller enterprises at affordable price points. The era of large enterprise-scale ERPs or customized software is fading, being replaced by excellent subscription and cloud-based platforms to manage both highly complex and routine business processes.

Perhaps more significant than SaaS platforms is the emergence of engagement technologies that link external resources directly to an organization, contributing to what they create or services they offer. These enabling platforms create new opportunities for organizations to extend beyond conventional corporate boundaries — they can reach communities to help generate ideas, collaborate on solutions and add additional skills or knowledge when needed. Topcoder’s crowdsourcing platform, for example, connects developers around the world to work on projects for organizations like Harvard Medical School, Google, eBay and IBM. Other examples include crowdsourced idea management platforms that allow businesses to connect with, and engage, their external stakeholders — allowing partners, customers or members to generate ideas and collaborate on solutions.

Finally, the large amounts of data and ease of access to information is accelerating the ability of artificial intelligence (AI) to take on more tasks in both our personal and professional lives. Organizations will have to sharpen their focus to determine the specific skills and experience needed from people on their teams versus the routine tasks or processes to manage large amounts of data that are ideally suited to AI.

People and demographics

With an aging population, increased competition for talent, and values shifting towards balanced lifestyles, employees are making more intentional choices about how they will work and the type of employer they will work for. The idea of company loyalty or job loyalty is in steep decline with average length of tenure lower than 5 years — compared to a lifetime employment of 30 years. More individuals at all ages and career stages are making the choice to work in situations that suit their current lifestyle and quickly change as their needs shift.

Additionally, as technology supports remote and virtualized working, we are seeing the rise of freelancing as a viable career choice. The notion of becoming an entrepreneur as a self-employed and independent resource to service on-demand talent requirement needs is becoming mainstream. People are simply not leaving the fate of their career in the hands of employers selecting and hiring individuals for their team; rather, they are crafting their own destiny by servicing multiple opportunities, and often de-risking their prospects by having their eggs in several baskets with the potential for more lucrative earning potential.

New business service models

Virtual teams that can supply organizations with non-core capabilities are increasingly feasible given technological advancements. These teams of CFOs as well as HR and marketing professionals bring experienced talent to organizations in the right amount and frequency that matches the true needs of the organizations. Other new models offer smaller organizations the opportunity to share real estate, business infrastructure and other tools — not to mention the invaluable opportunity to share ideas, knowledge and new ways of partnering through the emergence of co-location spaces such as hubs, accelerators and incubators.

“Creatively leveraging alternate business models, adopting accelerating technologies and organizing into unconventional workplaces is not just an opportunity — it’s becoming a necessity.”

Economic pressures

Organizations increasingly face smaller pots of funding, with more demand or competition for those funds, with tighter limitations on how dollars can be spent. There is less money for administration overhead as funders direct dollars towards specific programs and activities, or upon hitting key milestones and events. Not-for-profits and high-tech start-ups in particular have fewer channels available to them to build and sustain value — poising them to be the ultimate benefactors of the highly flexible new service models mentioned in the previous section.

Expectations of stakeholders

Funders, members, customers, shareholders and Boards of Directors are looking for clear and distinctive value. Whether it’s funders requiring specific deliverables or milestones as conditions for further funds or activist shareholders elevating transparency and performance expectations, everyone on the team has intensifying pressure to optimize performance and bring out their and the organization’s fullest potential. Wearing too many hats — while often a necessity in early stages — quickly erodes the performance and capabilities of individuals in their primary roles and the add-on tasks.

What can SMEs do to embrace the future?

Predictions are that 80 – 90% of the economy is susceptible to disruption — and there is no middle ground.¹ In this context, SMEs have an excellent opportunity to leverage some of the features of best-in-class, forward-looking organizations to accelerate their performance.

• Look for smart sharing opportunities: Co-location spaces and shared infrastructure allow SMEs to leverage the energy, knowledge and creativity of communities.
• Rethink how to add value: With enabling technologies and gamification platforms, there are new opportunities to not just connect with communities, but to engage with them to create ideas and collaborate on solutions.
• Consider unique partnerships: When information is abundant, what you do may or may not be unique. Partnering with other entities that offer either complementary or tangential offerings can be an opportunity to create exponential value.
• Create refined organizations: Organizations should question which functions are vital to adding value, and then, which functions are business operations, processes or intermittent in nature. Outside of an organization’s core competencies, there are new opportunities to use virtual or fraction teams in business operations functions such as finance, HR, marketing. Crowdsourced talent or freelancers can also be leveraged for pieces of work or tasks on projects.

Change is inevitable but the opportunities for SMEs are great. Those that choose to intentionally design their organizations for the future will become the disrupters.

¹ Ismail, The Future of Work Podcast.