Will Data Help You Hire Better Employees?

The cost of hiring and retaining workers can approach 60 percent of a corporation’s variable costs, so it makes sense to manage this extremely well. Can big data and software help do this?

Nearly two-thirds of all workers are paid hourly in America and about half of them change jobs every year. Companies can save a great deal of money if they can better determine who will perform well and stay in these jobs.

Evolv is a company that monitors recruiting and workplace data in order to help companies decide who to hire. They have analyzed and studied millions of data points from more than 30,000 hourly employees.

Among their findings are that those who fill out online job applications using a browser that they had to deliberately install like Chrome or Firefox, perform better and change jobs less often than those who used Microsoft’s Explorer—the default browser that comes with most computers.

Evolv also determined that those who work in customer service at Xerox are more likely to stay on the job if they live near their workplace and can get there easily. And that those who belonged to one or two social networks stayed on the job longer. Using data such as this during the hiring process, Xerox was able to reduce attrition by 20 percent in an initial pilot program.

Using software and data to help determine viable candidates seems to make sense, but relying on algorithms alone can be a mistake. Like with any data, it can only be as good as the people who determine how to gather it, design the queries and analyze the output.

Think about your workplace. I’m certain you can think of people who may not have all the standard qualifications, educational background, and necessary experience that may be required to do the job. And yet, these very same people may be among the top performers. Are they only outliers who shouldn’t be considered or would it be a mistake to install a system that would deliberately miss them in the recruiting process?

My bet is that these people didn’t get the job through the normal HR channels because they likely would have been rejected by resume scanners and other data-driven software.

Data mining for people acquisition is not limited to hourly wage employees.

Google uses “people analytics” to better hire innovators who are so crucial to them as well as every other company. The way Google sees it, accurate people management decisions are the most important and impactful decisions a company can make.

And all these people decisions are based on data and analytics. They are applied with the same rigor Google applies to engineering decisions. It’s hard to argue with Google’s success: on average, each of their employees generate nearly $1 million in revenue and $200,000 in profit every year.

You can read more about Google’s analytical approach to human resources in an article by HR thought leader Dr. John Sullivan.

But the notion of putting such analytical decision-making above the relational issues human resources is typically relies upon seems ludicrous.

Aren’t these outliers more likely to be the very innovators many companies say they are really looking for?

So much of the hiring process is based on instinct and attentiveness to the relationship because human beings are not made up of ones and zeros. While our ability to do a certain task is something that can very often be quantitatively measured, our ability to work cooperatively with others, verbally communicate effectively, and generate creative solutions cannot always be quantitatively measured.

Think about how schools in China are now trying to teach out-of-the-box thinking so that their students can become more innovative like Americans.

There are so many subtleties in the hiring process that could ultimately miss great prospects through filtering software.

Let’s not lose sight of the importance of instinct, relational attunement and qualitative evaluation that cannot be determined via data and software analysis.

Retaining Your Top Talent

Now that the U.S. economy is beginning to show signs of life and companies are looking to hire again, it’s important to remember that this also opens the door for existing employees to explore their options elsewhere.

The last thing you want now is to lose your top talent to competitors. But if you don’t focus on the things that are important to these employees, you may find that they will indeed leave for greener pastures.

According to a recent CareerBuilder survey, nearly one-third of employers (32 percent) report that top performers left their organizations in 2012 and 39 percent are concerned that they’ll lose top talent this year. And while two-thirds of workers stated they are generally satisfied with their jobs, one quarter said they will change jobs in 2013 or 2014.

More than 3,900 full-time workers nationwide participated in the survey that was conducted online by Harris Interactive November 2012. The survey explored which job factors are most important to today’s workers.

“What determines job satisfaction is not a one-size-fits-all, but flexibility, recognition, the ability to make a difference and yes, even special perks, can go a long way,” said Rosemary Haefner, Vice President of Human Resources at CareerBuilder. “Being compensated well will always be a top consideration, but we’re seeing work-life balance, telecommuting options and learning opportunities outweigh other job factors when an employee decides whether to stay with an organization.”

A better job title is not important to more than half of workers (55 percent), however, upward mobility is key to job satisfaction and employee retention. Other things more important than job title include:

• Flexible schedule – 59 percent
• Being able to make a difference – 48 percent
• Challenging work – 35 percent
• Ability to work from home – 33 percent

Not surprisingly, nearly three quarters of workers reported that salary increases are the best way to boost employee retention while 58 percent pointed to improved benefits. Other actions workers said employers should take to reduce voluntary turnover include:

• Provide flexible schedules – 51 percent
• Increase employee recognition (awards, cash prizes, company trips) – 50 percent
• Ask employees what they want and put feedback into action – 48 percent
• Increase training and learning opportunities – 35 percent

Three areas I want to focus on include flexibility, being able to make a difference, and effective managers.

Flexibility
As I’ve written about previously, the flexibility to do the work when and where people want is an important way to stimulate employee engagement.

The premise of Results Only Work Ethic or ROWE is that employees are paid for results rather than hours worked. This provides both the freedom for employees and the results for employers. ROWE is based on the assumption that employees will do more and better work when given the latitude to decide how and when it is done.

In order to do this, of course, requires that these results are closely tracked and measured. If companies can do this and also trust their employees not to take advantage of the flexibility, then they should provide an opportunity for many to work at home.

Making a Difference
When it comes to being able to make a difference, employers need to continually remind workers the importance of their individual and collective contributions. Ensure that no matter the position, every person in every company knows how their contribution leads to the success of the organization. All of us can lose sight of this the further we are from the customer or the end result of our individual efforts.

Having a boss who reminds us of the benefit of our direct contribution can mean the difference between job satisfaction and the need to look elsewhere.

Effective Managers
Another thing to keep in mind is that people are attracted to and seek jobs at companies based on their reputation. On the other hand, people leave companies because of a bad boss. Although it may not show up directly in the research due to fear of retribution, many employees choose to leave a company not because they want better compensation, but because they don’t like their boss.

This dislike could be based on many factors, but it is worth looking into before it becomes an epidemic. Many managers and directors simply never got adequate training and instruction on how to be effective at leading people.

Talented people won’t let an incompetent or unfair manager stand in their way of job satisfaction, and will move on if necessary.

Ensure that your managers and directors know how to motivate and lead people in a way that brings increased productivity without sacrificing employee engagement. This may require training, mentoring, coaching or other interventions that are vital to keeping your top talent.

Don’t let your top talent leave now that the economy is improving. Instead, determine how you can provide what your employees need to increase overall productivity while also what they want to raise employee engagement. Then they will stay.

Telecommuting: When Does it Make Sense?

Yahoo’s chief executive Marissa Mayer recently declared that her company’s employees may no longer work from home and this has created quite a stir—both inside and outside of the company.

Telecommuting offers many benefits as it removes wasted time travelling back and forth to the job; it provides employees the flexibility to balance work and family around the individual’s schedule; and because there may be fewer interruptions than in the workplace, it allows for more focused attention that can lead to increased productivity.

Telecommuting also raises employee engagement. The more flexibility workers have, the higher their job satisfaction and the less likely they are to leave the company.

Research has found that they also work harder. A 2010 Brigham Young University study found that office employees work only 38 hours a week before they feel as if they’re neglecting their home lives. People who work from home put in up to 57 hours before they feel stretched too thin.

Nearly 15,000 Yahoos currently enjoy the freedom to do their jobs from home. And according to the independent employment research firm Telework Research Network, 20 million to 30 million Americans currently work from home at least once a week.

So what do we know about these telecommuters? According to the above study updated in 2011, the typical telecommuter is 49 years old, college educated, a salaried non-union employee in a management or professional role, earns $58,000 a year, and works for a company with more than 100 employees.

If all the potential telecommuters worked from home just half the time, the national savings would total over $700 billion a year including:

• The typical business would save $11,000 per person per year
• Telecommuters would save between $2,000 and $7,000 a year
• The oil savings would equate to over 37% of our Persian Gulf imports
• Greenhouse gas reduction would be the equivalent of taking the entire New York State workforce permanently off the road

The Congressional Budget Office estimated that the entire five-year cost of implementing telework throughout government ($30 million) would be less than a third of the cost of lost productivity from a single day shutdown of federal offices in Washington DC due to snow ($100 million).

So why can’t telecommuting continue at Yahoo? The answer could be manifold and surely includes Mayer’s need to reboot the company culture, cut deadwood and discipline the slackers who have taken advantage of the work at home policy.

Mayer was one of Google’s first 20 employees where data is used to measure just about everything, including people analytics. Now that Mayer is running Yahoo, she may be trying to instill this data-driven methodology to increase productivity, even if it means upsetting the company culture to do so.

While Google generates a whopping $931,657 in revenue per worker, Yahoo generates just $344,758. And Google actually encourages their employees to work in the office because, among other things, they say it generates a more collaborative atmosphere.

High technology companies have long been on the leading edge not only in products and services, but also in flexible work hours and employee benefits. Instilling the Results Only Work Ethic or ROWE model, for example, makes it easy to justify employees working whenever and from wherever they choose.

But there is something to be said for people working in the same physical space where serendipitous interactions can help stir creativity and innovation like nothing else. Bell Labs long ago designed their campuses around the management philosophy that innovation happens when you force smart people to collaborate in person where they can constantly bounce creative ideas off each other.

So how do you enable the benefits of telecommuting while retaining those of working in the office?

A Rational Telecommuting Policy would include:

• Identify which jobs lend themselves to telecommuting. Those who work in the fast food industry certainly can’t telecommute. However, those who work in certain types of sales and customer service who need only a computer with a telephone certainly could.
• Determine how to track and measure performance. Like any job, we should measure employee effectiveness in ways beyond how often they sit in an office cubicle and stare at a computer screen. Data can’t measure everything, but it can certainly contribute to overall accountability. This should be monitored regularly to avoid problems.
• Hold telecommuters responsible. Anyone who regularly works away from the office like outside sales people need to check in frequently to make themselves visible. Telecommuters need to do this as well and keep up with virtual communication so they remain top of mind to coworkers and supervisors.
• Demand that telecommuters be in the office on a regular basis. This is important because of the necessity of building rapport and fostering trust that is so vital to effective team building as well as increase the opportunities for collaboration and serendipitous creativity to spur innovation. Maybe it’s two days a week or maybe one day every two weeks, but consistency is key so others can plan around it.

Telecommuting offers many benefits to individuals, their families, the organization, and the environment. It’s not going to go away and I suspect Yahoo’s Mayer will find a way to bring it back to certain employees.

In the end I believe companies need to give employees the flexibility to work away from the office, yet measure and hold them accountable for the work they need to do. At the same time, they should demand that these employees work in the office at least part of the time, because this strengthens teamwork and encourages collaboration. And that’s good for the organization.

What Business Can Learn from Finland’s Education Reform

Finland’s success in school reform provides valuable lessons that can be applied to the way we conduct business in the United States. Business reform is a lot easier than education reform, yet requires the same steadfast focus on results.

As everyone in the U.S. is well aware, we have a crisis in education. We are failing our children because they are dropping out of high school at an alarming rate. Those who do graduate from high school struggle to afford the extremely high cost of going to college. And we fail many of those who do graduate from college because they are unable to find jobs they are qualified to do.

This is a huge problem with no easy solution.

In Pasi Shalberg’s Finnish Lessons, he describes how and why Finland was able to combat a mediocre educational system and, after 30 years of school reform, Finnish students now regularly score highest among all other nations in reading, mathematics and science.

Some may attribute this to the Finnish government spending more on education. But it turns out that while public expenditure on all educational institutions in Finland was 5.6% of GDP, it was 7.6% of GDP in the U.S. over the same period in 2007. Many factors contribute to educational success, and clearly money is only a part of the equation.

For example, teachers in Finland are highly respected professionals rivaling only doctors, according to many surveys. As a result, teaching is a very competitive field to get into and only the very best become teachers. Compared with their peers in other countries, Finnish teachers actually spend less time teaching and their students spend less time studying both inside and outside of the classroom. Yet Finland now has the most educated citizens in the world.

Back in the mid-1970s when Finland first decided to do something about its educational system, it focused on outside-the-box thinking. They didn’t simply look to those countries that were doing better than them and adopt their strategies. Instead, they took into consideration their unique culture, and adopted a vision that embraced inclusiveness and creativity.

The Global Educational Reform Movement (GERM) is the unofficial educational agenda created in the 1980s that relies on a set of assumptions to improve education systems. It has been adopted by many countries including the U.S., but Finland decided to look beyond this in order to achieve even better results.

Below are key elements of the GERM in comparison with Finnish education policies since the early 1990s.

GERM	Finnish Way
Standardized teaching & learning	Customized teaching & learning
Focus on literacy & numeracy	Focus on creative learning
Teach prescribed curriculum	Encourage risk-taking
Borrow market-oriented reform ideas	Learn from the past and own innovations
Test-based accountability & control	Shared responsibility & trust

Many may argue that the U.S. education system could never adopt these types of changes for a variety of reasons. Perhaps this is true, but that doesn’t mean we should not consider overhauling what we have for what we need. Incremental changes like No Child Left Behind and Race to the Top may at best chip away at the problems, but could also make things worse because they are not focused on the fundamental changes required for necessary reform.

In business, of course, there is greater flexibility in terms of how a company functions and treats its employees. And in our free market economy, customers can ultimately determine whether that business succeeds or fails.

However, many things from Finland’s educational reform that countered the GERM agenda can be applied to our business procedures. These include:

1)      Break from standardized business models to more customized and creative ones.

2)      Do not focus first on profits, but instead on customer satisfaction.

3)      Move from traditional means of productivity to the encouragement of risk-taking opportunities.

4)      Rather than copy the methods of others, choose to learn from the successes and failures of others and then forge a new path based on your own innovations.

5)      Move from command and control leadership to shared responsibility and foster greater trust in each other.

Nokia is a leading mobile communications company founded and based in Finland and it rose at the same time as the Finnish school reform movement. An executive from this company explains the connection between Finland’s educational system and business.

“If we hire a youngster who doesn’t know all the mathematics or physics that is needed to work here, we have colleagues here who can easily teach those things. But if we get somebody who doesn’t know how to work with other people, how to think differently or how to create original ideas and somebody who is afraid of making a mistake, there is nothing we can do here. Do what you have to do to keep our education system up-to-date but don’t take away creativity and open-mindedness that we now have in our schools.”

The Finnish term sisu loosely translates as strength of will, determination, perseverance, and acting rationally in the face of adversity. But there is also an element of maintaining action despite adversity. This means staying the course, and looking out for the long term benefits even if it means failing to achieve more immediate revenue goals.

I think business leaders in America should adopt sisu in doing what is necessary to reform aspects of how we move forward in business.

And many companies are already practicing this with customized product and service delivery, encouraging creativity and innovation, sharing responsibility and fostering trust. These are the companies that will most likely survive and thrive going forward.

In the same way our educators need a new and improved model for how we help our students learn, so too do our business leaders in order to raise productivity, expand markets, and compete at a high level in the 21^st century.

Rethinking the Role of Manager

Does your boss often get in the way of helping you be more productive? This is not entirely his or her fault as many organizational structures are based on an outdated incentive mentality that can actually be detrimental in today’s workplace.

The workplace has changed dramatically over the past 50 years. Secretaries are scarce, the metallic sound of office machinery is replaced by electronic tones of pagers and cell phones, and—rather than conversing around the water cooler—we are more likely to be texting or using social networks as a way to interact with others.

How we manage other people, however, has remained the same.

The role of manager varies depending on the industry and nature of the work, but when it comes to supervising others, there is very often conflict and disharmony.

In a recent working paper from the National Bureau of Economic Research titled “The Value of Bosses” by Edward P. Lazear, Kathryn L. Shaw and Christopher T. Stanton, supervisors were found to have an enormous impact—good or bad—on productivity.

Among their findings, nearly 75% of all employees say their boss is the worst and most stressful part of their job. And 65% of employees say they would take a new boss over a pay raise.

The same study determined it is not what these bosses do, but what they don’t do that makes them so bad. This includes 1) failing to inspire; 2) accepting mediocrity; 3) lacking clear vision and direction; 4) inability to be collaborate and be a team player; 5) failing to walk the talk.

It turns out that the best bosses are actually teachers, and the report stated that teaching accounts for 67% of a boss’s effect on employees’ productivity.

What if your manager was focused on teaching and encouraging your intrinsic motivation to enable you to be more productive and happier in the process?

Too often motivation throughout many companies is based on the carrot and stick approach. For all but a very few types of manufacturing jobs or those requiring mechanical skills, however, this approach has been scientifically proven not to work. In fact, it can actually be detrimental to productivity.

So why is there so much time and money spent on extrinsic incentives in order to get employees to work harder? Extrinsic incentives include things like a high salary, bonus, stock options, and generous benefits, which are often what attract employees in the first place. However, it is the intrinsic incentives such as interesting work, flexible time on when and where to do the work, ROWE or results only work ethic, 20% time to follow interests, etc. that keep employees motivated and highly productive.

According to author Daniel Pink, intrinsic motivation is absolutely required and his model includes three essential elements: autonomy, mastery and purpose. Autonomy is the urge to direct our own lives; mastery is the desire to get better and better at something that matters; and purpose is the yearning to do what we do in service of something larger than ourselves.

Workers today face challenges that require right-brained, creative, and/or conceptual thinking. This “outside the box” thinking cannot be incentivized through conventional external means, but instead requires internal motivation.

Intrinsic nature means the job’s core responsibilities and you’re being paid to do something you find satisfying, says Timothy Judge, Mendoza’s Franklin D. Schurz Professor of Management.

After conducting a hundred job-satisfaction studies, Judge says he’s never found one where the intrinsic nature of the work itself wasn’t the most important predictor of overall job satisfaction.

So what if a manager’s role was not to incentivize, scold, or threaten those he or she manages, but instead to teach, inspire, and support the employee’s need for autonomy, mastery and purpose? This new role for manager would look a lot more like a coach, mentor or teacher who is in service of raising the level of productivity of others.

In this way the workplace could be less hostile and more cooperative, less competitive and more collaborative. Managers could contribute to the workplace environment in a way that creates higher employee engagement and greater productivity. And that would be good for any organization.

Group Accountability for Effective Teamwork

Effective teamwork depends on many things. At a minimum, it requires capable people working together cooperatively to achieve a common goal.

According to author Patrick Lencioni, author of The Five Dysfunctions of a Team, truly cohesive teams trust one another, engage in unfiltered conflict around ideas, commit to decisions and plans of action, hold one another accountable for delivering those plans, and focus on achieving collective results.

Effective teamwork ultimately requires practicing a small set of principles over a long period of time, says Lencioni. “Success is not a matter of mastering subtle, sophisticated theory, but rather of embracing common sense with uncommon levels of discipline and persistence.”

Unlike individual accountability, which I’ve written about in previous posts, group accountability is about the willingness of all team members to call each other on performance or behaviors that are detrimental to the team. This requires a great deal of trust and commitment, and it also requires courage.

Holding one another accountable can actually demonstrate respect as well as maintain high expectations for everyone. This peer pressure encourages everyone to take part in achieving the team’s goals through shared leadership, which I believe is vital to successful teams.

Teams that avoid holding one other accountable:

• Create resentment among team members who have different standards of performance
• Encourage mediocrity
• Miss deadlines and key deliverables
• Place an undue burden on the team leader as the sole source of discipline

Teams that do hold one another accountable:

• Ensure that poor performers feel pressure to improve
• Identify potential problems quickly by questioning one another’s approaches without hesitation
• Establish respect among team members who are held to the same high standards
• Avoid excessive bureaucracy around performance management and corrective action

In addition to a foundation of trust and commitment, clarity around individual roles and responsibilities in relation to the team’s goals is vital for group accountability to occur. There can be no ambiguity and every member must know exactly what is required in order to achieve the group’s goals.

It is helpful to encourage group accountability behavior so individuals feel more comfortable speaking up with regard to each other’s performance level. Providing specific feedback on witnessed behavior demonstrating group accountability during meetings can go a long way toward encouraging others.

Keep the focus on achieving team goals and not individual accomplishments. In fact, rewarding individuals can actually be counterproductive and often undermine group goals. In the same way a basketball team suffers if players refuse to play as a team, so too do workgroups when individual performance is praised above the group’s achievement of goals. This is not to say individuals shouldn’t be rewarded, however, if their accomplishments are singled out too frequently then group goals may become secondary.

Ultimately, there should be both an internal and external focus on accountability. Each person must be internally focused with full accountability for his or her own goals. And to be an effective group member, there must also be an external attention focused on accountability for the group in order to meet its goals.

This external focus on accountability requires holding each other to the same standard you hold for yourself, helping each other stay focused on the task necessary to achieve the group’s goals, and challenging each other to raise their level of performance.

As Lencioni says, effective teamwork is simply about embracing common sense with uncommon levels of discipline and persistence. And group accountability is one way to ensure your team can raise its performance and reach its goals.

Workplace & Leadership: This I Believe

In my work with organizations both as an employee and external consultant, I have learned (and continue to learn) many things over the years. Many of these have evolved or been entirely reversed, which is indicative of the fact that we are living at a very dynamic time.

For example, in a recent article in Harvard Business Review magazine, Michael J. Mauboussin writes about how organizations are so often using the wrong metrics to measure success. The continual focus on earnings per share instead of other metrics and statistics prevents these companies from fully understanding their business. It’s time for business leaders to adapt their thinking.

In this blog post, I thought I would simply state some of what I believe with regard to the workplace and leadership. Although these statements are likely to continue evolving over time, I believe they will retain a kernel of truth that should remain constant.

I am indebted to many great business leaders and theorists for these ideas and I apologize in advance for a lack of attribution.

• Most people want to do their very best at work.

• More autonomy for how the work gets done leads to greater employee satisfaction and higher productivity.

• Great companies don’t hire skilled people and motivate them. They hire motivated people and inspire them.

• Character traits like zest, grit, self-control, social intelligence, gratitude, optimism and curiosity are common among great employees, yet are rarely advertised for or even looked for when seeking and interviewing candidates.

• Emotional intelligence may not get you the job, but it will undoubtedly keep you in the job and help you get promoted.

• Getting the right people focused on the right task is the most important objective for any organization to reach its goals.

• Focusing on employees first is what will make customers happy and this leads to happy shareholders.

• The role of a great leader is not to come up with great ideas. Instead, a great leader should create an environment in which great ideas can happen.

• Everyone has the capacity for leadership no matter the position.

• Leadership development should not be restricted to executives, but implemented throughout every level of the organization.

• Most of the billions of dollars companies invest in leadership development fall short of success because the programs are so heavily focused on data and assessment gathering and very little on people and processes.

• A high level of trust in the workplace is directly related to greater productivity, higher profitability and more engaged employees.

• Building trust and accountability are the most important things a manager should work on in order to get the most out his or her people.

• Praising workers in a meaningful way is a simple, yet highly effective means of raising employee satisfaction and overall productivity.

I welcome your thoughts and comments as well as other statements with regard to what you believe in order to extend the conversation.

Organizational Behavior: Monkey See, Monkey Do

All too often I find organizations do things a certain way not because it’s the most effective or efficient way to do them, but because they’ve always been done that way.

This is not a recipe for success. In fact, this inertia may be what keeps organizations from growing and thriving more than anything else.

In a famous experiment by G. R. Stephenson back in 1967, five rhesus monkeys were placed in a cage with a bunch of bananas hanging from the ceiling. Underneath the bananas was a ladder just tall enough to reach them. Any time a monkey tried to climb the ladder to reach the bananas, cold water would spray the entire cage. The monkeys quickly learned it was better to avoid the ladder and give up on getting bananas.

When one of the monkeys was removed and replaced with a new monkey with no prior knowledge of the sprayer, all the other monkeys would attack the new monkey if it attempted to climb the ladder. Even when the sprayer was removed, this made no difference as the monkeys never tested it again. The new monkey has no knowledge as to why it was attacked, yet when another original monkey is replaced, even that previously new monkey will attack the new one if it tries to climb the ladder.

When all of the original monkeys are replaced one-by-one with new monkeys who have no previous experience of the sprayer, they continue attacking any monkey who attempts to climb the ladder. They all obey the same rules of behavior even though none of them have any firsthand experience as to why.

A great deal of corporate policy is formed and followed in this way. Employees continue doing things in a certain way even when there is no logical reason for it. When new employees are brought in and question things with suggestions for change, the entire organization resists the change even though it may be in everyone’s best interest to accept it.

Behavior is strange in this way and is often dictated by what the organization rewards or punishes—even if the original reason for the rule is entirely forgotten.

Leaders of organizations who recognize this problem and actively work to correct it are those who are open to learning and embracing positive change. The first step is for them to acknowledge those policies and procedures that hold the organization back. It then takes a great deal of perseverance to continually monitor behavior and acceptance of individuals to freely question practices that do not make sense.

This also takes a great deal of patience in order to continually defend these policies. But if you can no longer easily defend a policy or procedure then it likely cannot be sufficiently supported and should be ripe for modification or abandonment altogether.

Though it is often easier to continue doing things in the same way because they’ve always been done that way, organizations that encourage questioning these practices and enabling them to be modified are those that will grow and thrive.

Collaborative Culture of the Coworking Contingent

The American workforce is going through a sea change with regard to how and where we work. The workplace of the future may no longer include nearly as many fulltime workers in cubicles, but instead provide only a gathering place for many contingent workers to collaborate on specific projects.

Contingent workers—including freelancers, temps, part-time workers, contractors and other specialists—today make up 25 to 30 percent of the U.S. workforce. By the end of the decade, they will make up more than 40 percent, according to the Intuit 2020 Report.

The report also states that “more than 80 percent of large corporations plan to substantially increase their use of a flexible workforce in the coming years.”

Our knowledge-driven economy contributes to this rise in contingent workers because organizations rely more on specific knowledge and expertise.As demand increases for highly-skilled and knowledgeable people, the expertise of contract workers becomes more attractive.

This can save the organization money as there is no longer the need to pay the fully burdened costs of fulltime employees as well as the real estate to accommodate them.

So what does this mean to the contingent worker? Greater freedom? Yes. Less job security? Maybe. Greater work/life balance? Possibly. Less compensation? Perhaps, but not necessarily.

One thing is for certain: the contingent worker will need to be a lot more intentional and active in finding opportunities, and also in collaborating from outside the organization.

A lot of contingent workers want to get out of Starbucks and other coffee shops, but they don’t want to be at home alone says Ryan Coonerty, co-founder and chief strategist of NextSpace in Santa Cruz, California.

“People like being around other people,” he says. “While they don’t miss some of the traditional office culture—like cubicles and set work schedules—holiday parties matter.”

NextSpace is one of a growing number of coworking spaces with locations in San Francisco, Los Angeles, San Jose and Santa Cruz. Coonerty says he plans to open another four to six locations by the end of the year.

Contingent workers are moving to these coworking spaces because they can find more quiet, fewer distractions, shared office resources, and collaboration opportunities. These coworking spaces can also be a lot cheaper than renting a traditional office.

According to Deskmag’s Second Global Coworking Survey completed last fall by more than 1500 people from 52 countries, “individuals increase their productivity and networks by joining a coworking space.”

The survey found there are now more than 1,100 coworking facilities worldwide, and that number is likely to increase dramatically.

It’s not entirely clear how an increase in these independent workers will change an organization’s culture. Contingent workers could help make companies more responsive to customers and market trends by bringing in a fresh perspective.

And just as outside consultants can often ask the hard or sensitive questions internal employees may not, contingent workers can focus on the objective at hand rather than let the internal politics get in the way of meeting those objectives.

My concern is how well these contingent workers will be able to effectively collaborate with fulltime employees. How quickly can rapport be established if the interaction is primarily via email and phone calls? How can trust be developed when there isn’t the time to regularly work side by side?

These contingent coworking professionals will definitely change the culture of organizations. And how organizations adapt to this less tangential and potentially more collaborative culture will determine whether this transition is successful or not.

Corporate Values and Goldman Sachs

Corporate values are often what attract and keep many of us at the fine companies we work for. They are above and beyond the paycheck that give our working lives meaning. Corporate values are what attracted Greg Smith to Goldman Sachs 12 years ago.

The values Smith describes at Goldman were “teamwork, integrity, a spirit of humility, and always doing right by our clients.” Beginning as a summer intern while at Stanford, he ultimately reached the position of head of United States equity derivatives business in Europe, the Middle East and Africa.

Smith recently left Goldman Sachs and wrote a scathing editorial in the New York Times as to why.

“I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity,” writes Smith. “And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.”

“Leadership used to be about ideas,” he continues. “Setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.”

Goldman leaders immediately responded to this with an open letter to employees on their website. However, other than reporting that 89 percent of employees say the firm provides “exceptional service” to clients and that for the third consecutive year, the firm was the highest paid financial services company, I read no real challenge to the assertions Smith made regarding values and integrity in his opinion piece.

It reminds me of the importance of things that do not necessarily show up on financial quarterly reports and are therefore less likely to be reported in the mainstream press. Corporate values like integrity, teamwork and doing the right thing are what attract and keep the best employees and ultimately what wins and keeps customers.

Earlier in my career, I remember working for start-up software companies where customers were treated as the top priority and employees a close second. When some of these companies filed for an initial public offering, shareholders replaced employees in second place and, in some companies, were even prioritized over customers.

When short term profits take precedence over corporate values, a company is in great trouble. Trust and ethical behavior outweigh financial performance if not in the short term then certainly over the long run.

I have had an increasing number of clients during the past several years complaining about unethical behavior, lack of honesty and bullying by their immediate supervisor. This leads to a stressful work environment and a depreciation of corporate values.

The old adage that people join a company based on its reputation and leave because of a manager is truer than ever. When managers engage in unethical behavior, they damage not only their own careers and those around them, but also the entire company.

Earning and keeping customer trust takes a long time; losing it can happen overnight. Goldman Sachs is 143 years old and surely they won’t sacrifice that trust easily.

I am sure Smith’s assertions have some basis in fact, but with 30,000 employees I’m equally certain there are many contrary opinions.

Regardless, the lesson should be that respecting customers and employees should be paramount in any company. Maintaining corporate values that attract employees and customers should always be more important than higher short terms profits.