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Deep Dive: Working with workforce ecosystems
Will the future of work reinvent B2B as customers reinvent their workforce?
This edition is an over-the-horizon brainstorm workout for innovators. I’ve spotted a trend for the future of work and am taking a stab at finding a B2B opportunity. My premise: the future of B2B is about tapping into how customers are adapting to the future of business and especially how their organizations will work and learn. In this edition, I share essential findings from a just-published report on a strategic trend for the future of work. Inspired by the report, I suggest a new approach for B2B companies to engage with customers—one that goes beyond selling products and services to offering support by sending people to work side-by-side with a customer’s people. The ideas below are only a start. I invite you to add your comments and help push the conversation along.
Helping your customers is helping yourself
In my ongoing work as a Fellow for the NAW Institute for Distribution Research, I find that the most innovative B2B companies are innovating by helping their customers innovate. Helping customers get to their future is the surest path for a B2B company to control its destiny. New products and services emerge from working side-by-side with customers, leading to opportunities that are not easily identified through traditional market research techniques. In the first chapter of Innovate to Dominate, I make a case for enabling the future of business for customers and offer state-of-the-art innovation methods. One recommendation is that B2B innovators become skilled practitioners of Clayton Christensen’s jobs to be done framework. Christensen’s genius focuses innovators on unearthing reasons why a customer might “hire” their firm to help with the customer’s needs and then design helpful solutions. There is much more to be said about this approach, and B2B innovators will find a wealth of information at the Christensen Institute.
I have found that as the future of work evolves, the nature of every business—customer and B2B provider—is changing. Change is coming in the form of products and services, but more fundamentally, in how organizations get work done. This change presents a new opportunity to apply the jobs to be done framework and new opportunities to physically work side-by-side with customers as they change the way they work. This creates a revolutionary opportunity for B2B companies: Rather than conducting research to understand customer needs and invent solutions, B2B companies can engage with customers to work on projects and reimagine the customer’s workforce. By so doing, B2B companies will reinvent their innovation culture and processes. This newsletter edition explores one approach.
Workforce evolution can fuel B2B innovations
A critical new research report published by MIT Sloan Management Review, in collaboration with Deloitte, builds the case for “workforce ecosystems” as a new strategic approach for the future of work. The report’s executive summary opens with a clear statement of every company’s challenge in designing and managing a modern, competitive workforce:
Ask managers today how they define their workforce, and a common answer is, “That’s a very good question.” It’s a good question, managers tell us, because they often feel squeezed between two realities. One reality is that their workforce increasingly depends on external workers. The other reality is that their management practices, systems, and processes are designed for internal employees. The struggle to reconcile these two realities is an ongoing challenge, with significant implications for strategy, leadership, organizational culture, and workforce management practices. (MIT Sloan Management Review)
The solution to these challenges may be a workforce ecosystem, defined as a structure that “encompasses actors, from within the organization and beyond, working to pursue both individual and collective goals.” The research finds that about 87% of business organizations already include external workers in their workforce composition, consisting of contractors, service companies, gig workers, bots, and more. As a B2B provider of products and services, employees of your company may already be in the mix!
From my perspective, the ideas, concepts, facts, and survey results in the report apply to every business and help develop foresight about the future of work and B2B offerings. And, since every company is a potential customer of a B2B business, then the evolution of your customers to managing a workforce ecosystem presents a significant opportunity. In my work, I find that innovation leaders are thinking beyond offering products and services for sale to finding methods for helping customers solve problems and pursue growth. As I read the report’s findings, several align with my experience:
For customers, leveraging a B2B company’s employees may be a better solution than hiring an employee. Accomplishments by an external worker may be better captured in the conduct of a project, including data that measures results. In my experience, the need for a worker may be temporary, or the skills required for ongoing execution may be different than getting the work done.
Companies are already doing a significant share of work through external employees and businesses. The significance for B2B companies is that they can intercept customer behaviors, eliminating the need to create or change them. In a sense, customers are in the rapidly rising phase of early adoption. The challenge for B2B companies is to define a credible offering, one that earns a return in exchange for value created.
The nature of work is changing; it’s evolving away from process-driven organizations to an approach that is much more about teams and projects. This transformation enables higher levels of speed and innovation and depends heavily on relationships. In my work, all of this is analogous to innovation methods for B2B companies—methods that emphasize agility, testing prototypes, and frequent fast iterations. In this sense, leading B2B innovators are already building cultures that will enable support of customer transformations to workforce ecosystems
I encourage every B2B innovator to read the entire report and the detailed survey findings in its appendix. Identify your takeaways, then imagine your B2B innovations. Below, I share my ideas. I’ve coined a phrase—workforce ecosystem engagements—to capture a new B2B offering for customers. The name is clunky, and a better term may emerge.
How might a “workforce ecosystem engagement” actually work?
Imagine a customer, one that is striving to improve results by achieving coordinated improvements around business processes, data analytics, robotic process automation, and/or inventory controls. The customer sees the need for change but does not have a clear path to make investment decisions or measure returns. As an essential supplier and business partner, your company has deep complementary knowledge and experience but no established mechanism for leaning in to help—other than advice that can be offered through the sales process. And that process is tainted because it is more about providing information to close a deal than it is about rolling up sleeves and committing resources for the long haul.
Building on the concept of collaborating as a partner, and working alongside a customer’s employees in their workforce ecosystem, your company might design and offer a program around these guidelines:
Pull together a working group of customers to identify their initiatives and projects that would benefit from your company’s knowledge and experience. Your goal is to establish a baseline offering that might fit more than one customer and several needs.
Assess and align your competencies against the baseline offering. Relevant knowledge and expertise from B2B capabilities might include digital marketing, omnichannel sales, inventory management, financial planning, procurement, vendor negotiations, and more.
Identify one customer and project to get started. The ideal project would be one that lines up with your people that have not just the knowledge but the working skills needed to jump in and help. Beyond functional experience, emotional intelligence or empathy in a business context is essential.
Provide a portfolio of project management and execution tools that your customers may want to use in place of (or to supplement) their tools. Platform examples include project management tools, software for online collaboration of remote workers, financial modeling spreadsheets, big data analysis, and more.
Identify additional resources from your company’s workforce ecosystem of technology vendors, service companies, thought leaders, consultants, community colleges, universities, suppliers, and more. Be ready to call in their support to work with your customer.
As you work through your first workforce ecosystem engagement, make plans to adjust your staffing and talent. In the short run, cross-training and fractional resources can fill in for their absence. But as you figure out the length, time commitments, and cadence of working side-by-side with the customer, longer-term talent and staffing needs are required.
Before your work begins, gather quantitative and qualitative data to establish a baseline of “as is” performance at your customer. Identify key metrics and track them throughout the work. At the end, take a final measurement and calculate progress and benefits. Confirm your findings with the customer and memorialize the results in a report and, perhaps, an event to celebrate progress.
Earning a return requires consideration of possibilities
If your company creates measurable value for your customers through a well-planned and executed workforce ecosystem engagement, you should expect compensation for your efforts. If the scale of benefits is small, your returns may be measured in terms of purchases, the share of customer spend, and perhaps, a premium price for your products or services. But if your contributions are more strategic, direct compensation should be earned.
The most obvious payment method is to offer your help as a consulting engagement. However, this model invites comparison with actual consulting companies. Moreover, spending may be associated with an established budget for consulting services, and therefore limited. A more modern idea is to offer your support as a kind of subscription model—much like a company might pay for a software-as-a-service solution. Another approach would be structured as gain sharing based on measuring and allocating measured improvements.
Workforce ecosystem engagements may also be offered in the context of a joint venture. If the engagement helps the customer get into a new line of business, a new business could be created. Ownership is shared between your company and the customer. Financing to cover investments and costs may be provided by private equity, venture funding, or even ESG investors if your collaboration creates social good. But, whatever the compensation method, for any size and type of workforce ecosystem engagement, your contribution is offered in a business context, and your company must be compensated for the value it delivers.
Ideas for innovating B2B
Workforce ecosystems are an emerging concept in the overall framework for imagining and planning for the future of business. The concept of a B2B company offering workforce ecosystem engagements is far from an established way of doing business. There are few precedents if any. Any B2B leader pursuing these opportunities must pave the way with thoughtful execution that might include:
Offering foresight. Tell stories and share a vision through industry presentations, media interviews, and podcast guest appearances. Consider publishing a book.
Leveraging digital marketing and social media. Amplify and retell stories, including perspectives from your customers, technology vendors, university collaborations, and so forth.
Practicing what you preach. Implement workforce ecosystem principles in your company, engaging your suppliers, vendors, industry associations, and more.
Challenging your sales model assumptions. Think beyond striving for sales performance achieved for your company’s benefit through omnichannel design, artificial intelligence and automation, and value-selling methodologies
Finally, it may be very important to intentionally explore new business models for your company with plans to capture new revenue streams. For B2B distributors, workforce ecosystem engagements may be an opportunity to break free of margin constraints associated with a buy and resell model as a value chain intermediary. For B2B manufacturers, opportunities may emerge by embracing a business designed around the internet of things (IoT) data created by intelligent products. In both cases, new collaborations around data are likely a critical enabler, and concepts covered in my earlier newsletter edition—Can new data collaborations revitalize the value chain and spark a B2B revolution?—offers essential insights.
Join the journey
Thank you for reading my fourth newsletter on innovating B2B. Like all previous editions, my goal is to introduce new ideas and look for a path forward. Download and read the MIT Sloan Management Review Research Report article here. Share your thoughts in the comments section below. Don’t be a stranger. If you like, reach out directly at firstname.lastname@example.org.