D uring our Beeline conference in April, I made 10 (boldish) predictions about the future of technology.

Number 5 on that list was:

Large corporations will become smaller, with swarms of temporary teams.

I have a couple of reasons why I believe this will become a reality sooner than later.

First, larger companies have issues with size.  They grow in the good times and shrink in the bad.  Of course, smaller companies have the same issue, but it’s not front-page news.  For Fortune 500 and Global 2000 companies, layoffs create brand problems.  In a climate that features what’s been called “The War for Talent,” that’s problematic.  Hiring in times of growth and firing in times of decline is not a strategy.  Or it shouldn’t be.  Imagine the following conversation:

CEO:  Our strategy is going to be hire and fire in the foreseeable future.  When our quarterly bottom line hits 10% growth, I want to hire 10% more people.  When it slims to 0% or negative, then fire all of them.  Let’s publish this in all our social media.

Marketing:  But, that’s insane.  No one will want to come work for us.  Especially if they know they are in that 10% bucket.  Every quarter we don’t hit our numbers, we’ll have some sort of publicity crisis.

CEO:  How is that different than doing this every few years?  At least here we can acknowledge that it’s our strategy, as opposed to having to apologize for it.

Marketing: [sigh]

A much better strategy is to keep the company size as small as possible and hire swarms of contingent labor to fill in needed project gaps.  Working side by side with full time employees, these swarms provide all types of services, from expert to day labor.  But, the biggest boon for companies will be in allowing swarms to perform work that normally would be considered ‘too important’ to outsource.  And that leads me to the second reason.

One of my favorite websites is www.kaggle.com.  It’s a Data Science website that features competitions created by major companies and government, such as Google, Mercedes-Benz, and the U.S. Department of Homeland Security.  Teams (let’s call them swarms) create solutions to problems posed by the companies.  Winners of the competitions can make a significant amount of money, in some cases the purse is millions of dollars.  How the swarms are formed, and the makeup of the swarm is irrelevant to the company.

What is relevant?  The project must be well defined.  Each project on Kaggle has:

·      Start and end dates

·      Required outcomes

·      Relevant information (in this case, data sets)

·      Published prize money to be awarded on successful outcome

·      Evaluation criteria

·      Rules of engagement

·      Discussion and leaderboards

That’s about it.  There are other features specific to this type of competition, but in general, the guidelines could pertain to almost any work.

The major difference in the Kaggle model and a normal outsourcing project is who takes the risk.  In the traditional employee relationship, the company takes the risk by hiring either full time or contingent staff to augment a project.  In the swarm scenario, the risk is placed on the swarm itself.  If they compete and win the project, they get paid.  Otherwise, they get nothing.  In order to get more projects adopted by swarms, that risk profile will need to change somewhat.  Companies will have to take on some monetary risk in order to get the right swarms engaged.  But the big payoff would remain in the hands of the individual swarms that produce the best outcomes.  The company gets an excellent outcome with a known end date and goal – something that doesn’t always happen in the existing model, as projects often overrun both timelines and budget.

I do believe major transformation is on the horizon for employment models.  Or perhaps I should say “A swarm is a-coming.”

To learn more, read this Ardent Partners report which describes the “ultimate optimization of work” and “perfect storm” of economic, talent, and market shifts that are paving the way for a new era of work optimization.

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