W2? 1099? C2C?

One of the questions I get asked most often from those considering contract work is whether to work as a W2 contractor or should they consider 1099, or incorporate so they can bill corp-to-corp (C2C).  The answer is – it depends – and it mostly depends on you.

If you are going to contract long term, or you have a particular expertise that you sell, eventually you will move from working as a W2 Contract Employee to being Independent / Incorporated – in other words: A vendor.  These are not mutually exclusive, BTW. When you’re a vendor that means that you could be billing on a 1099 basis or you could be incorporated and use your corporation to bill the agent or client corp-to-corp (C2C). 

When you choose to bill as an independent vendor that means you are viewed as a business, which is a separate legal entity, and completely different from being an employee. When you’re independent, you have all the privileges and responsibilities of a business owner.

“Responsibilities” is the key word here:  If you choose either 1099 or C2C, you will take home a lot more money than you would as a W2 Employee. But if you are not prepared to handle the responsibilities (and risks) of being self-employed, mo’ money mo’ problems.

Whether you are a sole proprietor, in a partnership, or a principal of a corporation, if you are deriving “Schedule C” income, you are responsible for obtaining business licenses, paying business taxes, keeping accurate records, maintaining general liability, and other types of insurance.  If you’re working as a vendor, you may need to purchase and maintain your own tools, equipment, prepare your own contracts, invoices, and track your payables and receivables. Some clients will provide you a 1099 form for taxes; some do not. Sometimes they’re accurate; sometimes not.  Regardless, you are responsible for an audit trail of your gross receipts and expenses, maintaining bank records, and insuring you adhere to all applicable laws. If there is a discrepancy, you need to be prepared to prove everything.

When you are independent or incorporated, you are a vendor. Instead of a job description, you have a statement of work (SOW). The SOW details what you are to accomplish for the client, a time frame for doing so, and what are the payment and acceptance criteria. SOWs can be very general or very specific. There’s no “standard” SOW. Its specificity varies by the complexity of the project and your relationship with the client.

When you are a vendor, the client cannot dictate the manner and means by which you complete your work.  So, if you wanted to assembly your PB&J in a different order in your kitchen that is your prerogative. The client can only accept or reject the work.

Most importantly, if you are billing as independent or incorporated, you do NOT have the same legal protections as you would if you were a W2 contract-employee. You are a vendor, just like the Crystal Geyser guy. If the customer decides to go with Sparkletts, Crystal Geyser doesn’t file for unemployment. If the delivery truck gets stolen, Crystal Geyser doesn’t ask the customer to buy them a new one. Similarly, like the Crystal Geyser vendor, you also have an implied warranty with your service.  If something goes wrong, your service is defective, you drop your Pepsi on someone’s laptop, it’s not a “My bad!” you are financially liable for that expense.  If your work is on the critical path of a project, be sure to talk to an insurance agent and your client to ensure you have the coverage you need.  If you own things – like a house – and want to keep it, you’ll need to incorporate.

You want to run a business?  Make big bucks?  We live in a litigious society. Don’t take chances.

Unlike W2 workers, your client will want to pay you every 30 days just like they pay all their other bills. But, what if your client doesn’t pay you in 30 days? What if they pay you in 45 days or 60 days?  Or not at all? How long will you keep working without being paid?  A week?  A month?  Two months? How will you collect if they don’t pay? (A big concern in today’s “virtual” world.) What if they claim your work is defective, and they refuse to pay?   Similarly, who pays for your travel expenses? Are you putting them on your own credit card and waiting for client to reimburse? What if they don’t reimburse you or take months to do so? I’ve worked in big corporate offices my entire life: You’d be amazed how many rich companies don’t pay their bills on time.

If you suffer from people pleasing, can’t say no, can’t write a contract, could never see yourself suing someone, or all this sounds just too unpleasant for you, don’t waste time billing as an independent or incorporated contractor. I’ve listened to lots of stories (mostly from women I’m sorry to say) who thought they could handle this kind of relationship, and ended up being taken advantage of by someone who was really, really going to pay them as soon as <somecrisis> passed.

There’s a certain amount of cold, hard, capitalism required when you truly work for yourself. I can assure you that no one is more unpleasant than someone who owes you money. You can’t put up with excuses. Other people’s bills and emergencies and sick kids are NOT your problem. Always track your hours and tasks; always keep copies of your work.  Be prepared to withhold work until you are paid for it.  Be prepared to walk off the job if you’re not paid on time, and be prepared to sue. 

If you have a tough time sticking up for yourself, can’t handle people’s anger, or you’re afraid of being “mean,” being a vendor is absolutely not for you.

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Excerpted from: The Temp Job: A Survival Guide for the Contingent Worker. Copyright 2021. Pierce/Wharton Research, LLC.  All rights reserved.  No part of this post shall be reproduced without permission. info@piercewharton.com.

Four Reasons People Just Don’t Want to Work (for YOU!)

Employer’s are facing a long-overdue reckoning, and like all reckonings, rather than reflect inward, the focus for many has been external. They’re angry at their inability to control events, and blame others for their predicament.

The blame du jour: Lazy people, who don’t want to work…

……for you.

(Never has a prepositional phrase been more important!)

Here’s four reasons why …..

You’re Disinterested and Indifferent

Consider a job applicant who is bored, disinterested, and going-through-the-motions in the interview. Even worse, what if the applicant were rude, curt, or clearly not listening? Would you hire them? Of course not.

Employers are being interviewed by labor, and they’re blowing it because many of your hiring managers simply do not know how to behave in an interview. They’re rude, disinterested, and entitled. As a result, people just don’t want to work for you. Do you blame them?

You Took Too Long

You’re bored, disinterested, and then call me three weeks (three months!) later and say now you’ve decided to hire me, and I need to call you back right away….yeah, right.

The days of “keeping your resume on file…” went out with the Selectric typewriter. It doesn’t work that way. (It really never worked that way.)

A tight labor market is like a tight housing market. Be prepared to act quickly, compromise, and pay over asking. If you can’t do that, stay out of the market until you’re serious about buying.

You Came in Under my Minimum

Too many employers tell you they can pay your asking price but really have no intention of doing so. Similar to the housing market, the idea is that once the applicants’ commit to the hiring process, they will become so “invested” in closing the deal, that they will capitulate on their original ask for compensation.

This is not the market in which to call people’s salary “bluff.”

If I tell you that I’m seeking $45/hr, you drag me through weeks of interviews only to offer me $43/hr (wink), I’m not amused or impressed with your negotiation savvy, I’m pissed.

Result: I ghost you. I tell all my friends what an asshole you are, and (possibly) post a negative Glassdoor review – permanently damaging your brand. All for the bargain price of $2 an hour. Well done.

You’re Too Far Away

If you’re in a business where I can’t work virtually, the time and distance of my commute may make any job – regardless of compensation – difficult to fill. Restaurants in expensive urban areas, or hard-to-get-to resort communities have the additional challenge of the high cost of living making it unlikely any of the help would be housed in the immediate vicinity.

Consider a commute bonus, or other ways to mitigate that expense for your employees. Otherwise, you’re going to be short-staffed, and the staff you do have will be overworked making them much more likely to quit.

Finally…

This labor shortage didn’t just happen – it’s been coming for decades – the perfect storm of Covid, bad corporate behavior, retirement/death, and ubiquitous social media has weakened the stool upon which capitalism has balanced for decades.

Historically, businesses never worried about competing against one another for talent. Now that they must complete, many simply do not know how.

If you’re still clinging to the notion that the tight labor market is about lazy millennials or enhanced unemployment benefits, and any minute we’re going to “go back” to the way it was, you’re flat-out wrong. Our world, has fundamentally changed, and if there’s one thing we know about change is that it never changes back!

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If you enjoyed this article, check out some of my my posts and podcasts on employment, interviewing, and the contingent job market. Thanks for reading!

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Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Phishing for Employment Docs

Of course, you would never provide a telemarketer or Nigerian Prince your passport, credit card, or banking information. Those we know. But what if it were a Zoom call, and then you were offered a great job? How much diligence would you do before you turned over your ID, SSN, DOB, and a whole bunch of other personal financial info?

Phishers are using Video

Here’s how it works: You are a high-income individual. You are contacted by a head hunter and asked to interview for a position at a desirable, well-known corporation. The video interview goes well, and a day or two after the call, you receive a verbal offer (via the agent or “implementation partner”) and a request to start ASAP. Congratulations! So happy for you!!  Now, please provide passport, social security, bank account, DOB so they can expedite your offer letter. You never hear from them again.

Signs of a Phisher

  • There’s a HUGE rush for you to start; they need your info ASAP
  • Everything is verbal. You email, they call. You ask for docs, they call.
  • They want a “deposit” for your equipment, a credit card is fine…what’s the security code?
  • Staffing or “implementation partner” has a thin website. No corporate officers, no street address, no phone numbers, no contact information.
  • You’re not 100% sure to whom you report.
  • Offer, contract, or SOW is coming soon. When it does, it looks like it was put together by a 3-year old.

Trust Your Gut

In all cons, the mark inevitably says, “I knew something was wrong..…” Closely followed by, “But, everyone was SO nice!”

The con is counting on your want of the job. Stay focused. Even if its a dream job (and they always are), if something seems off, don’t ignore your Spidee-sense! Cons are charming and charismatic; that’s how they gain your CONfidence !

Remember: Just because there’s a person on video asking you questions that doesn’t mean they are who they say they are. Anyone can ask a question, and far too many interviews are completely one-sided! 

Cons choose common names, so they’re hard to Google. Others Catfish legitimate LinkedIn profiles, especially if they lack profile pictures. Did the “client” vid-in or not? Do you have legitimate contact information?  Multiple email domains with multiple parties? Offshore? If so, you have reason to be concerned.

Do Your Diligence

Before you turn over your ID and financial information to a staffing agent or prospective employer, be sure that you’ve done your diligence!  You have a real contract, employee handbook, and benefit package.  Ensure you understand who owns the company, where they are physically located, and who, exactly, is responsible for paying you.  If you have any concerns, be sure to contact your prospective manager or client contact. Get all your questions answered – in writing – before you turn over any of your personal information.

Say Nothing

Once you’ve discovered the con, cut-off all contact, and resist the urge to call them out on it! They will only assure you that you are mistaken, and details you impart about how you caught on, what they did wrong, where they were sloppy, will only help them to improve their process.  Check your ego. Click delete. Select Block. And, keep your brilliance to yourself!

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If you enjoyed this article, check out some my posts and podcasts on employment, interviewing, and the contingent job market. Thanks for reading!

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Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Three Reasons Your Agile Practice Isn’t Agile

A strong Agile practice is a three-legged stool comprised of the Product Owner (the What), the Team (the How), and the Scrum Master (the Process). These roles are equal to and independent of one another.

In other words, there is no hierarchy in an Agile team; there are workstreams, and workstream owners. No workstream is above or below more significant or more important than another. Each has its own purpose, its own outputs, and its own responsibilities.

In a high-performing Agile team, there are no bosses – there are only teammates.

If your three-legged Agile stool is wobbling, consider these most common root-causes of poor performing Agile teams:

The Tyrant or Timid Scrum Master

No position is as misunderstood in the Agile practice as the scrum master. I often ask prospective clients why they’re hiring a scrum master (as opposed to a project manager or business analyst), and I’m no longer surprised that most cannot tell me why, or what, exactly, the role is responsible for (except for the events) or what the differences are among the PM, BA, and scrum master roles.

The most common answer is, “A scrum master is a project manager, except for Agile.” Dead wrong.

The scrum master owns the PROCESS. He does not determine what is built (that is the role of the PO), nor how to build it (that is the role of the team). The scrum master ensures a consistent, transparent process (timekeeping, utilization, governance, metrics.) He ensures accountability, keeping people honest (in other words, calling them out on their shit.) He demonstrates leadership through questions, coaching, by defining workstreams, R&Rs, working agreements, DOD, DOR, and using the word, “No.” It’s less about servant and more about leadership.

The scrum master is the “Servant Leader” of the team. Unfortunately, too many people stop at the word “servant,” especially if the scrum master is female or an immigrant.

As a scrum master, it’s not my role to “whip” the team. I’m an advocate and a coach. In some ways, I’m unconcerned about the project’s “success” or “value.” That’s not my lane. I trust that the PO has determined/documented the value of the effort, the success criteria, and KPIs. If that’s not done, I’ll ensure it is done, or I’ll escalate it as a risk. I might think the project is a huge waste of money. That’s not my call as scrum master.

The leadership of the scrum master is easily corrupted if the scrum master has a direct report relationship to any of the other parties in the team. It’s also corrupted if the organization hires a scrum master when it really needs a product owner, an analyst, or an architect — this is all too common with “Purple Squirrel” hiring managers in many tech organizations.

The Faux PO

While letting the team continuously iterate some BPOs “mind dump,” is a common ailment, even more debilitating is the old-school, top-down manager posing as a Faux PO.

The Faux PO is common in the Ghost Ship Agile practice, which means that from a distance the Agile Ship seems like it’s sailing along, but when you look a more closely, you see no one is on board.

The Faux PO tells you that the jury is still out on this Agile fad. He’s not convinced it works because the team is too incompetent to complete anything on time, which is why they need to be managed closely. Meanwhile: No metrics. No Dashboards, No backlog. No working agreements. No Definition of Ready (DOR). No Definition of Done (DOD). No separation of development from analysis. No Requirements. The Faux PO isn’t going to sully himself documenting requirements in JIRA. Plueeze….clerical tasks are for women and subordinates who can take notes while they hold court.

The Faux PO’s unwillingness to actually DO the work of being a bona fide product owner doesn’t mean that work goes away. Instead, like a house without front steps, everyone has to find a way around the Faux POs lack of output. What choice is there? Calling your boss out for being lazy AF isn’t really an option…

The Faux PO excuse is that he is much too important for events and deadlines. Because of this, there’s no cadence to the work. The Scrum Master/ Servant arranges a ton of last-minute, ad hoc brain storming or demo sessions to accommodate the Faux PO and other people with titles and opinions. At these meetings, the Faux PO talks at, past, and through the team, (who sit on mute, and stopped offering opinions long ago). No need for backlog refinement or DOR. The Faux PO tells the team exactly what to do, who to call, what to say. If they have questions, they can email the Faux PO for more detailed direction on how to accomplish their work.

But, I Like Being the Boss!

When I’ve suggested to Faux POs that the direct report relationship they have with the team is corrupting their Agile Practice, the Faux PO is incredulous! Don’t be ridiculous! They are natural leaders and visionaries! Their leadership is what is keeping this boat afloat. The team would be rudderless without them.

If everyone on your Agile team reports to you – you’re not an Agile team!

I’ve asked Faux POs if they would give up their direct reports and move their “vision” to another team as a loose-matrix product owner. They won’t. I’ve also asked if they would hire a bona fide product owner, who doesn’t report to them, and can make decisions independently. They won’t do that either.

So, I think we know what the deal is here – it’s called control – and if managers and executives are dictating the manner and methods by which work is accomplished by the team, then you’re not an Agile Shop – you’re old-school, command-control, boss-helper, my-way-or-the-highway shop, and it’s probably not going to change. Why? Maintaining a status quo (especially when you’re benefiting from it) is easier than change. Being a boss is easier than being a teammate. Hierarchy is easier than egalitarianism.

Bosses like being the boss. It’s awesome having people do what they’re told, when they’re told, without pushback or question. If only their wife and kids were like that…..

The Faux PO is a very common root-cause of Agile failure. In a risk report, it would fall under “executive-level support.” or “Unwillingness to adopt new systems and processes.” If there is an unwillingness to acknowledge these entitled behaviors or modify organizational structures, no Agile transformation can be had.

Architect as King

The Architect as King organization is really the worst of all possible Agile worlds. The team builds whatever it wants – the business can take it or leave it. There are no repercussions for crappy work, technical debt, or missed deadlines. UAT? What’s that? Open a ticket with the service desk….

The entire team, scrum master included, reports to an invincible lead, architect, or engineer, who doesn’t GAF about your process or product or metrics. You don’t like it? Do it yourself! Oh, you can’t? Oh, well. Scrum Master? Product Owner? Plueeze, The team reports to me, and your name is NOT on my performance review. Don’t piss me off, or I’ll quit, and then you’ll really be screwed….

From a product, user, and process perspective, the Architect as King organization is DOA for an Agile practice. Hire a technical writer to document the build. Anything else is a waste of money.

As amazing as this sounds, Architect as King is pretty common – especially in private or mid-cap companies. And, when I encounter a dev lead or principal architect who has been with one of these organizations since Christ was a baby, I know that this will be dev-driven development, an inelegant user experience, a shit-ton of technical debt, and I also know that nothing going to change until the king is deposed and replaced.

Final Thoughts….

It’s called an Agile practice, not an Agile perfect, and just like anything that requires practice, you’re going to suck at it the first 1000x you try to do it. But, you WILL get better. Things are never perfect, there’s always more to do. That’s why we have retros. Over time, you’ll begin to see how and why one team is better than another, why a coach is different from an owner, and how having a player in the wrong position or a hot-shot who hogs the ball can kill the team and ruin the game.

If you’re in software or tech, you’re going to have to learn to play the Agile game. Learn everything you can about it, and keep practicing. Agile is part of good project management, and good project management is Agile!

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I hope you enjoyed this article, please check out some of my other posts and podcasts on Agile and the contingent job market. Thanks for reading!

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Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Four Reasons No One is Responding to Your Job Posts

The job market is on fire. Not only are we experiencing the Great Resignation, we’re in the middle of The Great Reshuffling, which will result in The Great Consolidation. If you’re serious about keeping your doors open, a “post and pray” recruitment strategy isn’t going to cut it. Want to get people in the door? Here’s four reasons no one is responding to your job posts:

Your Application Process

Every job site allows employers to choose a “quick apply” or “one-click-apply” option. Use it. Being user friendly and mobile-friendly is a must. A huge number of people ONLY have internet access through their phone. Any company that is insisting applicants go to their site, set-up an account, (some with multi-factor authentication! Really?!), and then populate several forms (with mandatory fields like month and date of my degrees and jobs), is likely to have very, very few applicants.

Also, if you’re going to use Quick Apply, use Quick Apply! Employers who embed additional questions into their quick apply aren’t clever, they’re disingenuous, and it makes me not want to work for you.

Finally, there isn’t a single recruiter out there who thinks AI screenings are helping your efforts. There’s a reason people went to college! Read the resumes! Most importantly, focus on what the applicant has to offer, not poking holes into their background and creating a checklist of what they don’t have.

Essay Questions

I know it’s super-easy and awesome to have each applicant write an essay on how they would deal with difficult stakeholders, or describing their last project, or even telling you why they want to work for you (why not all of them?) That way, you can review, discuss and critique each response and each candidate at your leisure — you don’t want waste your precious time calling or emailing anyone. Essays are perfect for you…but here’s the problem: It’s all about you, and it smacks of entitlement. Worse, it tells me that you don’t see writing as work, which it is. To do it thoughtfully and well takes (my) time, which is the same as (my) money.

Essays are perfect for you…but here’s the problem: It’s all about you, and it smacks of entitlement.

Essay questions embedded in ‘quick apply’ options are infuriating because you can’t opt out of the question or skip ahead. So, since I can’t opt-out of the question, I close the browser and opt-out of the application. It’s usually too late, though, because they’ve got my email, and I’ll be hit with a ton of notifications reminding me to complete my application (which I don’t).

Interestingly, you’d think it would be the big enterprises, and the highly-coveted employers who insist on the “tell me why I’m so beautiful” essays. Nope. It’s the small shops and public employers who have the most hoops when it comes to applying, and that’s why no one does.

Your JD Lacks Focus

A lot of JDs are a laundry list of nice-to-have experiences intermingled with tasks and requirements. Many applicants – especially women and “freshers” – disqualify themselves because they don’t meet all the requirements. More experienced applicants, note the confusion and disconnect with reality, and pass on applying.

If your JD is a laundry-list of tasks, requirements, and nice-to-haves thrown together in no particular priority, your lack of focus and thoughtfulness is a BIG red flag to any quality applicant.

A good JD should be no longer than a page. It should clearly describe the core responsibilities, and to whom the position reports. Education, credentials are clearly stated, and requirements are listed in order of priority. The Must have Security Clearance line should be at the top of the list of requirements, not the bottom! Don’t use the “Preferred” section to obfuscate real requirements (Mandarin speaking “preferred” when your entire team is in Hong Kong? Stop already!)

Most importantly, stop looking for unicorns and purple squirrels; you are not the prettiest girl at the dance, and your hubris is counterproductive to building a real team. Whenever you hire anyone, you need to be prepared to compromise and change both yourself and your organization based on the talent available in the market. If you don’t want to change…..

Bad Habits

Why are so many employer’s struggling to hire? The answer: Bad habits. Zero training on how and what to hire. Zero training on how to interview. Toxic managers with high-turnover permitted to hire and fire “at will.” With human resources the most important asset a company can have – in 2021 – how could this be?

First, let’s recognize that for the past 100+ years, employers have never had to compete for labor. Sure, they said they wanted to be “attractive,” but that’s not the same as being competitive. We know lack of competition stifles the invisible hand of the market, and the over-supply of labor verses limited jobs has resulted in a ruling class of corporate executives — America’s Royalty — whose every want and need must be accommodated because they are “job creators.”

Historically, businesses never worried about competing against one another for talent. Now that they must complete, many simply do not know how.

Labor, unlike employers, has been forced to be nimble and adaptable. We’re used to fierce competition, no safety net, and changing direction quickly. Workers have had decades of practice and advice on how to compete for work, how to write good resumes, how to answer questions in interviews, and most importantly, how to be a subordinate and compliant worker. What training do employers have in how to hire people and how to be a good employer? None.

Employers need to act quickly and level-up their hiring game. How? Create hiring committees, dump toxic managers, bottom-up your culture, hire professional recruiters and coaches, finance real retention strategies. Most importantly, understand that your interviewers are brand ambassadors, just like your salespeople. They represent The Company, The Culture, and The Brand. A bad interview experience can damage your brand – permanently – and that is not something you can afford in this highly-competitive labor market.

Final Thoughts

This labor shortage didn’t just happen – it’s been coming for decades – the perfect storm of Covid, bad corporate behavior, retirement/death, and this ubiquitous social media has weakened the stool upon which capitalism has balanced for centuries. Covid’s timing could not be more remarkable. It has jolted our attention to the global economy, our reliance upon technology, the importance of essential workers, and a Kafka-esque understanding that we are more than our labor.

No workers = No customers = No business

If you’re still clinging to the notion that the tight labor market is about lazy millennials or enhanced unemployment benefits, and any minute we’re going to “go back” to the way it was, you’re flat-out wrong. Our world, has fundamentally changed, and if there’s one thing we know about change is that it never changes back!

When it comes to sales, businesses understand competition. That same focus and concern must carry over into resource management. If they can’t compete, just like in sales, they will be out maneuvered by those who can.

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If you enjoyed this article, check out some my posts and podcasts on employment, interviewing, and the contingent job market. Thanks for reading!

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Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Tight Labor Market is Here to Stay

If you’re clinging to the notion that enhanced unemployment is the reason you can’t hire help, let me be the first to say you will find yourself short-staffed – if not closed – come this time next year. Here’s why….

A LOT of People Died; They’re Not Being Replaced

Covid has cost us more than 600,000 lives, and it’s not over yet. The ripple that those deaths have caused throughout our country and culture hasn’t even been examined never mind calculated. The loss of a parent has enormous repercussions on a family – not just for a few months, but for years. Worse, we’re all getting old. Our crap diets, epidemic of obesity, Type 2 diabetes, and a variety of other “behavioral” and “non-compliant” health issues will contribute to the rapid exit of many from the labor market.

Declining birth rates, along with a declining sperm count, has been a back-burner socio-economic issue for decades. China’s lifted the one child rule. There’s a huge shortage of women in both China and India, and some countries are now encouraging motherhood via subsidies and other programs.

I’m not sure this will make much of a difference in the birthrate, though. Seems that regardless of incentive, wealth or opportunity, women choose to have fewer or no children, and that trend will likely continue. Maybe motherhood isn’t the greatest job a woman can have.

Wealth Transfer

You think millennials are spoiled and entitled now? Wait until they inherit a ton of money….

We are on the cusp of the greatest generational transfer of wealth in our nation’s history. As Baby Boomers die, they are transferring their wealth — not necessarily to their children — but often to their grandchildren. According to the WSJ, the average inheritance is a little over $200K. That is a life-changing amount.

Money gives you freedom. Money gives you options. Money gives you the ability to take risks. Money makes it whole lot easier to tell people to fuck-off.

Business owners take heed: If you’re difficult to work for and/or your business depends on a never-ending supply of people who are poor, desperate, or have few economic options, you may need to reconsider your business model.

Retirement

The tail end of the Baby-Boom generation (those born in the late 1950s early 1960s depending on who’s talkin’), is nearing retirement age, which can range from 62-72, or earlier, depending on how much money you want to pull from Social Security and your other accounts.

It’s estimated that Covid “forced” about 2 million people into retirement. Some could be enticed back into the job market, but most of these are permanent life changes – they will never return to the labor market.

Money managers are quick to point out that people can’t “afford” to retire, and you are likely to outlive your money, but that’s mostly their commissions’ talkin’. You’d be surprised how little you need to live on when you only have two old people to feed, and all your stuff is paid for.

Nevertheless, depending on the nature of the work and people’s health, some of boomers, of course, will continue to work. However, those are more likely to be at the very top-end or very bottom-end of the income spectrum. The rest of us will sell our homes, move to someplace cheaper, and be done with working for “the man” every night and day.

Small City Employers are at a Disadvantage

Gone are the days that a company in Des Moines or Charlotte or Salt Lake could pay less than a company in San Francisco or New York. If your profession is in demand, and you can work virtually, no longer does your compensation and career path need to be stifled because you want to live in a smaller city.

This is the start of a golden age for labor. Companies that pay more and support virtual workers will suck talent out of smaller markets – to the detriment of those companies headquarter or office-ed there.

Regional pay scales are on the shelf next to the fax machine. No one cares where your office is. If you want IT talent, other highly skilled, gold-collar workers, you’re going to need to level-up your compensation, or you are not going to be able to compete. And, if you can’t compete? You’re not going to be in business.

The Commute? That’s Comin’ Outta YOUR End!

Jamie Dimon, a champion of capitalism (until he’s short on cash, then he’s first in line at The Fed), has “demanded’ JPMorgan/Chase workers return to on-site work and Jamie’s “culture,” adding that if people didn’t like the commute, that’s “too bad.”

Maybe Jamie isn’t good at math? Let’s say you have a 45-minute drive to work, and are on-site five days a week (eight hours working, one hour unpaid lunch), that’s 52.5 hours a week “dedicated” to work – minimum. Men, add in an additional hour of “prep” time; women 1.5 hours of prep each day and now you’re up to 78.75. In other words, almost double the amount of time compared to the hours you are paid for….!!

So, if you’re making $35/hr your real hourly is closer to $17/hr – before taxes and before other expenses and lost opportunity costs, like your side hustle or education. That’s why the poor stay poor. And, that’s also why I’m not going to drive to your office, or commute to a restaurant, or hire a sitter (if I could find one). I think I’ll just stay home, cook from scratch, take on-line classes, and look for job where I contribute 40 hours and get paid for 40 hours. That’s just a smart business decision. It doesn’t make me an entitled ass-hole who doesn’t want to work.

It’s not about the commute — it’s about being paid for all my time. I’m contributing time (which, I believe, is the same as money), to enhance Jamie’s “culture” – whatever metric that is. However, all that good culture money is coming out of my end, not Jamie’s. He’s all up for the “free” culture, but I’ve yet to hear him say that his culture is important enough that he’s going to part-with-some-cash for it.

I believe in karma (and capitalism), so I feel confident Jamie and his other banking buddies will receive a big message about onsite work (probably when one of their cloud APIs goes down in a smoldering heap of technical debt). At that moment, they will see that labor isn’t as forgiving as The Fed. I think Jamie will also learn that he’s not a home-town hero, a lot of employers are more than willing to hire talent from Ohio.

Finally….

Here’s a universal truth: When you’re rich, life doesn’t change very quickly or very radically. For the affluent, things roll-along, even in the worst of times. Because many wealthy capitalists haven’t personally “felt” the change Covid has brought to the labor market, they don’t think that it’s real. They don’t understand this “entitlement” of labor, or that the world is fundamentally different now, and why we just can’t order people to “go back” to our good-old pre-Covid cubical culture.

Even before Covid, the rise of gold-collar, knowledge workers was beginning to reverse the employer advantage in competitive labor markets like tech and healthcare. Crisis, as a cultural accelerant, has firmly flipped the advantage to labor – and economists predict it’s going to stay that way for a l-o-n-g time….

Labor has had decades of opportunity and advice on how to be a good employee. That cannot be said of employers. Most employers are spoiled, entitled, and have a long history of a “Doritos” style of talent management (“They’re just people, we’ll get more…”). And because so many employers historically have shown zero interest in being a good employer, now they can’t seem to hire anybody.

The tight labor market isn’t about lazy millennials or enhanced unemployment benefits. Things have changed, even if they haven’t changed for you personally. Employers need to accept reality, and level-up their hiring game or they’re going to be out maneuvered by those who will.

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If you enjoyed this article, check out some of my other posts and podcasts on employment, interviewing, and the contingent job market.

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Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Why You Can’t Hire Anyone

The Great Resignation and The Great Reshuffling have converged. It’s official: There’s a shortage of labor. And, the labor you do find wants to be paid more, and if you don’t pay them more, they’re going to quit.

If you need people to run a business, and you want to continue to run a business (because, the thought of you being someone else’s employee (gasp!) is just too horrifying a scenario for you to consider!), here’s where to start:

Lose the Attitude

The “Impress Me” Interview

My headhunter friends are fond of reminding their (predominately white, male) clients that they are, “~not the cutest girl at the dance.” But, even if you’re smokin’ hot, there’s nothing more off putting than someone who thinks they’re better looking than they really are. And, it’s amazing how quickly those killer looks become invisible when you’re in a relationship with someone who is patronizing and entitled.

Too many employers grossly mis-over-estimate their attractiveness at the Employer Cotillion. They think everyone wants to dance with them. They don’t. You’re not doing anyone a favor when you hire them. This is a transactional relationship, not personal one. You’re simply buying time from a service provider to perform a service that you need. And, often times, it is a service that you cannot do yourself. Your hubris and entitlement is counterproductive to building a high-performing team.

Sadly, attitude and entitlement seems inextricably intertwined with implicit/explicit bias. They’re not dismissing you because of your gender, your accent, your age, your college, your clothing, your life choices. They’re dismissing you because you’re not a purple unicorn, and because they’re paying you (!) they WANT A PURPLE UNICORN, dammit! (Note: they have no barn, no feed, and no idea how to care for a unicorn, but they want one nevertheless)

Let me assure every employer, big or small, prestigious or unknown, that your “impress me,” entitled hiring manager interviews are killing your recruitment program, and your brand.

You’re Lookin’ for Love (in all the wrong boards)

I Don’t Feel a “Connection” Interview

Liking the help isn’t listed on the job description as a requirement, but it’s always the #1 requirement for every job. I’ve lost count of the number of folks I’ve listened to grumble about how they’re short staffed, how they can’t find anyone, and how they’ve interviewed sooooo many people, but well, they don’t know, but, ahh, err, I just didn’t feel, aahh, err, a “connection” with anyone.

Enough with the “connection”! This isn’t Tinder. You need someone to manage your SAP implementation, not marry your daughter. You want connection with someone? Post on Match, not Monster.

Looking for love is the root cause of enumerable workplace disfunctions. Too often likeable incompetents (“Someone I’d like to get a beer with…”) are hired rather than awkward, aloof experts. When you consider the competence/congeniality axis, incompetent sweethearts can suck the life out of your company’s bottom line faster than any irritating high performer.

You want to stay in business? You want to grow your business? Focus less on finding a love connection, and focus more building a team with solid skills.

BTW: If you want to hire talent, you need to learn how to manage and retain talent – they have options. When’s the last time you went to a seminar or picked up a book about how to be a better boss?

Your Dream Doesn’t Pay My Bills

What about MY Dreams!

NOTE: Entrepreneurs and small shops: People work for the money. Stop looking to them to finance your “dream.”

The my-dream-must-be-your-dream types generally start their interviews with questions like, “Why do you want to work here?” “Why should I hire you,” (also part of entitlement), or the puppy-dog eyes, and deep, soulful, sigh, “So, tell me, why [companyname]???”

It’s like meeting a blind date, and the first question asked is, “Why are you soooo into me?” Or getting a bid from a plumber, and then asking him, “Sooooo why my garbage disposal??” Nothing could be more irritating.

Am I some kind of dream-killing Nazi? No. I’m a person who is paid to manage time. And, when I hear someone ramble on about the “dream,” what I hear is “~~there’s lots of long days, unpaid overtime, and probably a few unpaid weekends as well.” At no time does anyone ask about MY dreams…

More than 90% of start-ups fail in less than five years. Those that make it past the five year mark don’t catapult to the top of the NASDAQ. More often, they continue to struggle with cash flow, sales, and customer retention. You know: the stuff dreams are made of….

When I look back at the thousands of hours donated to someone else’s “dream,” I realize that what I was really doing was compromising my own dreams, my own career, and worse, my own finances for an “entrepreneur” with a corporate AmEx card and a BMW that never ran out of gas.

My dreams are different now. Now, I dream of a matching 401K.

It’s All About The Benjamins

I Work for the Money!

You can couch it however you’d like, but people work for the money. Period. And, your dreams, ping-pong table, and Thirsty Thursday’s Kombucha pizza parties aren’t going to make up paying 30% below market.

While gold-collar workers may chose more cutting edge or risky work over compensation, they are the few and the lucky rich. Most of us, and especially those at the lower end of the pay scale, we don’t have that choice. For us, it’s all about the money.

Interestingly, I’ve noted that the CEOs bitching the loudest about the Invisible Hand of Capitalism aren’t losing people because they got an extra $30k at their new gig – they’re losing people for an extra $1-2 an hour! Less than $100 bucks a week! That’s not a lot of money for someone who routinely picks up bar bills bigger than that, but let’s pretend you’re not spending your money on $10 beers. An additional $400 a month is enough to cover a car payment, utilities, and a cell phone bill. An extra $5 an hour is more than $10K a year, and while it’s not a life-changing amount, it’s almost an extra $1K a month – half of an average mortgage payment. If you add in a boss who isn’t an entitled asshole, you can see why people are saying, “I’m outta here!” Cleaning hotel rooms, restaurant work, customer-service — those jobs are pretty much the same no matter where you go.

It’s Your Brand

Are you ready to accept reality, and up your hiring game? Here’s what you can do: Hire a professional recruiter. Listen to his/her feedback, and then DO to what s/he says. Be courteous and respectful to all applicants, even the ones you don’t want to hire. One bad interaction can sour a person on a company for the rest of his/her career! AND, if you’re going to be an entitled jerk to your applicants, don’t think for a second that they’re not going to tell their friends, family, and social media contacts about it.

Every interaction, every touchpoint is a chance to enhance or damage your brand. No where is that more important than in the hiring process.

Ensure all hiring managers and interviewers are trained. No one should be a “Brand Ambassador” for your company or be involved in hiring decisions until the are trained. Feedback and mentoring is required. A lifetime of bad habits isn’t likely to change after one training class.

“The world doesn’t owe you a living,” and it most certainly does not owe you a business!! If you’re going to be entitled, insist on free labor to finance your dream, and only hire people you want to have a beer with, finding labor will be very, very difficult for you.

When People Quit, They’re Firing You!

Employers Need to up their Game

Since the dawn humankind, capital has had the advantage over labor. Revolutions, strikes, unions, labor laws, and even unemployment insurance have helped to level this advantage – but the scales were always tipped in favor of the capitalist employer. Those days are over.

Pre-Covid, the rise of gold-collar, knowledge workers was beginning to reverse the employer advantage in competitive labor markets like tech and healthcare. Crisis, as a cultural accelerant, has firmly flipped the advantage to labor – and economists predict it’s going to stay that way for a l-o-n-g time….

Labor has had lots of opportunity and advice on how to interview and how to be a good employee. That cannot be said of employers. Most have zero training in how to interview and little interest in being a good employer – which is why, now, they can’t hire anyone. I won’t be the last to say it: You need to level-up your game or you’re going to be out of business.

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Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Four Ways to Blow your Interview (*for employers)

 Podcast Available on Spotify

I’ve gone on lots of interviews where – at first – I was very excited to be there, but as I watched, listened, asked questions (took and compared notes), that excitement quickly fizzled.

Twenty years ago, there wasn’t much to do about it. There were few jobs and many people who wanted them. It was incumbent upon job seekers to convince employers to hire them; the applicant’s opinion of the job – for the most part – was of little concern. That’s not the case anymore. Now, employers are dealing with both a cultural and economic shift in the global market for talent. For the first time (ever), labor actually has a bit of an advantage in the labor market. The shoe is finally on the other foot: Employers (who used to interview applicants), are now being interviewed by applicants, and a lot of them are blowing the interview!

 Consider the following:

1. What Employers Say…

“This is a tough place to work; you have to have a thick-skin to work here…..”

~What the Applicant Hears…

We foster a culture of disrespect and verbal abuse. Expect to be run over because having an opinion or self-respect will get you fired.

I get the “thick-skin” comment in about 30% of my interviews. This tells me “Bro-House.” Women are subordinate, fart jokes abound, loud voices win, bullying is leadership.

At first I thought thick-skin comments were gender specific (or maybe I seem delicate), but I decided to asked around, and I’m happy to report that guys get the “thick-skin” comment about as often as I do! Whoo-whoo! Hooray for equality! It’s good to know that some companies treat everyone poorly, not just women!

Respect is like air. When there’s enough of it around, no one notices. If there’s a shortage, it’s all you’re gonna think about….

2. What Employers Say…

“I see you’ve changed jobs every couple years. We want someone who will stay….”

~What the Applicant Hears…

This is a dead-end job, and we churn through a lot of people. We’d prefer to hire someone with little ambition who’s happy just to have a paycheck.

Are you ambitious? Do you care about your career and remaining current? Are you interested in learning new skills and growing? Because if you are, this isn’t the place for you.

3. What Employers Say…

“I see you haven’t worked in this <domain>…”

“I noted you don’t have this <credential>…”

“I saw you don’t have this <skill>…”

~What the Applicant Hears…

I’ll need to deal with nit-picky criticism and being dismissed because I’m not good enough. If this employer does make an offer, it will be under market because, well, I’m hardly qualified to work here in the first place! If I’m desperate enough to take the job, I’ll be reminded that I’m less than, and that everyone generously looked passed my woeful credentials.

Note to Interviewers: You went through the trouble to bring someone in for a face-to-face (sometimes in front of a panel). Now, you’re going to call out – one by one – all their perceived shortcomings? Focus on what they can do. You had their resume, you saw their LinkedIn… if they’re not qualified, why did you bring them in?

4. What Employers Say…

“I see that you have some gaps in your employment. For example, in <randomyears>, you only worked for part of the year. What’s that all about….?!?”

~What the Applicant Hears…

I’m more interested in your personal life, and nosing around your health, family, and finances than I am in your work experience, skills, education, and how those qualifications are applicable to the opportunity I have available. Your professional background is less important than my moral approval of you and your life choices.

My father died, I wanted to take some time off. I had a baby, I wanted a more flexible job. I was laid off, I wanted to spend time with my kids and re-think my career. I spent a year designing and building my custom home. I was working on a patent. I had major surgery. My mother has Alzheimer’s, and I needed to care for her…

At best, my personal life is none of your business, at worst you’re seeking to circumvent employment laws that prohibit questions of this nature. An interview is to discuss work – stay on topic…

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For employers: Whenever you are in a position to hire (and pay) someone, it’s natural to feel a little entitled. And while we all seek qualified labor, remember that you’re not the only game in town. If you want the best people, your hubris is counter-productive to building a high-performing team. Your culture needs to be one of partnership, not entitlement.

For applicants: A job is a relationship, and the interview is like a first date. Spend less time thinking about how to impress people and pretending to be someone you’re not, and more time listening and asking thoughtful questions. That way if the position is offered, you and your client/employer can feel confident that you are both making the right decision.

running away

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Copyright 2019 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Should I Quit my Full-Time Job for a Contract Gig?

Dear Plume de Poison,

I’m one of those people who has been sticking it out through Covid at a job I hated 18 months ago. My resume is current, and the job boards are filled with positions that pay more and could level-up my career, but the majority of them are contract, and only for six or 12 months.

I’ve never worked as a contractor before. Should I apply for (and take) a contract job? There’s a lot of them out there, but I feel like it might be step down from being an employee. And, I dread the idea that I’d have to look for another job in six months or a year. What should I do?

– Unsure

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Dear Unsure,

There is no right or wrong choice here, the question is this: What would you do if you weren’t afraid?

You’re right, gig work is a higher risk, but it’s also higher paying, and there’s lot of gigs out there. It’s certainly not a step-down from being an employee. Many highly paid, “gold-collar” experts work only as contractors. If you’re stuck in a dead-end job or dying industry, definitely consider contracting. Contracting offers a way to hop out, acquire some new skills and experience, and level-up your career.

For those new to contracting, know a great gig can be found in a company you might not find suitable as a a long-term employer. For example, you could spent 6-18 months building a software application for an insurance company. That doesn’t mean you want a career in the insurance industry. Similarly, you might desire the stability and culture of public employer, but that comes with the risk that your position could have little private sector marketability, and if (really, when) you lose that job, you could be unemployable.

Being employed is great, but Covid has taught us that being employ-able is much more important.

The contingent workforce has exploded over the past decade. Why? Because CapEx money is much easier to get and manage than fulltime headcount. If you’re going to contract, know your client is hiring a contractor because they do not have permission to add headcount. In many cases, they never will.

Moreover, one of the biggest misconceptions about contracts and contractors is that the contractor’s goal is to work for the client as a full-time employee. This is akin to assuming that every blind date wants to marry you. Nothing could be further from the truth.

While there are some contracts designed to convert contractors into employees, those contracts are the exception, not the rule. It’s much more likely you would renegotiate or extend your contract. (You may not want to extend, so be prepared for that!) When you work as a contractor understand that all contracts have a fixed duration. Know when yours ends, so you can be prepared to move on to another opportunity. There’s lots of them out there.

The choices you make for your career should never be driven by fear, avoidance, or discomfort. Focus on the “what’s next?” not the worse-case scenario of “what if?” If you want better work, you’re going to have to take a risk. If you’re serious about your career, you’re going to have to keep looking for better jobs. Success isn’t one job or one company; it’s sacrifice and difficult choices — if you want it, you going to have to make some of those.

Lastly, some work is just not suitable for contracting. Jobs with P&L, fiduciary, management, or agent responsibilities must be done by full-time employees who have the legal authority to represent the company. A contractor cannot represent the company. In tech, contractors often have limited access to systems because of security protocols. This is why many companies hire employees for IT/DevOps, but use contractors for other IT positions. If your work is not impacted by legal or security constraints, contracting could be an important career strategy for you.

Contractor or employee? In today’s gig economy, it really doesn’t matter much anymore. Evaluate each opportunity presented to you on its own merits, AND without fear. In that way, you’ll be better able to choose what is in the best interest of you and your career.

***

My book, The Temp Job: A Survival Guide for the Contingent Worker offers straight-forward, no-nonsense advice to anyone navigating today’s contingent labor market. If you’ve never worked as a contractor or consultant, it’s essential reading.

***

Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

The Effective “Agile” Executive

Most of us have read at least one of Peter Drucker’s more than 35 books. If you haven’t, you should know that Drucker’s writings are considered landmarks of the managerial profession. A long-time professor at Claremont Graduate University, he is credited with defining management as a distinct profession, and coining the term “gold-collar” and “knowledge workers.”

One of his most popular books, The Effective Executive, was published in 2004. Reading it now, almost two decades later, it’s easy to see why so many of Drucker’s insights have had such an enormous impact on the shaping of the modern corporation.

As an Agilist, I was gratified to see that the core principles of an strong, well-functioning Agile practice are the same disciplines Drucker outlines in the Effective Executive. If you and your organization are looking to become more Agile, here are two key take-aways from Drucker’s, The Effective Executive.

Know Thy Time

When I meet with clients who are dealing with failed projects, high turn-over, missed deadlines, spotty delivery, and assorted other maladies, my first question is this: How does the team track it’s time? The answer always is: They don’t.

My next question is: Do YOU track your time? The answer: I’m an “executive.” (In other words: No.) This is generally followed by an agitated, if not terse, lecture about why they are too busy to track time, or how time is not why their projects are over budget and behind schedule, and then I’m dismissed with: “Everyone is working hard…”

Consider the above, only now replace the word time with money. Were I to ask any executive or portfolio manager, “How do you track your money?” I would be treated to a barrage of spreadsheets, dashboards, and death by PowerPoint. I certainly would not hear, “We’re too busy to track money….”

Time IS money! If you don’t track it, you’ll never have any control over it.

Sure, people show up. People work hard, okay. But if you’re telling me that your Corkscrew Upgrade Project is your #1 priority, and I see that only 40% of your team is allocated to that project (and 60% of that team’s time is spent on website enhancements), then the Corkscrew Upgrade Project is NOT your #1 priority. (That’s assuming you actually have priorities because if you have more than three, you have none.)

People who sell time – attorneys, consultants, physicians – have a keen understanding the value of their time. They understand billable hours, and “The Thousand-Dollar Meeting.” Unfortunately, this intuitive understanding of time is not reflected in many of the steady-paycheck-white-collar Americans I’ve encountered. It’s even worse in the executive ranks, many of whom see time their subordinates’ time as endless (and free).

Executives are salaried; and, for the most part, they come and go as they please. I have yet to meet a single one didn’t think s/he worked hard, but I’ve never met a single one who tracked his/her time with any accuracy. Truly a missed opportunity.

If no one – including you – is tracking company paid time against tasks or goals, then you truly have no idea where time is spent until it’s gone. You don’t know the real duration of anything (there’s no roadmap for future efforts), nor do you have any data to determine whether or not the time expended in these activities was a good value compared with other tasks.

Tracking time is not about punching in and out. I’m not questioning your work ethic, I’m questioning the value of the work produced. Those are two different things.

Tracking time allows you to see exactly how projects are advanced (or hindered) by activities. It’s about metrics, priorities, difficult choices, saying no. By tracking time, you will learn exactly how much of your time, AND your team’s time is consumed in churn, or consumed producing low-value work. Keep in mind, low-value work is not the same as poor quality! A perfect widget only has value if someone wants to buy it!

The inability to assess the value of activities as it relates to time expended is why projects fail and, frankly, why people fail.

Tracking time and tasks is not difficult. It requires a little discipline, but it is one of the easier things to fix. In some organizations, though, this is akin to stepping on a scale. You know you’re overweight and not running a healthy show, but you’re just too afraid to see the actual number! What happens when people start tracking tasks and time? Just like your money (or your food!) you realize that you’re spending a lot of it on things that bring no joy and offer little long-term value.

What am I Contributing?

The mindset of an Agile executive is the humble acceptance that the higher-up the food chain you are, the more removed you are from the actual work, and the less likely it is that you are effectively contributing to the success of effort. You might have a bigger title, make more money, or sit in an office with a big window, that doesn’t make you valuable to the project.

Executives need to ask themselves: What, exactly, am I contributing? Does this team need my expertise to direct their work? Is my participation improving output? If so, how am I measuring that improvement? How much time is this taking from my other priorities? What, exactly, is my role? Role is not the same as title.

Effective Agile Executives don’t just report up to their managers, they are also responsible for owning the relationships with their peers, and even more importantly they need to meet their “downward” obligations to their teams. Scaled Agile Executives insure alignment, negotiate with peers and stakeholders, communicate strategy. They don’t dictate the manner and methods by which the work is completed.

Drucker and Agile agree: Executives accustomed to hierarchy who now support Agile teams must resist the temptation to pull rank, second guess the Team. If your organization is making an Agile transformation, understand that if you want to be an effective executive, you must change your work habits and your leadership approach.

How to Become an Effective Agile Executive

The first step toward becoming an effective Agile executive is understanding that hierarchy – as an organizational model – is a relic of the industrial age, and it is poorly suited to managing knowledge workers and knowledge projects.

Traditionally, to be a “boss” implied that you were an excellent individual contributor. Being made “boss” was a reward for your hard work. The thought behind this structure of hierarchy was that the boss, as an all-star worker – would impart his wisdom and best practices to others. The result of his supervision and management would be subordinates who produce the same excellent results as the boss did.

In theory, this sounds perfectly reasonable, but in practice, we all know, it is a failed model. While being a good individual contributor offers some advantages when you’re the boss, now, it is commonly accepted that management – in itself – is a profession that requires special skills and aptitudes.

This boss-helper model is the foundation for factory management where work is repetitive and “neck down.” In knowledge industries, such as tech, this model is just not scalable. Why, because these industries are dependent upon high-skilled, highly-specialized “gold-collar workers.” Moreover, The Standish Group in Boston annual report shows, through data analysis, that traditional top-down management actually has a negative impact on an organization’s ability to deliver consistent value in cognitive and creative work like, IT, marketing, and sales.

Unfortunately, despite the overwhelming evidence of its lethargic ineffectiveness, top-down leadership is still practiced and greatly loved – by those at the top. Decisions are made, late or ad hoc, good or bad, thoughtful or capricious, and everyone jumps. It’s awesome. Having people do what you say, when you say it, without argument or push-back is kind of sweet. As time goes on, hierarchical organizations develop cultures that value compliance, over disruption. Inevitably, they become stale, risk adverse, old. No one ever gets fired for the bold decision that they never made.

Drucker correctly predicted that “Gold Collar” knowledge workers would ultimately elevate the role of labor and demolish hierarchy in future organizations, and it looks like he was right on trend. In 2020, Gartner predicted that AI would replace as much as 70% of a traditional manager’s workload. This shift will change the executive’s role to that of coach, not commander.

The relationships and mindset essential for a strong, successful, progressive, and high-performing Agile organization are the the exact same qualities Drucker encourages in The Effective Executive,

Executives are not paid to tell people what to do. They are paid to ensure that the right things are done, and that the money and the time expended return a value to the organization. The best way to support a meaningful value stream in a modern organization is to move from top-down boss-helper to bottom-up team-roles where the effective executive functions as a coach and advocate, not as a boss and commander.

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For a more nuanced view on change in mature organization, view this outstanding Ted Talk from Martin Danoesatro, What are you willing to give up to change the way we work? (15 min)

Turn the Ship Around, a video of one of L. David Marquet’s outstanding Talks at Google. In this session Capt. Marquet discusses common myths of leadership and how to become a more effective “flat org” leader in a large organization. (45 min)

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Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

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