by Kenneth Rudich
The labor market is squarely in the midst of experiencing radical change, and it will have a significant impact on future workforce needs.
For the past thirty years, companies have been realizing tremendous boosts in productivity by reengineering and automating their core processes, then outsourcing everything else. While early adopters of these practices frequently garnered a competitive-edge by being first, the ability to duplicate these strategies have since made them too commonplace to produce an advantage for anyone anymore, thereby forcing those in industry to seek new avenues for achieving competitive advantage. This has resulted in an awakening of how important it is to be talent-rich with knowledge workers.
the higher value worker
According to Bradford C. Johnson and his colleagues James M. Manyika and Lareina A. Yee, reengineering, automating, and outsourcing eliminate activities that prevent employees from undertaking higher value work. For employers, this has had the dual effect of bypassing the need for certain kinds of employees, while precipitating a need for another kind of employee, in what might be characterized as an evolutionary pattern that dates back to the industrial age.
Johnson and group have organized this evolutionary pattern into a progressively graduated scale of worker categories (the predominant activity of the work determines the category a given worker falls into):
- Transformational workers: extracting raw materials and converting them into finished goods, like those found in production jobs;
- Transactional workers: interactions that unfold in a generally rule-based manner and can thus be scripted or automated;
- Tacit workers: more complex interactions requiring a higher level of judgment, involving ambiguity; and drawing on tacit, experiential knowledge, and creative capacity.
Today’s most valuable worker belongs to the tacit category, performing what economists call tacit interactions. These interactions occur around the need to get a bead on a complex situation and then make context-based decisions for correctly handling it. For instance, managers, sales people, and customer service representatives may be required to orchestrate activities across an enterprise network in which the workflow is comprised of both internal and external sources of labor and resources.
This is where the modern-day notion of the knowledge worker comes into play. In such a fluid environment, the skilled performance of this work is harder for competitors to duplicate because it rests with the talents and abilities of individuals to manage non-routine tasks, and to build trust and rapport among loosely coupled teams of people with different backgrounds, skills, and expertise.
The objective is to mount a collective effort that leads to achieving or maintaining competitive advantage. Doing so will rely on the capacity to leverage opportunities for innovating how the work is accomplished — that is, to provide added-value (or enrich the knowledge asset) by searching, monitoring, learning, and devising ever-better solutions.
The ultimate is to move past merely orchestrating processes to orchestrating innovation, wherein each spin on a concept uncovers a new and better way of doing something, and that realization in turn stimulates another round of innovation and growth. In his book “The Free-Market Innovation Machine,” economist William Baumol of Princeton University argues that this, simply, is the nature of capitalism: “…innovative activity — which in other types of economy is fortuitous and optional — becomes mandatory, a life-and-death matter for the firm.”
These management ideas are hardly new or novel, says Scott Beardsley. After all, the labor market has always had workers who perform tacit interactions. “But the ever-increasing growth in their number and value,” he says, “is driving companies to adopt such ideas more quickly and deeply.”
A 2005 report issued by Johnson and his colleagues reinforces this assertion. They note, “During the past six years, the number of U.S. jobs that include tacit interactions as an essential component has been growing two and a half times faster than the number of transactional jobs and three times faster than employment in the entire national economy. To put it another way, 70% of all U.S. jobs created since 1998 — 4.5 million or roughly the combined workforce of the 56 largest public companies by market capitalization — require judgment and experience.”
They also add, “Workers who undertake complex, interactive jobs typically command higher salaries, and their actions have a disproportionate impact on the ability of companies to woo customers, to compete, and to earn profits.”
As the composition of the workforce continues to expand in this direction, it becomes evermore necessary for individuals to keep pace with it.
While knowing something is one form of knowledge, the talent to capably apply it is quite another. The latter requires the development of cognitive skills to go along with the knowing, so as to effect a meaningful integration of the two. It’s a matter of continually auditing your own skill set with questions like what kind of knowledge will keep me current, who needs it or can use it, how much is needed to remain market competitive, and how can I most effectively apply it?
In the end, it’s about satisfying the appetite for a workforce that is talent-rich with knowledge workers.