How to convert COVID-Issues into Productivity Opportunities

What is an office anyway? COVID is teaching us some engaging lessons about what office work really is. It's not working in any particular building; it is having a computing device with a secure, high-speed internet connection to the servers of your organization. Anything else, like being together in person with others in the same physical location, is a nice add-on we can emulate to a larger or lesser degree through today's communication technologies. As COVID-related restrictions are continuing, we are not just learning how to operate in the new world - we are forgetting the old one step-by-step, becoming accustomed to living and working in virtual institutions. There is no way back.

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Remote work within one's own organization is likely to bring productivity gains, both for the institution and for the individual. But company-internal remote collaboration is only the first step in this fundamental transformation of how we work. Virtualizing professional collaboration across institutional boundaries will be the real productivity jump. As the "transaction costs of collaboration" decline, knowledge needs increase, leading to evermore granular specialization requirements that will crack formerly tight institutional boundaries. As a result, institutional borders will become porous, and talent will flow to where it is needed most and can be leveraged best, regardless of where it is located organizationally (please see our blog on the topic for more details).

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What does this development imply for the organization of professional work, and how can companies take advantage of it? Here are a couple of ideas; they are based mainly on client work experience in our company 10EQS, which has been operating in a completely remote and virtual mode since we started in 2008.

• Large teams for deep insights. Since knowledge is granular, building large teams with specialists for each issue is key to quality results. Complex business issues typically consist of a multitude of individual specialized questions. Getting the right answer to each of them fast requires finding subject-matter experts that "have been there, done that." Often, this will imply having several experts per issue. The effective team of the future will include many experts, each of whom will contribute to the team effort only in a narrow way and for a limited amount of time on the particular issue in question, but all together are needed to crack a complex problem.
• Looking beyond your organization. Often, the right expertise for a given issue will be outside your organization. The global professional community comprises hundreds of millions of people - a resource pool that no organization, however, its scale, would be able to match. This external expertise is not only required for outward-looking questions (about markets, customers, technologies); assessing internal issues (like profitability, organizational effectiveness, R&D productivity) will also typically benefit from outside perspectives that bring global best practices and benchmarks. Consequently, when staffing a project to crack a particular issue, companies should consider any professional - inside or outside of the organization - as a potential team member. They must develop the capability to identify the best specialists and integrate the insights from each of them into a comprehensive business solution. Finding the right people inside your organization is often already difficult enough because of limited interaction between different business units; getting used to finding the right expertise outside your organization is a capability in its own right. A genuinely virtual organization is not just "virtual" in a technological sense (working remotely). It is virtual in an organizational sense, with skills and capabilities flowing in and out as needed.
• Tight management, quality, and compliance control. Having a water-tight, technology-supported management process, controlling quality, and ensuring compliance is critical in this new environment. Complex issues need to be disaggregated into many small, granular pieces, corresponding to the specialist expertise found in the global professional community. The knowledge needs to be extracted from the multitude of experts participating in a given project, and solutions need to be reassembled based on the input that the team has received. Leading these large, complex teams containing a wide variety of skills is in itself a critical skill that requires corresponding experience. Quality management and compliance controls are key individual and institutional capabilities vital to the virtual team model.

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The benefits of this approach can be enormous - in the critical dimensions of efficiency, quality, and speed.

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Efficiency. The key gains in efficiency result from "effective utilization," defined as "billable utilization x knowledge productivity." Billable utilization (or time spent on defined projects/activities) is typically recorded by most organizations; it is a routine part of the project management process. In contrast, accounting for knowledge productivity is not done because it is poorly understood and difficult to measure. Here are some thoughts on how to go about it:

• Knowledge productivity can be defined as the time an assigned professional spends on a given task compared to the time needed by a top expert on that same task. Our experience (comparing our past activities in large management consulting firms with our current approach in a virtual environment) has been that the time needed for assigned "non-expert" team members to get up to speed is often at least two to three times that of an expert on the topic. In many situations, assigned team members will never get there by themselves because the required expertise is not "learnable" in the short time of a consulting assignment. This proportion may be different for company employees working on issues that correspond to their "daily routine" but is unlikely to be much better for tasks requiring skills that are not part of their usual jobs.
• But even billable utilization is an efficiency problem in the usual way employed staff is assigned to project work. In a typical consulting organization, billable utilization rates are around 60-70% of the total time available. The remaining 30-40% are used for training, internal tasks, and non-working time like leave or sick days. During the pre-COVID time (and to some degree, now), logistics/travel time will also play some role in non-productive but needed time. When using virtual teams of non-employees/freelance professionals, utilization economics look different: by definition, the utilization from the client's perspective is 100% because as a client, you only pay for what you get; non-working or idle time is not being paid for, and the virtual working model ensures that there are no logistics or travel cost involved.

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Combining billable utilization and knowledge productivity in a favorable setting will lead to substantial efficiency gains. Using the numbers mentioned above, the efficiency gain for a well-led virtual team of experts could be 3-5 times over a team that consists of employed professionals that do not have precisely the skills required by a given project. The point is not that an external virtual team consists of better professionals but that a flexibly composed external virtual team in all likelihood will provide a better match to the skill requirements than one where the organization is just relying on in-house staff (or hiring a consulting firm that itself is working only with in-house staff).

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Quality. The critical gains in quality essentially refer to the number of people and the number of "brains" participating in a given project. The typical project team in a management consulting firm consists of only 3-5 people (and thus, brains) as organizations are not used to splitting up complex issues into small slivers of individual tasks assigned to different experts. A typical project organization will lump together several questions of complexity and give them to a responsible team member, who first needs to learn the context of the issue and then figure out a solution.

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In contrast, in our experience and in the work that we are doing, the number of people participating in a project is often ten times that of a classical consulting team because of the need to match expertise requirements and available skills on a very granular level. Obviously, the time needed for any of these slivers of work is typically small because tasks are very narrowly defined and the skill that someone brings fits precisely what is required. As a result, the degree of specificity is higher; it is like comparing the "pixel resolution" of a modern retina screen to historical, low-resolution pictures.

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Speed. The gains in the speed coming up with a solution to a given issue can also be substantial. The potential efficiency gains mentioned above could translate themselves also into speed gains of a factor of 3-5. But it does not stop there. Since complex projects are being split up into small pieces that can be worked on independently, this project approach is highly suitable for parallel processing and a 24/7 approach - around the clock, around the globe. All factors combined - knowledge productivity, parallel processing, and 24/7 operations - have the potential for dramatic improvements in delivery speed and corresponding reductions in delivery time if compared to the traditional approach of localized "linear" project teams.

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In summary, technology has been (and continues to be) the incubator for the virtual operating mode of professional work; COVID has been - and will continue to be - the accelerator. Remote work is here to stay. And collaborating in large, virtual teams of independent professionals across institutional boundaries will become the "Future of Professional Work."

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Interested to learn more