How the Fortune 500 experiment with platform adoption
Organizing for successful platform adoption: Part 2
Large corporations are starting to realize the benefits of leveraging online platforms to access freelancers on an on-demand basis. However, they are also presented with new challenges around how to organize for successful platform adoption? In part One of this blog I’ve drawn upon innovation literature to identify some of these challenges and how to address them. In part Two I share the stories of two Fortune 500 firms, named ‘Hotel’ and ‘India’ (pseudonyms) who successfully integrated online freelancing into their business models. Their stories offer important insights for firms who consider to use platforms and wonder how to organize the adoption process.
The story of Hotel
One reason why firms adopt online platforms is the ability to access freelancers with highly specialized skills and expertise. Hotel recognized they had to rethink their strategy for sourcing talent due to a shift in worker demographics. Namely, freelancers have opened up a space for on-demand work that makes firms re-assess how they source talent. Hotel also realized how digital technologies are changing the way work gets done: Previously, the team determined what work was performed, but now it was the work that determined the composition of the team. Previously, the company could choose between their own employees or hiring freelancers through staffing or outsourcing agencies. Now, they could also source freelancers on an on-demand basis, through online platforms:
“. . . work is going to be done very differently in the next ten years. It doesn’t necessarily mean that the 10,000+ Hotel employees today aren’t going to be 10,000+ Hotel employees in ten years. It could mean that they’re leveraging an additional 10% of folks [online] to do work differently. The point is we’re going to have the ability to tap into this pool of very skilled talent in a way we never could before.”
To explore this new approach to creating value with “on-demand talent”, Hotel signed an initial contract with one of the leading platforms and designed a program to experiment with sourcing work directly from online freelancers. The program became a tremendous success within the company, and Hotel is now expanding their platform usage into new areas.
Another reason why firms adopt platforms is the processes of conventional staffing agencies, do not always align with their internal operations. Agencies are therefore unable to support their needs. Today, firms should quickly adapt to changes in their business environments, for instance by initiating ad-hoc projects with quick turnaround times. The challenge confronted by India was that their headquarters requested two-week delivery times for projects. However, project leaders often didn’t have enough employees to deliver on time, and agencies on average needed six weeks to find the right freelancer, before the actual work had even started. This caused substantial problems and delays:
“The six-week sourcing process of agencies has fundamentally become a broken model because organizations don’t operate like that anymore.”
To address this challenge, project leaders at India started to explore alternatives, such as online freelancing platforms. They started a pilot program with one of the leading platforms, and found they were able to find suitable freelancers and complete projects in as little as two business days. As summarized in the table below, Hotel and India thus followed quite different paths for adopting platforms.
Timeline of platform adoption at Hotel and India
|1-3||Learning about online freelancing.
Signing a contract with one of the key platforms.
|Learning about online freelancing.
Starting discussions about on-demand talent strategy with platform and internal stakeholders
|4-6||Organizational members didn’t use the platform to access freelancers.||Starting pilot program with platform|
|7-9||Creating an internal program layer and designing the experiment.||Starting formal discussion with one of the key platforms and sign contract.|
|10-12||Starting the experiment to organize work with on-demand talent.||Collaborating with platform to customize workflows and develop scalable work processes.
Organizing a kick-off event to launch the new sourcing solution.
|13-15||Gradually expanding the program and platform spending to prove the benefits and give credibility to the project in other parts of the organization.||Gradually expanding audience to test the new solution before scaling up the use of online freelancers in the organization.|
The stories of Hotel and India provided insight into the organizational impacts of adopting online freelancing platforms. During their journey, the two companies learned that using online freelancing wasn’t simply a decision they had to take, but actually required some organizing. Here are the 7 things Hotel and India did to create a space for experimentation and a supportive environment to explore how to get work done with online freelancers:
- Doing your homework. India started out with studying what online sourcing and crowdsourcing encompassed, identifying the different platforms that were out there, and how they met their needs. Then they got in touch with the platform of their choice, to learn more about their online freelancing process and how it fitted the sourcing processes and practices of their company.
- Creating space for experimentation, for instance by starting a pilot or experimentation program inside your organization. Some platforms are offering dedicated pilot programs for enterprise clients to learn about their platform in a safe and risk-free environment. Hotel viewed its recognition that adopting online freelancing platforms actually constituted innovation as a key reason for its success. Testing the adoption process in an innovation context provided them with the space to test and learn, ideate and iterate, as well as to fail in order to learn about every aspect of the online freelancing process.
- Carefully designing the experiment, for instance by targeting a small number of project or team leaders to test out the platform and share their experiences. India’s 3-month pilot program started with two research teams using the platform, and ended with 13 teams using it, including software development, finance, accounting, and human resources. To compare their experiences and outcomes, groups were instructed to use the platform for relatively small, low-risk, and short-term engagements that varied in duration between two days and two weeks. Hotel started their 100-day experiment with 15 project managers in their innovation department. They came up with a set of criteria for selecting project managers, who each completed 10 projects on the platform to assess the possibility to maximize value with online freelancers.
- Creating a program management layer. During the first six months, Hotel learned that instead of relegating platform adoption to junior managers, who had to divide their time between different priorities, they “had to be intentional”. They therefore initiated a program around platform adoption inside their innovation department. A management layer was installed to organize the program. A project manager was appointed who could serve as “an internal advocate” and take the day-to-day lead in the adoption process. To motivate people to use the platform, India learned it helped when your project manager is trusted on the work floor and has in-depth knowledge of platforms. This allowed for a conversation around how this new sourcing solution related to what people inside India were looking for.
- Securing executive support to ensure that online freelancing is the right direction for your company. At Hotel, the head of human resources was the executive sponsor for developing their on-demand talent strategy. He was part of the program management layer, which helped to break down barriers and get buy-in from legal and human resources. This helped to create space for experimentation around how things could be done differently.
- Allocating sufficient resources for experimentation. This is important, since a lack of funding will be a barrier to implementation. For instance, Hotel started off with a $100,000 budget that they could give to project managers to test out the platform and explore its potential for generating value.
- Involving stakeholders early on to secure successful adoption. Especially people in finance and human resources tend to be risk averse in trying out new things. Working closely with these stakeholders, and making them part of the implementation process, can help to mitigate risks and to make adaptations to organizational processes and practices for involving online freelancers. At Hotel, human resources cared about employment relations and the proper classification of freelancers. Legal was concerned with issues around information security and privacy when freelancers were using internal systems or had access to sensitive data. To support the implementation process and create a good governance structure, Hotel created a team of internal partners, consisting of attorneys, labour relations experts and HR professionals. Also, India involved their heads of HR, legal, and finance. By teaming up with them early on, they benefitted from their experience and expertise to develop an adoption model that was easy to roll-out during later stages of the adoption process.