Event Description

Bryan Peña: Good morning and good afternoon, everybody, and thank you for joining us for today's webinar, building an Agile Workforce in a Post-Covid World. I am super excited to be here today and also to be joined by our CEO, Miles Everson. But before we do that, I want to do a couple of a little bit of housekeeping tips. My name is Brian Peña, the Chief of Market Strategy here at MBO, and I will be your emcee today. We love questions, and we certainly hope that you'll take advantage of that in the Q&A session to go ahead and put your information there any questions you have, we have agreed that we will respond to as many questions as possible in real-time. So while we will hopefully have some time for questions at the end, it is our intention to be as responsive as possible to the questions and issues you may have in real-time. So please take a moment to do so. If you have any issues with your technology, please just raise your hand or submit a question or comment during the chat and I will be happy to help take care of that.

 

Bryan Peña: MBO our mission and adhere and be your partners is to make it easier for enterprises and organizations and top independent professionals to work together. We've been doing this for more than 20 years and we always said we've been in the gig economy even before it was the gig economy. We are approaching a billion dollars in annual volume and we have over 60 plus large enterprise clients. Our average project size is over $50,000 and over 70% of our talent are very high earners. So we like to think about owning a very particularly rarified air with the folks that we work with. Speaking of rarified air, you can learn more about some of the stuff that we're doing to advance thought leadership and promote the cause of independent talent at our upcoming events. You can find more information about our upcoming events, including our monthly direct sourcing hack that I do with Dustin Tally, our resident marketplace expert at MBO partners/events. And finally, before we take it out that I want to make sure we remind everybody of the MBO purpose. Our purpose at MBO is to give people the control, to do the work they love, the way they want to do it. And we certainly are looking forward to doing that with each of you in the coming covid recovery. And with that, I am really tickled pink to be able to introduce our main speaker, Miles Everson. Miles has been a CEO here for a little bit over a year, and I can honestly say that I personally have learned a lot from his leadership and I am really, really excited to be part of his team. So without further ado, Miles, let us go ahead and take it away.

 

Miles Everson: Be with you today. We're kind of in a new world now with these post-covid and covid. I don't know if it’s post yet, right? But there's still a lot of changes that have happened. So, you know, change has been happening around us no matter what. But what we've seen in the covid-19 is it really has caused a level of change that came upon most of us very quickly. Bryan can you advance the…

 

Bryan Peña: Yeah, there you go.

 

Miles Everson: Thank you. So it's its accelerated change in a way that most organizations hadn't really planned for. And, you know, for purposes of our discussion today, it's really changed the way work gets done, i.e. a lot more remote work. And it's starting to change how organizations are actually structured. As I talk to companies about what they're going to do in the return to work or post covid, whatever you want (to) talk or call it. What's really clear is that there's more change to come. So if you think what happened in (the) late March, April timeframe is it caused us all to initiate a change. Kind of not by choice, but by necessity. And the more change that's going to come is that now everyone's planning on the return to work. And so the change is where it ends up could be, frankly, could be anybody's guess. And what we do know is that the impediment to any change is the status quo. The good thing for all of us that you are looking at this is that the status quo has been changed for everybody literally in America, and so the opportunity to then say how do we want to reset the table is really, you know, it's an opportune time, despite the hardships that have come out of the covid-19 situation. But I want to point to a recent article by McKinsey that published which talked about what happened during the crisis. And, you know, I see it in spades, which is during the crisis, businesses worked extremely fast and frankly, better than they ever dreamed possible. And they did this again out of this necessity. But I think one of the challenges and opportunities for all of us on the call here is how can you maintain that sense of seeing the possible and ensuring that you have a really sharp edge for your competitive advantage? Because coming up on the backside of COVID-19, just like there, we're going into it, there will be winners and there will be losers depending on who adapts to more modern business models, that will be a necessity. Now, some of the challenges that we expect to see in recovery specifically have to do with how do you identify opportunities to recover revenue. And every CEO that I visit with that had a drop in revenue. One of the biggest concerns is one is how do I make money in the new world and how am I relevant to customers? And then how do I act with urgency and really embrace in my company and attitude and philosophy about how we really got to be pretty nimble and regain a little bit of what we think of as a startup mentality. And this is, again, (what) you see is found in the McKinsey findings as well. And so you have to go drive revenue growth and you need to accelerate digital adoption. You know, when you think about the expectations of customers that they have. I would add to it the expectations of employees, frankly, in terms of how they want to work is just so critical. And so even in our own company and I know a lot of others and with all of our talent, is the rate at which you adopt collaboration tools and other digital mechanisms to help you operate is at a much higher rate than it was even a few months ago. And then the third thing is, how do I think about building operations that can scale but yet are resilient? So it used to be the mindset was you built scalable operations by having a formidable foundation that tended to be higher fixed cost structures. But what you're seeing now is the ability to scale is can I scale up and can I scale down with my cost structure, my operational capability, at the same rate that the market or external environment is scaling. And this is where we see there's really for folks on this call and for what MBO does for a living is what does the future of work look like? And can we not just embrace it, but can we help shape what the future of work will be like? And so we're obviously committed to that. And then when you start to do that, though, you have to think of that future of work. In the context of rethinking organizational business models, because the old business models will not necessarily be the models that get you success in the future. And so those are the challenges that we see people looking at. I think it's helpful and we're going to put this in the context of some bigger macro events. But, Brian, I think you posted up a quick little survey, right?

 

Bryan Peña: Yeah, I did. I did post a survey. What does your post covid extended workforce look like? So far I'm going to go ahead and close the poll in just a second, but I want to touch upon this notion of accelerating digital adoption. I think this is something that people miss and it sounds relatively nebulous. But the way that I think it expresses itself that's really much more accessible for a lot of folks is once everybody started working from home and working in this particular manner, phone calls got replaced by video calls. And I think now the expectation is much more transparent. That's a great example of how technologies like Zoom and Teams are really changed the dynamic of how business gets done. And that that shift reflects not just in interactions on the individual level, but also interactions at the corporate level with expectations of transparency and connectedness. In the past, you know, really we couldn't take advantage of and go ahead and close the poll right now and give me just a second to just share the results. So the question that we posted on the poll, and we love to do polls. What does your post covid extended workforce look like? 47 basically 56% of you say that it will grow somewhat or significantly, 13% stay the same, and then 6% smaller 22% say they're not sure, which I think is entirely a valid response. Any particular thoughts on those findings, Miles?

 

Miles Everson: Yeah, look, I think we're dealing in a time of uncertainty and certainly folks, so that will grow somewhat. You know, it's a very wide variation between companies in terms of what they did with their workforce. Some decided to go to furloughs, some did layoffs. Some said that they were going to keep everyone on and do pay cuts. And that, to me, the biggest wild card in here is probably what is going to happen with demand for the product or service that their company delivers because the external demand will ultimately start to influence what the total resourcing of a company needs to look like so that their headcounts.

 

Bryan Peña: Yeah, absolutely.

 

Miles Everson: So good. Why don't we jump in, Brian, to these four forces that we talk about regularly to lift this discussion too? We started with it and what happens in post covid and we're going to circle back on that. But there was a number of forces changing the world well before the COVID-19 hit, and those are not necessarily going away. They have a high degree of permanency to them if you will. And so the first one is that the rate of change is accelerating. And that is not a news bulletin to most people. But what is important is that it's the rate of change accelerates. It's also that innovations. Then converge more frequently, so you have more innovations and more innovations, you have, the more they converge. And so if you're looking in the rear of your windshield, you can see things like, you know, I was invented in 1959 and it really didn't get legs until there was (the) ability to bandwidth on communication systems and frankly, computer databases to hold the data and then to start to apply logic to it. And when you look in the windshield, what you see is 5G is now starting to get some real traction. And the amount of change that that's going to drive from a pure where work gets done is pretty high because there (are) many things now that can be done if the 5G networks are in place that used to have to be local and physical, that can be done remotely. And so we're going to see that have a pretty big impact, in my opinion, in terms of how work gets done. And then the second kind of megatrend is as these innovations converge, what happens is anything that is of societal importance creates progress, downward pressure on pricing. And so when you think of the genome, it was only a 2,000 that are a cost of hundred million dollars to decode the genome, and today you can decode the genome for $1000 because it's being done at scale and it's a convergence of technologies that (are) making this happen. So you couldn't have the supercomputer in your hands that would have cost billions of dollars 30, 40 years ago if it weren't for the Internet if it weren't for cloud computing. So it's the convergence of technologies that creates this downward pressure that so we say progress is deflationary. And then the third thing here is this has been around for thousands of years, but the rate at which is occurring is also accelerating, which is the fractionalization of everything. And what we mean by that know years and years ago, you know, the E-Touch Indie Company was the first company to be a publicly traded entity because they needed it to derisk the risk of shipping large amounts of goods on a single vessel. So we created stock exchanges. So we fractionalized ownership of companies. In the 80s, you know, we fractionalized homeownership with this thing called mortgage-backed securities. So what I find fascinating is in the United States, about 20 to 25% of the population will ever see the title or deed to their home. Their own home, but if they're invested in a balanced fund, they own a fraction of somebody else's home through their mortgage-backed securities. And then the obvious ones that you see are things like Airbnb, fractionalized lodging, the rideshare companies are fractionalized, ride-sharing, and automobiles. And it's happening at all levels. And so one of the things that (are) now possible is that you can fractionalize the human workday and you can fractionalize the human career for people. And that's happening. And I think most of the folks on this call can see that.

 

Miles Everson: And then the fourth thing that is just so critical is the power of knowledge flows. 

So one that most people can resonate with is used to be that you get a paper map and then it got that you could get an electronic map. But then when Waze came out, it would change your direction for instructions on where you should go based on traffic patterns. So it's a knowledge flow, not just a map, which would be what we refer to as a knowledge stock. And so they start trading, if you will, the use of information knowledge flow(s) freely. And we're seeing this manifest itself in many ways. I mean, one of the most powerful is some of the leading edge, most of the leading-edge innovations in technology that are coming out. Information technology (is) coming through open source technology. So it's getting a lot of people's inputs to help determine what that technology should do. And that's different than a knowledge stock environment and knowledge stock is kind of the industrial air mentality that says I'm going to get an asset, I'm going to protect it, and then I'm going to trade it in binary transactions with one counterparty at a time. I'm not just going to open it up and let it free flow, free, flow(ing) free. There we go. And that issue I mean, there (are) so many companies today that make money that way, but those are the types of companies that are getting running into trouble, if you will, with the flexibility and some of the things that are necessary. So, Brian, let's just take a look at how we think these forces are affecting the way work gets done.

 

Miles Everson: So the first thing that we want to highlight is obviously there's an increasing demand for hot skills. Most companies, even pre covid when unemployment was very low, still had many skill gaps and so they couldn't get the hot skills. And then we see with covid happening a number of displacements of legacy roles inside a company and really asking looking for can we be more agile in the way we do our work and be more flexible. And this isn't just in the way I do technology development programs any longer. It's really applying agile philosophy and mindsets to the way we run the business. And it links to the second box, which is in most companies, there's been an erosion of employee tenure on the human capital front, higher turnover, and the tenure going down. And increasingly there's this adoption of Sprint's to drive change and it can manifest itself in a number of ways. But most companies today would not say this is my five-year strategy. They have much shorter, shorter cycle times on their strategy. And so the sprint to drive change allows you to more demonstrably determine if you're getting the outcomes that you desired. And then what goes hand in hand with that is there's clearly a rise in project-based work. As opposed to this role-based work, so let's drive projects, get teams together, get things done, and then define another project and do a sprint to get that done. So we're seeing this rise of project-based work just in a way the workforce works.

 

Miles Everson: And then, you know, to do that. Is you have to be able to get to address to speed the market urgency that was referred to in the McKinsey article earlier around revenue and frankly, just overall customer experiences. You've got to be fast to market and you've got to compress that time in which value is created, which means everybody's looking for a reduction of friction in their business models. So how do you get a frictionless business model is kind of the overarching question. And increasingly, we're seeing the use of networks, whether it's social or collaborative networks, tools, et cetera, for companies and their customers and their employees to communicate better. You know, AI and Big Data are so important. I've written a number of articles on this, but when I have AI or machine learning and big data delivery, you can deliver a personal experience without having a person involved. And that's the personalization of the experience at scale, which is really what's happening with the rise of platform businesses. Platform businesses allow you to get a personal experience at scale. And so that's really the trend that's happening out there right now.

 

Bryan Peña: I have a question, Miles, that when we look at this the agility to rising and project-based work and friction, it seems like the time frame for action obviously is compressing. But how do you measure long-term objectives and build kind of a longer-term strategy when things change are changing and basically by this example being so disrupted so quickly, how do you build a long-term vision?

 

Miles Everson: Yeah, so, look, you see this in a number of companies statements today, but once you get grounded and anchored on what your purpose is of a company, then all of the other goals are merely measuring how you're doing against your purpose. If the purpose that some company states is just a tagline that they thought they should do to be cute or to go with the crowd, then it doesn't work. You have to be committed to the purpose. And if you're committed to the purpose of all these others, whether it's a financial goal or non-financial goal, etc., are measures on how you're doing against and increasingly you're seeing the most successful companies have their purposes, their North Star, and then they have the other measures saying, how am I doing against delivering on my purpose.

 

Bryan Peña: OK, we're closing the poll because I definitely want to share the context in this particular poll was really illustrative. If you just give me just one second for the close and then I'm going to share it. And Miles, I'd love for you to talk about this. So what is your most important objective post covid, reduce cost, increase efficiency and reduce friction, minimize risk and increase program adoption, and access higher quality talent. Surprisingly, the winner is to increase efficiency and reduce friction. Followed not so close second by access higher quality talent. Followed by reduced costs a distant fourth. What do you think about these findings, Miles? Anything that strikes you as particularly interesting?

 

Miles Everson: Well, look, I think I'm going to start with the one that used to get the beat on the leaderboard and this type of a question which was reduced cost. It's much, much lower. And we see that in other surveys, too, that we found. And increasing the efficiency and reducing friction is is really critical. I think it ties directly to what we highlighted here. And what's interesting about this is we didn't know how you were going to answer the poll. Seriously, this SAP survey is very consistent with what everyone on the video today is feeling, which is it's to the point of this webinar, which is how do I increase organizational agility? We framed it as increase efficiency and reduce friction. And you can see that SAP and the Oxford economics here, that nearly two-thirds of the survey respondents are looking to independents to increase their agility. And so what we see is one of the challenges then for everyone here is can you increase the efficiency and reduce the friction in accessing and deploying independent talent? And it will start to shape your entire workforce strategy and so this is another one from clearly rated that came out, I think, Bryan in the last two weeks. Right?

 

Bryan Peña: Yeah, just a couple of weeks ago.

 

Miles Everson: If you want to just speak to this one. If you don't. So it's not just me speaking here.

 

Bryan Peña: Oh, yeah. No, absolutely. So this survey was done by equilibrated in conjunction with up work, and it kind of talks about how companies are going to be using more independently and directly source talent, as you can see from the survey. Seventy-two percent of hiring managers are going to be continuing or increasing their usage of independent professionals, 57 percent of the hiring manager surveys that they're doing more strategic work and recognize their importance. And then also, finally, more than half of the hiring managers recognize that adopting a really flexible workforce strategy is going to be super, super important towards our long-term objectives. And I really love this survey because it follows in line with our four forces narrative around the value of knowledge flows. And I want to take another second just to go back on that particular topic because it is a critical element of discussion that I personally have found myself sharing a number of times just this week alone. The way that somebody I was talking to who was an innovation expert talked about the movement of hoarding skills to responsively being able to quickly engage those new skills. And I think leveraging in talent, independent talent, is a true evolution of the tapping of knowledge flow strategies that Miles talked about earlier.

 

Miles Everson: Yeah, it's a really great point, Bryan. The knowledge flow to remind ourselves of the importance of that. So what are these macro trends, concepts? What are they take to drag it down a little bit closer to home, so to speak but, you know, remote work is now more the rule than the exception? I do think time will tell the relative extent to which remote work is the rule versus the exception, but I think it's fair to say that it's highly, highly probable that most companies will now embrace a relatively greater share of remote work than they did before March 31st. It's changed the shock, the status quo has happened, and so what we're going to see, obviously, that some industries are expanding rapidly and thriving. We've seen a number of companies, you know, one that most people wouldn't put on their radar, but certainly is happening. I was recently talking to somebody that has a boat store in Austin, Texas, where I live, and they told me that May was the best month of boat sales that they've had in the history of the company. So there (are) some really unique areas that kind of hit you out there. That another one was a Cheese company told me that their cheese sales are up to Brooke because more people are eating from home. And so there's it's not all bad news for certain businesses that are doing really well. Obviously, some were hit extremely hard in certain industries. You know, transportation, hospitality, etc., were hit very hard by the COVID-19. But what we know is change will continue to accelerate. And the change that got a shot in the arm, no pun intended, from COVID-19 will continue to accelerate because the macro trends for the last several decades (have) been the acceleration of change. And what we can see as it relates to the business that we're all in is that it's going to increase the volume of change in the way the workforce is composed and the way that independents get used in the strategic part of that workforce. And that means that the talent brands need to embrace independence, not just full-time employees, because from other research that we haven't shared here today, but again, folks have probably seen. Increasingly high, high-impact independents are choosing to work independently. It's no longer that they lost their job or can't find it, are those people out there? Of course, they are. But many, many highly talented Keystone-type talent are working as independents, which is many of those are the people that we engage with on our platform. And so, you know, being able to access, reach, nurture, create a relationship with those talents needs to be frictionless because the frictionless component is what everyone has come to get used to in their personal lives. You can get things delivered to your home that you couldn't before. Just the frictionless aspect of doing what you want to do is so much better than what it used to be. So. You know, you compound that with this next point, Bryan, on the. So what's going to happen? And we certainly see this being the case, which is on the backside. There will be some constraints on hiring and one could be (a) kind of policy-level constraint from a company. But let's assume that the company wants to hire. Normal structures are designed to grow your workforce under normal life’s turnover, you're not really equipped for a surge in demand, at least many companies aren't. Of course, there (are) exceptions to that statement. But can your organization support 30, 40 percent headcount growth in short order if they need to have the capacity to do that? I think that's a good question for folks in this work area. And so we're encouraging folks to do as you think about leading your company in the way that they become more agile going forward. A big piece of that agility should be tied to your talent strategy, including the mix of what you want from an independent model component of it and what full-time from a full-time employee model.

 

Miles Everson: So let's just go on to the agile talent and agility, right. So agility is the ability to move quickly and easily. And abilities to think and understand quickly so, you know, how quick are you to be able to move? And so what we wanted to do is share a few things here about an agile workforce and so so what's important and so. Access to a wide array of talent with multiple engagement modes. So we think that this is really important because if you really believe or your CEO believes that he or she are recruiting and accessing the best talent. They have to include in that population of talented, independent professionals, and it's because people are choosing to be independents. And so it's a really important component of the workforce strategy. And being able to engage them in different ways than what has traditionally been the model for engagement is really critical and adaptability, which is the ability to supplement or replace legacy talent with high skills. How quick can you pivot to the skills that are needed to help grow and go get that revenue growth, for example, that came through in the McKinsey article? And then cost flexibility I talked about before about an agile workforce makes you a lot more flexible on (the) cost. And so you can you got to be able to, as I said, move your cost structure in your workforce structure at least as fast as the volatility of your revenue. So if your revenue can surge way up or way down, you have to be prepared to be flexible on the resourcing side of the business as well. And then the last one is, you know, with an agile workforce, we tend to use them for (the) almost academic term. But the reality is there (are) all kinds of research that show that happy people are more willing to change and are more willing to accept that the change is accelerating. So happy people are people that are doing the work they love the way they want. And are you doing that for your workforce? And can you become that client of choice for talent, not just full-time talent, but the client of choice for independence as well?

 

Bryan Peña: Yeah, I think something yeah. I was just going to add I want to kind of reinforce the point that we hit a couple of slides ago, which is, you know, I challenge everybody on the phone or on the webinar who is managing a workforce program to approach their leadership with that previous deposition of what it's going to take to bring the necessary resources on at scale. And I don't think people really can understand in the article that is referenced there states that really well about the limitations of organizations to grow rapidly enough with an FTE (the) only approach. So a lot of those of you who in the previous poll felt that their programs were going to stay flat, the odds are it's probably going to grow. And for those who felt that it was going to grow somewhat, the odds are it's going to grow significantly. And for those of you (who) felt it's going to grow significantly, it's probably going to grow more than you think, depending only upon the penetration you have within your organization to evangelize the value of an agile workforce. And so that's that. That, to me is really a sea change article. And I encourage everyone to reference in the link because it is one hundred percent spot on referencing why we should be thinking more creatively about how we bring people on board.

 

Miles Everson: So what is it you kind of look at your workforce and you size it up and you say, how do I think about my workforce? And this is a way to think about it. So you have no one full-time people. So these are the captive W2 employees. And the owners of the companies’ approach to human capital and how they get treated is more of a white-glove experience it's often managed by human resources. And then what we have had for decades now is more a workforce that is more transient and we refer to this as the unknown workforce. So you post up a requirement and you match it based on skills, but you don't really know the human and the human doesn't really know your organization. And there's a multi-layer of supply chain managed there. And so because there's a supply chain, frequently procurement functions have been asked to take the lead in that because candidly, there (are) a lot of moving parts and it can get really complicated and people try to circumvent the system, all the things that you all are familiar with and running a contingent labor program. And then you have this third category, which is independence, but it's a known workforce. So it's people that are referred and that it's human capital. And they're really on-demand and access to you, so not only do you know them, but they know your organization and you can do direct involvement with them.

 

Miles Everson: So, look, we realize that the idea of direct sourcing is not new. So let's dig into that, Bryan. So let's lay it out there. What is direct sourcing?

 

Bryan Peña: So I'm going to read this verbatim because I think it's really important and also because I wrote it. Direct sourcing is a term commonly used to refer to a process by which a company leverages its own employment brand and candidate pool to place talent within a company as temporary or temporary employees or independent contractors. And that's the extent of it. Direct sourcing has been around for a long time under a lot of different names. We can go back to the early days of the union hall at the dock where people would be sitting around waiting for resources. The notion of direct sourcing and talent pools and forms is decades old. I can remember a company (that) was at the front end of the freelancer management movement called computerpair.com, which eventually became enforce. What's really different now and we're going to go into this a little bit later, is the fact that these solutions have harmonized in terms of the demand side of most enterprises are kind of increasing their level of participation to match the supply side of available and independent talent. So it's that harmonization and network effect that is screaming why direct sourcing and talent pools are getting such movement. But at the same time, one of the things that we've seen, this is from SIA most recent buyer survey, you'll see that sixty-seven percent of the hiring managers surveyed and eighty-four percent of the hiring managers surveyed said they're interested in town pools and sixty-seven percent are interested in direct sourcing. What's really, really intriguing about those numbers is they've stayed the same pretty much for a number of years. And that's the key element that I've always talked about when we talk about some of these newer approaches to leveraging the workforce, these things are not new. And if we look at the likeli(hood) to be explored within two years in direct sourcing of content to work, it's 41 percent. I would argue that it's been forty-one percent for a while now. A lot of people have been cautiously dipping their toes in and we could probably spend some time going over what those barriers to adoption may be. But I think now with the current crisis, we can make a claim that the time is now. The interest is certainly realized that the strategy of talent pools and direct sourcing has proven to be effective in a number of different ways. So the time is now. And that's really the key message we want to put out today, is that we've all known it with and there's never a better time to do it than when you're at a time of tectonic change. It's time to implement these sorts of things. But the key element that speaks of these things being successful is the migration of the traditional workforce pipeline strategy to more of a network strategy that we see in those platforms. And Miles wants to take us through this differentiation for folks.

 

Miles Everson: Yeah, so this is this is really kind of an overarching point on business models. And again, I'm going to take you back to that McKinsey article that said organizational and business models will need to change. So for decades, maybe even centuries, you could say that what serves (the) business as well, is what's known as a pipeline business model. So that what it is, is it's a step by step arrangement for creating and transferring value. So you have a series of things that are cereal in nature and you have a producer at the beginning of it and everyone adds a little bit in between. And then at the end, there's a consumer, it's a linear value chain. And that linear value chain, when you run that model, it's all about cost optimization in cost-reduction of the producer. Now, what we've talked about for the last thirty-five minutes is that it's not just about cost, it's about access. It's about efficiency. It's about reducing friction. OK, the pipeline model relies on hoarding these knowledge stocks we talked about. And it hoards them and it monetizes them in binary one hour, one to one transaction's, that's the old model. The new model of businesses that (are) creating the disruption is the platform which this is enabling value, creating interactions between multiple external producers, i.e. a lot of independents and buyers, i.e. your company. And then it's about providing an open participative infrastructure for these interactions. Even today and many direct sourcing programs, it's very close and pipeline-ish as opposed to open participative infrastructure for the interactions.

 

Miles Everson: The overarching purpose of a platform is to consummate a match between the users, i.e. talent and businesses, and I would argue for most of the people, in this case, it's not just between you and your program, but it's between all the people in your company that rely on your program. Getting that match between them and that talent, and that's where the exchange it's the facilitation of the exchange of value that allows you to move with much less friction, allows you to move with more speed, allows you to access the knowledge flows we've talked about. We highlight here that there's this book called The Platform Revolution that I'm sure some people have seen and read. But as you think through this, I would encourage you to take a look at it. I have nothing to do with the platform revolution, just in full disclosure. But I think it's a really good handbook, as you think about what it takes to be competitive and not just in the talent area, but for your company to be competitive overall. So, Bryan, why don't you spend a couple of minutes hitting on how you build pools of people?

 

Bryan Peña: Absolutely right. So one of the benefits of a direct sourcing strategy, obviously, is to simply bypass a lot of the traditional intermediaries and build your own pools of talent. And our notion of a third channel is operating from a level of knowingness and sourcing these folks from a number of different disparate realms. For those of you who have been working with MBO for some time, this might be a relatively familiar slide to you. But I think it bears repeating a couple of these elements kind of go through the fact that all of these sources of work from your current independent alumni independence, furloughed and laid-off workers who have never been more important than the now-retired previous candidates or otherwise known as (a) silver medalist. And finally, external talent pools. These are all new sources of talent for a large number of you. And it really relatively clear-cut in terms of building a diverse strategy. And sometimes these talent pools are quite significant and immense. I was talking to a company just the other day who says they're building their assets right now, is bursting at the seams with new talent and they are chomping at the bit to develop a direct sourcing strategy moving into the future. This third talent is certainly our third channel of talent is certainly one that's been around, but also it can be supplemented by building external talent pools. And those are also an element of direct sourcing, either through internal recruiting structures or your program office or the like. It's really, really important to recognize that these things are accessible to each and every one of you. You just need to build a strategy to implement it.

 

Miles Everson: That's right. So maybe I'll just give a reminder, Bryan, that we're happy to take any and all questions because we're about 15 minutes away from the top of the hour. And I want to make sure that if there (are) any questions, people know that you can post them down below in the Q&A.

 

Bryan Peña: We do have a question, which is, do you see an uptick in the adoption of building independent alliances and hunting larger game or larger scale projects? If so, where do you think those entry points would be? This is from an independent is participating on the call and interested about how he may be able to penetrate and compete with (a) greater scale against some of the larger consulting firms.

 

Miles Everson: Yeah, I don't even know if it's competing against the larger consulting firms in that question, Brian. I think it is. I would describe it this way. You know, earlier we commented that there's increasingly a greater movement to project-based work. And so project-based work oftentimes requires, obviously, a team of people. And so there is a lot of projects that get done in the world of SOWs by small little firms of people, etc., that have high markups in there. And so we are seeing an increase in people teaming together as there's an increase in project-based work. Because for a lot of the independents and I think most of the folks on this webinar today are actually running programs, et cetera, but most of a lot of the independents, they're working on something, helping someone, and they see that there's a need that the company has. And when they're on their own, they can see it, they can mention it, but they can't help deliver the resource. So we are starting to see in our platform anyway that there's an increasing amount of teaming going on where they can say, hey, we know somebody that's really good at a particular skill or capability. So they team together. And we certainly expect that to continue as you see more project-based work in companies.

 

Bryan Peña: You know, Miles, I think for the sake of time, let's go down to and spend some time on what people can be doing right now, and then we have some questions that we can end with. So let's go through this.

 

Miles Everson: Sure. Yeah. Look, so, you know, I'm going to kind of make two comments here. One is maybe an appeal to anybody that has the energy to help make a difference for their company and for their employees, which is. You know, people who lead choose to lead. So I think it's just such an opportune time for people running programs, working and programs to make that choice, lead your company into more flexibility, less friction, more efficiency through the use of an independent composition in the workforce.

 

Miles Everson: So what do you do then? How do you start that? One is obviously to get the macro picture and understanding that we've discussed today. But some more specific things you can do (are) really the first thing is just (to) take stock of your available talent channels. And I would even expand the aperture on that a bit and say take stock of all available talent channels, not just the ones. When we say you are, it sounds like it's you. It's any available channel and evaluate(s). Why you're not using a channel that you're not using today or how you might use another channel to a greater extent. The second is identify(ing) talent, demand, and supply densities. One thing about reducing friction is you have to have (a) density of talent that correlates to the density of the demand that you have for the types of skills. And when you do that, it's a better experience for both the people in the company that need the talent and for the talent because there's greater liquidity in that match market. So it's a really important piece of the making these things work. And then three is work with leadership to identify your strategic priorities and forward looking cathepsin potential choke points. Know, we say capex. I think it's you know, it's not just what's on the balance sheet. It's the capital budgets that you're deploying in your operating budgets. So, you know, there's a great opportunity to create more flexibility while also driving down the cost of driving cost flexibility, which ultimately results in lower cost. You know, I reassess your organizational processes and policies to look for friction areas where their friction being created. And is that really necessary? You know, one of the big things we've seen in during covid is background checks. I'm sure some people said on the phone exploding with this comment right now.

 

Miles Everson: Background checks have been a nemesis for many companies. But when you dig into it and you say, well, why are we doing the background checks? You know, the depth of the background check, you know, there's lots of questions to ask around that in terms of why you're doing it and how you're doing it. Provisioning, onboarding and talent, engagement, reassess all those policies and friction points to see if you can reduce friction, because some of the friction comes from, you know, policy. In fact, a lot of it does, not just from execution. And then the fifth item is revisit your extended workforce technology stacks, because a lot of the reducing the friction and being more agile is using technology that is more modern technology that allows for an easier and more fluid process of exchanging information and ultimately getting people to do the work you want them to do, then six and then revisit MSA and agreements with providers. You know, there's lots of terms in here that can create friction and slow things down. And you have Z-Score on here, Bryan. One of the things we know is that. The biggest challenge for any company from a real durability perspective is what is the liquidity of the company? And so a lot of organizations have been hit hard. So understanding who your suppliers, what their liquidity looks like, what their source of liquidity looks like, what their balance sheet looks like, things are very different today than they were six months ago for a lot of companies. And if you're going to rely on people to be producing for you and delivering, you know, I think this is a really important component as well. And then lastly, start building a direct sourcing strategy and a business plan. And not just the strategy is one thing. And then the plan is, well, how am I actually going to operationalize it and how I'm going to drive change management through the organization to get a much more flexible workforce and access to the talent that's helpful to the company.

 

Bryan Peña: So, yeah, I'm really going. I think you need to be doing. Yeah. I'm really interested in number six. Just as in another reference point, when you're looking at your suppliers sufficiency, a lot of people think about is that should I do I have enough suppliers? I think I can't obviously stress enough to know the true fiscal health of your partners, whether it's your staffing partners or your office supply partners. Understanding their ability to weather the storm where is that liquidity coming from, not just from organic growth, but also if they have a venture capital backer, what are those that what does that venture capital backers health and their quality. The landscape is littered with companies that have been forced to pay invoices twice because providers have fallen out of favor.

 

Bryan Peña: We have a couple of question, Miles. I'm going to go ahead and write right to that one. The first question we have is from a program manager. It is you know, we have been aware of direct sourcing and trying to get the attention of senior leadership. Miles, you've been with CEOs and in those rooms where there's some of the most tectonic decisions have made at the enterprise level, what are some of the ways that you can build a business case that senior leaders will pay attention to? I mean, the most accessible is maybe cost savings. But moving beyond that, how can you get the C-level attention to something like a direct sourcing or a kind of an agile talent strategy?

 

Miles Everson: Yeah, so, I mean, I've I've done that, obviously, as you know, Bryan, both before I came to MBO running a big business that was full of some really awesome knowledge workers. And then also being at for the last year. So there's a maybe trigger points. Number one is when you ask a CEO who what were his most important asset is, they will inevitably say their talent. And you say to really so let's talk about how you define talent and most often they'll think about it is their full time employees. And I understand that full time employees are extremely important. We have plenty of them and they're important. But you also have to look at the people that can help drive the change in the company, the independents that are they've chosen to work in a work style that's different than a full-time employee. But that doesn't mean you should treat them in a way that causes they'd rather go work somewhere else. So so it's it's saying take a total talent picture. And how do we become the employer or the buyer of the best talent on the planet? And if you're really being honest with yourself, that CEO is going to say, I do have to have access to independent talent because people have chosen to do that. And then the other thing is we have some quite compelling data points around. I'm going to say correlation, not cause and effect. Pretty high correlation between the more relative share of independent workers you have there's correlation to higher market capitalizations and enterprise value and it's actually there's lots of ways to look at it. But the fundamental point is that when investors really valued business at all, it ultimately comes down to cash flow yields in return on discounted cash flows. And when you have a variable model, you can drive up that cash flow and you can determine when you're going to deploy cash or not against against an opportunity. So that's a much longer I have a much longer answer, but those are.

 

Bryan Peña: Yeah. So it's well, a lot of people would think about cost savings and the like the key notion is at the CEO level, they're thinking about very, very different terms and sometimes that seem much more expansive than to something like discrete by cost savings. So the notion of enterprise valuation, I think is the real important one that the CEO is focus on, which is things that deliver revenue and enterprise valuation improvements as opposed to something as tactical as discrete cost savings.

 

Bryan Peña: How do you see the current crisis affecting the consulting and services industry long term overall? Do you think that it will be very different in the modes of delivery and engagement moving forward?

 

Miles Everson: Yeah, so I think there will be differences here, Bryan. But I the way I see it is it would be remiss if I was to think that the only thing that's going to change that industry is covid-19. I think it's like many of the other frankly, every other industry which is subjected to those four forces that I was talking about in covid-19 is accelerating it. But I do see that, you know, the consulting industry, frankly, is companies go to more and more project based work companies that are really good at managing and utilizing those consultants as a strategic asset would be better off. And so I actually think it'll be good for them. Not bad. OK, the other thing that's interesting is, you know, some of the consultancy firms, I would argue, are perhaps at the top of the charts being good on managing and rewarding and attracting a remote workforce. So one of the challenges that we haven't talked about with remote work that we've seen come up is that there's many people that had to go remote that weren't used to it, and the effects of physical isolation start to have an impact on their wellbeing. And so you have to be you know, we've done this in our companies, you know, but you have to be very deliberate about making sure you're engaging people as much as possible to minimize and dilute the effects of physical isolation. This is I'm not a psychologist, but I've talked to enough of them about this issue. And it's one of the challenges. And all I'm saying is the consulting firms and others have been able to do that successfully well before covid-19 hit because of the way the nature of the business they ran.

 

Bryan Peña: All right, I think that brings us to the end of our time. Thank you, Miles, and thank you to everyone for attending. If you're interested in getting a copy of this presentation, we will be posting it on our website, I believe, or you can email me at that details below or reach out to your MBO account contact. Thanks so much, Miles. I think this is a great discussion. As always. I learned a lot and I certainly hope everyone else on the phone did. And hopefully we'll see you again next week or next month, I should say. Stay safe, everybody.

 

Miles Everson: Thanks, everyone.

Bryan Peña: Thanks, everyone.