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Welcome to the New Normal of Talent Management

Bill Castellano presents a comprehensive, innovative model of workforce engagement that responds to today’s new realities, and helps you anticipate tomorrow’s.
This chapter is from the book

You truly live in interesting times. Change has been a constant in your life for some time now, and the pace of change is increasing at a dizzying rate. You are entering a new and challenging way of working as a result of unprecedented technological, global, economic, and demographic trends. Unlike previous tumultuous business cycles, you can now witness structural shifts in labor markets and the economy that are fundamentally changing the world of work. Many economists, business leaders, and commentators are describing this trend as the new normal.

This is a new era in which dazzling technological advances, new global competitors, and a new generation of workers can change the direction and fortunes of the old economic order. Every day new companies creating innovative products or services replace established, yet rapidly becoming obsolete, companies in a continuing process of creative destruction. In the United States and much of the developed world, the long-term trend is slower economic growth and higher unemployment, whereas in much of the developing world, it’s faster economic growth and rising employment. Furthermore, you can witness dramatic labor force trends. In the United States, the workforce is growing at a much slower rate due to slower population growth and lower workforce participation rates. Even more alarming, there is a growing unsustainable gap between the supply and demand of high-skilled U.S. workers.

The world of work as a result of these trends has become increasingly more complex. An amazing amount of new information exists that must transform into knowledge, a greater degree of global interdependencies, and a need for much faster response times, all resulting in a much less predictable and chaotic workplace (see Table 1.1).

Table 1.1 Welcome to the New Normal

Seismic converging trends:



Labor force



Increasing complexity

Structural shifts

Technological Trends

Many people describe the new normal purely as a phenomenon of the impact of technological advances on every dimension of your life. Indeed, advances in computer and communication technologies transform how you work, live, and play (see Table 1.2).

Table 1.2 Technological Trends

Increasingly faster, powerful, and less expensive technologies

Transforming how you live and work

Reducing barriers of entry

Creating new industries

Increasingly Faster, Powerful, and Less Expensive Technologies

One reason why technology has been so ubiquitous is the seemingly impossible trend of simultaneously getting faster and more powerful while getting cheaper. In the 1960s, Gordon Moore, one of the cofounders of Intel, accurately predicted that the power and speed of computers would double approximately every 2 years. Unlike many predictions, this one was accurate, and today it is known as Moore’s Law. You may be amazed about the stories that today’s average home computer has more speed and power than the technology used to put a man on the moon.

Not too long ago you measured computer-generated information in kilobytes that equaled 1,000 bytes of information. Today, most home computers store gigabytes of information, which is the equivalent of billions of bytes of information, and have backup drives holding terabytes of information that equal 1,000 gigabytes. In 1 year, the entire world produces more than 800,000 petabytes of information. A petabyte is 1,000,000 gigabytes. To put this in perspective, the entire written works of mankind in recorded history in all languages equal 20 petabytes, which is equal to the amount of data processed by Google in one day. This is a true example of Parkinson’s Law, which states that whatever information capacity you supply to humans, they will use it.

The competition for creating the world’s most powerful computers is increasing more than ever. The United States, which was knocked from its top position by China in 2010 and Japan in 2011, once again is home to the world’s most powerful computer according to the Top 500 list. Actually, the United States now holds the top two spots. The Department of Energy’s Cray XK7, named Titan, has clocked in at 17.6 sustained petaflops or quadrillion floating-point operations per second (Top500, 2012).

You can witness a similar trend in the communications sector. The global mobile phone industry was launched on September 7, 1987, when 15 phone companies signed an agreement to build mobile networks based on the Global System for Mobile Communications (GSM). It took 12 years to reach 1 billion mobile connections, and only 30 months later there were more than 3.5 billion subscriptions globally. Today, there is an estimated 4.5 billion mobile subscriptions (Meister and Willyerd, 2010). The first commercial text message was sent in 1992; today, the number of text messages sent every day exceeds the total population of the planet. In addition to phone calls and text messages, advances in communication technologies enable massive amounts of digital data to be sent at light speed.

For example, fiber optic cables can now push 14 trillion bits of data per second, which is the equivalent of 2,660 CDs or 210 million phone calls.

Unlike any other industry, the fantastic advances in computer and communication technologies were accompanied by equally dramatic price decreases. Since the turn of the century, the cost of moving data across a network has dropped more than 90 percent, while over that same time period, data storage costs per unit fell from more than $500 to slightly more than 10 cents. Computing power measured in costs per 1 million transistors dropped from $222 in 1992 to $0.27 in 2008. Perhaps if the automobile industry advanced at a similar rate, everyone would drive cars that get 1,000 miles to the gallon and cost $500 (Benko and Anderson, 2010d).

At the dawn of the technology revolution, the costs to purchase and power a computer were so prohibitive only the government used the power of technology. As the speed of computers increased with a correspondingly decrease in price and the need for power, the transformative power of technology spread from governments to corporations to individuals. Actually, the average individual today has access to virtually an unlimited amount of information and computer power. In the past, companies spent millions of dollars on infrastructure and developing computer applications for their businesses. Today, individuals with a laptop computer literally have the world at their fingertips via search portals such as Google and Bing, have access to many free applications such as Gmail, Google Docs, and Picasa, and enjoy free online content from newspapers, magazines, and blogs.

More transformational than the power of technology is the impact on behavior that it engenders. Today, more than 65 percent of adults in Organization for Economic Cooperation and Development (OECD) countries use the Internet to send more than 9 trillion emails a year; perform more than 1 billion Google searches a day; and form countless communities and relationships that were previously unimaginable (OECD, 2011). Today, technology is a ubiquitous and integral part of our lives, and the pace of innovation and its scope is increasing at an accelerating rate. It took 75 years for the telephone to reach 50 million, 38 years for the radio, 13 years for television, 4 years for the World Wide Web, 3 years for the iPod, and only 2 years for Facebook.

Transforming How You Live and Work

Technology has been transforming how you live and work for decades. When access to technology is equalized, technology becomes a commodity, and companies can no longer differentiate by just having technology. Companies need to start viewing innovation as the true enabler and technology as the means to drive innovation. “In the last twenty years, becoming digital was a competitive advantage. In the next twenty years, in the New Normal, we have to focus on how to be clever with digital” (Hinssen, 2010 pg. 174). Companies use technology such as social media and digital marketing to improve their communication and collaboration within and beyond their boundaries.

In addition to fostering better collaboration among employees and gathering invaluable market intelligence from a significantly expanded audience, companies are doing so in faster and more efficient ways. Social media is shifting the older one-to-one communication channels via emails and phone calls to many-to-many communication channels via an array of social media platforms. These social channels enable employees to find information more readily within the organization and have access to communities of experts that facilitate knowledge sharing. As a result, they can connect with suppliers and customers and gain insights for improving customer service, as well as marketing and product development.

For example, innovative companies such as Inuit use technology to forge stronger customer relationships by creating online customer support communities to help monitor and resolve customer issues that enable more experienced customers to give their personal advice to those who need it. They monitor the questions and responses to help drive product upgrades and fixes without paying for costly customer surveys (Bughin et al., 2010). Procter & Gamble (P&G) created a customer network called Vocalpoint where mothers share their experiences using P&G’s products with other members of their social circle. In markets in which Vocalpoint influencers are active, product revenues have significantly outpaced those markets without online customer networks.

Technology also transforms customer intimacy companies such as Nordstrom. In an interview published in USA Today, Blake Nordstrom noted how technology changes customers’ shopping experiences (Malcolm, 2012). Think digital fitting rooms, where parametric technology simulates a shopper’s body type to show how a garment might look or fit. Soon 3-D printers will enable consumers to make products in their own homes. Intel has recently designed a mirror that shows shoppers how clothes look on them, enabling them to avoid having to use fitting rooms. Increasingly, where customers shop will not matter. People could shop from their homes, cars, or wherever they have access to mobile networks using a multitude of mobile devices. According to a 2012 survey of C-level executives conducted by McKinsey & Company, the top digital trends transforming business are big data and analytics, digital marketing and social media, and cloud computing (McKinsey & Co., 2012b).

Advances in technology have long been transforming where, when, and how work gets done. The idea of a workplace that is a fixed, physical location is obsolete. Today, there are millions of individuals working remotely from home and distributive workplaces. Going to work for many employees means walking to a home office where they are instantly connected to their managers and coworkers or can join a videoconference with team members around the globe. It’s estimated that there are more than 13 million workers in the United States who work outside a traditional office space almost daily and another 10 million who telecommute at least one day per week (Benko and Anderson, 2010d).

Social networks such as Facebook, LinkedIn, and Twitter create new ways for employees to collaborate, share information, and get to know each other better. There is now a “virtual water cooler” at the workplace where employees spread out across vast distances can converse with one another. Companies such as Cisco and IBM utilize social networks as well as videoconferencing technology to help dismantle silos and increase collaboration and knowledge sharing across their organizations (Bisson et al., 2010). These new technologies transform and reduce the costs of how knowledge is created and shared, as well as increase the speed to access external experts.

Venture capitalist firms in Silicon Valley use advances in mobile technology to create what is often called the distributed workforce. Companies such as TaskRabbit have taken the on-demand workforce to a new level by organizing and auctioning tedious and time-consuming chores. According to Rob Coneybeer, managing director of Shasta Ventures, which has invested in several of these new companies, the goal is to build a new kind of labor market “where people end up getting paid more per hour than they would have otherwise and find it easier to do jobs they are good at” (Stone, 2012 pg. 1). What makes these companies different than the traditional job boards is the innovative use of smartphones and the supervisory services they provide.

Workers can load an app on their phone and can bid on jobs any time of day. Employers can monitor the whereabouts of workers, evaluate each job after it’s completed, and make payments on their phones or via the Internet. In an interview with Bloomberg Businessweek, Leah Busque, the founder of TaskRabbit, says thousands of workers make a living (up to $60,000 a year) on her site. She goes on to say, “We are enabling micro-entrepreneurs to build their own business on top of TaskRabbit, set their own schedule, specify how much they want to get paid, say what they are good at, and then incorporate the work into their lifestyle” (Stone, 2012 pg. 2).

Crowdsourcing is another example of how advances in technology can transform how work is done. This innovation provides companies access to a potentially unlimited pool of talent in which Internet users over a common platform contribute to a project without necessarily getting paid. For example, in 2006, Netflix famously offered a $1 million prize to anyone who could increase the accuracy of its movie recommendation system by 10 percent. It openly provided access to its data set of more than 100 million customer movie ratings. In September 2009, it awarded $1 million in equity to the best-submitted recommendation. Meanwhile, social networking sites, blogs, and wikis offer many ways to tap the wisdom of many experts. Facebook regularly taps into its growing number of power users to translate its site into different languages, which for example took only 1 day to translate into French.

Reducing Barriers of Entry

Technological advances significantly lower the cost of entry for many businesses. One of the most revolutionary technological developments for start-up businesses is cloud computing. Today, companies have access to sophisticated business applications they can run over the Internet and pay only for what they use. Instead of investing large sums of money to buy hardware and servers and employ highly skilled and expensive teams of technologists to manage their business systems, they now have better and more economical options provided by specialized providers in the cloud. The shift to the cloud has also fundamentally transformed corporate information technology (IT) departments. Today, companies need people with technical skills who understand business and customer needs and focus on innovating with technology instead of managing technology.

Cloud computing also increases the computing capacity for many organizations while reducing costs, which is having a significant, positive impact on productivity. In a hypercompetitive work environment with an ever-growing number of new competitors entering markets due to reduced barriers of entry, it is imperative for organizations to continue increasing productivity to remain competitive. This is particularly the case in Western economies where there is slow workforce growth and thus a reliance on productivity increases to fuel future growth.

The reduction of barriers has also enabled more companies to compete on a global scale. You can now witness organizations that are literally “born global.” These firms have the capabilities to virtually manage all their functional operations. They electronically access and link an array of offshore partners for their design, research and development (R&D), manufacturing, marketing, selling, financial, and human capital needs.

Creating New Industries

Not only is technology lowering the cost of entry and increasing business competition, but it is also radically changing entire industries. Through a relentless process of creative destruction, entire industries have been altered or have vanished while new totally different ones have taken their place. Just when I finally replaced all my old albums with shiny new CDs, I replaced all of them on my iPod I can carry in my pocket. Overnight, the music industry was transformed when people could download, copy, and play music on an array of devices. Other industries such as print media are rapidly being replaced with online alternatives.

In a similar fashion, the travel industry had to quickly adapt to remain relevant. People no longer have to go to a travel agent for research or make their travel arrangements. All these options are available online. At one time, the travel industry produced two glossy print catalogs a year, one in the summer and one in winter. Today, it must constantly update its online content. According to Peter Hinssen, “Once the industry hit the New Normal, the rhythm of two releases per year evaporated and the operations of the companies became a 24/7, 365 days a year operation” (pg. 23).

These technological advances also impact the manufacturing industry, which for decades has been the one area in which a blue-collar worker could make a decent living. You can see this trend in the automobile industry in which robotics and computer-controlled lathes have altered production so significantly that fewer but more highly skilled workers are needed to produce a fixed number of automobiles. Today, nearly 90 percent of U.S. and European automotive original-equipment manufacturers (OEMs) use robots for welding and car assembly (Agrawal et al., 2003).

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