The Future of Work by Thomas W. Malone
A Book Review

chillibreeze writer — Vilasini Kumar

This is the first book by Thomas W. Malone, a Professor of Management at the MIT Sloan School of Management and the Founder and Director of the MIT Center for Coordination Science. The book is about the new order of work that is to come. With its powerful insights, it is bound to shake all serious CEOs into taking stock of where their organization stands.

Future of Work - is it here and now, at chillibreeze?

This book was of particular interest to Chillibreeze, a content development firm, on two counts:

Chillibreeze, which operates from Bangalore in India, follows a pattern of working with a small core team and a pool of freelancers, which Malone proposes is going to become the norm in the not too distant future; and
Chillibreeze is a service provider in the outsourcing industry for all kinds of content, be it a web page, a book review or a white paper. Malone points out that outsourcing is a direct effect of companies adopting the new model of working, where they exert lesser and lesser direct control over general business activities.

To read more about Chillibreeze and its Business model, check out the Chillibreeze case study.

We read this piece of work by Thomas Malone to see if Chillibreeze is on track with the future and discovered so much more that we wanted to share it with our readers.

Dream scenario of work:

Imagine this: You acquire a set of skills of your choice and liking and then have the freedom to work where you want, in whichever project that interests you and for whatever period of time you wish. No more bosses to ‘report’ to, no more public relations lunches and dinners to host and no more heated closed-door meetings to sit through. You could be in a small town 30 miles outside of Bangalore, India and be a part of a project implementation group spread across London and Seattle! You could engage in all the important activities in your life, like spending time with children or taking care of your aged parents and still have opportunities to earn.

Welcome to the Future of Work! A futuristic book, which is a must read for all lovers of new ideas and for business leaders and executives.

Organizational Changes in Societies and Businesses – Similar Trends?

Malone sets the tone to discuss the future by walking the readers through the parallels in the growth patterns of societies and businesses. He highlights the fact that these organizational changes and expansions, in both the societies and businesses, became possible only due to rapidly falling cost of communication and because people and organizations willed it.

He points out that societies moved from kingdoms and empires to democracies in the late 1800s. In this new order, of a democracy, people the world over have had more freedom and say in their own lives. Prior to that, as citizens of monarchies and kingdoms, when power was centralized, one had to obey a central order and fall in line.

Malone asks whether we could be looking at a similar scenario in the world of businesses too, where centralized operations could give way to looser hierarchies. Could we be seeing democracies emerging in businesses and companies?

Click here for a flow chart of ‘Parallels Between the Evolution of Societies and Businesses’

Democratic Companies?

Most corporations and companies still continue to operate as highly centralized organizations, where major decisions are taken at the top and executed by the employers. Think about this - what if the workers have more freedom, what if even major decisions are taken at the lower level in the hierarchy, what if everyone had a say in the operations? The company prospers because the workers are keenly participating, out of choice and are self-motivated.

Malone contends that all these could be possible. Decentralized operations, he points out, will become the norm. The way people choose where to work and how to work could change dramatically – with few people in the core team, controlling, and everyone else chipping in with a high level of commitment. Human values will decide such engagements and the prime agent of change in all this was, and will be, falling communication costs.

A Compelling Book:

Gems by way of examples make this book very readable. The kind of book you will want to refer to again and again, to revisit the case studies presented. Backed by research, the book has showcased many organizations operating in a totally new and innovative manner.

Malone points out that:

Decentralized businesses are already here - as we see from the fact that more and more companies outsource most of their non-core areas;
He cites the example of Nike outsourcing all its manufacturing to other companies;
Some companies operate as democracies – Hewlett-Packard taking a vote from its own employs to decide whether the company should merge with Compaq;
There are many examples where people engage in a project of their own volition – because they want to, not because they need to. A case in point - a loose network of volunteer programmers develop Linux, one of the best operating systems in the world.

Non-Economic Goals & Falling Communications Costs act as Catalysts:

No longer is a centralized way of control and operations essential to run successful companies. If anything, companies may need to bring in change to meet the needs of tomorrows’ workers who are looking for something more than just money – human values, quality of life, time with family and more freedom.

According to Malone “ humans changed the way they organized themselves, because falling communication costs made the changes possible, and people’s value made the changes desirable”

The author makes it clear that this book is not about ‘predicting the future’ but is meant for ‘shaping the future’. Malone says emphatically very early in the book that “The real impetus for the transformation in business will not come from the new technologies, however. It will come from our own innate desires for economic efficiency and flexibility, certainly, but also for non-economic goals like freedom, personal satisfaction and fulfillment.” The author thinks “the time is right to reap the benefits of big organizations like economies of scale without giving up the human benefits of small companies like freedom, creativity, motivation and flexibility

Centralized Vs Decentralized:

Thanks to many forms of business communication - like email, conference calls the web and so on, a decentralized system of operations becomes possible in companies. Though technology may make this probable, what could make such a loosening of the structure possible is that a decentralized organization gives people more freedom and helps them find more meaning in what they are doing.

Centralization Decentralization

Centralization	Decentralization
Useful when economies of scale are important.	Motivation, creativity & Flexibility can be tapped.

Types of Decentralizations:

Okay, if decentralization is what would be welcome in the future of work, what form should it take and how should it happen? Malone presents three types of decentralizations – ‘loose hierarchies’, ‘democracies’ and what he calls ‘markets’. To cover all this would be outside the purview of this review, but we hope to get you interested enough to read the book! Here is a peek into an example in each of these types of companies:

• Interesting examples of a loose hierarchy is GOOGLE. COM, which hands over any major project to small autonomous engineering teams, with a lot of freedom. Interestingly, the system GOOGLE set up to help the teams keep a log of their progress has now become a popular blog.

• Example of a democracy: Who would think that no one, except the president and the secretary of a $12 billion company with six thousand employees, has a job title! Everyone is an associate. This is W.L Gore and Associates, which makes waterproof fabric in the US. The democratic way of operations in this company goes to such an extent that to be a team leader, an associate should be able to sell her/his talent and their idea and get other associates to be a part of the team! It is the associate’s choice – whether to be a leader or a team member. Again their choice, of which group to work with!

• Markets can be of two kinds:

1- Using External Markets for Internal jobs:
Outsourcing internal work is what this is all about. Some examples of external markets being used for internal jobs are companies outsourcing the production of brochures to freelancers or machine parts being bought routinely by manufacturers from suppliers. Chillibreeze is providing services to such companies, which are outsourcing content development.

2- Companies Using Internal Markets for Internal jobs:
An interesting example that Malone cites is that of the British Petroleum. The Chairman John Browne’s vision of reducing the company’s greenhouse gas emissions by ten percent in twenty years was achieved in eleven years using just such a technique! Each business unit within the company was handed out a tradable permit, which allowed the holder the right to make one ton of carbon-di-oxide equivalent emission in a year! Business units, which felt that they might be well within the pollution limit allotted to them, were free to sell the extra permit to other units, which expected to exceed the limit allotted to them. In 2001 the BP business units traded more than 4.5 million tons of ‘emission rights’ at an internal price of about $40 per ton!

However, decentralization without controls will lead to chaos. An overall framework of rules and guiding principles, written or unwritten, is needed for decentralized companies to succeed. Malone cites the example of how, on the Internet, there are rigid technical standards, as Protocol, to enable flexibility.

All about Coordinate and Cultivate:

The mindset of companies moving away from centralized operations to loose hierarchies or democracies needs to change. It will then no longer be about Command and Control but about Coordinate and Cultivate. Malone’s choice of words, to convey the difference in operating style, is commendable. He says ‘ Coordination focuses on activities that need to be done and the relationship among them, but Cultivation focuses on people doing the activity. To cultivate is to bring out the best in people through the right combination of controlling and letting go.

Is your Company Ready for Decentralization?

Reading this book a CEO may be in a hurry to adapt the concept, lest their company be left behind! Expecting this, Malone has done some thinking on it and has come with a few parameters to look at, to judge whether or not the company is ready for the change.

The three basic types of decentralized companies are, as said earlier, loose hierarchies, democracies and markets.

When there is a possibility of conflicts of interest arising often, when quick decisions are important and when you want to economize on communication costs, stick to the centralized system of operation.

On the other hand, if tapping the creativity of employees is important and the company wants them to be highly self–motivated, then you are looking at the market option.

The other two, the loose hierarchy and democracy models, are in-between. A hybrid, where at the ground level the workers make the operational decisions, but the managers set the ground rules, seems to find quick adaptability in companies.

Outsourcing – a smart move?

It is not wrong to conclude that one gets a clear signal from the book that outsourcing will no longer be a bad word but a smart move, as more companies adapt the new order of work and loosen up.

Chillibreeze, India, does not have rows of workstations with hundreds of people glued to the systems, executing the projects. It has adapted Malone’s idea of encouraging freelancers (much before we knew about the book!). E-Lance Economy is a term coined by Malone and his colleague Rob Laubacher in 1998, denoting an electronically connected freelancer.

When there are projects on hand, the Chillibreeze Writers and Associates come on board and work on them. They do so only if the assignment catches their fancy. If the elancers want to take a break, they do so, but not while they are on a project.

Chillibreeze is striving to provide the environment for such engagements to happen, in a mutually beneficial way. It wishes to provide opportunities for elancers to be creative; make a difference; and attend to other important things in their lives. Figuratively, Chillibreeze needs to design docking stations of various sizes and shapes for the satellites of elancers to lock into, whenever they want to.

In this context, it is interesting to read Malone’s observation:

" In an e-lance economy, the fundamental unit is not the corporation, but the individual. Tasks are not assigned and controlled through a stable chain of management, but rather are carried out autonomously by independent contractors. These freelancers join together into fluid and temporary networks to produce and sell goods and services. When the job is done, the network dissolves, and its members become independent agents again, circulating through the economy, seeking the next assignment"

Work Off-line, yet Online:

We are not saying that Chillibreeze has found all the answers, but we do know that we want to be different. We want to encourage more young mothers, experienced professionals and people with free time to work from home, but feel that they are working for a company. Work off-line, yet online!

How does a content development company ensure that its elancers do not walk away with its clients? If all the jobs are being executed by elancers then will the client see the value addition the company is providing – be it through the collective ideas generated by the core team or the editing, the project coordination or ensuring quality? These are the issues that the core team has to thrash out. This is a delicate balance. We did not find answers for these in the book. To be fair to the author, when a book is presenting a very new idea, one cannot expect the writer to come up with all the possible questions and answer them.

Chillibreeze's disclaimer: The views and opinions expressed in this article are those of the author(s) and do not reflect the views of Chillibreeze as a company. Chillibreeze has a strict anti-plagiarism policy. Please contact us to report any copyright issues related to this article.

Chillibreeze has not tried this decentralized system long enough to say that it is a success. The company is treading new ground. If it clicks, it would be awesome!

To ensure that such a loose system of operation succeeds, we should not bow down to imponderables, but create mechanisms that circumvent them. We need to design and refine systems under which a healthy Chillibreeze - Elancer engagement can be enabled. Chillibreeze wants to continue to grow organically and be recognized as the place to go to for content development, whether it is for highly technical writing, or light travel writing or keyword-rich web page material.

We have a lot of coordination and cultivation to do before the Future of Work becomes the Present of Work at Chillibreeze, but we might be on track. To find out more about our content services, contact us.

Out of 5 “chilies”, our editorial team gave this article...

—About our writer:

Vilasini, seen here with a cat, is actually a dog lover! Started her stint with Chillibreeze as a writer and is presently the Chief Operating Officer of the content division. This is who she says she is "a Masters in Math by qualification, a Coordinator by birth and a 'people person' by nature." Seeing Chillibreeze become a globally recognized company, adding value to clients and making a difference in the lives of Chilli writers, is her mission in life now! You can reach her at vilasini@chillibreeze.com

The Future of Work by Thomas W. Malone A Book Review