Our CEO was last seen around here heading NorthWest

There was a meme that went around a few years ago highlighting that Airbnb was the most valuable accomodation service with no hotels, Uber the most valuable transportation service without cars, and so on. The point of the meme was an ongoing shift in our economy from asset ownership to services as the source of competitive advantage.

Our new pandemic world throws up a new source of competitive and strategic change. Organisations are beginning to recognise that location isn’t what it once was. We are in danger of being dislocated.

At the beginning of the industrial era, entrepreneurs created factory towns to have a dedicated community of employees, to develop unique skills and capabilities in their employees and to preserve intellectual property. From that location they sent product out to the world.

Despite the major shift from manufacturing to services, organisations still think in factory town terms. A new campus is still a marquee project for a CEO and in Australia we have been through an era of heavily investment in collaborative office spaces, mostly for property savings but under a veneer of innovation, collaboration and human capability. Location is a source and a gathering point of human capability, even if that location is a financial centre trading in global markets or an innovation hub like Silicon Valley intent on enabling the world to collaborate, work and live digitally.

Organisations are now challenged to think about where the best capability lies for their strategy, not where their organisation may be located. Effective strategy has always been about the best development and use of human capability. Now this capability can come from a global market. This is not offshoring where organisations engage in labour arbitrage, or the gig economy where organisations seek to shift the risk of business volatility to contingent contractors. This is an explicit recognition that, subject to the limitations of remote work, you can hire anywhere and get the best capability. If your organisation has global ambitions, one has to question why your human capabilities are limited to the supply in your own town or that which will move to your town.

How did Airbnb, Uber and the like become household names? They presented novel solutions the limitations of marketplace services for accommodation and transportation. They aren’t perfect but the delivered a compellingly differentiated proposition to scale globally. The barriers to remote working and its issues are problems for organisations to solve to leverage the best global capabilities to deliver their strategy. Many organisations are already deep into experimentation, investment and development of new models of hiring, of work and of capability. There is new strategic advantage and new level of performance that organisations can achieve if they are able to work with their people and develop new and better ways of working.

Remote and flexible work is not a temporary or short term fix to a pandemic. Things will not go back to 2019 business as usual. Organisations seeking competitive and strategic advantage should be exploring the opportunities and new solutions and new ways of working for our dislocated world of work.

One thought on “Dislocated

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