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Wednesday 6 February 2013

Is the Future of Talent in Clusters?

The Future of Talent Is in Clusters

An effective team is a powerful thing. Many of us have participated on teams where the members complement each other, trust each other and find ways of working that are not only effective, but also enjoyable. For teams like this, performance is typically much higher than might be expected of the sum of individuals.
And yet while teams often are where the real work gets done, most businesses don't value or manage them well. Many businesses aren't skilled in talent management or team nurturing. Team management, in particular, is often a scarcely recognized activity.
What's more, most employees don't work in high-performing teams for long periods — team members move on, projects finish, and other pressing needs come to the fore. While it's part of the normal course for organizations, disbanding well-functioning teams is actually a value-destroying activity, eradicating the "team capital" built and stored in the team. Because businesses don't fundamentally recognize such teams as entities beyond the activity they are performing, this value destruction seems inevitable.
But what if there was another way? One in which organizations capitalize on the inherent value of a well-functioning team? One where the organization evolves its management style to let teams self-manage to preserve their culture and value?
A New Kind of Team: Clusters
Clusters are a radical alternative to our traditional notion of teams. They are formed outside a company context, but are hired and paid by companies as a unit, as a permanent part of the company. They manage, govern and develop themselves; define their own working practices and tools; and share out remuneration. Technology trends and tools like the cloud, and collaboration suites, are evolving to make this more and more workable.
The business or agency treats the cluster as an atomic unit of resource and it hires, fires and positions the cluster as a unit. Likewise, each cluster appears as such a unit in the business's organization chart. Clusters plug together like Lego bricks to achieve the business's goals.
A cluster is not the same as a consulting model. The main difference is that clusters will typically be hired permanently by a business with a mutual intention to commit for the long term. As such, a cluster can be considered a real asset of the business, just as high-performing staff members are today. Also, the cluster model puts extreme emphasis on teams that learn how to work well together and determine their own tools and work practices. This is not always true of consultancies. An individual can be in different clusters over time, and possibly in multiple clusters at once, similar to a conventional part-time work model. Similar approaches can and should be applied to consultancy models.
Clusters Manage Themselves
A cluster typically consists of five to eight people, is hired by a business with a clear scope of work, and remunerated based on outcomes. Clusters have already established shared values, work practices, tools, and roles, such as who is good at what. Balancing team roles can be particularly important to avoid the Apollo effect, where every team member needs his or her idea to dominate and the team is unable to come to a consensus. Clusters actively seek the variety of skills, talents, and personalities necessary to create a high performing team (see the Belbin model for a good example of nine discrete team roles.)
While there are close equivalents of clusters in a few corners of the working world (elite military teams, medical units, and TV and film crews), this model could and should pervade much further into the working world, possibly and ultimately for all operational and project work, and sometimes even for leadership teams. I would project that by 2020, 30% of work will be performed by permanently employed, self-managed clusters.
The cluster manages itself by finding, hiring and firing members; governing itself and resolving conflicts; creating and sustaining work practices and tools; and managing its engagement with other clusters, teams, people and organizations in order to fulfill its direct business goals and to nurture itself.
In short, a cluster is an extreme version of a self-managed team. It is extreme because the enterprise only has a formal legal and financial relationship with the cluster, not its members. Note that while a cluster is self-managed, it is not typically a self-directed team. Self-directed teams define their own goals, whereas clusters agree on outcomes with the businesses for which they work.
Clusters Create More Value
Clusters offer four main benefits:
Higher levels of business performance through higher motivation. The cluster model, when executed well, addresses known performance drivers such as purpose, autonomy, and mastery (see Daniel Pink's book Drive for more on these).
Higher levels of business performance through a custom work environment. Clusters can create and sustain leading-edge electronic work environments since they are less burdened by bureaucratic decision-making and the need to serve the diverse needs of many types of teams and individuals.
Talent management in the right place. The cluster model removes the burden of team and individual performance management from the business — where it typically sits uncomfortably and ineffectually today — to the cluster. The cluster knows its own members, contributions and development needs much better.
Higher levels of personal happiness. Clusters are sufficiently small for members to genuinely know and care about each other, and they are stable and autonomous enough for members to support each other's long-term personal development.
Clusters Have Risks, But They Are Manageable
For the cluster model to work well, with businesses hiring, firing, positioning and remunerating clusters as atomic units, considerable changes are needed in the macro work environment, to HR and payroll, recruitment agencies, legal, financial, and real estate. Even if these macro changes are made, there are two main real and perceived risks with the cluster model: the formation of mini silos, and the inability to retain clusters or their loyalty. The key to success is to ensure that the cluster's agreed-on scope of work includes appropriate levels of commitment to, and multiple interfaces with, broader corporate goals and initiatives.
Eventually, wherever the cluster model is adopted, businesses will need to work hard at managing and leading them well, just as they have always done for their emerging talent assets — ensuring that the best are motivated to stay, the worst are inclined to go, and those in the middle are motivated to improve.
More blog posts by Dave Aron
Dave Aron

Dave Aron

Dave Aron is a vice president and Gartner Fellow in the Gartner CIO Research group, focusing on IT leadership issues. His work on clusters is part of a Gartner Maverick research project, which examines high-impact future scenarios as they emerge.

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