Michael Klein* writes,
“[B]y the time you realize you’re in trouble, it’s too late to save yourself. Unless you’re running scared all the time, you’re gone.” – Bill Gates
Realizing that you are replaceable is hard for individuals and organizations to come to terms with. Yet, the reality is that 99.9% of the time we are completely interchangeable. Accepting this is the first step to increasing your odds of success.
When businesses (industries) fail it’s because they ignored the fact they were replaceable.
This is largely true because we have allowed the human dimension in society to become commoditized. You see as older workers are exchanged for younger less costly ones.
In a conversation last week with Ty Hallock and Duncan Work, I referred to Ron Burt's theory of structural holes. Burt's idea is that the person who knows two people who do not know each other has a competitive advantage over the other two. Duncan pointed out that is probably less so today as networks have grown through the mediums of Facebook, LinkedIn and Twitter.
I believe Duncan is correct, and the implication is as I wrote about here, that crowdsourcing is a function of the commoditization of professional services. In other words, we are all replaceable by someone who can provide the same or better services at a lower price.
How, then, do we individually develop a competitive advantage that makes us irreplaceable?
That is one of the questions of the day.
My own sense is that it comes from two sources.
In the future development of networks.
There is a tug-of-war taking place between the value and importance of quantity versus quality in networks. You may have ten thousand Twitter followers. Can you get 10% of them to buy a book? Can you get a hundred to donate to a charity? Can you get them to do anything? That is the difference between quantity and quality.
If you can convert followers to actors, then you have a competitive advantage over the person who has ten times the numbers, but not the influence to make a difference.
The character of the networks.
Proximity, which is the same thing as numbers, doesn't mean you have a competitive advantage. The character of a network goes beyond the numbers to the values that unite a network to action. Outside of network conversation, we are talking about collaboration.
A network that collaborates is a network whose character is more like a community than a phone system.
I'm convinced that it is the second of these sources of competitive advantage that will dictate whether you are a commodity or a valued service.
The key to this second source is the person or persons who intentionally take initiative to take the network beyond its map to being a collaborative group of people engaged in work together.
The ebook, Managing Morale in times of change, was a project that came about because the network of relations was more than just a place to post opinion. It was a place of engagement where each individual's contribution mattered to the discussion.
To be a human resource commodity means that you are no different than the next person. There is no competitive advantage. The character of the individual and the character of their network is the counter force that will dictate value in the future.
How Networks subvert Commoditization.
So what are you to do?
How do you push away from being a commodity, and become a value-added, asset-rich resource to others.
First ask, "What do I have to offer that matters to people and organizations?"
Think in terms of leverage. A lever is a tool or skill that makes another task easier.
For example, in group meetings, you might be the one who knows how to jump to the flip chart and lead the discussion to more quickly define a problem or reach an agreement. You are a faciliator of group thought.
The reality is that this ability is something someone else can do as well, possibly even better. So, the second key matters.
Second ask, "How can I describe what I have to offer as assets that solve other people's problems?"
In other words, the focus is on meeting another person's needs, not your own.
Recently, I wrote about Starting with a Client's Perceived Need. When services are commoditized, it is the person relationship that is the value-added distinguishing mark which matters. I find that the perceived need is often not the real need. But the perceived one is the one that is most pressing and must be resolved in order to get to the deeper ones.
As a result this means our relationships matter, leading to the third key.
Third ask, "Who do I know already who may know others who need my help?"
If you network does not know that you are offering a service, then how can they utilize what you have to offer?
I find the way to work within a network is not direct sales, but rather seeding the network with information and engagement that shows rather than tells of your value.
When you are a human commodity, no one sees YOU. They are only looking at cost and output.
For this reason, I practice a lot of giving away, of sharing my strengths in small, but generous ways. I am also always seeking to understand the stresses and pressures that are affecting people at any one moment. I'm engaged and listening for the opportunity to offer my help. Some times the offer is for free, sometimes for pay. But that is my approach.
Whatever you do, your network must trust you and have confidence that what you bring to the relationship matters beyond the mere accomplishment of the task.
Sure, we are all replaceable. Which means that someone can replace me, as they have, and I replace others as I have. The point is see one's competitive advantage as as a set of assets that one offers to a network of relationships who value you the person, and not merely the service. This is the future that is before us all.
*- Post deleted
Grant McCracken posts an interesting dilemma for design professionals that is relevant to people in all types of professional services.
At year’s end, I have an unhappy thought, that some of the creative professionals who rose to prominence in the first decade of the 21st century will be eclipsed by the end of the decade coming, that the first decade of the 21st century will be, for some creative professionals, a brief moment in the sun.
Why is this?
According to McCracken, it is a product of changes in the supply of able designers, the demand for design services by corporations, and the approach these companies take to utilize the supply of design talent available to them. McCracken relates the following conversation.
Recently, I was chatted with a friend. He’s owns a design firm. Over the years he’s done very well, thank you very much. But he can see a cloud on the horizon. He is seeing some corporations "crowdsourcing" their creativity. They hold competitions in which all the design talent "out there" is encouraged to apply. The best work is selected…and paid much less than my friend would have charged. In sum, demand may be increasing, but supply is increasing more. So prices are falling.
In essence, technology allows for more people to provide design services and for those purchasing them to do so at a lower cost.
This is both the beauty and bain of crowdsourcing.Is there an alternative to this trend toward commodification of professional services?
McCracken suggests that designers consider the following.
In the new "crowdsourced" economy, there will be one place where designers will continue to flourish. It will be with clients who do not know what they need. When they do know what they need, they will take advantage of the new economy. But when they don’t, they will need a enduring connection with a designer who gets who they are, who the consumer is, and what the culture is. They will need designers who deliver a larger package of knowledge, intelligence, and creativity. (Emphasis mine.)
He is absolutely right in his assessment. Crowdsourcing is fine as long as you are clear about what you want. If, however, you need a strategic assessment of your needs and a comprehensive plan to address it, crowdsourcing isn't your answer.
What Grant McCracken is pointing to is a distinction between creative ability as a commodity, and creative perspective as a marker of distinction.
For designers to avoid falling into the trap of being in a commodity business, they must "creatively" look beyond the boundaries of their own profession to see those people with whom they can collaboratively join to provide a value-added service as he describes above.
Of course, this doesn't just apply to designers, but to all professional service providers, for physicians, CPAs, lawyers, counselors, and wealth management professionals. The world of the professions through the advance of technology and the growth and availability of information is being commoditized. It touches everyone of us.
The answer to the "crowdsourcing and commodification of professional services" comes in a new type of collaborative. In this group, professionals from across a range of disciplines join together in a "collaborative relationship of understanding" that is built on "a system of shared values." What this kind of collaborative group allows to develop is a client-centered value-added range of services that would not typically be available to a client from any one professional service provider.
For example, my services as a leadership consultant and life/work coach are now available to the clients of a collaborative group of wealth management professionals. I provide a value-added service of strategic insight and direction beyond investment, insurance and tax advice their clients receive from them.
There is an assumption in this type of collaborative that no one company can have the best in every field working for them. This type of collaborative is, therefore, intentionally crossing organizational boundaries to create a new type of organizational structure, one based on a commitment to the values that govern the relationships between members and their companies.The key to these collaborative relationships is the recognition that the collaborative is not about me, but about the clients that WE can serve.
When a collaborative structure of this type forms, it is not directly an answer to the commodification of professional services. It is an answer to how I can better serve my clients.
Your specific service may still become a commodity in the long run. However, the difference is the relationship that can be developed with the client that allows for a more strategic approach to meeting the client's needs to be developed.
Don't wait to get crowdsourced or commodified before you begin to establish the relationships that can lead to the kind of collaborative that adds value to the services you provide.