In 2013, a Tesla burst into flames when it ran over a metal object. Then it happened again a few weeks later. A federal investigation was launched and within four months, it was closed.
Tesla quickly determined should debris hit the car’s battery pack when the chassis was lowered at highway speeds—well, it would catch fire. The company simply and swiftly updated the software for its cars, raising the highway ground clearance up by an inch.
Problem solved. No recalls.No repairs at dealerships. No horrible financial hit to Tesla. Federal case closed.
Imagine if this had been General Motors.
Fortune’s article on the “The 21st Century Corporation” uses this example to illustrate a shift that is happening. The move to a “friction-free” economy means that “labor, information and money move easily, cheaply and almost instantly.”
Tesla is a 21st century company. GM is still a 20th century company.
More from Fortune with respect to labor in a 21st century company:
“What happens when the labor market becomes friction-free? It’s clearly headed that way, as the rise of the gig economy shows. Companies still employ full-time workers who aren’t really needed full time, but keeping them on staff is easier than constantly hiring and firing. At least it used to be.”
The article goes on to talk about online marketplaces for labor such as Upwork and HourlyNerd. Former Cisco CEO John Chambers said “soon you’ll see huge companies with just two employees—the CEO and the CIO.”
I’m sure he meant to say “CEO and CHRO/CPO.” Right.
While I don’t see huge companies with only a handful of employees anytime soon, the rise of the 1099 worker isn’t a fad. It isn’t a plot to pay people less than they’re worth. It’s happening because of how people want to work (gig economy) and how organizations need to shift their way of thinking about human capital.
HR’s ability to be in front of this new way of working is paramount to the function’s ability to drive business results. Understanding how and when to deploy an outsourced or flexible workforce model should be part of the organization’s workforce planning process and effectiveness measures.
Working in a 21st century company could truly look more like the Hollywood model, “in which people and resources come together to achieve a goal and then disperse to other projects.”
I’m up for that—especially if in that model my Uber driver is driving a Tesla!
As an aside, I was in Washington, D.C. this week and used Uber twice. I asked my drivers if they felt underpaid, overworked, or misled by their 1099 working arrangement with Uber. Both said it was the best gig they’d ever had.