Leadership in the Sharing Economy

What does it mean to be a leader in the “sharing economy?” How do you lead when most of your employees are contractors or simply users of your website? How do you manage an organization that has been designed to virtually eliminate the need for command and control?

 

These are some of the questions more and more of us will face as new organizational forms and business models continue to grow and displace more traditional organizational structures. As the disruptive business models pioneered by the likes of Uber, Lyft, and AirBnB expand to other services and segments of the economy, more of us will be involved in starting, managing and leading these “organizations”. Even more traditional organizations will continue to evolve their human resources practices and allow flatter organizations, more flexible working arrangements and greater use of part time and contract employees. How can the leader of the future adapt to this new environment and what management skills and personality traits will be necessary for success? (Some additional thinking on this issue can be found in a recent Forbes article: http://www.forbes.com/sites/blakemorgan/2015/05/26/scaling-customer-experience-in-the-sharing-economy/).

 

One of the first questions to ask is whether there is a “leader” in the sharing economy. If everyone is an independent entrepreneur, is there really a leader? Of course there is. Even Uber and AirBnB have leaders that created the business model, manage the overall direction of the company, set policies and standards, and maintain the brand. The role of these leaders has many of the aspects of leadership in more traditional organizations. The key difference, however, is that there is less command and control of individual employees that in a typical corporate structure. The rank and file “employees” are really independent contract workers (pending, of course, the court cases currently underway to determine employment status). Traditional methods of motivation, direction and evaluation need to give way to new tools and techniques.

 

Regardless of the changing relationship between new economy leaders and workers, leaders still need to provide the key elements of any successful organization – a vision, a strategic direction, a set of values by which the company operates, and a culture that supports the company’s goals. In fact, clearly articulating these goals, standards and values is even more important when you don’t have the opportunity to look over your employees’ shoulders. Leaders of tomorrow have to be great communicators, and work hard to craft a vision and values that are easily understood and welcomed by the workforce. Regular tracking of how the organization is living up to these standards is also important.

 

Training is also a critical element of the new economy. The workforce needs to be absolutely clear on what they can and cannot do, how they are expected to behave and how they are to reflect the company’s brand image. Uber drivers are expected to have reasonable automobiles, drive safely and arrive on time. AirBnB apartment owners need to be able to meet the expectations of the renters who stay with them. Leaders in the organization must provide the guidance to ensure that the customer experience is consistent and high quality. This requires not only training, but regular evaluation of the customer experience. This, in turn, requires significant investment in data capture and analysis. With thousands of “employees” around the world, all acting independently, the only way to keep an eye on them is through regular analysis of customer feedback data. In many ways, this data replaces the on-hand manager in a typical business structure.

 

Tomorrow’s leaders also need to be keenly aware of the public perceptions of their companies. With new organizational structures and business models come new challenges. Dealing with governments, lobbying for appropriate regulatory frameworks, handling misperceptions of the business model and fighting entrenched special interests become even more important.  Diplomatic and negotiation skills are critical. Public relations and the ability to sell yourself, your company and your vision are indispensable. Getting the public on your side can mean the difference between a thriving business model and a failed experiment.

 

Finally, leaders in these new organizations need to be vigilant and focus on creating environments where trust, integrity and safety are at the fore. These attributes are important for any organization but without ongoing daily supervision, it’s far too easy for a single employee to damage the image of the organization beyond repair. Leaders must continually communicate of the firm’s values and regularly review employee performance and customer comments. Ensuring adherence to a clear set of values is perhaps the most important role of today’s new leaders.

 

In summary, leaders in today’s sharing economy need to 1) create a compelling vision, 2) communicate the vision, goals and standards clearly to all employees, 3) develop a public platform for communicating with governments and the public and 4) create the data gathering and analytical tools to continually track of both employee activity and customer perceptions. Leadership today is no longer command and control, but more guide and cajole. Whether you work in a “sharing economy” company or are considering a flatter, more flexible organizational structure, your management skills will need to adapt. You’ll have less direct control but potentially a wider sphere of influence. As a result, effective communication is more important than ever before and developing and enhancing the firm’s brand image is critical. So, brush up on those communications and negotiations skills and make sure your data analytics are up to speed. Without them, you won’t have much to share in the sharing economy.

 

 

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