Developing a concept and a business model for an HR Tech startup that wants to better integrate freelancers into projects

Elaborating a business model and a launch plan for Ahoraz – an HR Tech startup that plans to reinvent the project management profession to better integrate freelancers into projects. My thoughts on a concept for how to innovate project management and leadership to integrate external personnel. By applying management innovation and organizational behavior to the process of managing projects in an open organization.

The startup idea: a new project management profession

The idea for Ahoraz was presented by Denis at the Startup Weekend Nice Sophia-Antipolis 2017. Denis wants to innovate the profession of project manager to better integrate freelancers into business projects.

Today, an increasing number of freelancers is working in enterprise projects. The internal project managers lack the competencies and resources to manage external personnel. This calls for a way of managing and leading projects with freelancers.

The teamwork: elaborating the business plan and launch plan for an HR Tech startup

Denis was supported by François, Michael, Lise, Benjamin, Nadine, Iago and me. With backgrounds in engineering, business and design, we elaborated the value proposition, business plan and launch plan for his idea.

Denis is convinced that his experience in hiring freelancers and coordinating projects for his clients is so valuable that we need a new project manager profession modeled after his experience. He sees the need in freeing clients from the burden to manage their projects and teams themselves. As for the project manager qualification, he sees the main points in matching client needs with freelancer profiles and managing the project scope in an agile way.

Over the weekend, we elaborated the value proposition and business model for Denis’ vision: formalizing his experience in a formation for project managers that shall qualify them to manage client projects with freelancers. The formation shall be offered via seminars and eLearning on Denis’ existing website. The educated project managers shall then become long-term freelancers of the platform and will be matched with clients who want to delegate the coordination of their projects – for a daily fee.

To launch, Denis wants to do a pilot by forming a first cohort of project managers and matching them with client projects. Roadshows, free eLearning courses, cooperations with universities, and international representation from the start shall promote the service.

Nicole’s approach: How to manage and lead projects with freelancers in an open organization

I have offered advice to Denis on how to create a more powerful value proposition by enlarging the scope of the project management innovation to include the big challenges to tackle: how to conduct the project work with motivational, cultural and leadership aspects in mind to create the prerequisites for managing projects in an agile way and creating value with a network of external partners.

Denis’ idea was an occasion for me to reflect on what it takes to manage projects and lead internal and external personnel in organizations with open boundaries. Let me elaborate it here.

A framework for management innovation: how to reinvent the way you manage and lead projects with freelancers

What Denis is intending to do is basically the starting point of all my work with clients, be it in the form of eCourses, Workshops or Consulting: helping my clients to manage and lead in innovative ways. If I would answer this by brain dumping my personal experience on every client, I would be doing my clients a bad service. Instead, I am applying structured approaches to help my clients develop their own solution.

In the case of innovating the management of established companies, I like to follow the framework offered by Gary Hamel in The future of management.

Step 1: Define the challenge. First, you describe the problem and transform that into a management and leadership challenge in form of questions. This is your management innovation agenda. You identify and deconstruct shared beliefs and past choices that may have contributed to the problem.

Step 2: Solution approaches. Next, you search for solution approaches from fresh principles and positive deviants; basically you are searching for counterexamples to traditional management in other areas of life where managing happens without managers and organizing happens without organizations to find new approaches on how to mobilize and organize human effort.

Step 3: Application. Then you draw new management principles and practices from these counterexamples and apply that to a specific management process that you intend to innovate. This usually requires to also innovate all core management processes that affect the people working in the process you intend to innovate.

Let’s apply this management innovation framework to reinventing the way to manage and lead projects with freelancers.

Step 1: Defining the challenge

The problem: Internal project managers are lacking the competencies to lead projects that consist of internal and external personnel

Today, organizations operate in value creating networks over which they have no formal power. An increasing number of freelancers works in enterprise projects.

Freelancers have different motivations than employees. When people opt out of traditional enterprises and choose the freelancer path, they are searching for more freedom to organize their workday, to contribute to compelling projects and have their contributions recognized, and for a more compelling work culture as offered by companies like Automattic or 37signal. They are attracted to evidence based management where ideas and contributions are judged based on their merits.

Project managers have no formal power over how freelancers conduct their work. This calls for servant leadership. Leadership becomes temporary and fluid; an increasing number of people may at some point take over the role of managing a project and leading a team of internal and external people. So, we need to build this leadership competency in a many people.

Contracting with freelancers requires to settle on a project scope in advance, which may limit the projects potential more than when you put employees on it who may change the scope under way and display organizational citizenship behaviors.

Organizations with open boundaries have to find ways to make people from inside and outside the organization feel connected to the project and with each other while strengthening the culture of the core organization.

This all contributes to the problem that project managers are lacking the competencies and guidelines for managing external personnel. Now let’s transform that into the management and leadership challenge in form of questions.

The challenge: How might we enable project managers to manage and lead projects with internal and external personnel?

Freelancer work culture vs. organizational culture

  • How to tap into the motivations of freelancers to receive the best contributions of all team members?
  • How to blend freelancer and organizational work culture to create more freedom and accountability at work for everyone?

Leadership without authority

  • How might we help project managers to lead external personnel over which they have no formal authority?
  • How might we prepare many people to manage projects and lead team members from inside and outside the organization?

Managing the work and leading people in an open organization

  • How to use agile methods to contract and manage project scope to realize the full potential of projects with external personnel involved?
  • How might we recognize, integrate and compensate contributions from internal and external team members on an equal footing?
  • How might we help freelancers to feel connected to the enterprise teams they are a part of, and at the same time strengthen the cultural identity of the core organization?

This is my rough sketch of the challenges I see in managing projects with freelancers in an open organization. Now we have a set of questions to guide our management innovation efforts.

Step 2: Solution approaches from fresh principles and positive deviants

Next, we use the defined challenge to search for solutions. For inspiration, we look for fresh principles and positive deviants that take unusual yet effective approaches to mobilize and organize human effort and already display the qualities we intend to build into organizations.

We plan to instill more freedom at work, servant leadership and evidence based management into organizations, so great positive deviants can be found among internet communities and companies, particularly those operating in the open source development ecosystem.

For example, we may examine open source communities and ask ourselves why otherwise busy developers contribute to open source software projects, how open source communities are organized, how project scope is managed and leader roles are created in communities of voluntary contributors, what kind of leaders voluntary contributors follow, how contributions are acknowledged and integrated.

Or we may examine the management principles and practices of internet companies like Automattic and 37signal who offer employee contracts combined with a different work culture and ask ourselves what exactly makes it more attractive for people to work in this kind of work environment. We will likely find out that these companies have many characteristics of communities where ideas and contributions are judged by their merits and leaders seek to convince, not coerce.

Then we extract lessons learned and underlying principles on social systems and human motivation from these positive deviants.

For example, community based management and leadership leads to what we call organizational citizenship behaviors: work behaviors that people choose to offer to the organization but that cannot be enforced by contract – and that is exactly what we need when we try to manage projects in an agile way with freelancers involved.

Step 3: Helping clients to apply it to their organization

In the last step, we ask how we can bring some of these principles and practices into client organizations to help them better manage projects with freelancers.

If you are an enterprise owner you may consider for yourself, if you could imagine to delegate this entire management innovation process to an external project manager. Note that to tackle the above mentioned challenges, you cannot just reinvent your project management, you also need to innovate all your core management processes that may affect these freelancer projects and the people working in them: everything from setting objectives, allocating capital and talent, to evaluation and pay. This is something you cannot delegate.

That’s why I’d opt for a value proposition that educates and trains project managers directly in the client organization, and assists the client organization to make the transition by consulting and interim facilitators.

As for the HR Tech startup, I would include an education curriculum that outlines the scope of the project management innovation that the formation is intended to facilitate.

The result: validating the HR Tech startup idea

At the Startup Weekend Nice Sophia-Antipolis 2017, Denis got a valuable and constructive feedback from the jury: he should continue to work on his value proposition to make it clearer what exactly distinguishes his offer from existing offers like freelance platforms or project management formation. Denis now has an initial value proposition and business plan that he can further elaborate and validate, if it resonates with project clients, project managers and freelancers.

The Startup Weekend is the perfect testbed for your business idea and leadership style. Two out of seven people left the team entirely over the weekend, and I stopped saying anything when I realized that the seed fell on anything but fertile ground. That reminded me of the definition of leadership without authority: If you have no formal power over your team and people are not following you, then you are not a leader and maybe your business idea is not that compelling after all.

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