Lead the Work. Creelman David

      As leaders, we worry about attracting and retaining employees. As parents, we groom our children, so they can get good jobs. Yet, there are many ways to get work done without having employees, and many ways of being a worker without having a regular full-time job.

      Even when work is done by employees, not free agents, the work need not be done by your employees or in your place of business. Some leaders see the work occurring in an organization with a more permeable boundary, where work – and people – move inside and outside more freely.

      In our book Transformative HR: How Great Companies Use Evidence-Based Change for Sustainable Advantage (John Wiley & Sons, 2011) we described how Khazanah Nasional, the investment arm of the Malaysian government, recognized that companies did not have sufficiently varied developmental opportunities for leaders. Khazanah Nasional's executives came up with a bold idea: Why not convince the companies in their portfolio of investments to share leaders with one another, with Khazanah acting as the matchmaker? For example, the power company Tenaga Nasional could send a leader with strong operating capabilities to work for several years at Malaysia Airlines in order to acquire skills in turning around a troubled business. And a leader with significant experience in negotiating international energy agreements could move from the national oil company Petronas, to Telekom Malaysia, where she could acquire the skills associated with operating an integrated telecommunications network. The companies embraced the concept. Employees got valuable development experience, the companies got top talent, and Khazanah helped further the nation's ambition of becoming an advanced economy by building a deeper pool of leaders.

      At first the idea of loaning out leaders seems bizarre and unworkable, but Khazanah proves it is entirely doable.

      Soccer fans will recognize the model: soccer teams have well-established systems for loaning players to other teams where they will have a better chance to develop their skills. A key to these arrangements is a governance structure and agreed rules for making the loans so that the advantages outweigh the costs for each team. For example, in the Premier League, players on loan are not permitted to play against the team loaning them. Loanees are, however, allowed to play against their “owning” clubs in cup competitions, unless they have played for their owning club in the cup during that particular season.

      If we can break down the idea that the organizational boundary is an impermeable barrier, it opens up a world of opportunities. Why doesn't Pottery Barn borrow a couple of product designers from Banana Republic to develop next year's products and next year loan their own designers to Banana Republic? Why doesn't American Express swap employees with Geico Insurance to build capabilities related to enhancing cyber security?

      Of course, lending your talent carries new risks. Does it matter if one of your best leaders, or best players, is outside the organization giving their heart and soul for another team? Will you reap the benefit when they return? And if you had not created this development opportunity might you have lost them anyway?

      Again, it depends, and the difference between success and failure lies in the ability of leaders to make good choices, to lead through the work in a way that optimizes the inherent ambiguity that this kind of talent sharing creates. Leaders must navigate practical issues such as whose benefit plan a loaned employee is on and whether, in a soccer match, we allow the loaned player to play against their original team. What a brave new world, that has such options in it.

      The engineering and electronics giant Siemens makes hearing aids.5 Among the end users are kids. How do you make hearing aids attractive to kids? How do you get their classmates to think hearing aids are cool, not weird? For all its immense depth of technical expertise and its world-class employees, these questions were far out of Siemens' comfort zone. Siemens is a great company, but its history, strategy, and culture had never encountered the challenge of marketing technology to kids. The question, “Which of our regular full-time employees can take on this assignment,” undoubtedly turned up many remarkable workers, but none with deep expertise in this area.

      So, the leaders at Siemens reframed the question to ask, “Who in the world really gets kids?” The answer was not hard to find – it was Disney. Rather than trying to build the capability among its own employees to figure out how to market to kids, Siemens took advantage of an alliance with Disney. Disney employees were assigned to the project of marketing the Siemens hearing aid. Their solution: Don't sell the hearing aid. Disney experts packaged the product in a colorful case with a Mickey Mouse stuffed toy and a comic book with a compelling and inspiring story about kids with hearing aids. Disney saw the hearing aid more like a toy than a medical technology.

      Children don't buy the wind or gas turbines that are closer to the core of Siemens' business, yet children's hearing aids are a valuable application of Siemens' core capability, an opportunity too valuable to lose. If Siemens tried solving this problem by hiring employees to package and promote hearing aids to children, it would take a long time to hire them, the best of them probably wouldn't consider Siemens an employer of choice, and the new employees wouldn't easily fit into Siemens' core business once they finished work on the hearing aid project. Why build a permanent structure based on employment when Siemens can get the work done faster, with higher quality and less cost, by “borrowing” Disney's employees through an alliance?

      Siemens leaders led through the work, by realizing that this project could be constructed with Disney as the employer in alliance with Siemens. Siemens got the benefits of Disney's world-class employees, reward structure, and culture with decades of experience marketing to children, without having to create a similar structure internally. The move was enabled by an existing alliance between Disney and Siemens for building theme park rides; the two had learned the trick of working together, and that set the stage for an unforeseen collaboration on hearing aids.

      Does the work of your organization require the talent to reside inside your organization, or do you, like Siemens, simply need a way to access the right talent in another company? If the work you need to do is outside your core value proposition (like marketing to children was to Siemens), might there not be better talent you could borrow from outside? Do you structure your alliances based on optimizing the work, or based simply on financial or technical elements?

      How does one develop a comprehensive portfolio of noninsulin diabetes drugs? You might think that giant pharmaceutical firms could take that on, but even for them it is a daunting challenge to perform at world-class levels on all the many elements of drug development. AstraZeneca and Bristol-Myers Squibb are robust competitors, but their leaders led through the work, realizing that the best way to fight diabetes was to do it together. In 2007, they formed a global diabetes alliance to discover, develop, and commercialize new drugs for type 2 diabetes. Add in Bristol-Myers acquisition of Amylin Pharmaceuticals in 2012 and the alliance had the capability to offer a full spectrum of treatment options.6

      This is a good example of borrowing and buying capability rather than building it internally. In their book Build, Borrow, or Buy: Solving the Growth Dilemma, Laurence Capron and Will Mitchell argue that knowing when to build, when to borrow, and when to buy capability is critical to success.7 The trouble is most leaders lean too heavily on one tactic instead of applying the appropriate solution to the situation.

      AstraZeneca ended up buying the alliance in 2014, essentially incorporating employees who were formerly outside its boundary and bringing them inside. Does that mean the alliance was a mistake? No. It is instead an example of another way to lead through the work: Envision your organization as flexible, constantly changing its shape, rather than as a rigid structure. In 2007 AstraZeneca extended its organizational boundary to overlap with Bristol-Myers Squibb in diabetes research; in 2012 Bristol-Myers engulfed Amylin. In 2014 as Bristol-Myers Squibb began moving in a different direction, it