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The Subtextual Struggle Over Entrepreneurial Talent  

5 min read

In 1937, an upstart 27-year-old British economist published a short essay whose modest title, The Nature of the Firm, has newfound resonance in our post-hybrid information work world. The flash point is return-to-office (RTO) and the disconnects it’s generating between some companies and their employees, but under the surface is a much more profound argument that I’m not sure either group recognizes, one that Ronald Coase analyzed 85 years ago – the subtextual struggle over entrepreneurial talent. 

The pre-COVID structural synergy of company and full-time-employee placed every company and job in a unique working bargain along six distinct axes between two extreme poles: 

1960: Mad Men commuter 2020: Uber-gigger 

1. Payment Security. Base salary plus upside. Pay for piecework. 

2. Benefits above pay. Vacation, pension, health. None to start, maybe awarded. 

3. Workload regularity. Reliable pipeline and routine. Tempest to doldrums and back. 

4. Infrastructure of work. Company tools in one place. Location-agnostic portability. 

5. Work availability. Time-and-space boundaries. Wider availability and agency. 

6. Productivity oversight. Perception based on proximity. Output speaks for itself. 

While the market equilibrium norms for all these elements evolved over the last 60 years, the last 15 have seen the acceleration of the final two. With more and more companies dealing with supply chains, teams or customer relations spanning time zones, the window of daily work availability—when it’s proper for someone to expect you to be responsive to messages, inquiries, meetings or deadlines—steadily widened. The ‘old 9-to-5’ steadily lost ground to a 12-hour window of availability (for the company) and personal agency (for the employee) during which people would toggle back and forth frequently. Among dining al desko, getting to doctor’s appointments, answering email at all hours, doing online shopping or group calls while in transit, everyone tacitly accepted that more availability to the job meant more personal agency about when and how you did it – as long as everything got done on time, to quality standards. 

But if work is happening across a span that includes lots of out-of-office time, how do companies and employees evaluate productivity? The timecard and its successor the hourly (or quarter-hourly) weekly timesheet became increasingly a certificate of attendance instead of achievement. That shifted everyone’s definition of productivity from effort to outputs – many of which are themselves intangible. All this placed a steadily rising premium on inculcating a corporate culture of high trust, high responsibility and high esprit de corps. Or else [cue heavy piano chords] shifting from employees to piecework-paid gig workers. 

The biggest pre-COVID disrupters of the legacy Mad Men model were everyone’s favorite tech-barbarians, Uber. Founded in 2009 and bursting into public consciousness in roughly 2013, Uber triumphantly touted the emotional appeal of escaping the office: be your own boss, earn extra money, work when you want and as much as you want, and drive your own car. Only as time passed did gigging’s techno-downsides gradually emerge: dynamic pricing squeezed drivers’ margins, in-car altercations led to visible and invisible surveillance, and GPS monitoring put Big-App Brother into your vehicle. In parallel, several states, watching their withholding taxes wither while the tech companies’ market caps soared, launched regulatory or legal assaults seeking to reclassify gig workers as employees.

Until COVID, most of us used Uber or Lyft as welcome competition to taxi monopolies with minimal thought to employment issues, but COVID changed the game for everyone: 

• Work-From-Home upended the normal learning curve and corporate adaptability dynamics. Instead of youngsters giving up their laptop-coffee-shop productivity paradigm, the oldsters had to be reluctantly and painfully introduced to Zoom, videoconferences and virtual teams. 

• The normal circadian rhythms of co-worker socialization—morning coffee, impromptu lunch jaunts, birthdays and corporate team-building leisure—all went into hibernation.   

• Coworkers’ personal lives seamlessly blended into their business conversations because now home and health affected work, and vice versa. Out of this emerged an imperative for managers and employees to develop a practical and mutually acceptable etiquette of sharing personal information, and for many companies, an ongoing dialog, as if among friends.  

• Two years’ sojourn meant WFH became not simply a rare and valued perk for progressive companies to offer their senior and most trustworthy employees, but a new (and often mandated) norm of behavior, work-life rhythm cycles and post-COVID employee expectations. 

For affordable housing, all our core activities—development, investment banking, property management, asset management and supporting the workforce—everything we do is an intangible service. When it’s easier than ever for talented individuals to hop companies, to take their creativity into moonlighting, or to do a slow fade into emotional disengagement, how does a company keep lean and agile and with its rising talent engaged? How do employees advance and have a financially, socially and personally satisfying upward path? 

For employers, today’s key question is, “What benefits does full-time employment in our company provide that gig work doesn’t? And how do employees and recruits know it?” 

For employees, today’s key question is, “What entrepreneurial value do I add to this company that working elsewhere wouldn’t? And how do managers and employers know it?”    

David A. Smith is founder and CEO of the Affordable Housing Institute, a Boston-based global nonprofit consultancy that works around the world (60 countries so far) accelerating affordable housing impact via program design, entity development and financial product innovations. Write him at dsmith@affordablehousinginstitute.org.