I’m finding that entrepreneurs in their 50’s and 60’s with significant business backgrounds are increasingly building companies with few if any employees while drawing on vast networks of partners, affiliates and independent contractors to get the work done. When asked about this phenomenon, many friends and colleagues in my age range talk about their exhaustion from having to manage complex employees issues in their former careers, the currently high costs of employee benefits, especially healthcare, and the ability to pick and choose the right expert with the right skill sets at the right time without having to carry lots of overhead. What was once a major logistical nightmare in managing disparate personalities with conflicting calendars around the world has been vastly simplified by the advent of email, social media and other electronic forms of commerce and communication.
To be honest this is not a new business model – as long as there have been employees there have been networks of independent contractors. The real estate industry is pretty much entirely staffed by independents working without traditional employee contracts. The same can be said for much of the entertainment industry. But I am surprised by the sophistication of many of the businesses run by baby boomers that are almost entirely virtual.
Interestingly enough, I’ve found that younger entrepreneurs who have tried to use virtual networks have often been less successful and tend more often than not to be highly motivated to build traditional organizations as the way to grow as managers and leaders. Are younger people strangely less advanced in these new organizational models than us older folk? Or are baby boomers too lazy to bother with the usual leadership headaches and are less interested in growing as leaders?
I believe that building and running a virtual business is actually the next step in the evolution of leadership and requires advanced skills to keep the network happy and productive, ensure clients are satisfied and make a good living for all those involved.
The fact is that after 20 or 30 years in an industry, experienced managers and leaders have developed huge networks of affiliates who we know, trust and can depend on to deliver excellent results without much hand-holding. All the years spent hiring, developing and managing fresh talent is no longer necessary. Many of us have gotten to the point that if we hire someone on a short-term basis we’ve never worked with before, we can usually spot within less than a minute whether there is a fit or not. And this goes for people we have never met face-to-face and may not actually ever physically meet, although most first-time relationships probably come through a referral or are preceded by reputation.
We have gone through gut-wrenching lay-offs so that if an independent contractor or an affiliated group is not working out as expected, our leadership experience has made it that much easier to have those difficult discussions. While ending a working relationship might threaten a decades-old relationship, maturity often allows both parties to rise above any hurt feelings or bruised egos, even though law suits are not uncommon.
I would say the older generation has most certainly not given up growing as leaders. Just the opposite, I believe we have not only embraced new technology as rapidly as our sons and daughters but have also met the challenge of managing vast networks of virtual teams head-on. Thus, we have continued learning and growing as leaders in ways we didn’t fully understand or appreciate earlier in our careers.