Episode 8
Guest: Marion McGovern, Author of Thriving in the Gig Economy
Air Date: November 26, 2018
Chad Nitschke:
Hi, everyone. My name is Chad Nitschke, co-founder and CEO of Bunker, and also host of this podcast, Read, Set, Work. Ready, Set, Work is a podcast series focused on the future of work, specifically highlighting all different perspectives from the gig economy to on-demand platforms and more. Join us each episode to hear from thought leaders paving the way toward the future of work.
Chad Nitschke:
Hey, everyone. Today, I’m talking to a true expert on the gig economy. Marion McGovern founded M Squared Consulting in 1988, before the gig economy was even a term, and went on to write two books on the changing workforce landscape. We’re gonna talk to her today about her most recent book, Thriving in the Gig Economy, as well as the insight she’s gained through decades of experience. As a side note, Marion, I’m not sure if you remember this, but when we first met, it was actually at a WeWork of all places, so kind of fitting from a future of work perspective. Marion, it’s a pleasure to have you on the podcast today.
Marion McGovern:
It’s a pleasure. I do remember that WeWork because I remember almost being hit by a ping-pong ball because it was a Friday afternoon, but …
Chad Nitschke:
True, yeah. Yeah, so the future of work and ping-pong, right, yeah.
Marion McGovern:
Community, community.
Chad Nitschke:
Exactly, yeah. Cool. Well maybe to get things started, do you want to tell us a little bit about just how you got into the gig economy and just what your experience was back in the early 2000s and 1990s?
Marion McGovern:
Well, I had been with the consulting firm, Booz Allen and Hamilton, which has since split into two different firms, but I was at Booz Allen and I saw the situation where the team of smart MBAs wasn’t necessarily the right answer. If you really had someone that had done this before, that could provide a much speedier result at less cost. I looked into the idea. I saw people jumping off the consulting train because they didn’t want to live on planes anymore, and the same thing in the advertising world. I thought, well, gee, if there are people that are out there on their own doing this, and companies could need it, could there be a business here?
So, like a good little consultant, I surveyed the marketplace. I did focus groups, and low and behold, everybody said, “Maybe. Maybe if there were really good gigs out there, I would join you” said the consultants, and “maybe if you really had the people, I would do it” said the company. So with that, I kind of went and started. Low and behold, there were actually already a lot of people out there, independent experts with tremendous credentials making their own living as independent consultants. Back in those days, ’cause this was the dark ages before we had the internet, it was almost like speculators. The good ones could stay out there and keep going. The bad ones would run out of money, would have to go back to regular work. The people that were actually doing it back in those days were, like, amazingly credentialed and accomplished, and so we kind of … I got started. The idea grew, although we did have a lot of skeptics at the time, but over time, more and more people saw the value of the idea, and now I look back and think how the whole idea has been validated by, thank you, the recent IPO of Upwork.
Chad Nitschke:
Definitely, yeah. I’m curious, what did M Squared Consulting kind of grow into, then? How did that evolve?
Marion McGovern:
Well, I have to say, it was interesting ’cause at first, we had this amazing idea that we could be the resource for small and growing companies. The challenge there was finding those small and growing companies. I have to say, in a lot of the work we did, ’cause we did work with medium sized companies, and often times, the engagements were much more interesting – an interim COO for one of the largest makers of ambulance equipment, that was a really cool gig that that person did for nine months some turnarounds work that we did with companies – but the truth of the matter was, big companies had big needs for independent talent, as well. The big companies became much more of an annuity string. Our business kind of developed into a specialty sector with independent and interim engagements, and then much more kind of add to your project teams and add to your strategic engagement sort of focus with bigger companies.
Chad Nitschke:
Interesting, yeah. I’m curious, just over the past 20 years, then, and this might be a difficult question to kind of tackle, but what do you think some of the biggest changes are, then, that you’ve seen, maybe just in terms of attitude towards independent workers, both, from the enterprise that’s hiring them, and then just the general public?
Marion McGovern:
Well, I was thrilled and somewhat surprised at the most recent collaboration in the Gig Economy conference, which I know you guys were there, too, but this is the third year this has been happening. So, one, the whole sector has its own conference now, but there was a decided viewpoint on the part of the purchasing department folks that were speaking about the power of the talent, that now the leverage was in the hands of the talent. That was a new and welcome message because the challenge starting in the mid ’90s was figuring out how to help the hiring managers that really needed the talent because, as I like to say, you have this alphabet soup of things that are happening in companies where you have the hiring manager on one end and the consultant that could help them on the other, and in between, maybe you have HR, but maybe not. Maybe you have purchasing. Maybe you have an MSP, which is a master services provider, or maybe you have a VMS, which is a vendor management system. So, there were all these points of contact, which could fatigue a hiring manager, frustrate a hiring manager, and quite frankly, it resulted in the hiring manager trying to figure out how to go around this structure. I can’t tell you how many large companies where we just … A hiring manager figured out, well, gee, I can just do it in this budget, and we’ll just forget about that whole thing. That has always been a big issue, and the idea that purchasing guys and that whole structure, their job was to make sure it was the cheapest option for the company, so I appreciate that, but recognizing that this is an important resource to deliver to your client, and if the resource is gonna cost more than you thought, you gotta pay that. That was wonderful.
One thing that I don’t think has changed enough is the respect accorded the independents. I think there are a lot of people who still get the, “When are you gonna get a real job?” People don’t understand that this is a career choice for most independents, depending on what study you read. There might be 65 million. It’s a pretty round, decent number for all the different people that track it, independent workers out there, and 70% of them are doing this by choice. This isn’t a default option. They’ve made a bold step. They’ve been very kind of entrepreneurial, like the American spirit of, I’m gonna go out there. I’m gonna do this on my own. We should be celebrating that choice, rather than saying, oh, that’s just a consultant. They’re not as good as us, the people who actually work for company X, Y, Z. So, I think as this becomes more and more a part of the agile corporation, which, of course, is the current hip term of art. The only way it’s gonna work is if everybody sort of trusts each other that we are equally competent. I may be external, you may be internal, but we are equally competent. We are going to make this project work. We are gonna have the success together.
Chad Nitschke:
Yeah, that’s a great point. I’m curious. Do you think that – have you seen that – evolve, kind of the cultural connotation of a gig worker, independent worker? Do you think that has evolved? And then the next question would be, what do you think is missing for it to evolve to the extent that it needs to?
Marion McGovern:
Well, part of it is, there is a bimodal distribution in the marketplace, if you will. You have the on-demand gig economy. You have the drivers, and the delivery people, and the unskilled labor task people on one end. Actually, I won’t say bimodal distribution. You have a spectrum. In the middle, you have the skilled guys. You have the handymen, the independent electricians, videographers, creative folks. Then you have the highly skilled people at the far end of the spectrum.
I think the unfortunate thing is, many people only view the gig economy as the on-demand guys, and they don’t recognize that there is this whole cohort, multiple cohorts, of people with all sorts of different kinds of skills, and credentials, and accomplishments that are also working independently. A lot of the bad press and frustration gets focused on the on-demand side. On the on-demand side, on the one hand, absolutely, there are social safety net issues, but there is also a lack of appreciation that, for many, this is another way to earn income. It is not the sole source of income. It’s not that, oh, the poor Uber or Lyft driver can’t really earn enough to make a full-time job. It’s that maybe they’re a teacher during the year, and they drive for Uber nights and summers. The idea that the gig economy has provided more ancillary income for a lot of people is kind of an unappreciated aspect.
Chad Nitschke:
Yeah, it does, yeah. It’s a really good segue, too, ’cause I know in your book, you kind of make this distinction between what you just talked about, right? The gig economy, the sharing economy, and the on-demand economy. Is that part of kind of what you think needs to take place, is just more, I guess, recognition around the specificity of those and what those terms really mean?
Marion McGovern:
Absolutely, absolutely. Again, there is also a failure to recognize on some of the critics. Again, we do have this social safety net problem, but if you look at cab drivers being the easiest displacement group, it was often tough for a cab driver to make a living, too. It shouldn’t be a surprise that it could be tough for a ride sharing company driver to do that. There is sort of an apples and apples challenge, but I think if you look at the idea that the gig economy, whether you’re a professional or someone just looking for extra income, there are so many new ways to get it. There are so many organized ways. It used to be, if you had to find extra income, you were kind of stuck. Now, you can drive. You can walk dogs. You can be a caregiver. I mean, there are a lot of options out there in a more organized fashion that makes it easier for many people to do things, and many people do things remotely. Remotely, you can have translation services, tutoring. There are lots of things that can be done remotely.
Chad Nitschke:
Yep, yeah. Yeah, it is interesting. You can almost do away with some of those, I guess, naming conventions or definitions and just think about it as democratized work, right? To your point, there’s a lot of different ways you can make money. There’s more ways that you can make money today than it were 10 years ago, and work is kind of being democratized. And it just is a function of, you know, you get paid differently, you work differently, you could be onsite, you could be remote. Like, it’s just the options are much more plentiful today than they were.
Marion McGovern:
Yes. The democratized word, though, made me think of the governmental side of things.
Chad Nitschke:
Yeah. I didn’t mean it in that sense, but yeah.
Marion McGovern:
But it is unfortunate now that we’re just past the elections. It is unfortunate that a lot of our elected officials don’t get it. ‘Cause there was a … Here in California, there were a couple of jurisdictions that wanted to put an additional tax on the employees of large technology companies to be kind of a … to have that tax fund the additional infrastructure and roads … solve the traffic problems that were happening in Silicon Valley. And all I could think about with my Gig economy hat on is, “Boy, you guys don’t know what’s going on. You don’t wanna tax employees.” You know. At some level … You know, I was at a conference recently where they were talking about remote work and the fact that one of the large technology companies ended up saving two hundred and thirty million dollars by allowing its employees … eighty percent of its employees to work remotely. And they reduced their real estate holdings. So, you know, all of a sudden it’s not … Should those employees who are working remotely be counted for that tax? And what about all the independent workers that might be working at those companies? So, you know, at some level there is a need for society to grasp what’s going on.
Chad Nitschke:
Yeah. Definitely. I think … Yeah, it’s kind of like the future of work train has left the station, but there’s still some government officials that are still back at the train station that haven’t really left, but the train’s moving. So it will be interesting to see how that kind of evolves and what happens.
So shifting gears a little bit. I wanted to dive into one thing that you talk about in your book. I’ve actually heard you speak on this, too, on panels. The topic of like marketplace algorithms replacing, you know, human instinct, or strategic judgment in placing a candidate. And I’m curious. Do you think we’re at a place where that is possible?
Marion McGovern:
I think it … Again, you’d have to look at that spectrum of expertise. That, you know, in the on demand world, I really don’t care so much who’s gonna drive me to the movie theater.
Chad Nitschke:
Yep.
Marion McGovern:
But in that middle area, do I wanna talk to the videographer about my project? Probably. I wanna have a sense of, you know, this is what I want from you when you video me giving presentations, whatever it is. And then on the far end of the spectrum, absolutely, you wanna have a discussion. So the question is are the algorithms pointing out the right thing? I think they are improving. ‘Cause they only improve by people saying yes and no to different opportunities. So the more opportunities you’re shown on a platform, the better the algorithm’s gonna get at you.
But the other side of that is it’s only as good as the underlying logic in that algorithm. So, for example, I can remember doing some projects where back in the day banks wanted to become more product focused and were very interested in getting kind of product management groups up and off the ground. And I remember presenting a … And they definitely wanted financial services background. And presenting someone to a major bank for this big, you know, strategic reorganization of the product management group that came from Proctor and Gamble. It’s like, person has no banking experience whatsoever. But quite frankly what they’ve done in P and G would be incredibly valuable. So do you wanna consider this person, too, even though they don’t have the specs you want? And I think that view … creative view of talent and its transferability is something that would be tough to build into an algorithm. And when you look at the pundits who are talking about what people need in the future of work, they need to be adaptable. They need to operate across environments. You know, if that’s true, how are the algorithms going to make any kind of conversion in their mathematics about this environment could be just as valuable as that environment. I don’t know if that makes sense.
Chad Nitschke:
Yeah. It does. And do you think that … So if you have these kind of more specialized roles … One thing we’ve seen is a more kind of vertically approach to on demand platforms. So, you know, an on demand platform that’s purely focused on medical technicians, or examples like that. Do you think that plays, also, a part in like what you were just talking about?
Marion McGovern:
Somewhat. You know, I am actually an advisor to a start-up in the drug development space. So they are doing the experts … and scientists and business experts in drug development and clinical trials. So not patients, right. These are the people that are doing the bio statistics and the regulatory affairs works, the filings, etc. etc. I think part of the special sauce of this particular platform is they’re really understanding how do you drill down into the details of a project understand the expertise you need? So it’s that precision that they bring to the puzzle. Now, could a more generic platform find a regulatory affairs person for a big pharma company? Probably. Would they do it as efficiently, and would they be able to vet the person as efficiently? I doubt it. So I’m a big fan, actually, of the specialty firms.
Chad Nitschke:
Mm-hmm (affirmative).
Marion McGovern:
I also think for that particular cohort, they like to be viewed together, and having that sense of community also provides a value to that group of consultants. So, I mean, I also see the value, heck, I’m a … As part of the book, I joined bunches of these things. And I joined a dozen of them, became a client of a bunch, and you know, I’m a regular up-work client for, you know, work on my website, work on direct mail stuff. So it’s valuable, but I don’t think that they could do what, you know, LifeSciHub is doing.
Chad Nitschke:
Yep. Yeah, no. Totally agree. Yeah. And it’s been interesting to kind of watch that trend. And I think that, on my personal opinion, is that that trend with kind of more specialization. One thing in the book, you used this metaphor, corporate stepstool, which I really liked. And I was wondering if you could just explain a little bit about that to our listeners and just what that represents.
Marion McGovern:
Well, again, sort of back in the day, there was a … a barrier to entry for us providing consultants because every company had their way of doing business. I remember … I mean, Kaiser, the large healthcare company actually had, not so much a glossary, there was a way they spoke. There was a way they did business. And this also translated into systems knowledge. So it was hard for us to place people if they didn’t have inside knowledge of a lot of big companies. So, that was part of that, you know, career ladder. You went up that ladder for ten years and then you could jump off. You know, the advent of the Cloud and the increasing use of technology that was similar has changed that. So, you know, you get sales force experience in one company, boom, you’re marketable as a salesperson potentially in another. You have Google Ad Words in one company, boom, you can bring that expertise to another. So the increasing use of common platforms across companies, regardless of whether it’s, you know, a marketing platform like Marketo , or, you know, a CRM platform, whatever it is, means that there are earlier opportunities to get off that ladder.
So you can kind of jump round and, here I’ll go to … I have my couple of years of background as a sales marketer, and I can jump because I know Sales Force, and boom, over here I get to Know Marketo, so I can jump off over there. So it becomes much more of a skill building exercise where the skills are transferrable across all sorts of enterprises as opposed to just unique to one.
Chad Nitschke:
Yep. No, that’s a great point. And I think it’s interesting because you could, on one hand, think of that kind of jumping around notion as a strength, right. That’s a potential value because that worker’s getting, you know, a variety of perspectives, you know, versus kind of the more traditional way of thinking of things like, I’m gonna work for the same company for twenty years, you know, which might have some benefits associated to it. But I do think the notion of jumping around just could potentially provide more value for the worker, and then whoever is hiring that worker, ’cause they’re getting different perspectives.
Marion McGovern:
Yes. I have to say that sometimes it was tough for us with really experienced people. Not so much because the didn’t have the expertise. They might not have the consulting skills. So they might not understand that you do different things when you’re working with a client than you do with … as an employee. So when you’re working as an employee and you’re working on project X, if your boss come in and says do Y, you do it. If you’re a consultant and you’re working on X, and the client says do Y, you say … you should say, “Sorry, no, that’s not part of the engagement. We can renegotiate it, or that can be another phase, but I need to finish this first.” And that is … That was always harder for more senior people to get than more junior people. Then again, back in the day, most everybody was ten to fifteen years experienced, and now there are a lot more independents that are out there that are in more junior parts of their career, shall I say.
Chad Nitschke:
Yep. Yeah, and then … So this is something that you touched on earlier, and you talked quite a bit about it in your book as well, but the social safety net, and kind of benefits element. You know, that get quite a bit of discussion in the media and the workplace today for independent workers. And I’m curious, you know, if you look kind of a few years down the road, do you have thoughts on maybe what that might look like, or ultimately, like what do you think it should look like?
Marion McGovern:
Well, you know, I am hopeful that we will get some version … some strength back in the Affordable Care Act. You know, the Affordable Care Act was a big deal when it came out for independents, not unsurprisingly. There is attention in some sectors of the federal government about the idea that we need to do something on this issue. Senator Mark Warner had a bill about trying out portable benefits for people. The idea being that benefits would travel with the person, not be associated with a company. So these are more traditional medical benefits and retirement benefits. Of course things don’t happen in Congress that well. However, things are also happening at the state level. So I guess I have some optimism that the Marketplace will come with answers … will come with solutions because we kind of can’t wait for the government. Not to sound too … I’m not a Libertarian or anything, it’s just that these are tough choices people have to make and it’s hard for …
Marion McGovern:
These are tough choices that people have to make, and it’s hard for them to make wholesale change. But I think, quite frankly, just like Bunker came up with a solution around a part of the marketplace that wasn’t working for the gig economy, for the professional side, coming up with cost effective professional liability insurance – that was incredibly valuable to especially that most experienced end of the market place – other people will do that too, in other ways.
You have a very different kind of gig economy company called ShiftPixy, which is also public. ShiftPixy, they work at the lowest level of contract workers, which is people in the hospitality world who work for Denny’s and McDonald’s and other restaurants as shift workers. They can’t get enough shifts with those restaurants to have full-time benefits, so ShiftPixy created an app and a system which assigns them, maybe at their choice, based on their own life and what they need to do with their life, getting kids to school or whatever it is, to four days at McDonald’s and three days at Denny’s and two days at Arby’s, and then they qualify for benefits as a ShiftPixy employee. So, A creative solution where the restaurants, the hospitality industry is happy to have somebody else dealing with filling their shifts and onboarding the people, and they’re happy to have contract employees who have benefits. It’s a win-win for everybody. So I think there will be other interesting solutions that will come down the pipe, from the entrepreneurial side of things.
Chad Nitschke:
Yeah, definitely. I’m kinda curious, let’s say you were hypothetically starting a company today to solve a problem, do you have anything in mind that you think that needs to be solved, related to that?
Marion McGovern:
Oh! Should I give away my ideas?
Chad Nitschke:
You don’t need to, so no pressure, but-
Marion McGovern:
Well, I have to say, as I was joining all of these groups, and it was a company that has since changed their name I should say, but early on their qualifying factor was that everybody was an MBA from a good school. The way they qualified you into their pool initially, or into their platform initially, was using your email address from your MBA program.
Chad Nitschke:
Oh, interesting.
Marion McGovern:
So I … sent them a very polite email saying, “I did go to the Haas Business School, but I went before email was invented. So I don’t have a Haas email address. Is there some way I can still join?” And I received back an absolutely contrite message that was clearly tailored to me, this was not boiler plate, it was clearly tailored to me of, “Gee, we’re so sorry, don’t worry, you’re in, blah-blah-blah.” But it made me realize that one, there probably wasn’t anybody over 35 in that management team, and two, my cohort was not joining the platform. Again, this was two and a half years ago now, at least, and I know for a fact that they have far more senior consultants than they did back in the day. But there is this notion of you have a very experienced cohort of boomers, many of whom are like me, I’m a gig person myself, I’m on a bunch of corporate boards, I consult, I write books, and we have expertise to offer. So there isn’t really a platform out there just for us.
Chad Nitschke:
Yeah, that’s really interesting.
Marion McGovern:
The former CEO of Joie de Vivre Hotels, who went into Airbnb as kind of a senior advisor, just wrote a great book, which I was a reader of and it certainly spoke to me, called Wisdom at Work. And it’s all about the making of a modern elder, kind of the role for senior expertise in … advising young companies and helping enterprises grow. So I think there is an interesting opportunity out there, but there’s also the … I actually had a focus group on it with a bunch of people, one person said, “But I don’t wanna be labeled as old.” Okay, sorry.
Chad Nitschke:
Yeah, there’s definitely no replacement for experience. You just have perspective that, if you don’t have that experience, that somebody lacks.
Marion McGovern:
And as we’ve got this economy where there is enough labor to go around, and 60 is the new 40, etc. So how long will certain people continue working? And you do have a very educated managerial class of senior folks, so figuring out a way to deploy that … We’ll see.
Chad Nitschke:
There it is. So there’s the big idea.
Marion McGovern:
And the other big idea, which apparently people are working on, is creating mortgage instruments that are not dependent on W2 income.
Chad Nitschke:
Yeah, that’s true. That’s a big problem.
Marion McGovern:
Fannie Mae and Freddie Mac are looking into this. But this is a problem for a lot of people, talk about home sales, real estate agents, real estate agents are independent contractors. They don’t have W2’s. And a lot of real estate agents make a lot of money. So I can’t tell you how many people over the years that we had to verify income for for mortgages, and we would say, “Look, this is 1099, but the fact that they earned six figures for three years through us, why isn’t that better than a W2?” You could be fired tomorrow. What’s the magic with W2?
Chad Nitschke:
Yeah, it’s a great point, and it’s another good example of financial services not really keeping up with the pace of change of work and how people are being paid. So yeah, those are two great ideas, I think, on how we could improve the future at work.
Marion McGovern:
Just on the future of work front, I think more and more people are recognizing this is, and certainly that same mentoring notion, I think just like people would always look around for, hopefully, mentors in the companies where they worked, especially as more and more younger people, more at the start of their career, are starting to adopt the freelance gig lifestyle, I think there needs to be more mentoring in the freelance community.
Marion McGovern:
So figuring out ways that folks just starting can be helped by folks who have done it longer without feeling that I’m giving away trade secrets, or something. We all are building this new world of work together, so let’s help each other out along the way.
Chad Nitschke:
Yeah, that’s a great point, especially as the workforce shifts so that people even coming out of school, or even not coming out of school, whatever, you could be approaching your first job this way. You could be approaching your first job independently. So yeah, having that better community element of mentors and people helping people, I think that’s a great point.
Marion McGovern:
There’s a very cool platform, and I haven’t connected with them lately, but I know they’re still doing some cool stuff, called Boonle. It was a guy who came out of the design school at the University of Rochester, and he realized there wasn’t a way to get started as a creative freelancer. So he teamed up with the design school and said, “Look, I wanna start this platform for your students to get gigs while they’re in design school, so that when they go out on their own, once they graduate, they actually have a portfolio of stuff.” So it really is almost like an apprenticeship platform, if you will. But now they’re even doing sort of recognition programs of people that have gotten a lot of gigs and had great reviews, etc. etc. But I thought that was such a great idea, because the thing that also isn’t keeping pace with the future of work is the educational system in America. The more that the educational system can focus much more on the attributes that, not so much rote knowledge, but developing resilience and critical thinking, and better communication skills, and all that, that will be far more important.
Chad Nitschke:
Yeah, that’s great. And what was the name of that platform again? Boonle?
Marion McGovern:
Yeah, it was kind of a … It was a URL that was available, it sorta sounded like Google, you know.
Chad Nitschke:
Cool, well that’s great. I appreciate you taking the time to be on the podcast, it was a great discussion, and I really enjoyed your book as well, Marion.
Marion McGovern:
Great, thank you so much.
Chad Nitschke:
And then for our listeners, if you want to continue this dialogue you can find Thriving in the Gig Economy, as well as Marion’s first book, A New Brand of Expertise, on Amazon, Barnes & Noble, and independent bookstores as well. I definitely recommend checking them out. And then feel free to reach out to Bunker, we’d love to hear your thoughts. And, as always, thanks for tuning in, and we hope you can join us again on our next episode of Ready, Set, Work.
Chad Nitschke:
We love to hear from our listeners. If you have ideas, thoughts for guests, or suggestions for future podcast topics, please reach out. Tweet us at BunkerHQ using the #readysetwork, or email us directly at hello@buildbunker.com. All right, back to work.
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