When Freelancing Replaces Big Organizations, What Gets Lost?

Ronald Coase argued in “The Nature of the Firm” that corporations will tend to grow ever larger because doing so lowers the transaction costs involved in coordinating among many individuals. That argument seems dated now in the era of online and mobile technologies, which make it easy to coordinate teams and individuals all over the world.

Besides, big institutions aren’t necessarily meeting all of our needs in the way that they used to. Why deal with all the bureaucratic overhead of a big corporation when you could work for a small startup — or for yourself — and enjoy life more?

It’s true that individual work provides more flexibility, and that’s one thing to look forward to as work evolves into a more independent contractor-centric model.

But there are “soft” benefits that large organizations offer, which we haven’t yet figured out how to replace in this new, more decentralized work world:

• How do you make sure people feel recognized and can take pride in their work?
• How can we foster trusted professional relationships among people?
• How can we ensure that people continue to get long-term skills development and career growth?

For all the advantages in flexibility that the gig economy offers, it does a poor job in replacing these soft benefits. In short, let’s not throw out the baby with the bathwater.

For example, at my former employer, there was a guy who loved doing stand-up comedy routines. Naturally, that had no role in his day-to-day work. But once we learned about this passion of his, we decided to harness that and have him do internal skits for training and knowledge sharing. It was a really useful way for people to get to know and appreciate him, and it turned out these extracurricular skills were actually quite valuable to the workplace.

Or consider a phone company with which I once did some consulting work. Once a year, one of the managers at the repair truck depot would have family day, where he would invite all of the families to come in and have a picnic. Doing this allowed that manager to acknowledge his team in front of their families, which made them feel great. Being a phone repairman is not the easiest job, but the family day gave employees of that company a way to feel good about their jobs and to feel validated — it’s very visceral.

Both of these examples illustrate what management experts have been arguing for years: Organizations should tap the full person, recognize the full dimension of people’s humanity in positive ways, rather than just focusing on the narrow bullet points on a job description.

If we move to a more atomized workforce, where people are working as consultants and freelancers, will they be simply become functional components of an outsourced machine? Who will be looking out for their sense of pride, their career development, their learning opportunities?