Organizational Challenges in the 21st Century

Now that we’ve got you thinking about your own skills and competencies, we’d like you to next begin thinking about how you can use this knowledge to respond to the challenges associated with a constantly changing business climate.

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Before discussing the practice of HR, it's important that we consider the external or business landscape that organizations operate within today and probably for the foreseeable future. Whether you work in a small business or government or nonprofit organization or a large multinational enterprise, the changes we will be discussing are relevant. Subsequently, we will discuss how HR fits into the picture.

We live in a global knowledge economy that is highly interconnected and interrelated. In that economy, knowledge is economic power. And there's a scramble for that power taking place around the world. Knowledge is considered as both input and output of the business today. In today's global knowledge economy, more inputs of knowledge from more places producing more complex outputs demands that firms organize and synthesize knowledge that originates in a variety of sectors, locations, and cultural settings.

In the 21st century, it is becoming more and more important to recognize the wisdom and implications of these words. Knowledge is power.

Okay, so what do we know? One thing we know is that our global workforce is changing. According to a report published by Deloitte titled "Human Capital Trends 2013" our workforce is evolving into a mixture of full time employees, contractors, freelancers, and increasingly people with no formal ties to your enterprise at all. People move more freely than ever from role to role and across organizational and geographic boundaries. The authors indicate that if we jump ahead to the year 2020, half the people you rely on won't actually work for you as full time employees!

Some scholars have suggested that we are moving increasingly toward an open talent economy. The authors of the Deloitte study state that an open talent economy is a collaborative, transparent technology driven, rapid cycle way of doing business. According to the authors, the drivers behind the changing workforce are globalization, technology, mobility, social business, education, and analytics.

Moving toward an open talent economy entails moving from a closed system that involves talent being employed on a full time basis by an employer who is responsible for bearing all carrying costs, such as wages and benefits, to an open system. These open talent systems can be viewed as falling along a continuum where talent….at one extreme end of the continuum….provides services for free either independently or as part of a community. An example of talent at this end of the spectrum would be someone who answers questions about your products on the web, in an open source help function, and does it better than your own people….for free.

Something else we know is that the very nature of what it means to work, how work gets done, from where, and by whom, is changing. Continual change has become the new normal. Frequently, organizational leaders are required to navigate in uncharted territory. Best practices originating from the past may not be very helpful because organizational leaders are operating in a place they have never been or ever seen before.

Some scholars have referred to this world by using the acronym VUCA. VUCA stands for volatility, uncertainty, complexity, and ambiguity. The challenging question for organizations and organizational leaders is how do we operate effectively in a VUCA world? According to C.K. Prahalad, "In this volatile world, more and more companies will strive to become Velcro organizations in which people and capacity can be rearranged and recombined creatively and quickly without major structural change. The winners won't stop focusing on quality, cost, and efficiency, but they'll be paying more attention to agility, too."

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