At first glance, the organisation chart for the maker of True Story, a card game and mobile app in which players trade stories from their daily lives, resembled that of any company. There was a content division to churn out copy for game cards; graphic designers to devise the logo and the packaging; developers to build the mobile app and the website. There was even a play-testing division to catch potential hiccups.
Upon closer inspection, the producer of True Story was not really a firm: The workers were all freelancers who typically had never met and, perhaps more striking, the entire organisation existed solely to create the game and then disbanded.
True Story was a case study in what two Stanford professors call “flash organisations” — ephemeral setups to execute a single, complex project in ways traditionally associated with corporations, nonprofit groups or governments.
The professors, Melissa Valentine and Michael Bernstein, contend that information technology has made the flash organisation a suddenly viable form across a number of industries.
And, in fact, intermediaries are already springing up across industries like software and pharmaceuticals to assemble such organisations. They rely heavily on data and algorithms to determine which workers are best suited to one another, and also on decidedly lower-tech innovations, like middle management.
But to the extent that temporary organisations replace permanent ones, they have the potential to add to the economic uncertainty that workers must increasingly contend with.
Temporary organisations capable of taking on complicated projects have existed for decades, of course, perhaps nowhere more prominently than in Hollywood, where producers assemble teams of directors, writers, actors, costume and set designers and a variety of other craftsmen and technicians to execute projects with budgets in the tens if not hundreds of millions.
In principle, many companies would find it more cost-effective to increase staff members as needed than to maintain a permanent presence. The reason they do not, economists have long argued, is that the mechanics of hiring, training and monitoring workers separately for each project can be prohibitively expensive.
But Valentine, who studies management science, and Bernstein, a computer scientist, note that technology is sharply lowering these costs. “Computation, we think, has an opportunity to dramatically shift several costs in a way that traditional organisations haven’t realised,” Bernstein said. “It’s way easier to search for people, bargain and contract with them.”
There is some evidence that the corporate world, which has spent decades outsourcing work to contractors and consulting firms, is embracing temporary organisations. In 2007, Jody Miller, a former media executive and venture capitalist, was a co-founder of the Business Talent Group, which sets up temporary teams of freelancers for corporations. “We’re the producers,” Miller said. “We understand how to evaluate talent, pick the team.”
Some of Miller’s biggest clients are in the pharmaceutical industry, whose economics are not unlike Hollywood’s in that it is heavily project-based and a small handful of blockbusters drive most of the profits. Business Talent Group teams frequently work on the kickoff of a new drug — devising the strategy for reaching out to patient groups, journalists, doctors and insurers — and help pry open new markets for existing drugs.
Similar intermediaries have sprouted in other industries. In the tech world, there is Gigster, a platform founded in 2014 that knits freelancers together into software-building teams, so that an entrepreneur with no technical know-how can hand off an idea and get back a fully functional app in months or a prototype in weeks.
Each project began with a project leader and an organisation chart. To fill each role, Foundry emailed a group of qualified workers on Upwork, a huge freelancer site, which generated pools of candidates. Once the workers were hired, something Foundry could do automatically, they were assigned tasks and communicated through Slack, the messaging software. The organization chart could be altered as needed, generating new roles and new workers.
“One of our animating goals for the project was, would it be possible for someone to summon an entire organisation for something you wanted to do with just a click?” Bernstein said. In addition to True Story, the two professors enlisted one team that built an app to help emergency medical technicians communicate with hospitals, and another that built a web tool to help a consulting firm run workshops for clients.
The professors recently presented their research at a prestigious computer-science conference. Three lessons stand out across the flash-type models. First is that the platforms tend to be highly dependent on data and computing power. Roger Dickey, a co-founder of Gigster, says every member of each team assembled by the company reviews every other member, generating 20 to 30 data points per person per project. Artificial intelligence then looks for patterns and helps the company figure out how best to build future teams.
Second is the importance of well-established roles. Sociologists and organisational theorists have marvelled for decades at the way disaster response teams or emergency room trauma units pull off complex tasks, even if they have never met before, because the division of labour is understood.
The same goes for flash teams. Dave Summa, who worked on a team that the Business Talent Group assembled to advise a major agribusiness company on which markets to compete in, said it fell to him to define the questions that needed answering and the mode of analysis, while a colleague oversaw teams of workers who produced specific plans. “He was very detail-oriented and meticulous,” Summa said. “He let me do what I was good at. I let him do what he was good at.”
Then there is perhaps the least likely of innovations: middle management. The typical freelancer performs worker-bee tasks. Flashlike organisations tend to combine both workers and managers.
New version
The flash organisation has obvious limits. It tends to work best for projects with well-defined life spans, not continuing engagements. Microsoft probably would not set up one to build Windows given that it releases a new version every few years.
Yet the flash model appears to have revolutionary potential. If nothing else, millions of middle-management jobs that fell by the wayside in recent decades might one day be reincarnated as freelance project-manager positions. “The bottleneck now is project managers,” Valentine said. “It’s a really tough position to fill.”
Still, even while fostering flexibility, the model could easily compound insecurity. Temporary firms are not likely to provide health or retirement benefits. And even if high-skilled workers like project managers and web developers find they are well compensated on the open market, said Lawrence Katz, a Harvard economist, low-skilled workers tend to fare worse outside firms.
Bernstein concedes that the anxiety is legitimate, though he says platforms could eventually dampen insecurity by playing a role that companies have historically played: providing benefits, topping off earnings if workers’ freelance income is too low or too spotty, even allowing workers to organise.
“This could be a potent force among many in the future,” he said. “From a policy perspective, we have to figure out how to empower labour when contracts last a few minutes or a few weeks.”