Business is changing. As authors Reid Hoffman, Ben Casnocha, and Chris Yeh have noted (and as they note in this interview), we are moving away from business embracing employees as a longterm "family" and entering the realm of "Free Agent Nation." The Alliance is their answer to this change. I found the book to be a fascinating read, and I was happy to be able to ask them some questions about The Alliance.
1. How has the employer-employee relationship changed over time, and why do you consider it to be broken now?
Over the past few decades, we’ve seen a steady shift away from thinking of companies as families and towards what Dan Pink prophetically dubbed “Free Agent Nation.” The metaphor of company-as-family worked as long as companies offered lifetime employment. Once technological change and globalization made this kind of inflexible arrangement untenable, trying to pretend that companies which treated employees like free agents were still like family forced both managers and employees into being dishonest with each other.
The result of free agency and the lack of honest conversations has been an erosion of trust. And without trust, neither employer or employee will be willing to make the kind of mutual investment that drives breakthrough results.
2. What can Silicon Valley teach us about the new world of business?
Intentionally or not, Silicon Valley has pioneered a new way for companies and employees to work together. Rather than making false commitments to lifelong employment, employers and employees come together to form a mutually beneficial alliance between self-interested parties. Silicon Valley’s famous stock options reflect this approach; the typical vesting schedule of an option grant is four years—long enough to work together to build something of value, short enough to reflect an honest and mutual understanding.
3. Describe the basic idea behind the Alliance?
The alliance is a two-way relationship between independent players that lets company and employee work together toward common goals, even when some of their interests differ. Manager and employee work together to define a “tour of duty” whose mission, when accomplished, helps transform the employee’s career and the company’s business. The paradox is that recognizing an employee’s independence is what allows the manager to have the honest conversations necessary to rebuild the loyalty and trust that’s been missing from today’s employment relationship.
4. What is the ultimate goal of the Alliance?
The ultimate goal of the alliance is to help company and employee build a deep, mutually beneficial, and lifelong relationship. When both parties feel comfortable enough to invest and reinvest in each other, they can achieve breakthrough business results. And even if radical changes in the business environment lead company and employee to end the employment relationship, they can continue to help each other via a corporate alumni network.
5. You make a point of encouraging networking to solve problems, not just inside the company but out. Aren't there inherent risks in this strategy (like revelation of sensitive information to external parties, or employees being lured away by outside contacts)?
There is always the risk that an employee might reveal sensitive information or be lured away, but this risk is overblown, and pales in comparison to the potential benefits. Most employees know what information needs to remain secret, and if they don’t, a manager can always specify what can and cannot be shared. Similarly, most employees are quite aware of their market value. Here in Silicon Valley, a good software developer might receive dozens of job offers every year.
Meanwhile, the benefits of tapping the collective network intelligence of the company are enormous. This network intelligence can provide useful information on everything from the competitive landscape to key industry trends—before they hit the trade press.
6. Do you consider the book to be aimed at managers, employees, or both?
Our primary focus is on helping managers find a better way to work with their people. That’s why we’ve included specific and detailed tips on how to have these honest conversations about values, career goals, and explicit tours of duty. But we also think the book will be helpful to employees who want to explore a different way of working with their boss.
7. What are some companies that already practice the tenets of the Alliance?
A large number of the principles outlined in The Alliance come from Reid’s own experiences at LinkedIn, many of which we describe in the book. We also tried to incorporate lessons from other CEOs like John Donahoe at eBay, Brad Smith at Intuit, and Linda Rottenberg at Endeavor.