The Shamrock Organisation This concept was developed by Charles Handy, co founder of the London Business School.

His belief that people were the most important resource within any organization differed from FW Taylor who believed in tall hierarchical structures with close supervision of workers. Handy believed in meeting the needs of workers, through job enrichment. Handy did not believe in jobs for life but that short term jobs or contracts were more appropriate. He argued that non-essential work should be contracted out to specialist people who should be able to do the work more productively and cost efficiently. An example of Handy's changing perception of organisations is provided by his use (in The Age of Unreason) of the Shamrock. Handy uses this symbol to demonstrate three bases on which people are often employed and organisations often linked today. People linked to an organisation are beginning to fall into three groups, each with different expectations of the organisation, each managed and rewarded differently. The first group is a core of qualified professional technicians and managers. They are essential to the continuity of the organisation, and have detailed knowledge of it, and of its aims, objectives and practices. They are rewarded with high salaries and associated benefits, in return for which they must be prepared to give commitment, to work hard and to work, if necessary, long hours. They must be mobile. They work within a task culture, one within which there is a constant effort to reduce their numbers. The second group consists of contracted (outsourced) specialists who may be used, for example, for advertising, R&D, computing - computer , catering and mailing services. They operate in an existential culture; and are rewarded with fees rather than with salaries or wages. Their contribution to the organisation is measured in output rather than in hours, in results rather than in time. The third group--the third leaf of Handy's shamrock--consists of a flexible labour force, discharging parttime, temporary and seasonal roles (insourced). They operate within a role culture; but Handy observes that while they may be employed on a casual basis they must be managed, not casually, but in a way which recognises their worth to the organisation. The 3 components have own advantages and limitations for an organization. The core workers must be well paid and remunerated. They will have high job security while the insourced workers will suffer from a lack of job security thus affecting their morale levels. These workers are able to develop 2 or more careers simultaneously (portfolio working). Time has shown Handys ideas to be vindicated as businesses strive to become more flexible, reducing core staff and using more peripheral workers.

When Handy described this concept in The Age of Unreason, he was at odds with the kind of industrial-era hierarchical approach that had long characterised management thinking. But his view has been somewhat vindicated since as organisations have sought more flexible ways of working. The interesting thing is how we've reached a point where, powered by networked technologies and the need for businesses (in the face of rapidly changing competitive and consumer environments) to be more flexible than ever, this kind of model is about to be taken to a whole new level. We are in the eye of a perfect storm: an influx of highly talented individuals into the market; the need for organisations to adopt structures and overheads that are more adaptable and far less rigid; the opportunity afforded by technology and ubiquitous connection to enable a totally different way of working. The rise of talent networks. In Where Good Ideas Come From, Steven Johnson talks about how ideas often lay dormant in the form of hunches, or half-ideas for years. And how it is the collision of these half-ideas that enable breakthroughs to happen. Agile enterprises that recognise this create spaces (physical and virtual) where ideas can mingle. In The Power Of Pull, Hagel, Seely & Brown talk about how 'flows' of knowledge have become as important as the stocks of knowledge that businesses have traditionally relied on. How it is the connected employees that bring new thinking into the organisation (thinking that is inherently noncore) allowing for innovation at the edges. McKinsey found that companies that were fully networked (intensively using social technologies to connect employees to each other and to customers, partners, suppliers) were "more likely to be market leaders or to be gaining market share but also use management practices that lead to margins higher than those of companies using the Web in more limited ways". This makes a lot of sense. Networks are highly efficient, benefit from a vastly broad talent base, new thinking, frictionless collaboration, flexible cost structures. Charles Handy was more prescient than he could ever have known at the time. Those organisations that ignore the opportunity for more flexible ways of working, who don't actively encourage their people to network outside their organisation, who block employees from using technologies inside of work in ways that they naturally use them outside of work will lose competitive advantage. And lose it fast.