Subcontracting Trade Fair

Happiness through subcontracting?

Column  20.09.2022

A happy ecosystem is an ecosystem that breathes and shows humanity. It dares to try and to live and it trusts the different people in the organisation. Kindness and offering peer support are characteristic to a happy ecosystem.

In subcontracting, we put work through a tendering process so that it can be done by Someone Else. This mysterious, faceless entity called Someone Else is the number one scapegoat in traditional subcontracting operations. Someone Else should have serviced this broken machine before it broke down, Someone Else should have brought the screws or reported the deviation. If a welding seam is in the wrong place in a design, it is the subcontractor’s fault.

In a happy ecosystem, there is no Someone Else to blame. People react to things immediately, whether they are part of their responsibilities or not. Any issues are brought up without delay or fixed immediately if possible. There are many grey areas at the junctions of subcontracting chains; these are the playgrounds of that imaginary Someone Else. Time and meetings can be saved if there is no Someone Else, only you and I. Us, together.

An ecosystem – a model familiar from our free time

There are two essential networks in the business world, the subcontracting networks and the customer networks. However, companies have many other networks, too, both larger and smaller.  As digitalisation moves forward, a critical distance should be maintained to subcontracting operations when forming modern networks, as networks of today are growing into amoeba-like ecosystems where the hierarchical idea of inflexible subcontracting does not work with the same overpowering logic as before.

Each organisation has its own special duties as well as internal and external networks. Even if a company has a complex hierarchy between its internal organisations, the network of an organisation’s external operational environment can be less steep and more flexible. You and I communicate equally and openly.

Outside working life, setting up a neighbourhood party is easy; everyone brings their own strengths to the table. Someone brings a salad, someone brings the table itself. Others bring something for the barbecue, or set up the music or the lighting or put up a marquee and so forth. The neighbours also bring their own networks to the party; someone always knows a great house painter or a bricklayer or whatever the others might need. A rich person is anyone who knows who can solve each problem.

Only an equal and transparent network of peer partners can be an efficient ecosystem. An ecosystem combines the operations of states, local authorities, education sector and the research and development work of universities or brings together the hierarchies and customs of companies’ – or even a darts club’s – internal organisations into a one, smoothly operating entity. Naturally, an ecosystem requires a shared need to resolve a certain issue. For example, how to design the new industrial area for Hattula municipality into self-sustainable both in terms of energy and data in an environmentally smart way?

Accessibility and effectiveness can be achieved when organisations work together to promote a certain matter. All unnecessary hustle and bustle can be removed by working together smartly. This can then lead to smart specialisation.

The paradigm of open innovation operations comes with the idea that it is impossible for one organisation to be best in all operations. Each organisation is the best in one topic and, together, these best organisations can then form competitive ecosystems. This creates industry and service operations that increase employment and wealth, making less into more.

An ecosystem is a team of teams. You and I. Us, together.

There are always networks between hierarchies and markets.

Short-term market relationships rarely lead to strengthening trust. A new kind of network thinking and conscious management of networks are needed. Management no longer means just playing in the ‘sandbox’ of your own organisation. It means managing the networks while valuing and continuously developing the expertise of other operators.

In an equal network, someone can always spot the needs and issues on the market and shares their information quickly with their own network, thus allowing the matters to be fixed without delay.

The internal and external networks of an organisation can be quickly turned into problem-solvers, or they can find ways of utilising new opportunities; they become open ecosystem that work between the organisation’s hierarchy and the market. An open ecosystem is nurtured by experimental culture, sharing of knowledge and resources, constructive sparring, equality, and cooperation that bridges the gaps between different hierarchies.

We are, by nature, social and networking animals. As is typical to our species, we want to take part in different networks, not only in working life but also on social media and in our hobbies. A rich network knows who can solve their problem.

People want to feel valued. They don’t want to be just Someone Else, like a subcontractor who is being wrung dry.  Today, one should think critically on whether simple subcontracting realises the functional strengths of networks. Consider a model, where three operators (subcontractors) are pitted against each other and one of them is chosen and wrung dry, and then new three subcontractors are again put through the tendering process. This traditional operational model of subcontracting does not lead to diversity, elasticity or the best possible utilisation of existing know-how. Still, companies want to keep repeating this same model year after year, always getting the same results and preventing the renewal and development of the ecosystem.

In an equal ecosystem, everyone has their place and each operator encourages the others to become even better. These kinds of operations across hierarchical borders are more sustainable in the changing winds of the world. It is resilient and tolerant of surprising external changes, and it encourages to try something completely new. An organisation such as this has a positive culture of curiosity and learning.


Authors: Research Director and Docent Jari Kaivo-oja, Finland Futures Research Centre and CEO Jari Saukko, Aiwoods Oy.