In an increasingly turbulent world, dynamic capabilities are an important part of any well-functioning organization. As David Teece has demonstrated, these dynamic capabilities are important as they are an organization’s “capacity (1) to sense and shape opportunities and threats, (2) to seize opportunities, and (3) to maintain competitiveness through enhancing, combining, protecting, and, when necessary, reconfiguring the business enterprise’s intangible and tangible assets.”

In an external environment of near constant change, organizations need to be able to adapt and modify their organizational strategies to ensure not only their success but sometimes even their very survival. The agility to rapidly process strategic data and transform that into changing tactical operations is a direct function of the dynamic capabilities of the organization.

There are two aspects to this discussion of capabilities. The first, drawing from the practice of strategic management, focuses at an organizational level on structures and processes. The second, drawing more heavily from the Strategic Human Resource Management (SHRM) tradition, focuses on the individual and on teams. It is this second aspect of dynamic capabilities that we’ll address here. The problem at hand is that global changes in the nature of employment arrangements are negatively impacting on the creation and maintenance of team capabilities.

The last twenty years has seen a shift to the increased use of contingent workers by organizations in an attempt to enhance labor flexibility and reduce labor costs. This is problematic though because, with ever-higher levels of external complexity and uncertainty, organizations are increasingly needing to rely on the ability of individuals and teams to adapt effectively to changing circumstances.

The use of contingent workers is an excellent method to quickly and rapidly acquire some of the dynamic capabilities required by an organization to effectively adapt to changing external circumstances at the level of the individual. However, the use of contingent workers can also undermine the strong sense of purpose and shared beliefs that often typifies high-functioning teams. In this respect, the use of contingent workers can negatively impacts on the ability for organizations to acquire and possess the required dynamic capabilities at the level of the team.

The ability to rapidly source individual capabilities via contingent employment is therefore at odds with the sense of trust and shared purpose that is required to build high-functioning teams. There are a number of ways in which this risk can be mediated though.

Three possible ways to build a sense of identity, belonging and purpose across a group of employees, while still maintaining the benefits of flexibility, are:

the development of long-term relationships with contingent workers mediated through temporary help services (THS) firms;
the use of alliances between organizations to share workers across organizational boundaries;
the use of part-time flexible employment relationships.

The key to the success of any of these mechanisms is the sense of continuity of relationship that flows through these mechanisms.

A well-understood key to the operation of high-functioning teams is a strong sense of purpose and shared beliefs. While the shift to the increased use of contingent workers negatively impacts on this, these three methods create a degree of continuity – which can positively impact on the creation of a sense of shared purpose and beliefs – that can help mitigate some of these negative aspects.

In fact, with increased numbers of workers desiring more flexible working environments these types of structures actually might end up providing value for not only organizations but for workers themselves.

Issues do arise though with legal frameworks in some countries that inhibit the ability of organizations to maintain a continuity of relationship with workers while still maintaining a high degree of flexibility in the employment relationship. That said, as organizations increasingly move to the use of contingent workers these legal frameworks will change to reflect the reality of modern forms of employment relationships.

Dynamic capabilities at the level of the team are an important strategic resource for any organization. While changing employment relationships are impacting on how teams are able to build the sense of shared purpose and sets of beliefs that underpin high-functioning teams, new ways of maintaining a degree of continuity of teams over time are available for use if organizations are willing to think outside-the-box in terms of how they structure their employment relationships.

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