This is a term coined by Peter Drucker when talking about contract management, particularly in relation to older contractors who bring a wealth of experience and hard won wisdom to the table.

Using contractors, particularly high level ones brings a number of huge benefits:

1. Turns a fixed cost of an employee into a variable, project specific  cost.
2. Easier to impose specific performance measures, as the responsibility of the contractor is to the task, and less to the cultural environment.
3. They bring immediate resources to projects otherwise difficult to staff
4.  Offers the flexibility for enterprises to bring in specific skills from time to time, that they do not need all the time.
5. Generalists, and those with a wide experience, are better at seeing how logically unrelated pieces may fit together, they are less concerned with ambiguity, than specialists, and less likely to “anchor” an analysis in their specialty, and narrow perspective.

Our economy is undergoing structural change, management productivity is under scrutiny, so it makes sense for businesses, from start-ups to huge multinationals, to take advantage of the big pool of highly experienced, mobile, and motivated older contractors.

Related posts:

Intellectual capital and return on assets. Intellectual Capital and the crowd. Working Capital Productivity, transaction costs and Demand chains Working Capital Productivity