What role people?
The digital revolution including; mobile, the internet of things, big data, analytics, artificial intelligence, robotics and intelligent agents, is a huge topic for forward looking business leaders. All are wrestling with what to do and the implications on their organisational performance, people, structures, strategies and business models. Since the industrial revolution commentators have talked about machines replacing people and today the conversation continues but at a wholly different level. A recent McKinsey article “Where machines could replace humans – and where they can’t (yet), July 2016, is another extremely helpful contribution to the debate. It highlights the nuances in the transformation taking place and the importance of balancing technical feasibility with the complexity of the task, social acceptance and potential returns.
Without doubt the world is shifting from analogue to digital, from the internet to the hypernet. Change is being supercharged and exponential in terms of speed, transparency, engagement and scale. IT capacity growth suggests by 2029 the human brain will be reverse engineered. The law of accelerating returns indicates that by the year 2045, progress will be so rapid it outstrips humans’ ability to comprehend it. We will have passed “singularity”, the point at which technologies capability will have crossed over many human cognitive and behavioural functions. The automation of activates we associate with human thinking and running organisations such as decision making, problem solving and learning will be within the realm of artificial intelligence, smart robotics and intelligent agents.
If you find all that slightly unnerving then take comfort from the fact that in times of great change the past is a very poor guide to the future and the future rarely turns out exactly as people think because nobody, or at least no mortal human, can currently accurately predict what is going to happen because there is no precedent.
Whatever the final outcome the trajectory, constancy and speed of change is set with dramatic implications for the way work is done, organisational forms are shaped and people working in them add value. In particular the way leadership is exercised and talent engaged. As all change brings both positive and negative consequences perhaps the biggest question is; “Are organisations and society able to manage the change in a positive way?”
Fuelling and shaping the digital trajectory
Just consider for a moment the following:
Digital Natives – the next generation of workers & customers – Much has been written about Generation Y and their different behaviours and expectations. They were born “digital”, live publically on line, naturally collaborate and are not managed by time. Without doubt they have different expectations related to responsiveness, service, information, choice, availability and access. It is therefore no surprise that HSBC has announced a plan to eliminate 50,000 jobs, close hundreds of branches and spend $1B on digital technologies over the next two years.
Mobile – delivering the digital future – There are currently more mobiles than people on the planet and half the world’s population has a subscription. Smart phones have more computing power than Apollo 11 and China (as well as other countries) has more users on mobiles than on PC’s and growing. It took Barclays 13 years to get to two million customers using internet banking and just 2 months to reach that number for mobile banking.
Internet of things – connecting through devices – There were 5 billion connected devices in 2015 which is predicted to be 50 billion by 2020. By 2026 every single person and every single thing will be connected to the hypernet … the successor to the World Wide Web. By 2020, 250 million vehicles will be connected to the Internet, giving us new possibilities for in-vehicle services and automated driving.
Big data and predictive analytics – We produce more data in 2 days than the last 200 years. The number of Bits of information digitally stored exceeds the stars in the universe. Big data has been used to predict crime before it happens by “predictive policing” and some retailers have increased profit by more than 60% using data analytics. Smartphones will soon be able to predict a consumer’s next move, their next purchase or interpret actions based on what it knows, according to Gartner, Inc. This insight will be performed based on an individual’s data gathered using cognizant computing — the next step in personal cloud computing.
The above are just the tip of the iceberg in terms of the dramatic nature digitised IT driven change is and will continue to have on organisations. Most importantly it is having a profound impact on the behaviour of most citizens, consumers, employees and people in general:
- People are connected like never before
- People have access to information, products and services like never before
- People’s ideas flow like never before
The impact on organisational DNA
No matter what industry you’re in it is almost certain that to some degree your business will be impacted by the digital revolution. Preceding the McKinsey article Bain and Co. published the “Digital-Physical Mashups”, Harvard Business Review September 2014 (Figure 1) showing the relative impact of digital and physical innovations by industry through to 2020. A related form of analysis (Figure 2) by Frey & Osborne shows how susceptible certain roles are thought to be to the relentless march of “computerisation”
This is all very interesting, very exciting and to some very concerning. According to research by Citi and the Oxford Martin School, 27 Jan 2016, the impact of automation on developing countries puts up to 85% of jobs at risk in the coming decades.
Digitisation and automation hold great promise but there is another discussion to be had which relates to how all of this impacts the role and value of people in organisation, particularly the nature of leadership, management and the type of talent required.
Today we are seeing standard operating procedures being “digitised”. In the medium term as we approach singularity between automation and humans it is feasible even the most complex of tasks will be done by intelligent agents. This includes many of the key activities of leadership and management including; resource allocation, decision making, planning and perhaps even creativity and innovation.
Organisations that cope best and thrive in environments of rapid and constant change have the capability to transform, be agile, adaptive, innovative and creative. Thriving in the digital age is no different other than it needs to happen at a completely different level, all the time and faster than ever before. To cope with the constancy of change and opportunity organisational DNA needs to enable:
- More fluid and agile structures – improving speed of decision making. Moving from hierarchies and rigid roles to self organising teams involving internal and external partners. Highly networked and outward facing. Commitment of talent and partners is increasingly voluntary as the number of direct employees drops.
- Democratisation and transparency – greater access to information and a greater flow of information between functions and stakeholders. Knowledge levelling takes place rebalancing where influence sits.
- Becoming highly innovative – more time and resources become available to focus on innovation as technology takes the load off administration, processing and delivery. It becomes easier and necessary to try new things. Operational disciplines become enhanced by artificial intelligence rather than diminished and human error is significantly reduced.
- Highly technologically fluent – this becomes a core competency to leverage open platforms and greater use of digital and intelligent agents to deliver operational processes such as sales, claims, accounts, general administration, and HR administration.
- Fewer people with different skill sets – people become increasingly focused on activities such as relationship management, partner and network relationships, innovation and prototyping, digital technology, analytics and product development.
- Investments in ideas – it becomes increasingly likely resources follow ideas through crowd funding techniques not just traditional business cases.
- Purpose & strategy – increasingly driven more by a compelling purpose to attract the most creative and able. For many organisations there will be a greater emphasis on agility with short term course corrections than developing 5/10 year plans.
- Inspiring, flexible and engaging – The dominant role of people will be to design and create business value which in turn will be delivered through technology. To engage people working environments will need to appeal to the intrinsic aspects of human needs.
- Total availability – customers can access and transact with the organisation anytime, anywhere and anyhow on any platform 365 x 24 x 7
- Complete customer intimacy – data and analytics will enable behavioural patterns and lifestyle to be tracked in great detail. Business value will increasingly reside in knowledge not products.
- Diversity of thought – specialists will continue but organisations will need to actively engage people who challenge and think differently to support the innovations and change efforts.
- Decision making – increasingly more people will have a voice and decisions become peer based and not just top down based on title authority.
- Flexibility in work contracts and reward systems will be required to stimulate engagement and suit diverse lifestyles. There will be less and less full time employees.
So what’s the shift for Leadership and Talent?
In response to the “digital revolution” as well as many other social and environmental factors, leadership will be required to shift its focus, devoting more and more of its time to the future and “business as unusual” agenda Vs the day to day operational “business as usual” agenda. This will have huge implications for the development of leadership and talent:
- Open minded leadership is required. The core assumptions business leaders hold will become increasingly toxic and will need to be challenged and reframed. For example;
- Our competitors are the established players – they will come from anywhere.
- Change takes time – speed, experimentation and failure will be required
- People need to be controlled and managed – creativity emanates from freedom
- Only we understand our business – diversity of experience not conformity holds increasing value.
- Specialists make the best decisions – but broader perspectives bring options
- Work and leisure call on different values – they are becoming indivisible
- Leadership needs to be extremely comfortable with increased transparency, knowledge leveling and access. Operating in a fishbowl environment will become the norm and consummate communication skills critical.
- Talent will focus more on creativity over administration and competition will come from unexpected quarters. Business models will be more fluid and change often as barriers to entry reduce and intelligent agents replace human activity.
- Talented future workers will be increasingly transient, project and contract based, looking for creative variety and meaning. Engaging talent will require a compelling employer proposition and multiple platforms to work, find and engage people.
- Talents value will be in developing networks and ecosystems way beyond traditional organisational boundaries. Business value will be driven through innovation, connectivity, and collaboration. People who are comfortable with boundary spanning, networking and connecting will thrive.
- Leaderships authority will be based on who you are, your value added contribution and not what you are, a job title or formal authority. The ability to “let go” will be crucial, gaining engagement will be a more facilitative process and not directive within a more self directed, virtual and part-time workforce.
- All partners, employees and contributors will need to demonstrate technological literacy to work effectively, appreciate the language and future possibilities.
- In a complex world leadership worries less about having the answers and more about asking the right questions and being constantly curious. The ability to actively seek different perspectives builds teams and communities will be highly valued.
- Management control will be a function of trust, delegation and respect requiring high levels of personal awareness and emotional intelligence. Paradoxically as work becomes ever more “automated” leaders will require a deep appreciation of the drivers and shapers of human behaviour.
- As automation progresses there will be smaller groups of full time senior employees but an increasing proportion of part-timers. General talent will be:
- Motivated by peer recognition and the challenge.
- Not looking for lifetime employment, more and more will have a portfolio or project based set of assignments.
- Looking for support with personal development but perhaps less face to face programmatic and delivered on-line in bite sized chunks.
- Requiring a compelling reason to work for the organisation increasing the importance of the intrinsic power of shared purpose and “a cause worth serving”
- Leadership needs to be comfortable as decision making becomes increasingly collaborative, data driven and a more democratic process on complex team tasks.
This paper has tried to set out how the digital revolution will impact the way leadership is exercised and talent is managed. Of course, no one solution will in itself be enough… there is no silver bullet. Each of us must reflect on who we are, who we want to become, and change many things now as the tides of change move every faster.
Leadership and Talent Development programmes will themselves need to respond to the new reality of the digital age. Delivering traditional classroom based, subject expert driven teaching programmes is no longer enough to create the new generation of leaders.
Accelerance believes in a more creative set of design principles fit for the 21st century directly relevant to the complex challenges referred to in this article. It has successfully designed and delivered executive interventions around the world for organisations wrestling with many of the issues and opportunities the digital age presents.