Thursday, February 16, 2017

Should your Chief People Officer have an automation strategy?

Work automation is happening, and it is happening fast. It holds potential for efficiencies and reliability on the one hand, but also for new jobs and new ways of working. And therefore, the Chief People Officer should be given the task to craft a work automation strategy. Sounds like a paradox? Not as much as some would like to think, if we take the time to understand the different technologies involved and the two types of outcomes that are possible.

Automation has been happening ever since someone made the link between process and mechanics: in the business world, two dates are significant: in 1913, Henri Ford used the automated assembly line for the first time and in 1981, IBM introduced the PC (personal computer) for use in the private and education fields. Those two events mark the beginning of automation. Automation of physical work, in the first place, which reaches new heights every day, with for instance Amazon needing only 60 seconds of human labour for each shipped package (see story); and automation also of knowledge work, of which one of the most disquieting examples is Uber use of algorithms in the assessment of driver performance: a company is using algorithms to assess and give feed-back on employee performance, once a hallmark of managerial skills. 
As automation expands its scope and threatens activities and occupations that were considered exclusively human only a few years ago, like knowledge work or even relationship building, it has brought a number of experts to wonder about its real impact, and to start putting some numbers together.

According to a McKinsey report on work automation (Harnessing Automation for a Future that Works), “60 percent of all occupations could see 30 percent or more of their constituent activities automated”, with some occupations being strongly threatened: for as much as 78% of the activities that compose “Predictable Physical Work” automation is feasible.

And obviously, where there is potential for efficiencies, there is an entrepreneur wanting to take a chance on it and build the business system that delivers the efficiency. As Erik Brynjolfsson writes in Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, “There has never been a worse time to be competing with machines, but there has never been a better time to be a talented entrepreneur.”

Automation is coming soon to an enterprise near you.

For the worrying Chief People Officer and her staff, probably engaged in digital transformation issues, the question seems to be: should we have a strategy for coping with this coming wave of automation? Or, if the strategy is to be made clearer, should we have a strategy for automating our own work activities?

For automation, it seems, has a strong potential to lower the cost base of the enterprise, and even more importantly, to increase the quality and reliability of the process or finished product it participates in. It can free workers from dull activities and open opportunities for more rewarding, valuable work, at the individual and collective levels.

From a corporate strategy point of view, then, the Chief People Officer should be mandated to explore the potential of automation for his company.

More interestingly, from an individual point of view, employees should be exploring the potential of existing technologies to make part of their jobs easier, simpler: automated. This would allow them to concentrate on higher value added part of their jobs or, at least, be proactive as to how to deal with the evolving value of their jobs. Arielle Paredes, in Vice, has a whole story on employees that have started “automating” their own jobs.

The question is then, how do we craft a work automation strategy, how do we implement it and how do we ensure engagement around it?

Strategy, as we know, is a series of consistent decisions, which are taken in conditions of uncertainty and of which the consequences are hard to reverse. These decisions aim at creating a lasting competitive advantage.

Let’s first look at uncertainty. Regarding the evolution of activities and occupations, uncertainty is not in what types of activities will be automated by digital technologies nor in what occupations will evolve in nature. The uncertainty is in the speed and scope of this evolution.

However, there is greater uncertainty as to the type of new jobs, new activities, new occupations that other waves of technological progress will bring about. Artificial intelligence, starting with big data, machine learning, virtual reality and advanced analytics, used in context thanks to increasingly efficient location and context based tech tokens, has the potential to greatly expand the individual ability of scores of common jobs: doctors, architects, field engineers, to name but a few, will be able to mobilize the complete corporate knowledge corpus at will, and in context, to solve complex problems or find novel approaches. Dominique Turcq makes a useful distinction on the impact of digital and AI technologies on the future of work.

Finally, there is also great uncertainty about the impact of blockchain and digital tokens, which, by providing alternatives to traditional intermediaries that establish trust and continuity in transactions and interactions, could strongly impact roles concerned with intermediation. Banks, insurers, notaries, even government agencies dealing with identity or ownership, among others, will be concerned by this trend.

Uncertainty for the Chief People Officer, then, is both short term (scope and speed of simple activity automation) and long term (value of new jobs and occupations to improve customer experience or deliver additional, value add services). 

The decisions to be made are two-fold: how to drive operational efficiencies and improve are cost competitiveness and how to reinvent the business systems around our key processes and offerings to improve our value proposition.

Both types of strategic decisions will bring about consequences that will be hard to reverse, on the one hand, but that will also be hard to implement if the proper trust relationship is not established with employees.

The key point to understand about the impact of technology on work structure, nature and organization is that this impact cannot be seen nor understood at executive level. Understanding happens in the front line, and a proper evolution of the work organization cannot possibly happen without the proactive, self-aware, trust-based engagement of the company employees.

The good news for the Chief People Officer is that this revolution is happening at a time when many companies have started to question old assumptions on organizational structure or talent management practices: Deloitte, GE, Airbnb, Spotify, Netflix, among others have taken steps to reinvent the organization in a way that, in the end, builds and leverages employee trust. As Netflix wrote in a much commented powerpoint in 2014, they will “Hire, Reward, and Tolerate Only Fully Formed Adults"

Talent strategy, it seems, just became the pivot of your corporate strategy. Driving it responsibly and with a view on its near term and long term social impact is mandatory for any Chief People Officer.

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