Michael Davies | 11 September 2018
With technology radically reshaping the world of work, we need to evolve the social contract. There’s no time to lose, says Michael Davies
I have a confession. As an MBA student at London Business School I fervently argued about “portfolio careers” with my professor, Charles Handy, when he talked about the thesis of his now-revered book, The Future of Work.
“Pah!” I said, “More part-time work? People with a multitude of skills?” Well, it’s time to own it, Charles: I was wrong.
“Jobs will be fewer and farther between.” Check. “Jobs will be shorter as the 100,000 hours get whittled away and we work shorter weeks, years and lives.” Check.
(Some ﬁrms have been slow to cotton on, but broadly true.) Handy also predicted a “greatly increased demand for education”; another truth – perhaps even an English (or Irish) understatement.
It would have been hard to imagine even 10 years ago how technological forces were destined to transform employment in the way they have. In 2008 less than 1% of the world’s population had access at any moment to easy and fast connections and thus to most of the world’s information. By 2014 the planet was home to 7.2 billion gadgets, multiplying at a rate ﬁve times faster than that of the global population. By 2016, there were more smartphones than people working.
‘By 2016 there were more smartphones in the world than people working’
Doing the reshaping are ﬁve key technologies that together create a platform – which is what economists would call a general-purpose technology (GPT); one that has such pervasive application that it drives a whole era of economic growth and technological progress (think the wheel, steam, electricity or the computer).
One deﬁnition of a platform is that the technologies stack together like a set of LEGO® bricks, leaving you to mix and match blocks to create what you want. The other is that platforms connect people to other people, machines, AI, you name it.
Living through mystification
Leaders often say we live in mysterious times. Owners of Jibo, a social robot designed to charm, would agree. At a whopping US$900 (£636), the artiﬁcially intelligent creation is more like a 12-year-old family member than an Amazon-type part of the furniture. Machines are getting smarter. Take Cogito, a Massachusetts Institute of Technology spin-oﬀ that detects your emotional state by listening to your voice. Hard to keep up, right?
So, rather than focus on what to many are baﬄing technologies, let’s examine how the platform GPT has unleashed three forces creating economic, social and political impact. First is empowered citizens: we’re well connected and thus well informed. It would take you less than ﬁve seconds, for example, to ﬁnd out what a Thornback Fanray is and how big it can become. (Try it.) Second is accelerated innovation: the pace at which we can achieve results under new patterns of working is dramatically faster. What I’ve come to call unleashed creativity is third: automate routine and cherish creativity. Once routine work is automated, work will begin to look like the picture LBS authors Rob Goﬀee and Gareth Jones painted in their book Clever: a handful of smart people creating real value. But clever people don’t like to be led, so expect to see more people working ﬂexibly on their own terms, enjoying Handy’s portfolio career.
“The future is already here. It’s just not evenly distributed,” said Canadian-American sci-ﬁ writer William Gibson. Look up “retail apocalypse” on Wikipedia and you’ll see that the future is no joke. Footfall in US malls has more or less halved in the last few years. In 2017 alone, 17 major stores went bankrupt; due largely to price pressure, comparison shopping and dramatic macro-shifts in consumer behaviour. And by April 2018, retail icon and one-time category killer Toys R Us had closed all its UK stores, having ﬁ led for bankruptcy in the US in September 2017.
Platforms are changing everything from retail, mobility and food to lodging, insurance and healthcare. Not to mention work. Tech titans are dominating and growing rapidly. Tech-enabled start-ups are following suit, so we’re seeing an explosion of innovation jobs. What of the old guard? Time and again, big traditional ﬁrms lose out to cheeky upstarts. The question, therefore, is whether they can be entrepreneurial and adapt to platform-driven working arrangements.
It’s a gig life
There are no neat boundaries between corporate and gig life. In 2016, the number of freelance workers in Europe had increased by almost 50% in just three years, according to research by the European Forum of Independent Professionals. This makes sense, reﬂecting the emergence of taxi-hailing and project-based platforms.
But a 2017 LBS survey with strategy ﬁrm Eden McCallum showed that knowledge-intensive industries such as professional services are also fast-growing parts of the freelance economy. Since 92% of independent consultants were pretty satisﬁed with their careers, it seems fair to say that the gig economy meets many of the needs of a white-collar, free-agent nation.
This GPT has enabled born-digital ways of working in which ﬁrms relentlessly automate routine tasks and place value on purpose, creativity and collaboration. These organisations are better able to support talented people to work ﬂexibly and pursue much-needed lifelong learning. The result? Improved productivity, job satisfaction and innovation.
Analogue is dead
Digital natives overcome incumbents’ economies of scale and scope by starting cheap, fast and easy, evolving quickly and scaling rapidly. In reverse, born-analogue enterprises have more of an uphill battle. There are four hazardous steps to climb:
1 Level one: digitally eﬃcient – applying digital to business-as-usual.
2 Level two: digitally enabled – evolving operations, albeit without
new business models.
3 Level three: digital explorer – anticipating tech-triggered behaviours,
creating new value.
4 Level four: digital ecosystem – building a community of interacting parts.
Too many established businesses are stuck at level one. To them, digital transformation translates to “cost reduction” or doing business-as-usual faster. The ﬁrst step is for ﬁrms to become digitally enabled by enriching their customer view, evolving the social contract with employees who want to work ﬂexibly and accelerate start-ups. Level three is where born-digital ﬁrms start. Here, the focus shifts from exploitation – selling the same products to the same customers, albeit in better ways – to exploration. Level-three leaders ask, “How can we rapidly evolve? Where are the opportunities to create new value?”
The most powerful level is four. It involves building and plugging into a digital ecosystem by enabling strategic partners. Microsoft CEO Satya Nadella dedicated an entire chapter to this in his book Hit Refresh, writing, “Healthy partnerships – often diﬃcult but always mutually beneﬁcial – are the natural and much-needed product of the culture we’re building.” To create rather than respond to a digital ecosystem, ask, “How can we identify existing partner pain points? Can we predict innovation? Who can we partner with to build new sources of growth?”
Three major challenges will aﬀect the future workforce. First, we need leaders to model digital behaviours. Humility will serve leaders well in a knowledge-based economy. It’s okay to be an incomplete leader when your followers are technical specialists who probably know more than you. “Ambidexterity” is another: can you exploit existing opportunities and explore new ones at the same time? Harvard’s Michael Tushman said: “This mental balancing act can be one of the toughest of all managerial challenges – it requires executives to explore new opportunities even as they work diligently to exploit existing capabilities – and it’s no surprise that few companies do it well.” Laser vision and the ability to discern what matters now and to look beyond the organisation will also help. Finally, leaders will need agility to get done what needs to be done.
The second linked challenge is ﬁnding and hiring the specialist skills that digital business increasingly demands. Technical talent is scarce and demand for it will increase, so ﬁnding individuals experienced in, say, AI and robotics will require you to be strategic as a hiring manager. How do you incentivise people when such an imbalance of power exists? By oﬀering them fulﬁlling careers, meaningful work and, not least, ﬂexibility.
The third major challenge is supporting accelerated lifelong learning. It’s so common to hear people say that the key to being a leader is being a lifelong learner. No, it isn’t. The key to being a leader is being supportive of the people on your team to learn faster than they otherwise would. It’s an outer-directive rather than inner-directive behaviour.
The price of not changing
If we stand still, the economy will be inhibited by the dominance of the tech titans. Small businesses will be hobbled by regulation. Defensive strategy from the incumbents will stymie innovation. And if they respond slowly, established enterprises will be swept away.
As Handy said in 1984, there’s no time to lose: “The signs of the future are with us now. The future is not that far away. Guessing at the future patterns of work is not, therefore, a fashionable game of social ﬁction; it is the prelude to a serious consideration of a whole range of political and societal dilemmas.” He was right, as usual – only today’s future is much closer than it was in 1984.
Click here for the original article (published in London Business School Review)