The Future of Work - Board Prep

Robots that learn. Self-driving cars. Chat bots. Siri and Alexa. Big changes are all around us and are changing our world at an exponential pace.

As a result, ‘work’ as we know it is about to transform – how we do it, where we do it and what we actually do.

…’work’ as we know it is about to transform – how we do it, where we do it and what we actually do.

Yet many of the boards and executive teams we encounter are still coming to grips with what it takes to play in the digital economy. Most have yet to grasp the next wave of business trends and what they will mean for their organisation and workplace.

So what’s going on out there?

Up to 50% of work activities performed by people today are technically automatable, and by 2030 as many as 30% of workers could be displaced by automation. That is around 800 million people. * 

800 million people could be displaced by automation by 2030.

And at the same time, technology is creating and enabling entirely new work, with estimates that 33% of new jobs created in the United States in the past 25 years were types that did not exist previously, like technology development and app creation. * 

Technology is enabling entirely new work. In the past 25 years, 33% of new jobs have been created in the US.

Things grow more complicated when we factor in the increasing number of remote workers who balance multiple roles and participate in the gig-economy, rather than engage in permanent work.

The Australian Bureau of Statistics tells us over 25% of the Australian workforce are now employed on a casual basis, up from 13% in the 1990s.

Technology is enabling the boundaries for work to be redrawn, creating new opportunities for certain segments of expertise to work completely untethered from location – think a graphic designer in Bali.

These new possibilities are redefining work and shifting competition for talent from an inter-company level, to the level of cities and countries, creating labour arbitrage opportunities in the process.

Add to the mix a workforce needing regular reskilling to keep pace with change, and the increase in demand for education and learning infrastructure to support this and we quickly see that the effects of these technology and people changes on work is complicated, high-impact and beginning to accelerate.

In this context, Boards need to be satisfied that management is tackling the resulting challenges effectively in their companies.

The questions the board should be asking

The role of the Board, particularly for people-intensive businesses, is to make sure the company avoids the potentially catastrophic consequences of doing too little too late. By asking the right questions of management, they can bring these challenges into focus and ensure they are on the case as the “future” becomes a reality.

Q1. What technology and workforce trends is our business model the most exposed to?

Boards and management need to form a common view about how key technology and workforce trends are likely to impact their business model and the advantages they rely on to compete.

By considering their organisation’s position on key trends relative to competitors, priorities can be understood and used to help feed strategic thinking about the future until a clear position and approach forms.

Q2. Does our strategy explicitly address foreseeable changes and the implications that these will have on our current workforce, people and culture?

Most companies can predict how their workforce will change over the coming 3-5 years in broad-brush terms like FTE count. If these projections represent the full depth of understanding around workforce requirements, that is a good cue for the Board to press management for additional detail.

With the right focus, tools and approach, management should be able to produce a rich view of future workforce changes and requirements that will help to reveal critical insights and new strategic priorities.

With the right focus, tools and approach, management should be able to produce a rich view of future workforce changes and requirements that will help to reveal critical insights and new strategic priorities.

Q3. What technology and people plans are we backing to transition our business model and workforce into the future?

Companies that are clear on where and how they intend to compete in 3-5 years should be able to define a strategy roadmap detailing new capabilities required for the medium-to-long term, as well as new policies which need to be added into their employee value propositions to accommodate changes occurring in the world of work.

Based on this, technology priorities and plans should be clear, as should impacts on the workforce brought about by changes in technology, or people policies. These should be assigned delivery milestones and should be tracked via Board reporting on strategy execution to ensure meaningful progress is being made.

Boards should also be aware that answering these questions requires specialised insight, analysis and detailed design work.

Boards should also be aware that answering these questions requires specialised insight, analysis and detailed design work.

This tends to fall beyond the typical remit of many of the best funded and most capable HR functions, let alone those in small to medium-sized organisations – and is possibly the first talent question to answer.

By raising these questions and challenging management to prepare answers, the Board will learn a great deal about how to secure essential talent for the future while avoiding unnecessary cost blow-outs linked to workforce changes.

Their questions will also create the tension necessary to evolve thinking in the right direction, sparking the first small steps that could well become the determining factor between companies who prosper from the changes ahead and the companies who find themselves lagging behind.

* The McKinsey Institute, 2017, Where machines could replace humans - and where they can't (yet)

The views expressed in this article are the views of the author. This article provides general information, does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information.