Work is changing and the pace of that change is accelerating. The number of different forces and trends influencing this change is hard to get your head around. The economy, the more fluid business environment, and many different types of technology are creating and magnifying one another’s impact in a positive feedback loop. But what does this mean for the “Future of Work”?
Approaching the “Future of Work” as a single topic in a single blog-post is a heavy job. There’s new energy and optimism for what it means to be at work. It’s more than just showing up, punching a clock, and cashing a check; people now have the chance to invest more deeply in the outcomes of their efforts. Companies are catching on that when people care about their work, quality and momentum soar. So, finally, we have big business investing in their workforce with a new kind of optimism after decades – or perhaps centuries – of discordant labor relations.
There’s also significant progress toward including a greater proportion of the working population in the newly respected and invested workforce. It used to be that these privileges were extended only to so-called ‘knowledge workers’ – professionals and creatives responsible for product development, problem solving, strategy, leadership, and innovation. We’re increasingly seeing, however, that investments of time, trust, and money, pays off in the broader workforce as well. Innovative and rapidly growing companies such as Costco, Zappos, and Chipotle are proving that it can work.
Even Walmart, infamous for their low wages is seeing the benefits of investing in, rather than squeezing, its workforce. A recent Fortune article quotes Wal-Mart Stores Chief Financial Officer Brett Biggs telling analysts about the impact of their pay raises: “It pays off in a number of areas: clean, fast, friendly store scores go up.” They’ve also spent more on training and that has also had an impact in the form of a “higher quality associate” applying for jobs internally.
As executives finally and truly appreciate the difference that engaged and committed employees make to product quality, operating costs, and customer experience, they’re investing in making it so. Employee engagement is a top level issue for a majority of CEOs (99% according to Jostle’s Engagement Gap survey).
We see a tangle of trends towards more employees enjoying more fulfilling work and workplaces. We’re also seeing some emerging factors that threaten to wipe out these advances. As they say, any technology can be weaponized. Or more to the point, nearly any technology can be used to uplift or to exploit the workforce. So what’s it going to be?
First, the good news.
Technology - especially mobile and online communications - has eliminated much of the challenge of staying in touch with people who don’t sit at desks, or in your time zone. This allows for much greater flexibility in where and when we work. Fluid online and mobile communications reduces the friction of collaboration, and allows for far more transparency and participation in the workforce.
At the same time online communications diminish friction in communications, they're also enabling more human faced and human voiced business. Co-workers and customers are building more emotional commitment to the outcomes of their joint work.
Leadership is evolving from an ideal of the infallible uber-mensch to something that balances confidence and humility. The mainstream leadership model has shifted from command and control to vision and coordination. In this new leadership model employees play a more vital and fulfilling role in the success of the company. Employees have more knowledge of how things work and why and have more autonomy to make decisions and act in ways that make a difference. In other words, their efforts matter more.
Another important trend here is the emergence of different organizational structures. These offer different approaches to the balance between optimized performance and flexibility to quickly respond to market changes. A greater diversity of corporate cultures and structures means people have more flexibility and choice in where and how they work, and what they are working toward. Not everyone will have every choice, but more diverse organizations will probably benefit a more diverse workforce.
The 21st century is well ahead of the 20th century in terms of education. More people (in the US) are well educated. 36% of adults 25-39 have at least a bachelor’s degree, as compared with 21% in 1975. Furthermore, the magical world of the internet, along with the support and expectations of peers, encourages far more people to learn continuously throughout their working lives and to keep their skills moving forward. Some countries, like Germany, are making college education free for all. Even the United States is working on ways to make a college degree affordable for all.
Companies are investing in new, more effective ways to provide training, learning, and support for employees, giving them a better path forward. This engages people’s intrinsic motivation, as proven by Dan Pink’s compelling work connecting motivation to mastery, autonomy, and purpose.
Work is providing more opportunity for self-improvement and self-actualization at nearly every level of skill and participation in the workforce.
Many, including business leadership gurus Steve Denning and Peter Drucker, have been increasingly critical of how the commitment to shareholder value has skewed corporate priorities and decision-making. The idea that companies exist to maximize shareholder value was introduced in the 1970’s, mainstreamed in the 80’s and 90’s and in recent decades has been blamed for everything from employee disengagement to a variety of ways to game and exploit accounting to get the right numbers.
While no one argues that businesses should not be profitable, some people have put a lot of thought into making it possible for companies to invest in long term profitability instead of scrambling to constantly meet quarterly numbers.
Eric Ries, famous for his book “The Lean Startup”, is championing a new stock exchange that would only trade companies that committed to longer term management strategies to people who would have to invest for relatively long terms. This may or may not evolve into a remedy for the problem, but it shows that people are working to innovate business to make it more valuable. The idea is that shareholder value should be balanced with value to customers, value to employees, and to the communities in which they live.
This is a positive trend for employees, as it tends to encourage more mission-driven work. It’s hoped that it will also promote a more ethical, sustainable, and resilient form of business. What is certain is that in the near future there will be a greater diversity of acceptable profit, management, and accounting structures for business. Over time we’ll learn how this impacts investment, profits, the workforce, and the world.
In general, we’re seeing a more flexible, human workplace where people have a vastly greater opportunity to find and master fulfilling work. But that’s not the only point of view. Some trends may be more worrisome to people in the workforce. These are areas where realities are moving quickly, and we’re not quite sure where they’ll end up.
Not long after IBM Watson’s famous Jeopardy win in 2011, Andrew McAfee and Erik Brynjolfsson published “Race Against the Machine.” The short book, written by two MIT professors, looked at how technology was no longer driving productivity and prosperity, but threatened to collapse the economy, killing traditional notions of a workforce-based economy.
They discuss how the forces that democratized production are quickly becoming the forces that consolidate wealth and power in a tiny fraction of the population. They explained that these forces would be accelerating exponentially and may be down upon us before we really understand what’s happening. This AI-driven future would impact not just factory workers but doctors, lawyers, and customer service representatives.
This is not a fringe point of view. London’s Financial Times has gone so far as to argue that next generation automation will create a trend toward “radical inshoring” – using robots and 3D printing to manufacture goods, abandoning the cheap labor markets of the developing world while still minimizing more costly labor in currently leading economies.
This point of view is essentially what’s driving legitimate discussions around guaranteed basic income in several countries. Andrew and Erik recently updated their perspective on this issue in the journal Foreign Affairs. Their key point is that governments and society will need to be more flexible and more innovative in how they create economic and labor policy. In other words, if we want the next 25 or 30 years to be prosperous for the majority of the world’s citizens, we need to be proactive in what we want that to look like, and ensuring we get there from here.
There could be some great stuff that happens here too. Maybe we’ll end up with better, more affordable healthcare, with fewer mistakes. Maybe we’ll be saved from more tedious forms of work, and more of us will be able to do more creative work. Maybe this extra power will finally help us make progress against the world’s most intractable problems of climate, poverty, disease, and justice.
The relationship between workers and employers has changed. “Uberization” is the idea that companies can build platforms that engage labor only as needed. This is the idea behind Uber, Lyft, Task Rabbit, and others. Buzz Feed acquired information that allowed them to calculate the average income for Uber drivers in Houston. It’s about $10.75 an hour. In Detroit it’s about $8.77. That’s a tough way to put your kids through college or even to pay for daycare. There’s a broader term for this – the “Gig economy” – which takes this model even further.
In the Gig economy, companies don’t hire people, they bring on contractors as needed. Companies that build platforms to coordinate this have the potential to scale dramatically, as Uber, AirBnB, and others have shown us. This is an economic boon to some companies, making them rich and influential overnight. The phenomenon may help make use of surplus labor in the market. It helps people who want part-time work, such as moms, students or teachers on summer break. There’s a problem here for workers though.
Workers unable to secure core employment may come to depend on putting together a portfolio of “gigs” to keep house and home together. Some entrepreneurial folks will find ways to thrive in this environment, but it leaves the vast majority of the (US) workforce in in situations where they are more fragile and vulnerable to short-term fluctuations in demand and long term deficits in benefits like insurance and retirement plans. If they aren’t certain of their monthly income, how will they rent an apartment?
The Gig economy may end up as a net positive to the workforce. It may empower a new generation of flexible entrepreneurs who do what they want when they want. It may help independent consultants and tradespeople to work more independently. To become a net positive, however, we need new ideas about how employees are classified. It’ll require more of an income safety net and benefits that aren’t tied to an employer. Some countries have these things in place already, but others, including the US, don’t.
One of the interesting changes coming to a workplace near you has to do with big data, analytics, and, to an extent, the internet of things. All this is allowing employee work to be monitored, analyzed, and interpreted. In a humane and aspirational company, this will enable people to learn from their own work and to develop their skills and habits to improve themselves. It may be used to help coach and develop people. Or, it could be used to micro-manage, manipulate or generally annoy people.
Many fascinating examples are emerging. In particular, there’s a new algorithm to predict police misconduct based on performance. In the US there has been a wave of problems of police behaving badly. The reasons are legion, but at least one of the solutions might be this new algorithm that can predict misconduct. University of Chicago researchers studied 10 years worth of detailed police data and records. They found that the most potent predictor of adverse interactions in a given year was an officer’s own history.
There are a few things that raise concern with this approach. The first is free will. Any time we judge people based on probabilities, we’re undermining the power of free will to make better decisions tomorrow than we did yesterday. The next is the witch hunt problem. People who feel that others are out to get them will have a harder psychological barrier to self improvement.
If this type of system is widely adopted by the police – and there are some strong arguments for why it should be – it won’t be long before other industries do similar things. But this is a kind of surveillance we are unaccustomed to, and it will need to be managed with respect and an eye toward building potential. Otherwise it could easily become a patronizing system of control and submission. Not a happy thought. Even more, we would then have complex issues around that data information. Is it privileged like medical or psychiatric information? Can it be used to set salaries? Should it be used to make other decisions by future employers or schools or mortgage companies?
One of the employee labor problems we haven’t made much progress on is the wage gap for women. Even accounting for differences in education, time in workforce, and other factors, women are paid significantly less than men. The cost of childcare compounds the gender issues in the workplace. In many parts of the US, the average cost of childcare is greater than tuition at an in-state college education. This makes it increasingly difficult for women and parents to thrive in the workplace, and depresses workplace productivity.
Steve Jobs famously said that the best way to predict the future is to invent it. We cannot predict which of these or other trends will dominate or whether the net effect will be better or worse and for whom. What we can do, however, is commit to building the future we want to have. We’re all now leaders to a greater or lesser extent and we can all use what influence we have to make that future shiny and bright.