In a digital world, how can being more human be key to unlocking more growth?

By

EY Global

Multidisciplinary professional services organization

10 minute read 8 May 2018
Related topics Digital Purpose Workforce AI

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EY, Unilever and The B Team explore why organizations must be more human if they are to deliver sustained growth in a connected world.

We are living in an increasingly fragmented world with a crisis of slowing growth in many developed economies. Meanwhile, many brands and employers are attempting to become more meaningful: those with clear purpose are prospering, while many corporate “dinosaurs” that refuse (or are unable) to adapt are dying off as the rate of change increases.

Organizations of the future need to embrace fully the concepts of empowerment, learning and balancing technology with the individual if they are to succeed, by using the power of technology and automation to rehumanize -- rather than dehumanize -- the workplace.

There are several significant trends driving change in the new working world:

  • The range of workforce generations is growing: More generations are working together than ever before, with different expectations and attitudes. It is estimated that by 2025 millennials will make up 75% of the workforce — and life expectancy is still rising, so up to two thirds of babies born in the last year could live to be 100. People are retiring later, or not at all. We now have an environment in which older workers already report facing prejudice at work and millennial executives struggle to gain acceptance from older colleagues.
  • Work is less permanent and more flexible: By 2020, almost 20% of US workers will be “contingent” rather than permanent. That’s 31 million people. If that sounds like bad news, consider that 80% of today’s contingent workers appreciate the flexibility. Most of Uber’s growth has come from drivers who use their own cars, and 75% of them have other jobs. (What happens when a job for life becomes a job for a day?)
  • Successful business models look radically different: New business models are springing up all over the world, many of them rooted digitally in the “sharing economy.” Nearly half of UK business leaders think that their current business models will cease to exist within the next five years.
  • Increasing economic inequality: The richest 1% of the global population is now estimated to own over 50% of all global household assets. This is especially bad news for economic growth: inequality at the bottom of the income scale hurts overall growth, and countries where income inequality is decreasing grow faster than those with rising inequality.
  • The rise of robots in the workplace: Smart machines could replace 33% of jobs by 2025, and Mark Carney, the Governor of the Bank of England stated earlier this year that almost 15m UK jobs could be “hollowed out” with the workforce being replaced by robots: “Alongside its great benefits, every technological revolution mercilessly destroys jobs and livelihoods … well before the new ones emerge.”
  • Political and social instability: From mass human migration as a result of war, conflict and the search for employment, to Brexit and the messages that Geert Wilders in The Netherlands and Marine Le Pen in France gained surprisingly strong support for throughout their respective election campaigns — these socio-political shockwaves are driven by people who feel frustrated and ignored. They threaten to undermine an intertwined, .global trading economy that was already in crisis.
  • These trends will affect everyone – and for those of us who run organizations, they should be a wake-up call.

    To thrive in the new era, we need to rethink the role that organizations and their workforce play in driving competitive advantage.

    Thriving will mean adapting to the changes, facilitating the interconnections between humans and investing in their uniquely human attributes.

Purpose provides a revenue edge
Technology is changing the nature of work in many ways, but businesses and society still depend on the resilience and creativity of human beings for their success.
Paul Polman
CEO, Unilever
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Chapter 1

What is the risk if organizations don’t act now?

Organizations need to keep an eye on talent, tax and trade.

  • An automation apocalypse: Software robots will remove humans from repetitive process-based jobs, creating mass unemployment, which in turn will erode purchasing potential. As Martin Ford, one of the most vocal contributors to the debate on automation, writes: “Workers are also consumers, and they rely on their wages to purchase the products and services produced by the economy.” Or in other words: if robots take all the jobs, who will buy our products and services?
  • The growth of a “useless class”: Social historian Yuval Noah Harari (1) asks, “What will happen … when computers push humans out of the job market and create a massive new ‘useless class?’ Millions of people will be left without any employable skills. And because no one will be sure what skills will still be relevant in the future of work, no one will know what to study in college: “The world is changing so quickly that by the time new college students graduate, much of what they have learned is … in many cases obsolete.” Will we as businesses have a significantly smaller talent pool to choose from? Where will diverse ideas come from and why would we want growth without equality? (1. Will AI create a Useless Class of Humans? WorldHealth.net, June 2016)
What will happen when computers push humans out of the job market and create a massive new ‘useless class'?
Yuval Noah Harari
Social historian
  • Turbo-charging the war for talent: If education is not equipping people with the right skills, how will organizations find the talent they need? This could lead to fewer skilled people being available. What will incentivise them? How will your organization compete with other potential employers, especially among freelance and contingent workers, who may become highly selective around their choice of employer? When talented individuals no longer want a job for life and can earn more outside of traditional full-time employment, how will we attract them?
  • Increased nationalism, isolationism and trade wars: With growing unemployment, “globalization will accentuate class divisions between those who have the skills and resources to take advantage of global markets and those who don’t.” (WEF, 2016) And, even though many economists believe that a political backlash could push the global economy deeper into a rut, we are starting to see politicians regulate against globalization. They will take actions that will reverse the current trade flows that have taken decades if not centuries to establish. This, despite evidence that “direct trade-restricting measures have the most negative impacts on growth and employment.” There could also be increasing charges or immigration barriers, which may prove prohibitively costly because securing the right human skills in the right place will come at a premium. All eyes are on the UK to see how they navigate the Brexit detangling of freedom of movement and free trade.
  • Tax and welfare overhaul: Some commentators have suggested a human solution to rising unemployment and economic inequality could be to give citizens a universal basic income. This is being trialed by Finland and the Netherlands among others, and early reports in Finland are already indicating improvements to people’s mental health. And while in 2016 Switzerland voted to reject it, “young people seem to overwhelmingly support [it] — making it a political likelihood in the decades to come”— perhaps even more so if younger people are the ones hit hardest by the new world of work. The obvious question is, how would we pay for this? And the obvious answer is: higher taxes. “America could afford to pay citizens about US$10,000 a year if it increased taxes from 26% to 35%.” Another option is “taxing … things we need less of, such as pollution, financial transactions and extreme wealth.”   
  • Can we afford to wait for governments to solve these issues for us? Or will we lag behind our competitors who solve them ahead of us?

    To make headway, organizations, governments and wider society will need to work together: we must at the very least go in search of a third way.

    This demands that we as business leaders, take proactive and responsible decisions and actions that transform the future of work, so that not just a few people prosper in a growth economy.

We can, and will and must … harness innovation to not just provide better products and services, but create more inclusive economic growth.

Mark Weinberger

EY Global Chairman and CEO

 

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Chapter 2

Putting people at the center of business with more human ways of working

Organizations need to balance automation and abundance.

We can balance the age of abundance with the age of automation in a way that benefits humans as a whole. We just have to think more broadly.

1. We must make our organizations reflect a more connected world

Most businesses are still organized in silos, which are often disconnected and dampen collaboration and cooperative learning. These silos are still propped up by traditional hierarchies. They’re no longer fit for purpose. Digital connectivity and collaboration on a local and global scale have made these traditional forms irrelevant.

2. We need to harness our entire human ecosystem, not just our own workforce

The relationship between a person and their organization is changing. They may be full-time, part-time, contractor, freelancer… This is what we mean by our human ecosystem. Around 18% of the workforce is currently contingent – and firms expect to increase their usage to 25% to 30% or even more within less than 10 years. This begs the question of what organizations will really be offering employees beyond just the basic contract of employment, and where a group purpose becomes particularly important.  Matthew Taylor, head of the UK Government review into the gig economy, links the UK’s poor productivity growth to a feeling of dissatisfaction among workers. He cautions that too few positions offer a feeling of “genuine flexibility, being valued and respected, learning and growing ... feeling work has a meaning and purpose,” and this view is supported by the Bank of England’s Chief Economist, Andy Haldane.

3. We are suffering from digital sicknesses – we need to adapt

The culture of “always on” technology over-usage is causing a rise in mental health issues such as “digital dementia” and “digital stress” from 24/7 work availability. We need to protect our people and help them thrive and survive in the connected world. France has already reacted to this risk, enacting on 1 January 2017 legislation giving workers in organizations with more than 50 employees “the right to disconnect” from the “always-on” work culture enabled by technology.

4. We have to anticipate and develop the skills we will need in the future of the Internet of Things, robotics and AI

If we don’t know what tomorrow’s valuable skills will be, it will be a challenge to train and develop our people today.The B Team’s Arianna Huffington predicts that the “two most essential skills in the new world order [are] creativity and empathy.” Organizations must help to hone them, as there will likely be a premium for these uniquely human attributes that cannot be easily automated or synthesized.

African school girl in classroom
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Chapter 3

How can we fully activate our full human potential to thrive in the future?

Employment is vital for well-being.

There is conclusive evidence that well-being generally is higher for those who are employed than those who are unemployed. We as organizations need to maintain employment levels to help ensure a happy and healthy workforce, talent pool and consumer base.

We now understand that for people to thrive, they need to be able to achieve a sense of balance, foster a mastery of their subject, continually learn and develop, to feel they belong, and have a meaning or purpose that extends beyond their basic functional needs.

Using technology to enhance, rather than negate, that which is essentially human is not just the right thing to do, it’s one of the most important ways that we can safeguard the long-term health and well-being of organizations, of the people who work for them and for society as a whole. We suggest that organizations should:

1. Inspire. Explore new ways of working to inspire individuals

  • Replace old hierarchies with new mindsets and real purpose. The B Team suggests that organization structures should be flat, not vertical. “Flatter structures not only make sure everybody’s voice is heard, they allow companies to make decisions quicker and innovate faster.”33 Organizations are no longer just about hierarchies, but lattices — “the network is where big change happens. It allows a company to more easily spot big opportunities and then change itself to grab them.” One key principle is uniting people through a common purpose: research from EY Beacon Institute demonstrates that a well articulated and integrated organizational purpose helps individuals and teams to work across silos in order to pursue a single, compelling aim. In fact, 87% of business leaders believe that companies perform best over time if their purpose goes beyond profit.
  • Review working hours to increase human productivity, creativity and wellness. The OECD found that when looking at the GDP created per hour worked, productivity is highest when people spend fewer hours working. With more jobs being able to be automated, and an increase in productivity, countries are starting to experiment with new working schedules.
  • “Democratize” your workforce. Z appos, the online shoe and clothing retailer acquired by Amazon.com for more than US$1b, has implemented a “holacracy”: people have “roles,” not jobs — with experience and expertise de-emphasized, less “typical” and more junior types have been able to succeed. Video game company Valve uses a modular work model whereby employees are free to work on any of the company’s projects that they may find interesting.

2. Learn. Embed continual learning and evolving education strategies

  • Use digital to enable constant skills development. Both Alphabet and AT&T have each invested more than US$2m in the Khan Academy, a non-profit organization that produces short lectures for YouTube and mobile devices, mostly on mathematics, with the goal of creating an accessible place for people to be educated. Such an investment will not only help many access education they otherwise couldn’t, it will also help to widen the potential talent pool for organizations requiring numeracy skills.
  • Work with government on education programs to provide the right skills for tomorrow. Given the rate of change in skills and knowledge required in the workplace, life in the future is unlikely to happen in two discrete stages: education then career. “The mantra of political leaders should be ’guidance, guidance, guidance’ for employees throughout their careers.” Denmark allocates funding for two weeks’ certified skills training per year for adults, and the strong emphasis the country places on in-work training helps explain its very high degree of employment mobility, with 70% of workers considering mid-career transitions a “good thing,” compared to 30% or less in most other European countries.

3. Balance. Actively balance the technology and the person to humanize, not dehumanize, the work experience

  • Automate to make work more fulfilling. The vast majority of millennials feel AI could make work easier for them. “The future won’t be about people competing with machines, it will be about people using machines and doing work that is more interesting and fulfilling,” claims Australia’s Minister for Employment, Michaelia Cash.
  • Invest in developing our uniquely human characteristics. Autodesk has built a strong culture of reinvention by bringing its employees through a series of innovation workshops. Employees are given both the training and resources to create business pitches that highlight the value of their ideas.54 Microsoft’s innovation team now actively encourages employees to get involved with three forms of innovation: product, business model and policy, taking the company “in directions that were previously unthinkable.”

In the connected world, there is a huge opportunity to explore how being more human can create even more value for our business. I am committed to driving this agenda forward.

Leena Nair,

CHRO, Unilever

Where should we go from here?

The one thing that we can be sure of is that technology is here to stay: it’s become an indispensable part of our lives, at work, at home and in our social relationships of every kind. As digital has evolved, it has unlocked more utility and meaning than we ever imagined.

It has made the human experience richer.

This is what we need to remember as we take further steps in this era of the fourth industrial revolution. In the end, business fundamentally depends on people’s ingenuity, interrelations and human decisions.

As organizations we need to be conscientious, and simultaneously embrace opportunities to balance technology, continuing individual development and an inclusive economic agenda. All this while bearing in mind that people are influencing the organizations they interact with and work for in a way that has never been seen before.

We are at a crossroads now, and as business leaders we all need to think hard about the direction of travel – and the human implications of our decisions.

So what does it mean to be human at work? How can being more human add even more value for the organizations that serve their many shareholders?

Momentum for changing the narrative about people and work is already under way.

Join the global conversation at #HumanAtWork and share your views and experiences so we can learn from each other, co-create a brighter future and thrive in the connected world.

Summary

Organizations need to embrace the concepts of empowerment, learning and balancing technology with the individual if they are to succeed. Technology should be used to enable organizations to rehumanize work, rather than dehumanize it.

About this article

By

EY Global

Multidisciplinary professional services organization

Related topics Digital Purpose Workforce AI