Photo: Steve Helber/AP
Here’s a paradox: While companies talk about the “war for talent” and their struggle to fill certain positions, they’re simultaneously accelerating their efforts to automate work.
This means that some high-skilled work becomes indispensable while much routine work becomes disposable. Still, this is a much more realistic way of looking at the discussion around whether
robots will take our jobs – commonly framed as the race
against (or
with) the machine.
Why does the way we work have to be set up this way at all? Because of the way companies have been organized since the beginning of time, or rather, since the existence of the modern firm itself. As
described by Ronald Coase in his 1937 essay, “
The Nature of the Firm,” the modern firm exists to do the activities that could be done at a lower cost inside the organization than obtained outside in the marketplace. So firms continue to organize in a way that favors scale to minimize transaction costs.
Companies want predictability. They depend on accurate forecasts and plans to ensure that the right resources are in the right place at the right time to meet anticipated demand. These models can be hugely efficient when the plans are accurate. But if plans are undermined by unpredicted events, the result is great inefficiency. Which is why the leaders of most organizations overly script and standardize processes in pursuit of predictability, defining work in such a way that it becomes easily automatable.
The irony is that the workers carefully following these scripts have bullseyes on their backs: Machines, after all, are far more predictable than humans (and far less demanding to boot).
But the world demands creativity. We need creativity at the company level to respond effectively to increasing competition and uncertainty. We also need creativity at the worker level to define jobs that will be augmented, rather than replaced, by machines.
This means we need to rethink the nature of work, and with it, the nature of the firm.
Why does the firm exist was a question answered (again, efficient transaction costs) long before the Internet and robots. Now, however, digital technology infrastructures and fewer government regulations are dramatically reducing the transaction costs across independent entities — witness the use of outsourcing and offshoring, microwork and virtual timeshares, the sharing economy, and more.
When the accepted rationale for the firm becomes less compelling, what will take its place? Or will large corporations simply disappear over time? Well, we believe there is still a reason for large firms to exist, but those reasons will be very different from today’s (and definitely from yesterday’s).
The reason for the firm to exist now? Talent development. Firms will exist so that workers can learn and grow much faster than they could on their own.
John Hagel & John Seely Brown
John Hagel III and John Seely Brown are co-chairman and independent co-chairman, respectively, of the Deloitte Center for the Edge. Their books include The Power of Pull, The Only Sustainable Edge, Out of the Box, The Social Life of Information, Net Worth, and Net Gain.
Now, that’s easy to say but harder to implement. Especially because scalable efficiency — and the predictability it requires — is profoundly hostile to scalable learning. Learning, talent development, and creativity require risk-taking and a tolerance of failure.
If we adhere relentlessly to tightly scripted, standardized processes, where’s the opportunity to tinker, experiment, or hack your way to a better solution?
Some companies have begun to take steps toward creating work environments that foster learning and development on the job, rather than isolating it to the training room. Consider what Toyota did on the factory floor of its automobile assembly plants. It redefined the primary job of the frontline workers to be creative — to identify problems on the assembly line as they surfaced and solve them on the spot, rather than report and wait for someone else to find an answer. If they couldn’t address the issue, the workers were to pull a cord that would bring the entire assembly line to a halt, and a team would swarm the worker to help solve the problem. And the worker would be a hero, not an inconvenient interrupter, for pulling the chord — after all, spotting a problem gives the factory an opportunity to learn how to achieve even higher performance.
Take another example. When Steve Jobs owned Pixar, he became deeply involved in the layout of the new facilities. One of his design principles was to put the restrooms and break areas in the center of the building so that employees would have to leave their own work areas and venture into areas that were attracting employees from across the company. The capacity of the dining facilities was also purposely limited to force employees to line up to get their food.
How does this aid talent development? These facility design choices significantly increased the likelihood of serendipitous encounters — you never knew who you might run into. Perhaps you might strike up a conversation with someone with interesting insight into a problem you were working on while you were both standing in line. Compared to this, uber-efficient, functionally-specific workplaces reduce the potential for the kind of learning that comes from unexpected encounters.
And then there’s the importance of talent beyond the enterprise. The kind of expertise that can help employees learn faster if tapped. There are many crowdsourcing, innovation management, and enterprise management software platforms that help companies connect to a broad array of talent to find answers faster. Companies like Samsung and governments in cities
like San Francisco are embracing various forms of hackathons and incubators that invite people from outside the organization to devise new products and solutions in a limited period of time.
Yet these examples remain rare. Despite the publicity such efforts receive, they’re not really that widespread. Most companies are mired in the practices of the past, and moving from a mindset of efficiency to one of learning will be difficult for them.
But the rewards will be enormous. If we can tap into the same network effects that drive the internet economy and bring it into the firm, we have the potential to build businesses that don’t just benefit the bottom line but create a culture of participation and learning. And that’s when we’ll find that machines are far less adept at delivering the imagination, creativity, genuine insight, and emotional and moral intelligence that is uniquely human. The things that not only allow us to cope with uncertainty … but live a balanced life.
