“(…) many businesses look for MBA graduates and those who are rising quickly through the ranks. These people can be fantastic for your organization. When you devote all your resources to them, however, you run the risk of committing all of your training dollars to workers who are anxious to climb the career ladder and may jump ship (…).”
“A well-defined culture is the key to uniting your company and scaling to new heights, says author and high-growth company culture expert Brett Putter (…) ‘When people are values-aligned they share much quicker, and the basis of the sharing is around the culture — almost the invisible way the company works,” he says. “We find that people get up to speed much quicker (…)’”
“You’re the manager of a high-performing team of great people. The team has hit its stride; members have even developed a bit of a shorthand with each other that helps them weather challenges and nail deadlines. Then a core member of the group gives notice that they’re leaving. It’s easy to assume retaining them is the best outcome for the company, the team, the work — and for you (…)”
“Change can be good. It is often needed, and in many cases, long overdue. The question is not whether to change, but how, and how often. By now, there isn’t a CEO out there who hasn’t heard the oft-cited statistic that 70% of change initiatives fail.”
“I just finished a week of meetings discussing HR Technology and the Employee Experience and I want to give you some thoughts. This topic is enormously important, and it’s actually harder than it looks.”
According to various studies, less than 40 percent of HR departments are playing a key role to exploit digital technologies for better talent management. We still seem to be stuck with “more of the same”, as in in the customarily time-absorbing transactional tasks in these areas. Let’s remember what Jaz Fizz-End, the founder of Saratoga Institute, points out and possibly exaggerates, that 90 percent of the tasks done by HR are transactions and only 10 percent bring value.
My theory is that HR must radically transform and take advantage of the moment to ride the wave of digitalization and convert its threats into opportunities. This means shifting from the transactional approach to the strategic and tactical one.
That is why, as seen from the previous graph, the proposition of this platform is to encourage you to increase the value that HR brings to the company, while reducing costs.
Progress in technologies, process automation, mobility enabled by different types of devices, socialization via social networks, data analysis and its potential for forecasting, cloud-enabled connections, emerging artificial intelligence, the advent of augmented reality and new forms of organizing work and hire, relocation of production, and more—all these make us ponder what will happen to the traditional HR function. What should those in charge of such transactional management do? Where is HR heading?
Quo Vadis? Wither HR?
Just as with our Latin expression linked to Christianity, as in when Saint Peter was fleeing Rome and met the Lord who asked him, “Where are you going?”, HR management does not have to flee from its past, instead use it to propel the future. For that purpose, it must have a quite different agenda from the traditional one.
First of all, HR must expand their scope for management to share employee experiences and review the life cycle of the people in the company. To do so, HR will have to go from being an independent function to one with a holistic vision that encompasses various disciplines and cross functions. Eradicating the points of friction in the employee’s relationship with the company is an essential part of HR’s agenda to create an effective culture and employee engagement.
Second, HR must have know-how available from anywhere, at any time. With the growing skills gaps, especially digital ones, organizations must be able to quickly access critical competencies on demand when, how, and where they are needed. HR will have to transform to adapt to a more global world, match talent with tasks in various parts of the world, as well as support mobile workers across different geographical barriers. In such a scenario, HR will play a critical role in enabling the company to adapt to changing business conditions.
Third, HR must review the ways the company is organized to build a networked ecosystem. Agility and speed for problem-solving will play a fundamental role in the company, meanwhile traditional hierarchies must be replaced by teams that work more holacratically or in networks and with decision-making powers. This entails managing an extended and distributed workforce, and one of HR’s main missions will be to develop a value strategy to manage a broad, diverse workforce with different types of contracts. Robotics, artificial intelligence, sensors and cognitive computing have become pervasive as talent sharing economy emerges. Organizations can no longer consider all their workers as belonging to their workforce; we are beginning to talk about TaaS (Talent as a Service) as having a diverse workforce composed of in-house workers, workers from partnerships (alliances with other companies to do something together), others subcontracted for specific jobs , freelancers, knowledge communities (open sources), and more.
Moreover, this amalgam of workers is complemented by robots, machines and intelligent software. These trends will result in the redesign of almost all jobs and positions, as well as a new way of thinking about workforce planning and the nature of the work itself.
Fourth, collaboration must be encouraged, because knowledge workers need and demand collaboration from anywhere and any place. This radically transforms the organizational structure, hierarchies and job titles.
Fifth, just as the company, as a whole, is becoming digital, HR must strive to become a leader in the digital organization. That means going beyond digitalization platforms to create digital work environments with a digital workforce and implement technologies that change the way people work and interact on the job and outside. And above all, to manage cultural change so that people adopt new behaviours. This, dear reader, is the key challenge that I predict for talent management in the years to come.
Sixth, HR must quantify what they do and use the data on the people at work. This is something that is now beginning to be more important than ever. However, barely eight percent of companies are doing so. Analytics applied to people management has become an essential discipline for HR. As an example of such data usage, we can draw attention to how leading organizations use social networks, analytics, big data and cognitive tools to find and attract the best talent through their global brand, but the same can be done for all functions that make up the talent life cycle in the company.
Seventh, talent management must evolve and be based on human behavioural sciences. Advances in neurosciences (biology, neurology, psychology, sociology, engineering) provide knowledge that, when applied to the company, will improve management. Moreover, talent management must be steered towards a one-to-one kind of management, so it will have to treat each professional individually through personalization and delivering individual solutions.
As a conclusion for our particular “Quo Vadis”, we need to recommend HR becomes a performance consultant able to provide solutions to the business through provisioning a diverse, skilled and motivated workforce that can do its job in a digital flat environment, from any place and anytime, and supported by efficient use of new digital technologies to achieve the best business results. And yet HR should remember that often there is a tendency to overlook what is really important: the company culture. We must be convinced that the main challenge for organizations is not the digitalization of their businesses (this is the vehicle), but ultimately the goal is the transformation of their culture, i.e., for people to do other things in a different way. The guru of the digital economy, Don Tapscott, put it this way, “Technology may open doors, but it can’t force people to go through them”, or as I regularly say, “We may have the fastest car, yet we may still be stuck same traffic jam”.
Whoever has started to be supervised by an algorithm recognizes that at first, they feel odd, but over time they get used to it. In a fairly constrained environment, an AI-based system can make accurate decisions. The rest of a supervisor’s activities are trivial for the system:
Assign tasks to team members by their availability and their skills profile.
Verify compliance with these instructions.
Assess effectiveness of these actions for meeting the proposed objectives. This assessment feeds back into the system, enabling the algorithm to make decisions with a higher success rate in the future.
Certainly, a boss of this kind does not bring about a high degree of bonding on a personal level, but how many human supervisors do? Aside from this, the benefits of an AI-based management system include:
A decision-making process based on data, even if high volumes of information must be handled.
Workload distribution through objective criteria, without preferences or exclusions.
Equally objective performance appraisal.
This focus drastically breaks away from how we understood the role of technology in working environments over the last two centuries. Since the first industrial revolution, machines adopted a subordinate role as a toolkit: they were something we used to perform our work more efficiently, sticking strictly to our instructions. Now we are seeing a scenario in which certain tasks can be performed preferably by humans, but under supervision from artificial intelligence systems. Think of tasks to do with service, where we want to be served by a human being rather than by a robot: waiters in the hospitality industry, nursing staff in a hospital, and more. What stops an algorithm from doing tasks that allocate shifts, distribute les or beds, give instructions on dispensing food or drugs, collect data on customer or patient satisfaction, etc.?
The problem arises when we analyse, instead of efficiency, the ethical issues associated with this change in roles. Some experts have underscored the risks of this change. Lasse Rouhiainen, the author of “Artificial Intelligence: 101 Things You Must Know Today about Our Future”, upon analysing the initiatives in some Asian countries, commented: “My distrust is that maybe they follow the same ideology as China, that is, that they first develop applications and then review ethical issues, when they should be upside down.”
Among the ethical paradoxes of this situation, the IESE Business School Insight (Fall 2018) points out the following:
The debate on fairness.
We said earlier that supposedly an automated system will make decisions without prejudices nor subjective conditions. However, initial experiences show that decisions made by algorithms replicate some of the biases present in human decision-makers, since we are ultimately the ones who developed them. It is possible non-human leaders assign tasks that bring more added value or greater visibility to the company, preferably to men (than women) or to people of a certain ethnic group. If they use historical performance indicators contaminated by our current social structures in which men on average are more available than women, such decision patterns will be perpetuated.
What is characteristic of a boss is not only his ability to make decisions, but also to take responsibility for these decisions. If an automated system fails and gives us instructions that lead to undesirable consequences, who is responsible: the manufacturer, the implementer?
A boss should not constantly explain the reasons behind a decision of his, but he should be able to do so if justifiably asked to do so. The complexity intrinsic to artificial intelligence algorithms can lead to their decisions not being understood even by their developers. It is uncomfortable to work for a boss with whom you cannot negotiate any of the instructions he gives us, and without even understanding the reasons why he relays these commands.
It is not bad to have non-human bosses, so long as the ethical framework in which they act is carefully designed and supervised by human beings.
Agility is the latest buzzword in the business world. But is it really a fad or is it here to stay? Before answering this question, let’s review some data:
In 2018 the most collaborative businesses tipped it as the main trend in the business world. Uber, Facebook, Netflix and Airbnb top the list of companies that have understood consumers and involved them in designing their user experience.
By 2019 technology is reckoned to continue to be the main accelerator and permeate throughout all spheres of life:
Augmented reality enables the generation of memorable experiences from mobile devices.
We will shift from big data to small and smart data, small enough to be accessed, understood and used in decision-making.
Artificial intelligence will be used daily, especially in voice interaction with consumers.
In 2020 all mobile devices will have biometric technology.
Over 80% of internet traffic comes from video.
Chatbots will be the protagonists of the customer experience, thanks to their 24/7 availability to consumers. For Pizza Hut, Ikea, Hubspot and Nordstrom, this technology is fundamental for their customer service.
Influencers (well-known personalities) and micro-influencers (anonymous people with influence in a specific segment) will be highly relevant for consumers to believe in a product or brand. According to one of the latest studies by IAB (Interactive Advertising Bureau), 85% of users follow influencers via social networks
In this scenario, there are many challenges for companies to provide an effective response to what the environment is generating. I could thus say that agility is not a fad; it is here to stay and while technology advances at breakneck speed, it will become a key factor for companies to be successful.
How to develop agility?
The concept of agility has to do with capacity, as in employees can respond quickly and appropriately to the information on the changes in the environment. Competitively too, because as organizations harness speed and response effectiveness, they become far more competitive than others.
The 2018 Gallup Agility Study assesses whether people have the right mindset to respond quickly to business needs and if they have the right tools and processes to respond quickly to those needs. In France, Germany, Spain, and the United Kingdom only 13.5% perceive their company as agile, 30% as partially agile, and 57% as non-agile.
Since earlier studies, indicators have improved; today companies have brought together practices that allow them to become more agile: use of technology as an accelerator, rapid decision-making, focus on simplicity, empowerment and confidence, freedom to experiment and innovate, collaborative work and greater openness to risk.
If you want to know how agile your organization is, these questions will help you identify the level you are at:
Do you know what your customer wants and what he is willing to pay for your brand and product?
Do you listen to your customer and involve them in the development of your products or services?
Does your customer perceive high value in your products?
Do you have more flexible structures in place for agile interaction and decision making?
Are your processes simple?
Are work teams empowered and can they do their work and more?
Are there interdisciplinary teams from different business areas working horizontally?
Do your leaders support error as a form of learning?
Do your leaders encourage doing things differently?
Do your employees optimize their work through practices such as working from home and flexible hours?
If you answered “yes” to more than six questions, then you are moving towards to agility. However, if more than half your answers were negative, it is still worth thinking about whether the way you are doing things will allow you to survive over time.
To conclude, I want to share my own definition of agility that may challenge you in the light of your experience:
“It is the ability of an organization to anticipate competition by quickly recognizing the opportunities in market changes and converting them into initiatives that are developed quickly and effectively, generating a return on investment”
The traditional corporate learning portal (the learning management system) is rarely used (other than for mandatory compliance training) and it often takes many clicks to find what you need. Learning therefore ends up being relegated — consciously and subconsciously — to the important-but-not-urgent quadrant of Eisenhower’s 2×2 matrix. (…) So, the question becomes: How can we make learning part of the powerful current of the daily workflow? We believe there is a way, a new paradigm, which Josh coined “learning in the flow of work”.
Even though increasing corporate innovation is almost always a top-five CEO goal, surprisingly few in recruiting realize that the highest business-impact action in corporate HR is the hiring of innovators. Innovator new hires make an immediate quantum difference in an organization’s performance, direction, and image.
Remote work has gone from mainstream to rushing river. While the productivity boosts of working from home are getting press, as are the skill sets required to succeed in working from home, the movement is broader and growing faster than most realize.
Besides the homebound, remote work includes employees working outside the office several days a week from multiple locations, freelancers who permanently work from a variety of locations, the co-working-space crowd, and digital nomads.
As more and more leaders come to understand that employee empowerment is paramount to achieving organizational goals, they realize that people are their most strategic asset; all other organizational elements – technology, products, processes – result from the actions of workers. To that end, leaders are increasingly concerned about ensuring that their employees feel truly empowered to contribute to the company’s mission and drive value to customers.
Some of the biggest, self-consciously “coolest” businesses including Netflix and the Virgin Group offer unlimited holidays to employees, allowing them to take as much time off work as they’d like. Where big firms lead, others follow: 5% of companies offer unlimited leave, according to the Society for Human Resource Management (SHRM), an American HR association, up from just 1% in 2014.
How much do big companies know about you through your Internet searches? How are you going to use that information? Large volumes of data processing through Artificial Intelligence (AI) is increasingly entrenched in our lives. Just like the voice assistant can help you find out how much traffic there will be on your way to work from home, depending on the information you have provided, AI too can do so in other fields. However, such devices are not the only ones programmed to create a profile according to your habits and interests, large companies have access to such tracking, and even you too.
What data can a company draw from its employees daily? Although we may be unaware of it, through our schedules, the bulk of mailshots or opened emails, the corporate events we show interest in, or holidays, we are handing over a large quantity of information to our company, which it can already use to start establishing behavioural patterns.
So, aware that AI in the professional field is already a reality we must pay attention to, let’s delve into several issues where there is still no unanimity:
Automation vs. Unemployment: AI use in companies is always shown linked to the concept of productivity, since it is mainly used in process automation. This enables cost savings as well as increasing production rates to be able to mechanize repetitive tasks. Even though this has occurred in all industrial revolutions ever since the mass production took off, many see AI as a threat to their jobs.
While it is true that process automation will lead to some jobs becoming redundant, studies by PWC on the impact of AI in the workplace offer another view: the creation of new jobs. Technological advances demand new professional profiles, so instead of job destruction, the experts carry on talking in terms of job displacement.
Subjectivity vs. Neutrality: personal perceptions in the HR field can make a big difference that become decisive in employee recruitment or development processes. This is because it’s the people who evaluate such aspects as team spirit, proactivity or communication skills which are hard to compute using data and skills that a machine cannot yet analyse exhaustively: these are known as soft skills. Is it possible to evaluate all these aspects through data? Probably yes, but there is still a long way to go to be able to fathom these much-needed values in the digital age.
Although automation has not yet been achieved for these soft skills, Artificial Intelligence has many uses in HR. One of the most common is for filters in the recruitment process, based exclusively on the information we have on the candidates. This impartial data processing lead to a more fair-minded corporate culture, since the algorithm does not take into account personal perceptions that could otherwise lead to discrimination.
Personalization vs. Privacy: how useful is it to us to know how much time it takes us to get to the office every morning, and what little importance do we give to the information that this detail provides to a third party. With just this single bit of data our rough profile can be established: income per capita, interests by residence area or the company we work for, and even our consumer habits by times. Hence, we obtain this seemingly free service in exchange for our information.
The same can happen in the workplace, since the company can personalize the employee’s experience by processing the information obtained from the employees. But then, what happens to your privacy? What kind of data would you easily hand over to your company and what would you not? And the most common question is typically: is this information a fair payment? The answer may be highly varied depending on each person’s priorities. Nevertheless, it is important to be clear to whom we are turning over the information, and above all, what they can do with it. In the case of your company, receiving this data can improve your experience in many aspects, since it can facilitate processes that, a priori, can be tedious. If for business needs, you take many trips annually, the company can offer services adapted to your circumstances, be it calculate tax deductions, automate expenses and allowances payment, or process visas if required.
Segmentation vs. Homogeneity: access to a large volume of data, and above all, knowing how to use them to obtain relevant conclusions, leads systems to organize people by shared interests or characteristics. So, by knowing your profile, these can assign you to a specific group for launching personalized messages. Just as with political trends, consumer habits also have a social component. Moreover, if the algorithm used by AI has slotted us into a specific profile, it is likely that we will only receive the information for that type of person. What does this make us become? A homogeneous group from which it will become harder to distance oneself? Will we be stagnating around a single opinion, brand or product?
Yet advances in information processing enable both the consumer’s and the employee’s experience to be personalized to offer products or services aligned with their needs. In the previous section, we saw an example of personalization according to an employee’s planned trips, but AI can have important uses in HR in connection with recruitment or even onboarding. The ability to segment our collaborators will enable us to offer solutions that match perfectly to what they need at any given time, keeping them always at the centre of the strategy.
Owing to these four dilemmas, among others, we talk about the duality of Artificial Intelligence. And if we want to come to a valid conclusion from all of them, then we must also consider several aspects:
It is our obligation as users and as employees to upskill ourselves in the new technologies and to be aware of the risks and possibilities of our actions. Knowing what happens to our data once it has been sent to the company is essential to be able to preserve our privacy in a digitally secure environment.
To find the balance between both options, since there is no absolute truth. When confronting new scenarios, we are likely to choose to cold shoulder them, but it is important to be familiar with the advantages AI offers.
To be aware that we are all part of the technology revolution and that we, as users and consumers, also have something to say. Demanding specific legislation for data protection may be one such issue we voice, but evolution does not end there. And the sooner we become aware of the change, the easier the path will be.
By Elizabeth Meza Rodríguez, editor for El Empresario and Management.
Companies are exposed to risks, both operational ones and natural disasters. Some risks in economic and financial crises, political issues, market trends and operational management can be avoided, but to do so requires a risk culture to be implemented throughout the organization.
This means a risk culture involves the both the Director or the CEO and the Operations Manager, as well as each of the employees to assimilate it as a routine activity that is a part of the company’s DNA.
An existing risk management culture helps the company to identify threats, tackle obstacles that may arise, increase the chances of achieving goals, lower employee turnover, engage employees, foster proactivity, and improve the company’s adjustment to the social and economic environment.
However, it isn’t enough to merely desire to establish a culture of risk management, it’s necessary to set out a policy and drive to get all workers involved. This starts with appointing a Risk Director or Chief Risk Officer (CRO), who will be the person in charge of creating this culture and transmitting it to the rest of the organization.
According to Price Waterhouse Coopers, there are three lines of defence: the first is made up of senior management and business units, the second of risk and compliance functions (including the CRO) and committees, and the third entails internal audit.
Although the Risk Director is the second line, he is obligated to interact with the first and third lines of defence.
One way to rapid dissemination and implementation of the risk culture is to set the parameters from the first line in collaboration with the Risk Director and then roll the strategy out to other areas, so as to create a pyramid that encompasses each one of the collaborators. This way an organization with greater resilience and risk culture is created.
In other words, the first line makes decisions in keeping with the strategy, while the second line shapes the measures to be taken, based on queries, consultations, and collaboration. The third line focuses on protecting the organization and creating value.
However, according to PWC data, only 13% of companies worldwide involve the front-liners or senior management in risk management.
Risk management in cybersecurity
With technological progress, more and more companies are looking to support their risk management models with technology for better decision-making, for greater control, and to allow them to act in advance of a problem.
Cyberattacks have become a threat that worries companies; an issue that has been escalated by massive attacks like WannaCry that affected over 200,000 computers in 150 countries in 2017.
A risk culture also implicates cybernetics, here it is necessary to define specific lines of action in three areas: the first is using a methodology aligned with the operation strategy, the second is flexible plans, and the third consists of having a line of communication with the groups.
Each of the risk management lines must be aligned with the company’s values, goals and objectives. This way it becomes easier for employees to be ready for any possible problem the organization faces.
Although it is hard to predict risks 100%, there are tools that help the organization to create strategies enabling it to overcome threats:
Identify the risks, weaknesses and consequences that may arise in the company
Assess the hazards by the level of impact or incidence
Conduct an analysis of possible risks and establish how to mitigate them, to find out the company’s real exposure
Design preventive and corrective measures.
How to achieve a risk management culture
Establish a solid organizational environment focused on the risk culture and on the administrative boards to starts right from the management board and the CEO and take hold throughout the organization
Align risk management with the strategy at decision-making time, so that the first line anticipates business risks when setting tactical priorities
Balance the program over the three lines of defence so decision-making takes place throughout the organization
Develop risk reports that allow management and the board of directors to execute supervision.
“While single-role jobs can be automated, hybrid work can only be done by people. Software can analyze data, but we need people to interpret the analysis, apply it, and make sure it’s ethical and valid”.
“We’re going to need people who are experts in AI. It’s that simple. Best to accept that AI will be a part of how your business functions if it’s not already, and start planning your investment in AI-skilled hires now”.
By Meghan M. Biro at Forbes.com
“(…) while executives are committed to improving the world and have a clearer grasp of the skills challenge ahead, they also feel stymied by organizational roadblocks that limit the development of effective Industry 4.0 strategies”.
“(…) 73 percent of U.S. workers possessed some sort of caregiving role. Further exploration of these workers found that 32 percent left a job due to the difficulty of juggling their professional life with their caregiving life”.
There is broad consensus on the impact of digital disruption on the labour market. The model on which we have designed our lives and our professional careers over the last decades no longer seems sustainable. In developed countries, a common paradigm for this model was defined through the following parameters:
Training stage: approximately 20 years for qualified positions (15 for less qualified activities).
Work stage: 40 hours per week of work, for 40 years.
Professional environment: relatively stable, in terms of the industry sector, the functional area, and even the organization worked for.
This framework was predictable and enabled personal decisions (to have a family, etc.) and economic decisions (to sign up to a mortgage, for example) on a solid basis.
For those who miss this model, digital disruption is not good news. We are already used to doom-mongering, both from the quantitative point of view (shrinking labour market, job elimination, etc.) and the qualitative one (poorer quality employment, precariousness of the labour market, etc.).
The growing automation of processes and the imminent rise of AI in many areas of work must be approached cautiously and intelligently. If we know how to take advantage of the opportunities presented by these events, we will avoid the risks voiced by doomsayers and migrate towards new labour models that are more satisfactory for humans and more socially beneficial.
Let me point out some of the benefits of intelligent digital transformation of the labour market.
Rupture of the rigid distinction between the training and professional stages. Probably many of our children’s experiences in their first years of life directly apply to work, and training throughout careers will become a mandatory requirement for most of us. It is much more stimulating to keep learning processes open than to end our training at a young age.
Greater equality of opportunities. In contrast to those predicting new social gaps between the people who develop highly technological profiles and the others, it is worth remembering that technology leads us to more homogeneous scenarios. The first industrial revolution concentrated the means of production into a few hands. The digital revolution puts into everyone’s hands the tools to access mass information. Today, the CEO of a large company carries a mobile device with very similar or identical functionality to the youngest employee’s mobile device. Even in developing regions, it is easier to offer wireless data coverage than distribution networks for drinking water or sanitation.
In particular, digitalization can contribute to greater gender equality. It has been said that highly technological profiles are still predominantly male. Aside from the fact that this gap is narrowing, it should be noted that the digital economy does not rely solely on technology profiles. In fact, the greater the use of AI extends, the more capacity machines will have to update their algorithms autonomously (machine learning). The jobs with the greatest demand will not be the ones that make us similar to machines, but rather differentiate us from them. Compassion and empathy will no longer just be moral values, but top professional skills. Highly labour-intensive sectors, such as leisure, tourism, education, health care, dependent care will require people to connect with people. For everything else, the machines are already here.
Higher quality of life. Sometimes, workload is correlated with employment in a very simple manner. Highly automated production environments will probably require less work, but not necessarily less employment. If more mechanical processes are efficiently performed by machines, there is plenty of scope for human beings to do tasks in which they contribute a competitive edge as humans, without prolonging their working days for tasks that will be done by the non-human “workers” in the company.
Paradoxically, machines are likely to help us to be more human.