Sometimes to get a glimpse of the future, we need to look into the past.
In part 3 of my interview with WorkHuman 2019 speaker Gary Hamel, we talked about his predictions for the workplace in 2019 and beyond. One part of the interview that stands out to me is our discussion on the pace of innovation. Gary uses the automobile industry as an example. In 1890, the average manufacturing company in the United States had four employees. Just 25 years later, Ford was making 500,000 cars per year. “The great innovation there was not the car, that invention happened in Germany,” says Gary. “Ford's invention was coupling the principles of bureaucracy with large-scale manufacturing. Literally, in one generation, almost all of modern management was invented.”
Gary believes we stand at the same precipice today when it comes to humanizing the workplace. How will robots and humans interact in the future? Which steps can HR take to make people feel more empowered at work – and hack their way to a more human workplace?
Read our interview below. To listen to this interview on WorkHuman Radio, click the audio player at the end of this post.
Globoforce: There’s a lot of talk about A.I. and how that intersects with humans. What are your predictions for the workplace for next year and even beyond?
Gary: I think A.I. is going to have significant implications for work. But I also believe it is the single most overhyped technology in history, thanks largely to the fact that, today, anxiety spreads at lightning pace.
It’s telling that Elon Musk at Tesla has said that one of their biggest mistakes was to believe that robots could, in every case, outperform humans. In many places, they can't. And so they've had to move away from that.
McKinsey did an interesting piece of research where they divided human capability down into 18 different categories. In some of those, like pattern recognition, machines are going to be ahead of us. But in terms of social interactions, in terms of novel problem solving, we are going to maintain a lead for a long time.
My sense is that the risk posed by A.I. and robots to employment is directly proportional to the degree we treat human beings as robots. Because in a world where we have robots to do the real work, we do not need human robots anymore. But what I've also learned is that in almost any industry where you give people the chance to develop and use their creative gifts, which is the core of humanocracy, you find human beings able to do things that machines will never be able to do.
" ... the risk posed by A.I. and robots to employment is directly proportional to the degree we treat human beings as robots."
One of the companies that I admire is the U.S. steelmaker, New Core. They have very few management layers. Every front-line associate can tell you the profitability of every order that leaves a plant. There are tens of thousands of experiments that get run every year, with no senior leadership intervention at all, where front-line teams are improving their processes. It’s the most innovative steel company in the world.
Every place where I've seen this kind of humanocracy applied, in plants at GE, at New Core, at Haier, you see a 30 to 50 percent productivity advantage that is based entirely on the fact that they are using the brains and the creativity of their employees in ways their competitors aren't.
Toyota gets more than one million employee suggestions a year, and 85% of those get implemented by the employees themselves. Over many, many decades, Toyota has built a system where front line employees have the education, the power, the ability to think, to improve the business, to implement their ideas, with very little in the way of process or bureaucracy. The pace of improvement is faster than their competitors.
I remember sitting in a meeting 30 years ago with W. Edwards Deming, who was one of the great quality pioneers, where he was talking to the leadership of Ford. And some senior executive of Ford asked him, ‘When do you think we're going to catch Toyota?’ And Deming said, ‘Are you kidding? Do you think they're standing still?’
It took 30 years of making excuses like, ‘This is just about changing some processes,’ before Ford, GM, Volkswagen, and others realized it is a completely different set of beliefs about what ordinary human beings can do. We have to give up our power and our prejudice for this ever to take root.
Every HR person will tell you, ‘You can be a leader anywhere.’ Is that really true? Are there courses for employees to develop their financial expertise, to develop their marketing sophistication? The prejudice that it's only senior people who are leaders runs very deep, and that's going to have to change.
We have to redefine leadership as a set of capabilities that includes building a coalition of people around you, having the courage to take a small risk, being persistent, learning how to put together and sell a business case. We need to teach people those leadership capabilities completely independent of where they sit in the hierarchy. Because, if we're not, we're leaving an enormous amount of human capability undeveloped.
Over the next decade, the idea of leadership will become increasingly divorced from any sense of formal hierarchy. There are some progressive companies that are using social network analysis and other tools to understand where the real leaders are, and who's really adding value, and who's behaving like a leader, irrespective of their position, and who's not. Data is going to help us start to sort this out. And then influence, and authority, and respect, and money will start to flow to the natural leaders in the organization, as opposed to the people who have just been very good at getting themselves into leadership positions.
"Over the next decade, the idea of leadership will become increasingly divorced from any sense of formal hierarchy."
Globoforce: It sounds like we have a long way to go.
Gary: We have a long way to go, but it’s all going to happen within a generation. You reach a tipping point where social change happens, where the forces have been accumulating gradually, and then, all of a sudden, there is an avalanche.
We saw this happen with democracy. It happened with the end of slavery. It is happening with patriarchy and the #MeToo movement.
It’s worth remembering that, in 1890, the average manufacturing company in the United States had four employees. It would have been unimaginable to anybody in 1890 that by 1915 Ford would be making half a million cars a year. And the great innovation there was not the car, that invention happened in Germany. Ford's invention was coupling the principles of bureaucracy with large-scale manufacturing. Literally, in one generation, almost all of modern management was invented. Financial reporting, capital budgeting, all of these things that we take for granted now were all inventions, and they happened in very short order.
I think we're at the same point now, and I think there are three things that will propel this forward. One is social technology. The second thing that's changing is expectation. You have a group of individuals who are coming to work and whose primary social construct is not a pyramid, or if it is a pyramid, it's one that's built from the bottom up by users, not top down by executives. And third, you have organizations that are confronting a set of challenges that lie outside the performance envelope of management as usual.
Every CEO will tell you, ‘We are not innovative enough.’ Everyone will tell you, ‘Change is way too slow, and we're constantly behind the curve.’ Everyone will tell you, ‘We’re not energizing people and inspiring them to give the best of themselves.’ And they're not yet sure how to fix it.
Since the early 1990s, companies have been working hard to optimize their operating model. This is the first wave of technology, and it started with the book by Jim Champy and Michael Hammer, "Reengineering the Corporation." Every business understood that, to drive efficiency, you have to use technology to simplify your supply chain.
Over the last decade, the focus shifted to digitizing the business model. The fact that it shifted power away from producers to consumers was a bitter pill to swallow in industries like publishing and banking, where many companies had built their profit margin on customer ignorance and inertia.
The next challenge is how do we humanize the management model? And I think that will be the most difficult challenge by far, because, if it was difficult to give power away to customers, it's going to be even more difficult to give power away to your colleagues and to people on the front line.
Globoforce: We look forward to hearing your talk at WorkHuman. Can you give us a quick preview?
Gary: I'd like to talk about what individuals can do. There's a growing gap between how empowered we feel in our personal lives as consumers versus how empowered we feel at work. Even for senior HR leaders, I think there's still the sense that to change any of these processes is so difficult.
"There's a growing gap between how empowered we feel in our personal lives as consumers versus how empowered we feel at work."
The rate at which any organization is going to be able to shift this management model is going to depend on the extent at which it can enroll individuals at every level in the work of management innovation. If you have an idea on a better way of coaching employees, roll it out. Try it. Don't stop the old model, and don't do something that's going to break the law. But start where you are. Run an experiment, see what happens, and then try it again.
Many companies, like Intuit, are already using this mindset in how they drive business innovation. At Intuit, you will never get investment by creating a great PowerPoint deck. You get investment by identifying customer pain points, building a little, getting feedback on that, collecting data, and then presenting the data.
As long as we think of change as something that starts at the top, involves dozens of people, is enormously complex and expensive, we have an excuse to sit on our hands.
We have to build organizations that are filled with HR hackers, and where that hacking isn't done just by HR people. This what will drive the pace at which any organization moves from the bureaucratic path through the human-centered future.
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