Before entering the debate of automation, it is important to understand how technology would be impacting the future of work. McKinsey Global institute’s Report on India’s tech opportunity: Transforming work, empowering people, nitpicks the twelve technologies which will reshape business, economy and the future of work in India. The twelve technologies that have been identified are – ‘Mobile internet’; ‘Cloud technology’; ‘Automation of knowledge work’; ‘Digital payments’; ‘Verifiable digital identity’; ‘Internet of Things’; ‘Intelligent transportation and distribution’; ‘Advanced geographic information systems’; ‘Next generation genomics’; ‘Advanced oil and gas exploration and recovery’; ‘Renewable energy’; and ‘Advanced energy storage’.
The collective economic impact that these.technologies could have has been estimated to be between USD 550 billion to USD 1 trillion by 2025 in India; the estimated economic value of automation of knowledge work alone is between USD 700 million and USD 900 million a year in 2025 in the country. Speaking of the impact of automation of knowledge work globally, McKinsey Global Institute’s Study, “Disruptive technologies: Advances that will transform life, business, and the global economy” says that its economic value would be between USD 5 trillion and USD 7 trillion a year in 2025. Automation of knowledge work, globally, will impact nine percent of the workforce, which means that two hundred thirty million knowledge workers could get disrupted.
The challenge to jobs (or not)
The question that arises then is – what would be the impact of this disruption of knowledge workers?
Another McKinsey Study done in the US and published in McKinsey Quarterly in November 2015, “Four fundamentals of workplace automation”, points out that the proliferation of automation and technology will lead to a redefinition of jobs. It will be redundant human activities that will get eliminated, and not occupations in totality. The susceptibility of jobs will vary based on the kind of activities people indulge in. The job that would be least susceptible to automation would be managing and leading others. The most susceptible would be predictable physical work. Something we currently see happening in the industry, with repetitive activities getting redundant and being replaced by robots. We are already witnessing repetitive activities such as warehouse workers in retail stores being done by robots now. Their work is getting redefined to supervising the robots, and would get redefined further as the capabilities of the bots evolve.
Take another example of artificial intelligence. There are advanced systems available today that are able to do Big Data Analytics independently. But we still require human judgment in decision-making at the end after the completion of the machine’s work. One may say that we could employ a lot of people to actually engage in number and data crunching – but the reality is, we weren’t doing that work earlier. In hindsight, this has only created new jobs. This is one example of how automation and technology open up new avenues.
In the given context, the onus is on organizations to be ready for the future of work.
Are organizations ready?
The answer to the readiness of organizations to embrace technology, relieve people of repetitive activities and be open for them to indulge in creating higher value lies in agility. Future-ready organizations need to be ‘agile’ organizations.
There are two dimensions to an agile organization – stability and speed. Agile organizations have the ability to do things consistently every time and do them fast. For instance, in an agile organization, the ability to procure materials and manufacture them, customer service and sales, is extremely efficient and consistent. These processes operate like machinery – consistent day in and out. But there are other parts of the organization are much more agile, for instance, the ability of employees to innovate and try new projects every month, the organization’s ability to quickly launch a new product, etc.
Automation, in fact, helps organizations in becoming agile.
How can organizations be agile? Organization theory talks of organizational evolution – it says that organizations in their crudest form are a fighting tribe, a small company which is recently created where the people work very closely like a tribe, overcoming challenges together. From there, the organization becomes a professional army, which has a larger workforce, defined structures and hierarchical ways of working. Organizations then become machines – there are values, processes, targets and accountability. The most evolved phase is what is called ‘a living organism’, which means the organization is agile, fast and innovative.
To be truly agile, the organizations must be able to respond to both internal and external changes like a living organism. They should be open to grow something today, and cut down something tomorrow, akin to a living organism. Mostly, today’s organizations are designed like armies or machines. A McKinsey research shows that only 17 percent organizations are agile.
The real question for the remaining 83 percent is – how to evolve and become agile? To begin with, organizations need to take two steps:
Step 1. There are three dimensions where organizations need both stability and dynamism – structure, process and people. In structure, the organization should have a simple stable structure as the backbone wherein the top team sets direction, and dynamic capability can stem from individuals owning projects and doing them end-end. In processes, the core process should be standardized and digitized, which should also allow for fluid reconfiguration in terms of experimentation, prototype etc. In people, organizations should have a set of values that hold people together, and then they can be dynamic in their approach to motivating people.
Future-ready organizations need to be ‘agile’, but currently, only 17 percent make for agile organizations
Step 2. An important next step is that the level of consciousness or maturity of people should grow. The frequency of change increases with technological advancement which requires evolved mindset and maturity of people. In a machine-like system, the roles are defined, and people go about their business as they are supposed to be. But when the organization evolves into a living organism, people have to self-organize teams, decide on their team goals, individual goals, collaborate with other teams, which calls for a much higher level of maturity.
However, organizations may not be at that level of maturity yet.
The adoption rate in this digital revolution is the fastest when compared with the historical transformations in the industry. So organizations clearly have to keep up and be ready for the future of work. Having said that, research concludes that automation of knowledge work will not penetrate to a level, at least in the short and mid-term, that makes humans redundant. What will happen in the long term? One cannot really predict as of now.
(As told to Vikas Arora)