The release of the 2018 UK Corporate Governance Code by the Financial Reporting Council further elevates the image and standing of corporate culture. After extensive consultation, the new code places emphasis on businesses building trust by forging strong relationships with key stakeholders. It calls for companies to establish “a corporate culture that is aligned with the company purpose, business strategy, promotes integrity and values diversity”.
The council also wishes to see clear and meaningful reporting and emphasises that investors and proxy advisors must assess explanations carefully and not take a tick-box approach. There is a new provision to enable greater board engagement with the workforce to understand their views with the code asking boards to describe how they have considered the interests of stakeholders when performing their duty under Section 172 of the 2006 Companies Act.
There is also a focus on succession and diversity. The FRC wants to ensure boards have the right mix of skills and experience, constructive challenge and to promote diversity, the new code emphasises the need to “refresh boards” and undertake succession planning. Other factors to consider are the length of term that chairs remain in post beyond nine years.
Organisations are also asked to address public concern over executive remuneration, with the new code underlining that remuneration committees should take into account workforce pay and related policies when setting director remuneration.
Sir Winfried Bischoff, chairman, FRC, reckons corporate governance in the UK is globally respected and is a framework trusted by investors when deciding where to allocate capital. “To make sure the UK moves with the times, the new code considers economic and social issues and will help to guide the long-term success of UK businesses,” he says. In its “shorter, sharper” form and, with its overarching theme of trust, he adds, the code is “paramount in promoting transparency and integrity in business for society as a whole”.
When it comes to culture, boards are asked to create one which aligns company values with strategy and to assess how they preserve value over the long-term.
Rialto has been banging the corporate culture drum for a long time. The FRC has undeniably helped it make the transition from something that was seen as a HR-nice-to-have to being directly linked to business success when it said in 2016 that corporate culture protects and generates value in the UK economy.
It is also spot on in its latest approach by telling businesses to align culture with its purpose and business strategy. This means not only having company values but ensuring they guide the actions and behaviours of every employee and leader. Culture can work like a magic elixir, running through a company not just correcting ills but enabling and helping to facilitate so many other things such as innovation and transformation.
“If you build it, they will come” is a much-quoted line from the sports film, Field of Dreams. Similarly, if you manage to build the right culture as a leader in your organisation, success will undoubtedly follow.
Any survey that suggests leadership is going backwards at such a crucial juncture for many businesses is extremely concerning. But according to research from Capgemini’s Digital Transformation Institute, organisations feel less equipped when it comes to leadership capabilities than they did six years ago. And this is despite considerable investment in digital transformation initiatives.
The consulting and technology services’ company’s in-house think-tank found that 35 per cent compared with 45 per cent in 2012 believe they have the right leadership capabilities while less than half feel they have the right digital capabilities to advance their transformations (39 per cent in both 2012 and 2018).
The research report, Understanding Digital Mastery Today: Why companies are struggling with their digital transformations, surveyed more than 1,300 business leaders in some 750 organisations and analysed the findings against a Capgemini Consulting and MIT Sloan 2012 report.
It found that while organisations are making progress on evolving their customer experience, they are struggling to transform their back-end operations. Furthermore, businesses are failing to create the strong digital culture needed to bring their employees into their digital transformation agendas.
Indeed, when it comes to digital capabilities, organisations have certainly prioritised customer experience with, for example, 43 per cent of organisations using mobile channels to sell products and services, compared to 23 per cent in 2012. Nearly 40 per cent are also improving their knowledge of markets and customers through devices embedded in products, compared to 17 per cent in 2012.
When it comes to operations, though, only 36 per cent of organisations reckoned it was an area they excelled in. Only 35 per cent are monitoring operations in real time (48 per cent in 2012) and only 29 per cent modify their operational processes to quickly adapt to external challenges (34 per cent in 2012). In addition, many organisations are not providing the tools and capabilities that their employees might expect. For example, only 38 per cent of organisations state their employees can collaborate digitally with other employees and one third of organisations agree that digital technologies improve communication between senior executives and employees (compared to 70 per cent and 62 per cent in 2012, respectively).
Perhaps one of the most worrying findings though is the disconnect that appears to exist between the chief information officer (CIO) and other members of the digital team. In 2012, two-thirds of organisations (65 per cent) felt that the CIO and senior business executives had a shared understanding of the role of IT in their organisation, but this has declined to 37 per cent in 2018.
Six years ago, more than half of respondents (53 per cent) agreed that the CIO and senior business executives have a common view of IT investment priorities, but that has also declined in 2018 to 36 per cent. The report concludes that such reductions suggest optimisation is still occurring in silos or that business leaders are impatient with the pace of IT and are spinning off shadow IT to lead their initiatives.
Having witnessed first-hand the silo mentality that still exists in many organisations, I am minded to agree with the research. There is little doubt that it also comes down to the prevailing culture in organisations which still isn’t as digital-friendly as it could be. The report found that only 36 per cent of companies said there are possibilities for everyone in the firm to take part in the conversation around digital initiatives – a decline from 49 per cent in 2012 – and just 38 per cent say they have a formal programme in place for digital reskilling of existing employees. Moreover, only 36 per cent of organisations believe senior executives and managers share a common vision for transformation.
It strikes me that the lack of progress is not so much to do with technology itself but rather good old-fashioned soft skills like communication, collaboration, engagement and building the right culture and environment for innovation to flourish. Could it be the case that today’s leaders are perhaps worrying too much about technology and forgetting the fundamentals? Time may tell, but time is also rapidly running out.
Even if you happen to be an awards cynic, when employees are the anonymous judges of who the best CEOs are, the list has to be worth a second look. Glassdoor, one of the world’s largest job and recruiting sites, this week announced the winners of its annual Employees’ Choice Awards, honouring the top CEOs in 2018 across North America and parts of Europe.
Awards are based on the input of employees who voluntarily provide anonymous feedback by completing a company review about their CEO’s leadership, along with insight into their job, work environment and employer over the past year.
In the UK list, Richard Flint of Sky Betting and Gaming, Satya Nadella of Microsoft, Richard D Fairbank of Capital One, Marc Benioff of Salesforce and Tim Kidd of Kantar Worldpanel take the top five spots in that order so well done to them. Nadella also has the honour of being the only CEO who has made five separate country lists (US, Canada, UK, France and Germany).
Glassdoor explains that employees are asked to rate several factors tied to their employment experience, including sentiment around their CEO’s leadership, in addition to rating workplace attributes like senior management, among others. They are also asked to report whether they approve, disapprove or are neutral about the performance of their CEO. Among the more than 770,000 employers reviewed on Glassdoor, the average CEO approval rating is 69 per cent.
When it comes to what makes a great CEO, a study from Glassdoor Economic Research found that highly rated CEOs are statistically linked to companies with great cultures. It points out that among measures of company culture, the biggest driver of high CEO approval ratings is employee satisfaction with their senior leadership. The study also reveals a strong link between CEO approval rating and financial performance.
Glassdoor has brought some welcome transparency to the corporate world and sites like this mean poor leadership will be found out. It should serve as a reminder to all leaders to regularly take a step back and assess their own standing and performance. This is an inherently difficult exercise though.
At Rialto, we would like to think that we’ve help to make the process easier by creating the Rialto Accelerated Leadership Index (RALI) which enables leaders to benchmark themselves against the very best. It is based on insights and trends gleaned from five years’ extensive global research and backed up by interviews with executives in leading organisations across different industries and functions.
We’d really like to hear what you think of the new tool and to what extent it has assisted you in discovering how you fare as a leader. You can try it for free at ralionline.com
Research finds that four-fifths of workplaces don’t have a culture of experimentation
Innovation is the lifeblood of business and in the era of digital disruption it is also critical to survival for some organisations. Many leaders may vaunt it as one of their values and genuinely believe they promote it but new research suggests otherwise.
According to a study carried out by RADA in Business, four-fifths (81 per cent) of workplaces don’t have a culture of experimentation. Moreover, while one quarter (24 per cent) reckon their workplaces are desperately in need of new ideas and fresh thinking to overcome current problems, only one fifth (21 per cent) of employees believed anyone was interested in listening to their ideas.
Worse still, 16 per cent of workers said that any new idea would actually be treated with suspicion and criticism, while 15 per cent believed their business leaders actively discouraged innovation. It is far removed from the vision espoused by many leaders of their workplaces enjoying a collaborative and open communication culture where innovation is championed.
In response to this so-called “innovation gap”, RADA in Business, the commercial subsidiary of the Royal Academy of Dramatic Art which provides communication skills training for corporate individuals, has been working with leading UK companies to transfer dramatic techniques, such as play and improvisation, from a theatrical setting to a business environment.
Kevin Chapman, director of RADA in Business, is concerned to see how many employees feel that creativity and innovation aren’t encouraged in their role “especially when there are simple techniques available to help companies to support and tap into the power of imagination for solving problems or developing new ways of working as a team,” he says.
Chapman recommends that businesses need to create space for people to play with new ideas “without being overly critical”. “Adopting an attitude of enthusiastic curiosity towards every idea that you come up with defies your critical voice and may lead the way to new innovations,’’ he continues.
The research found that government and local government workplaces are the settings where people find it hardest to think creatively (21 per cent). It also reveals that those working in IT (29 per cent) and financial services (26 per cent) find it hardest to make their voices heard, with companies often dominated by a few “loud voices”.
Interestingly, the workers who feel most able to think creatively are those working in teaching and professional trades (such as builders and plumbers), who are four times less likely to struggle with innovation than those in governmental jobs.
Whatever the sector though, it is essential that all leaders create time and space for innovation and put mechanisms in place for ideas to spring forth. Even if they don’t appear to be game-changing initially, they could provide the spark of inspiration for someone else. Adopt the mantra that all ideas are worth hearing about.
A true culture of innovation demands leaders to be more risk-taking, experimental and collaborative but above all, they must recognise the crucial part innovation plays in their organisations’ future rather than merely paying lip service to it. The research also stands as evidence of companies still not listening to their people, which has an extremely detrimental effect on motivation and ultimately recruitment and retention.
And with the most creative and innovative brands of the 21st Century also among the most successful – Apple, Amazon, Google, Tesla, Netflix et al – how much more tangible evidence do business leaders need before they elevate a culture of innovation to the top of their corporate agenda?
Leaders expect “AI-augmented employees” to generate tangible business returns such as greater efficiency
The tide seems to be turning when it comes to opinion on whether robots and automation will replace humans in the workplace. Last week’s blog covered findings from Infosys that showed artificial intelligence (AI) is actually a driver for investing in people. A new study published by software company, Pegasystems, predicts that pairing humans alongside machine intelligence will create more effective, engaged and meritocratic workforces.
The Future of Work report surveyed 845 senior executives working globally across key industry sectors, including financial services, insurance, manufacturing, retail, telecommunications and media, and government, on the increased role AI and robotic automation will play in the workplace of the future.
The survey reveals widespread belief that machine intelligence will work ubiquitously alongside humans over time and seven in 10 respondents (69 per cent) reckon the term ‘workforce’ will evolve to encapsulate both humans and machine intelligence. They also expect “AI-augmented employees” to generate tangible business returns such as more efficiency (73 per cent agree) and better customer service (62 per cent).
Responses suggest, though, that the effect of AI will not only transform the way people work but how they are managed and rewarded. More than three-quarters (78 per cent) believe AI and robotic automation will allow staff to make more informed decisions and lead to a flattening of traditional management hierarchies while a similar number (77 per cent) expect AI to help suggest “next best actions” for most customer service agents within the next five years.
The vast majority (88 per cent) are comfortable working together with machines but are less keen on being managed by them. Four out of five (79 per cent) respondents say they would not be comfortable with an AI-powered boss.
Unbiased machine intelligence could also help organisations in areas such as ensuring equal pay. Two thirds (66 per cent) believe the widespread use of AI will give rise to a more transparent meritocracy in the workplace. Three quarters (74 per cent) think that within 10 years, AI will become standard practice for evaluating employee performance, while 72 per cent predict it will be commonly used to set appropriate rewards and compensation. Four fifths (84 per cent) agree it will be commonplace for AI to calculate the true value added by each worker within a decade, while 44 per cent see this happening within five years.
Don Schuerman, chief technology officer and vice president, product marketing, Pegasystems, reckons that the potential of AI and automation has so far being largely untapped and that organisations must augment their human intelligence with AI across the entire organisation in order to move beyond basic efficiency improvements. “By deploying AI and automation with an end-to-end view in mind, businesses can move closer to fulfilling their customer centric vision,” he says.
This also chimes with some of the discussion at January’s World Economic Forum annual meeting where AI was frequently a topic for discussion. At the launch of a skills initiative there, Bill McDermott, chief executive officer of SAP, added that there are “exciting possibilities” when people and machines work together and pointed towards “a new frontier of augmented humanity”.
There are many challenges ahead when it comes to embedding AI and robotics into the workforce and we must be respectful of the defensive feelings some employees are likely to have. But it does seem it is no longer a case of “man versus machine” but “man and machine” and together we can be a powerful combo.
Through technology, companies are weaving themselves seamlessly into the fabric of how people live today
Professional services firm Accenture is the latest heavyweight to highlight the importance of a new kind of leadership if organisations are to capitalise on the growth opportunities that technologies like artificial intelligence (AI) and robotics offer. But as it points out in its annual technology report, it isn’t only about creating business opportunities but ensuring such technology has the right impact on society. The new era of leadership, therefore, must prioritise “trust and greater responsibility”, it states.
As part of its Technology Vision 2018, Accenture surveyed more than 6,300 business and IT executives worldwide. This year’s report, Intelligent Enterprise Unleashed: Redefine Your Company Based on the Company You Keep, reveals how such technologies aren’t just enabling companies to create innovative products and services but also changing the way people work and live. This, in turn, is changing companies’ relationships with their customers and business partners.
More than four-fifths of respondents (84 per cent) agree that through technology, companies are weaving themselves seamlessly into the fabric of how people live today and Paul Daugherty, Accenture’s chief technology & innovation officer, reckons just as cities developed around ports and then railroads, or people rebuilt their lives around electricity, the world today is reimagining itself around digital innovation. “And, by extension, the companies that provide those services. This requires a new type of relationship, built on trust and the sharing of large amounts of personal information.”
It is worthwhile noting that what makes this digital revolution so different from anything that has gone before is its interactivity. Customers have far more access to those who are developing the products and services that they purchase. As Accenture points out, this two-way street is leading to a level of “integrated innovation” and degree of trust between the parties that hasn’t been experienced before. “With this two-way partnership comes new responsibilities – to consumers, employees, government and the public,” it cautions.
The Technology Vision 2018 lists five emerging technology trends that Accenture stresses companies must address if they are to build the partnerships that will be necessary to flourish in the digital revolution. They are:
Citizen AI: raising AI to benefit business and society As artificial intelligence (AI) grows in its capabilities, so does its impact on people’s lives. Businesses looking to capitalise on AI’s potential must acknowledge this impact, “raising” AI to act as responsible representatives of their business.
Extended reality: the end of distance Virtual and augmented reality technologies are transforming the ways people live and work by removing the distance to people, information and experiences.
Data veracity: the importance of trust By transforming themselves to run on data, businesses now face a new kind of vulnerability: inaccurate, manipulated and biased data that leads to corrupted business insights and skewed decisions. To address this challenge, companies must follow a dual mandate to maximise veracity and minimise incentives for data manipulation.
Frictionless business: built to partner at scale Businesses depend on technology-based partnerships for growth, but their own legacy systems aren’t designed to support partnerships at scale. To fully power the connected Intelligent Enterprise, companies must first re-design themselves.
Internet of Thinking: creating intelligent distributed systems Businesses are making big bets on intelligent environments via robotics, AI and immersive experiences, but bringing these intelligent environments to life will require not only adding key skills and workforce capabilities, but also modernising enterprise technology infrastructures.
In my view, the trends make for fascinating reading as well as importantly alerting leaders to the challenges ahead and the exciting opportunities for organisations in the future. Organisations have an opportunity to impact and integrate with society in a way they never have before, and we need to grasp this with both hands. The more important organisations are to society, the more in demand our products and services will be to customers and therefore the greater security of our own future.
Study finds that culture isn’t a soft option but has clear impact not only on business success, but on the economy
Corporate culture has made the shift from a rather nebulous concept to something that is recognised as having a significant impact on the bottom line. Indeed, a new study puts the cost of a bad company culture at a staggering £23.6bn a year for the UK economy.
The Culture Economy report by software company breatheHR finds that one third of British employees (34 per cent) quit their jobs due to bad workplace culture. The survey focused on the SME market but should resonate with leaders of companies of all sizes, large-, medium- and small.
Decision-makers surveyed stated that positive culture led to improved morale and relationships (50 per cent); employees going the extra mile (44 per cent); better customer service and satisfaction (43 per cent); improved individual performance and productivity (43 per cent) and reduced employee turnover (35 per cent). Worryingly, it also indicated a lack of trust exists in many organisations with one fifth of workers saying they don’t trust their senior management. Of these, the main reasons for distrust was because: they don’t feel supported by them (59 per cent); they don’t appear to know what they’re doing (53 per cent); they’re not transparent (45 per cent); and are self-centred (41 per cent).
Jonathan Richards, CEO and founder at breatheHR, is right to point out that culture isn’t a soft option and can impact productivity. “It has a clear impact not just on business success, but on the economy and our society. This includes productivity, an area many SMEs struggle with and don’t have the time to dedicate to it,” he says. “However, one way to boost productivity levels is improving management quality and giving employees autonomy and purpose, as our report reveals. All of which validates the fact that businesses are now operating in a culture economy, and small businesses [which] fail to realise this won’t last long.”
As we know from other research and regular news reports, productivity remains an issue for many businesses and the UK economy as a whole. Those leaders who have failed to respond to the clarion call on culture previously must take it seriously. Company culture is an extremely powerful thing and improving it has the benefit of addressing a range of issues in a single go.
In the most part, employees want to enjoy coming to work, they want to enjoy their jobs, they want to like and trust their managers and employers. But they are unlikely to experience any of these if an organisation’s culture is toxic. In Rialto’s experience, get the culture right and so many other things will fall into place. Individuals who feel more aligned with an organisation and its mission are more likely to release discretionary effort and this, in turn, will lead to improved performance and increased productivity.
Put simply, to improve company culture is to directly treat the cause of many workplace problems rather than the symptoms and we all know from other walks of life that the benefits of this are far greater and more long-lasting.
Telefónica has launched Aura, an AI-powered digital assistant that it reckons will transform the way customers interact with the organisation
Customer service looks like being the next function to be impacted by artificial intelligence (AI). One of the boldest moves to date has been the appointment of five robots which the Dubai Water and Electric Authority’s believes can deliver “seven-star” customer service at its customer happiness centres.
Meanwhile, at this week’s Mobile World Congress event in Barcelona, Spanish telecoms giant, Telefónica, is launching Aura, an AI-powered digital assistant that it reckons will transform the way customers interact with the organisation and manage “their digital life” with the company.
Telefónica chairman José María Álvarez-Pallete López said the company is delivering on its promise of a year ago that artificial intelligence would form the basis of its relationship with clients. “Digitalisation is the core of our business and thanks to the deep internal transformation that we have undergone in the last eight years we have become a company of smart platforms.”
While it is too early to say if Aura will deliver on all of the company’s aims, its story is perhaps one of the best demonstrations of an effective digital transformation yet. Since 2012, the company has invested some 56 billion euros in the deployment of state-of-the-art infrastructure, integrated its IT systems and developed new digital products and services. Telefónica describes these platforms as building blocks that have enabled it to develop a fourth platform where the data is securely stored and infused with AI that will make the company more efficient and offer new services. This platform enables Aura to transform the way Telefónica will interact with customers.
This fourth platform empowers customers by giving them a personal data space which will soon allow Aura not only to offer a personalised experience for each user but also to show customers the data they generate and give them control over how it is used.
The other point to highlight about Aura is in terms of the wider digital landscape. Telefónica has enabled Aura to talk not just through its own channels (via a mobile application) but third-party ones such as Facebook Messenger and in future through Google Assistant and Microsoft Cortana. In short, and significantly, Aura can hang out in the same places as its customers. In Telefónica’s words, “Aura aspires to be where customers want to be”.
Digital transformation certainly doesn’t happen overnight and in this case it has taken eight years. Telefónica acknowledges that while this is a landmark moment on its digital journey it is not the endpoint and, indeed, Aura itself literally has lots to learn (it will grow day-by-day with new capabilities). But in terms of demonstrating the thought and effort that needs to go into a digital transformation programme, it is a remarkable story in itself and one that many leaders can learn from.
Organisations urged to get past the hype and understand how to apply AI to become truly intelligent enterprises
Plans have been unveiled to establish a new university in the city of Milton Keynes that will focus on digital skills. The first undergraduate cohort is expected in 2023 and around 5,000 students will study for qualifications in areas such as digital, cyber, autonomy, robotics and artificial intelligence (AI).
It is being developed in partnership with business and plenty of major players are supporting the project. It was announced this week that the exclusively postgraduate Cranfield University has been chosen as the lead higher education provider and other partners include Grant Thornton, MK College, Microsoft and Indian IT and technology solutions provider, Tech Mahindra.
The aim is to design new educational models which will be responsive to the needs of the city’s businesses and its people and Ian Fordham, Microsoft UK director of education, reckons the MK:U vision closely aligns with the tech giant’s mission to empower “every person and every organisation on the planet” to achieve more. “We are confident that this new institution will help ensure students develop the skills they need to thrive in a digital economy.”
It is great to see the UK planning to deliver a ground-up and robust solution for what is potentially one of the biggest skills gaps organisations have ever faced. It should also confirm in leaders’ minds everywhere that digital really is the future and even if technologies such as AI and robotics don’t affect their organisation now, they will more than likely play a part in the future.
According to a report by Capgemini and LinkedIn, the digital skills gap is widening though, and worryingly, budgets for training digital talent have remained flat or decreased in more than half (52 per cent) of organisations. Meanwhile, half of organisations said they “keep talking” about the digital talent gap but are not doing much to bridge it. The Digital Talent Gap – Are Companies Doing Enough? also found that half of employees are investing their own money and additional time beyond office hours to develop digital skills on their own.
Where there is training being provided, more than half of today’s digital talent say training programmes aren’t hugely effective and close to half (45 per cent) describe their organisation’s programmes as “useless and boring”. It is laudable that some employees are investing in their own digital future but a failure on the part of senior leadership, especially given the research also found more than half of organisations (54 per cent) felt the digital talent gap is hampering their digital transformation programmes and that their organisation has lost competitive advantage because of this.
None of it makes sense given the opportunities digital is likely to bring. Indeed, the 11th edition of Capgemini’s flagship publication, the Digital Transformation Review: Artificial Intelligence Decoded, highlights how artificial intelligence will be the most debated, invested in and disruptive business technology trend over the coming years. Lanny Cohen, Capgemini’s chief innovation officer, urges organisations to get past the hype and “understand how to apply this innovation to become a truly intelligent enterprise”. The review tackles the AI talent gap as well as AI’s impact on jobs and the characteristics of AI leaders.
While “we are all technology companies now” is fast becoming an everyday expression, it sends out one of the clearest message yet to leaders that they must invest in digital skills for the future. After all, you wouldn’t head up a pharmaceutical company and not invest in computational biology and genomics or clinical research know-how would you?
Only a minority of HR functions are fully prepared for digitalisation
In three years’ time, more than one fifth (22 per cent) of all work could be automated, compared to just 12 per cent today, according to a new study. Worryingly, the Global Future of Work Survey by Willis Tower Watson, a global advisory, broking and solutions company, reveals that less than seven per cent consider their HR functions are fully prepared for the changing requirements of the digitalisation.
Say it quickly and it might not seem significant but with an average of 22 per cent of work being accounted for by automation, this amounts to a large proportion of a company’s operations. What’s more, the survey also finds that the percentage of employers automating work and seeing an increase in skills requirements is expected to rise sharply from 27 per cent currently to 45 per cent over the next three years.
On reading the findings, I tried to think of a parallel from the first industrial revolution that would resonate with this. Maybe it was failing to recognise the impact of James Hargreaves’ spinning jenny that drastically reduced the labour required to produce cloth. Reportedly, the jenny made it possible for an individual to work eight spools at once and then 120 as further technological advancements were made.
Leaders cannot afford to under-estimate the impact of automation. George Zarkadakis, digital lead for Willis Towers Watson’s talent and rewards practice, sums up the situation well when he says that, on one hand, the growing use of artificial intelligence (AI), robotics, free agent workers, contractors, consultants and part-time employees brings with it HR challenges that only few organisations are prepared to tackle and on the other hand, many companies recognise the need for breakthrough and innovative approaches and are reinventing work and how talent and skills combine.
Indeed, the survey finds that some companies are putting plans in place for a more automated future. Almost one third (31 per cent) of companies have taken steps to address talent deficits through workforce planning and actions while a similar proportion (32 per cent) of companies have taken action to identify the emerging skills required for their business. Meanwhile, 29 per cent have taken action to match talent to the new work requirements, and 27 per cent have taken action to enable careers based on more agile and flattened organisational structures.
Additionally, Willis Towers Watson reports that half of respondents are either planning to take action this year or considering measures to prepare for the future, such as deconstructing jobs and identifying which tasks can be automated and identifying reskilling pathways for talent whose work is being subsumed by automation (48 per cent). Employers are also taking action to identify “skill and will” gaps as automation changes skill premiums (50 per cent) and to reconfigure total rewards and benefits to fit a radically different workforce (53 per cent).
According to Zarkadakis, most respondents acknowledge that automation will have a significant impact on leaders and managers in the next three years, underscored by the percentage of companies that say automation will change how managers educate workers on the impact of automation on their jobs: (32 per cent this year compared to double (61 per cent) in 2020. In addition, almost two-thirds (63 per cent) say leaders will need to think differently about the requirements and skills for successors and succession management as a result of automation.
“Management and leadership development will be a critical issue for companies of all sizes over the next three years,” he adds. “We know strong leadership is a key driver of employee engagement and retention. But in the face of rapidly changing work automation, companies will need to develop leaders and managers who can orchestrate a radically different work ecosystem while keeping all of the talent in their workplaces fully engaged.”
Zarkadakis is on the mark to highlight the deep-rooted changes needed to prepare for the future. Returning to the earlier parallel with the first industrial revolution, it was, after all, the spinning jenny that was instrumental in starting off the factory system of working. But just like automation, it was accompanied by a fear factor on the part of workers and brought a raft of challenges. Leaders who miss the vital cues being given relating to the future of work do so at their peril.
