Fundamentals of workplace automation

[ From McKinsey ]

As the automation of physical and knowledge work advances, many jobs will be redefined rather than eliminated—at least in the short term.

The potential of artificial intelligence and advanced robotics to perform tasks once reserved for humans is no longer reserved for spectacular demonstrations by the likes of IBM’s Watson, Rethink Robotics’ Baxter, DeepMind, or Google’s driverless car. Just head to an airport: automated check-in kiosks now dominate many airlines’ ticketing areas. Pilots actively steer aircraft for just three to seven minutes of many flights, with autopilot guiding the rest of the journey. Passport-control processes at some airports can place more emphasis on scanning document bar codes than on observing incoming passengers.

What will be the impact of automation efforts like these, multiplied many times across different sectors of the economy? Can we look forward to vast improvements in productivity, freedom from boring work, and improved quality of life? Should we fear threats to jobs, disruptions to organizations, and strains on the social fabric?

Earlier this year, we launched research to explore these questions and investigate the potential that automation technologies hold for jobs, organizations, and the future of work.3 Our results to date suggest, first and foremost, that a focus on occupations is misleading. Very few occupations will be automated in their entirety in the near or medium term. Rather, certain activities are more likely to be automated, requiring entire business processes to be transformed, and jobs performed by people to be redefined, much like the bank teller’s job was redefined with the advent of ATMs.

More specifically, our research suggests that as many as 45 percent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies.4 In the United States, these activities represent about $2 trillion in annual wages. Although we often think of automation primarily affecting low-skill, low-wage roles, we discovered that even the highest-paid occupations in the economy, such as financial managers, physicians, and senior executives, including CEOs, have a significant amount of activity that can be automated.

The organizational and leadership implications are enormous: leaders from the C-suite to the front line will need to redefine jobs and processes so that their organizations can take advantage of the automation potential that is distributed across them. And the opportunities extend far beyond labor savings. When we modeled the potential of automation to transform business processes across several industries, we found that the benefits (ranging from increased output to higher quality and improved reliability, as well as the potential to perform some tasks at superhuman levels) typically are between three and ten times the cost. The magnitude of those benefits suggests that the ability to staff, manage, and lead increasingly automated organizations will become an important competitive differentiator.

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Christine Haskell, PHD has built her practice on credible, published research and data. In the Research Series, you’ll find highlights, shareable statistics, and links to the full source material.

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The Prepared Mind: Our Current Problem

To tackle the wicked problems of our present and future, we need to embrace a strange, counter-intuitive irony: as organizations across all sectors continue to create and adopt technologies like artificial intelligence, employees need to stay relevant by increasing their subjective intelligence.

As production work and other jobs automate, the skills people need to stay relevant are becoming elusive.

OUR CURRENT PROBLEM

The structures that supported organizations and strengthened the American workforce for generations have been gradually breaking down in every sector. My research on master craftsmen and how they gain mastery helps connect the dots on this new dilemma, and might be the place to seek initial solutions.

It’s a cliché now to even reference the pace of change, exponential growth, and irreversible catastrophes as necessary catalysts for adaptation. We all know that tomorrow’s work will be very different than today’s — we just think tomorrow will remain forever “in tomorrow.” Regardless, in between these recurring reports a truly new change has appeared–one that creates tremendous opportunity with one hand, and keeps the employees from taking advantage of it with the other.

To fully understand this quandary, we need to understand how it took shape. Three primary structures that both support and perpetuate longstanding American traditions are weakening: education; workforce training; and the traditional 9–5 job, and the assumptions of advancement that go with it. Decline in each of these traditions has eaten away a different corner of the economy. All three areas wear down, spread and merge together with technological change, enabling a brand new problem: a job market mismatched to the skills and needs of the workforce.

According to McKinsey, the global consulting firm, the upcoming shift of workers to new occupations “could be on a scale not seen since the transition of the labor force out of agriculture in the early 1900s.”

This dynamic has put American workers in a dilemma. Job reports continue to show bursts of new jobs from time to time, but a range of solid opportunities geared to the future is not broadly reachable for most people. In fact, my research suggests that those best able to adapt and thrive in the years ahead will be people who learn to learn well, and the discipline to think like master craftsmen. However, the American system of advancement has never been designed to prepare people for these requirements.

STABILITY, WHAT IS THAT?

Previous generations could expect a structured, predictable path for career advancement that could last most if not all of their working lives. After attaining a specific degree, you were categorized into a current job, and worked to advance within the company or industry. Not anymore. Today, an employee’s average tenure is just over four years. Companies are increasingly hiring people on a part-time or contract basis.

Enabled by technology, gigging has become more and more mainstream. It has been estimated that 94 percent of the jobs added to the economy from 2005 to 2015 were in temporary, contract, independent, or freelance work. A recent Marist/NPR poll found that approximately 20 percent of Americans’ jobs are untraditional — a figure that could rise to 50 percent in the next ten years.

Since 1995, the percentage of workers engaged in part-time or freelance work has almost doubled. Image Credit: Laura Zulliger

THE HALF LIFE OF SKILLS

Stability has another enemy: skills connected with a specific occupation are becoming outdated faster than ever. By one estimate, the “half-life” of skills today is about 5 years, and quickly shortening. As digital skills become increasingly required across every job function, employees will have to update and invest in their skill sets even more often. Thus the decline of the 4-year degree in favor of targeted, flexible learning alternatives.

With as much as 45 percent of job activities automated with existing technology there is tremendous pressure for employees to complete with machines to do work faster and cheaper — or decide to change occupations altogether. Pearson, an ed-tech company, estimates that 7 of 10 workers today are in occupations that will see increasing uncertainty by 2030. In McKinsey’s view, the shift of workers to new occupations “could be on a scale not seen since the transition of the labor force out of agriculture in the early 1900s.”

THE DECLINE EMPLOYER INVESTMENT

Common sense would dictate that organizations spotting these trends would want to increase internal training efforts to maintain the relevance of their workforce. Some do. Employers like Facebook, Apple, Walmart and the Container Store are just a handful of organizations with notable approaches to internal employee training. Others like General Assembly, Galvanize, and various coding boot-camps are experimenting with new ways to train employees with skills targeted to an emerging need in a specific company.

The last Annual Engagement report published by the U.S. government suggests that 90 percent of leaders believe that building capabilities is a top-ten priority for their organizations; 8 percent track the programs’ return on investment; and, one in four employees get anything out of training.

Internal training programs are increasingly hard to find. One recent study found a 28% decline in employer-paid training across the United States. According to another, Annual Engagement analysis by the U.S. government, 90 percent of leaders believe that building capabilities is a top-ten priority for their organizations; 8 percent track the programs’ return on investment; and, one in four employees get anything out of training.

The lack of training opportunities disproportionately impacts lower-skilled and lower-educated workers, who are the most vulnerable to automation, and those workers who would benefit most from knowing in advance the outcome to which a specific type of training would lead. But make no mistake, lack of upskilling will impact more than just manufacturing. This dilemma will touch every profession from law, healthcare, psychiatry, education — just to name a few.

INVESTING IN THE WRONG SKILLS, WRONG TIME

For most of us, advancing in our lives and careers in a climate where much of what we do is being automated will require different skills — specifically, the capacity for imagination and deep learning. A recent report on the occupations of 2030 showed that 80 percent (8 of 10) top jobs will require creativity, an understanding of systems, and judgment. It is becoming clearer that employees need to start to seek out their own pathways toward training, if not outright invent the job they want to have.

Starting at the turn of the 21st century, the U.S. job market entered a decade of upheaval. As can be seen from this graph, at various times many more jobs disappeared than were created–the worst being just after the 2008 recession. Since 2010, those wild swings have begun to level off, leading to today’s uptick in demand for skilled workers. Image Credit: New America and Bloomberg

Our current systems are not built for just-in-time effectiveness to face adaptive challenges. According to Dr. Anthony Carnevale, head of Georgetown University’s Center for Education and the Workforce, the U.S. spends just $8 billion a year on training, compared to $500 billion on higher education — making the U.S. an education nation, not a training nation.

Adult training programs have had an uneven and often disappointing record of effectiveness. One reason is that they are almost always chasing a problem rather than preventing one which makes them appear out of step and experienced as irrelevant. Another reason is that there is little political will, within the organization or even more broadly across society, that ‘retraining’ is a solution, even as we learn that the ways we’ve tried to retrain workers have not been that successful.

When confronted with this challenge we too often opt for the easy way out or choose challenges with which we are familiar, leaving the hairier problems for the next leadership change. Some of the most promising, innovative approaches to credentialing and adult learning — such as “nanodegrees,” virtual and augmented reality, alternative MBA programs, coding boot camps and MOOCs (Massive Open Online Courses) — attract people already digitally sophisticated or highly educated. In other words, there are so silver bullets on what works at scale to retrain employees for jobs of the future. The challenges to upskilling are especially acute for low- and middle-skilled adult employees — a group that receives little support from employers, and faces many obstacles to advancing, stay up-to-date on market trends, and search for opportunities. They must, therefore, navigate this territory on their own, despite having less financial cushion, scheduling flexibility, core skills, and belief in the payoff of pursuing training in new skills.

THE UNSTABLE MIDDLE CLASS

Volatility in any part of the market hits the low and middle-income the hardest placing them at the highest risk of poverty. In a recent report from the Federal Reserve, researchers found millions of families experiencing significant month-to-month fluctuations in pay. Many of us are already there. Data from the report suggest that 40% of households have no emergency savings and 44% of the adults who responded said they could not pay for a $400 emergency expense without selling something or borrowing money.

As mentioned, support structures (e.g., education, the 9 to 5 workday, and workforce training) that have long held up the economy have not kept pace with the changing nature of work. As employees opt out in greater numbers toward independent work and with increasing turnover in traditional employment, the safety net for many is still built around employer-provided benefits. Workers struggle to find affordable healthcare, start retirement accounts, and many lack disability or unemployment insurance entirely.

A worker saddled with that kind of economic instability has little time to consider self-development. It is not within the realm of possibility to forgo income in order to study. They likely have little savings enabling him or her to invest in starting a small business, undertake an uncertain job search, or invest in a career pivot. Regrettably, taking those kinds of chances is quickly becoming the way to advance one’s career prospects.

MIND THE GAPS: EDUCATION

The World Economic Forum predicts that upwards of 65% of children entering primary school today will eventually work in jobs that do not even exist today. How are schools preparing tomorrow’s adults for a world like this?

44% of the adults in a 2016 survey said they could not pay for a $400 emergency expense without selling something or borrowing money.

We are on a crumbling foundation. A recent study by labor economists found that “one more robot per thousand workers reduces the employment to population ratio by about 0.18–0.34 percentage points and wages by 0.25–0.5 percent.” Despite students’ optimism about their prospects and confidence in their abilities, most employers found recent college graduates poorly prepared for the workforce. About a third of respondents expressed no confidence in training and education evolving quickly enough to match demands by 2026. Some of the bleakest answers came from some of the most respected technology analysts. A primary concern remains about employees’ capacities for applying knowledge in real-world settings, critical thinking, and communication. And those are just a few of the “soft skills” considered increasingly important.

A focus on nurturing unique human skills that artificial intelligence (AI) and machines seem unable to replicate: Many of these experts discussed in their responses the human talents they believe machines and automation may not be able to duplicate, noting that these should be the skills developed and nurtured by education and training programs to prepare people to work successfully alongside AI. In an economy that is getting increasingly dynamic, most schools continue to teach as they always have: with students working by themselves at their desks instead of collaborating on creative projects.

Respondents of the study suggest that workers of the future will learn to deeply cultivate and utilize individual creativity, collaborative activity, abstract and systems thinking, complex communication, and the ability to thrive in diverse environments.

In a 2017 book called “Robot-Proof: Higher Education in the Age of Artificial Intelligence,” Joseph E. Aoun, president of Northeastern University, challenges universities to revamp their entire approach to education. He illustrates a new discipline called “humanics,” which he believes would help students prepare for jobs that will increasingly exist alongside automated machinery. The study of humanics would stress three core skills: data literacy, technological literacy, and human literacy. Aoun also calls for more experiential and applied learning, including regular internships and work experience.

If Aoun is right, how far should schools go? It might be prudent to invest in coding and computer science skills, but since we can’t plan for what change is coming — but we can prepare for change itself. If schools adapt their curriculum to emphasize computer or IT skills, and computers themselves do those jobs within such a short time, won’t those skills be obsolete? Timing and relevance are certainly big concerns. But education needs to last a lifetime, not be targeted toward the half-life of a job or a particular technology. In other words, adult workers should get the same sort of in-depth studies that a youngster receives in elementary school.

If you can’t see yourself doing what you are doing for the rest of our life, ​you will never advance.

To make such a change really work, those elementary school studies must be truly in depth, and foster a capacity for change and innovation. But in elementary schools, where standardized testing is emphasized, failure is often seen as unacceptable, which discourages thinking outside the box. The current system is designed to “educate people out of their creativity,” says Sir Ken Robinson, author of “Out of Our Minds: Learning to Be Creative” and other books about revolutionizing education. “If you’re not prepared to be wrong,” he said in a 2006 TED Talk, “you’ll never come up with anything original.” This sentiment is echoed by the last carousel craftsmen in America, Art Ritchie, put it “If you can’t see yourself doing what you are doing for the rest of our life, ​you will never advance.” Surprisingly, some of the most vocal critics of education’s status quo are teachers themselves. Regardless, our schools continue to line desks in neat rows, distributing memorization-based worksheets reinforcing the student as the empty vessel to be filled rather than a whole, creative person with perspective.

MIND THE GAPS: ENTREPRENEURISM

As technology continues its path of creative destruction, of one sort or another, not everyone will need to be an entrepreneur to get ahead. They will, however, need to be entrepreneurial. The tumultuous changes we just described in the economy will require more people to be self-directed, seeking out their own opportunities and charting their own path through them. Reid Hoffman, founder of professional social networking site LinkedIn, calls this needed mindset “the start-up of you.”

To the institutionalization mind of memorized education and organizational conformity American ultra-independence feels like a distant myth, but the pendulum is swinging back. “The whole concept of a 9 to 5 job for life was a historical quirk,” says Susan Lund of McKinsey. “In 1900, 45 percent of people in the United States were self-employed. Today, with the rise of new employment and wealth generation platforms such as Uber, TaskRabbit, and Airbnb, it looks like we’re returning to that.”

The rising percentage of older people in the workforce over the coming decade presents a double challenge: As skills become obsolete with increasing speed, more and more adult workers will need retraining. But most retraining programs still haven’t proven effective.

Image Credit: NY public library

In spite of the many articles being written about the economy’s turn (or return, it seems) to an entrepreneurial future, there is a disconnect between trends and the preferences of the American worker. An Economic Innovation Group (EIG) report found that there is actually a decline in the number of businesses being started, the number of people moving for job opportunities, and the number of workers changing into new jobs.

EIG referred to this phenomenon as the retreat of “economic dynamism” and it impacts multiple demographics. Even millennials seem averse to taking risks and “are on track be the least entrepreneurial generation in history,” according to EIG co-founder John Lettieri. In a 2016 poll from the United States Senate, millennials overwhelming responded that entrepreneurship is essential to the economy, and they consider someone working at a startup a success. Yet when asked about the best way to achieve success, a majority chose employment at one company and working their way up as the best option. This conservative preference is not a coincidence. Millennials carry more student debt, face rising housing costs, and have less confidence about the future than previous generations.

In policy debates about the future of work, experts emphasize opportunity, training, and skills. They compartmentalize and therefore rarely mention the financial stability people need to explore those opportunities.

No one doubts that the situation we are in is complex and thorny. There are many reasons why workers are reluctant to take chances, but it’s also likely that a good number of them would feel bolder if they could afford to and felt psychologically safe enough about their future to experiment. Few connect the dots on this problem.

In policy discussions, these conflicting trends — career instability and income volatility — are continually treated as entirely separate and unrelated. Conversations about the future of work emphasize opportunity, training, and skills; meanwhile, the financial stability that people need to explore those opportunities is rarely mentioned.

Today’s job market is littered with these very dangerous potholes, which can be summed up as follows:

• Jobs are less certain and structured

• Skills lose relevance more quickly

• Pay is becoming highly unstable

• Employers provide fewer benefits, training, and assistance with career advancement

• The traditional safety net is ill-suited to the sources of disruption and instability that workers face.

A COMPANY OF CRAFTSMEN AND CRAFTSWOMEN

A clear take-away from all these competing trends is that in tomorrow’s world, courting risk and embracing surprise may be the safest routes to take. For more people to will be willing to dance with this kind of uncertainty, a stronger foundation will have to be laid. Among other things, education needs to prioritize individual creativity, adaptability and entrepreneurial through simulation-based learning; re-investment in on-the-job training instead of just classroom or online learning; and update the safety net that gives people the stability, time, and resources to take risks.

As we wait for our political leaders to catch up with this reality, individuals can take the lead in upleveling themselves. In fact, inspiring outliers to the economy’s declining support structure already exist — and the jobs people are finding aren’t all in high-tech. Benefits of automation are real (and if past trends hold, automation will spawn as many new jobs as it eliminates), but there are lots of people seeking a life, and interesting work, beyond a computer screen. And plenty of consumers are looking for products made by entrepreneurs who think like master craftsmen.

STAYING HANDMADE ONLINE

Charles & Hudson / Flickr / Creative Commons

In 2010, Etsy cofounder and Chief Marketing Officer Matt Stinchcomb had succeeded at something that seemed impossible: he and his partner took an idea about creating a durable business from joyful, ecological and more connected point of view over simply an economic one. What started as a marketplace to buy handmade things became a platform for building more connected human scale economies. Yet, by 2010, he found himself disillusioned with his job.

Matt moved to Berlin for a couple of years to run their international operations. His business partner left and the company appointed a new CEO, Chad. Chad asked Matt to take over marketing, again. “I hated it. I was less interested in email open rates and more interested in the real connections we could create with the platform which is hard to quantify from a marketing point of view.”

“The birth of my son made me question what I was doing with my life. We’re doing a lot of great things with Etsy, but I know that I need to be doing something of service to make this world better. I thought about running for office, and running a nonprofit…”

This birth of his first son made him question is career path and “in exploring some of the ways that fear was keeping me from the convergence of myself and my business, I put forward a proposal to say ‘if we really want to actually be this engine for impact, it needs to be someone’s job to steward it. Not someone’s job to do it.” Matt wanted to go deeper, to think about how do we use the business as the engine for impact and work across the company to give everyone not just the tools, but also the desire to maximize benefit for everyone in the system — he wanted to craft the business.

In 2015 Etsy.com went public, Matt saw an opportunity to pre-endow a different entity with stock. The CEO tasked Matt with the strategy of the new venture, leading to Etsy.org (later the Good Work Institute). Matt took space and risk to re-imagine how business is practiced and taught. He saw a need to “change what we are teaching, how we are teaching, who the teachers are, who the students are…. The things I was reading in all those marketing books wasn’t actually helpful. It was the things I was reading in Buddhist books, or permaculture books, or just what I learned by doing.”

Fear kept Matt from the embracing risk. “I always like to think about the idea that business as usual is destroying the world. Business as unusual could heal the world.” Having no formal business education he felt like an impostor when suggesting alternatives. Ultimately, he was willing to be misunderstood and challenged as he forge in a different direction. “The fear isn’t that you are not an intuitive person. The fear is that you actually listen to your intuition.”

“What I had been feeling on a personal level was disconnection — from nature, from community. That’s what initially led me to start exploring Buddhism. The more I explored that, the less willing I was to be in that disconnected state. I had to overcome those fears to connect these two things.”

The Good Work Institute. conducts something other than business as usual. Image Credit: Franco Vogt

For the Matt, the keys to success were basic principles that are time-honored but often forgotten: deep connection with a particular problem (or medium), confidence with one’s own creativity, self-management through trial and error, and the constant ability to pivot and learn on the job. In similar ways, countless creative entrepreneurs have used services like Etsy and Ebay to create, and then expand, their businesses.

HUMAN SKILLS IN AN AUTOMATED WORLD

With robots doing everything from conducting funerals, evaluating rules in legal cases, assisting surgeries, and erotic dancing, it doesn’t take much to feel replacement is imminent for everyone. Yet technology has clear limitations — today, and for the foreseeable future.

The trend in automation is to do things more cheaply and smaller. As such, machines excel at processing data and performing routine tasks. However, they fall short on inherently human traits such as humor, empathy, social intelligence, communication, and leading and inspiring others. Machines also aren’t particularly good at a range of other qualities, often identified with craftsmanship, which are expected to be in increasing demand as well. These include deep expertise, creativity, artistry, adaptability, and the capacity for individual creativity that leads to innovation. Master craftsmen are in the business of raising standards.

What will it take for today’s workers to flip their fear and convert threat into an opportunity? Taking the first step requires a shift in mindset — to see technology as not just a machine that must be operated, but a challenge that must be mastered. And it goes a step further, the problem that machine is solving needs to hold a deep fascination for the worker, so that compulsion and drive to solve it under any conditions aids in persistence in our thorniest issues, making any technology that aids the worker a means to a much larger end. The problems people are attaching to, if they are the right problems for them to solve, become their medium of individual expression — much like master craftsmen contend with the idiosyncrasies of wood or stone.

Apprentices of Siemens USA, provide an example, explaining their goal is to move beyond being simply a “machine operator” who “pushes a button.” Instead, they want to learn to become true “machinists” — employees who can understand the bigger picture, program the machine, fix problems, apply judgement, and comprehend with precision how their programming will impact production. This kind of end-to-end perspective returns us back to craftsmanship as it was and moves away from the kind of line specialization that had workers competing with machines to do work more cheaply. End-to-end thinking requires openness, discernment, self-management, and the ability to both seek and find problems.

Learning to think like a craftsman as a manufacturing worker could be applied to warehouse workers at Amazon, Walmart, and others. And the story doesn’t end there. As technology advances and the nature of work changes, both the apprentice and the master craftsman alike will need to constantly evolve, take risks, re-learn and adapt. But far too many will not, unless we start making changes — now — to our systems of education, workplace training, and employee support.

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Christine Haskell, Ph.D. is a leadership consultant and adjunct faculty at Washington State University. She helps busy leaders take responsibility for their learning and development. She writes on the topic of “Craftsmanship and The Future of Work.” sharing lessons from master craftsmen and women on personal and professional mastery, is due out late 2019. Sign up for her (semi-regular) newsletter here.

The pole dancing robots of CES

[ From recode ]

Pole dancing robots are giving erotic dancers a run for their money in Las Vegas. The robots showcased their skills performing at a Las Vegas gentleman's club. The Managing Partner of Sapphire Gentlemen's Club said they are trying to appeal to a different audience.

“I’m here to see the robot strippers?”

That was me, Monday night, walking into a Las Vegas strip club in hopes of finding one of the more bizarre forms of entertainment near the Strip: A pair of pole-dancing robots I’d read about in an International Business Times article earlier that day.

The robots were an obvious gimmick during one of Las Vegas’s busiest weeks of the year — the 50th Consumer Electronics Show, a massive annual tech trade show full of geeky gadgets and gizmos, from touchscreens to cars to fancy electric trashcans. The Sapphire Gentleman’s Club, a strip club right off Vegas’ main drag, paid to showcase the robots as a way to drum up interest from press and customers.

As a first-time CES attendee, the gimmick worked on me: What could be more CES than pole-dancing robots?

The robots were as advertised: They gyrated on a stripper pole to music from 50 Cent and Pharrell, with dollar bills scattered on the stage and the floor. A half-dozen human dancers, most of whom were dressed in tight, shiny robot costumes, repeatedly took pics in front of their metallic colleagues. (The woman greeting guests as I walked in told me that I missed a skit where the human dancers unveiled the robot dancers to “Star Wars” music, and then joked about them stealing their jobs.)