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Perspectives | POINT | COUNTERPOINT

How the Internet of People Will Change the Future of WorkBy Anna Tavis

When conversations turn to the future of work, the focus is often on technology first

and humans second. To shed more light on the human side of the equation, we invited senior HR professionals and leading experts to present their views on what the future may hold for people in the Internet of things (IoT) economy.

Ravin Jesuthasan, lead author, opens the discussion by building on the main theme of the 2015 book he coauthored, Lead the Work: Navigating a World Beyond Employment. Jesuthasan’s key idea is that under the conditions of the Fourth In-dustrial Revolution, the “traditional trap-pings of employment fall away,” while “new intermediaries step in to connect and support pools of talent that engage with companies in a myriad of ways.”

The parallels with IoT are transpar-ent. If IoT connects all types of digital devices and enabling applications that were previously unheard of, the “Inter-net of people (IoP) will connect various pools of talent, enabling continuous upskilling, boundaryless careers, access to work opportunities, income contin-uation solutions, and access to various other benefits.” Work and organizations, Jesuthasan proposes, will “continue their inexorable shift away from longer-term obligations to employees” and people will find community in the networks they create among themselves in coworking spaces and on diverse and specialized collaboration platforms, of which the or-ganization will be just one such option.

Not so fast, caution all four of our re-spondents. Here are the reasons why the promise of IoP that Jesuthasan presents will not work.

The scenario of an “inexorable ride away from the organization” does not really hold for Diane Gherson, CHRO at IBM. Speaking from her experience of running the HR function at one of

the world’s longest-standing and most successful tech giants, Gherson describes the new IBM work model in terms of ag-ile teams. For IBM, agile working cannot be supported by the loosely connected network of part-time workers. The new work order demands “co-location of agile, empowered teams, loosely coupled and tightly aligned to deliver outcomes valued by their end user.” To scale agile working, IBM went back to co-locating team members with clients breaking down functional silos and encouraging experimentation and learning and en-couraging facilitating casual interactions at work.

Peter Mulford, global head of innova-tion for the strategy consulting firm BTS, cites multiple data showing problems with the narrative of decoupling talent

from the organizations. No question, cost savings in the short term are attrac-tive to most employers. What is not clear are the longer-term consequences of employees disengaged from the organi-zations they work for. Michael Porter’s strategy research showed decades earlier that businesses’ strategic success depend-ed on a diversity of talent “that work together as a team” not on “crowdsourc-ing tasks to the lowest qualified bidder.” Mulford also cites Gideon Lewis-Kraus, who noted that “the most important thing happening in Silicon Valley right now is not disruption. Rather, it’s institution-building.”

Uri Ort, Reece Akhtar, Dave Winsbor-ough, and the team of organizational psychologists at Hogan X question the psychological validity of the proclaimed

When professional conversations turn to the future of work, the focus is often on technology first and humans second.

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benefits of the “uberization” of the econ-omy. As Hogan’s multi-year research has compellingly demonstrated, human mo-tivation depends on three fundamental needs: to get ahead, to get along, and to find meaning. Freelancing falls short of meeting these fundamental psychologi-cal requirements, and “the psychological payback that traditional organizations provide to their employees,” the Hogan X team argues, remains critical to employee well-being and organizational performance as a whole, technology notwithstanding.

Brian Kropp, practice leader at Cor-porate Executive Board, brings the con-versation back to the importance of the role companies need to play in the face of the automated options the new econ-omy offers. Based on CEB’s findings, Kropp presents a continuum of options where, on the one end, companies are increasing their investments into train-ing and development with the intention of bringing their employees along to the next economy. Those companies are set to create a win-win scenario for employ-ees and companies alike by working to engage their workforce and to increase productivity. On the other end, there are companies that are chasing the lower costs that the “gig economy” offers and possibly taking on more risk by disen-gaging their workers, losing institutional knowledge, and potentially damaging their reputation as employers.

The impact of automation on hu-mans is not yet fully understood. Fuzzy boundaries between the two economies will most likely persist and widen as workers continue to migrate between different types of employment. Even if the gig economy slows, it is not going away. Platforms, apps, and coworking spaces will continue to multiply and improve their user services. Commu-nities of practice will become expert at providing those intangible benefits that human workers need to thrive. Yet, despite some warnings to the contrary, innovative, fast learning organizations will maintain their stronghold on the employment of choice. They are loosen-ing their administrative grip on workers’ mobility while refocusing on cultural uniqueness and employee experience to meet the demands of the next genera-tion of talented nomads. IoP deserves a

closer examination, and we are here to contribute our share.

Anna Tavis, Ph.D., is associate professor of human capital management at New York University, Perspectives editor, and coeditor of Point Counterpoint II. She can be reached at anna.tavis@nyu.edu.POINT

The Human Response to AIBy Ravin Jesuthasan

As a participant at the World Economic Forum’s annual meetings in Davos, one can’t escape discussions about the Fourth Industrial Revolution and its implications for society, organizations, and work. The inherent relationships and dependency between these three elements cannot be overstated. The twin forces of technology enablement and the democratization of work are enabling rapid transformation in how work is done, where it is done and by whom or what. This in turn is redefin-ing what the organization actually is and its value exchange with its sources of work. Is it a self-contained entity, as in years past, or the permeable hub of an ecosystem for work? As more work escapes the boundaries of employment and companies increasingly embrace the plurality of means for work—whether that be free agents on a talent platform like Upwork, independent contractors, AI or robotics—the impli-cations for society will be profound. As the speed of the Fourth Industrial Revolution rapidly eclipses that of the previous three, companies will seek to seamlessly optimize speed to capability, cost and risk, shifting work between these various sources while eschewing longer-term contracts and liabilities in favor of more variable costs that are aligned to when work is delivered.

The shift in work from a singularity of focus on employment to this new plurality of means, as described in Lead the Work, will see organizations continue their inexorable shift away from the implied promise of long-term employment (think implied promises of long-term employment,

defined benefit pension plans, and retiree medical programs) in favor of work relationships that are shorter in duration. This trend has been playing out for some time as companies first transformed the traditional employ-ment relationship to reduce their long-term obligations, then shifted to utilizing alternative sources of workers (contingent talent, outsourcing) and more lately have started to use AI for the many routine aspects of work.

The rapid growth of cognitive automation is creating a new set of work providers that promise a step change in the aforementioned metrics of speed to capability, cost, and risk. Analysis by Willis Towers Watson sug-gest cost savings of 60 to 80 percent for cognitive automation over traditional employees. This is in contrast to the 25 to 30 percent savings typically real-ized through outsourcing. So, where does all this leave employees, or more broadly, human talent?

Without a doubt, we humans still have (and will for the foreseeable future) a pivotal role to play in work. As automation increasingly takes hold of the routine aspects of work, jobs will be reconfigured to emphasize the non-routine, truly human elements. But how will humans engage with or-ganizations? Even as companies reduce the traditional elements of security in the employee value proposition, our engagement surveys continue to point to the primacy of meeting that very basic human need.

Will we see the return of DB pension plans? Will we see companies reverse the declining trend of investing in the development of the workforce as the demands for reskilling acceler-ates? No, as the traditional trappings of employment fall away, new inter-mediaries will step in to connect and support pools of talent that engage with companies in myriad ways. Much like IoT is connecting all types of dig-ital devices and enabling applications that were previously inconceivable, IoP will connect various pools of talent, en-abling continuous upskilling, boundar-yless careers, access to work opportu-nities, income continuation solutions, and access to various other benefits.

As jobs get deconstructed so they

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can be automated, workers will in-creasingly manage a portfolio of work elements (i.e., tasks) and individual capabilities (i.e., skills, competencies). These work elements will be per-formed not as a job, but as discrete elements, some of which may be com-bined into a “job” in one organization, while in others performed for multiple entities.

Consider the example of Stride Health. Stride Health delivers mobile wellness and tax savings solutions for contingent talent, providing them with access to benefits that in the past may have been available only to employees. The Freelancer’s Union plays a similar role in providing access to various retirement, health care, and insurance benefits. The rapidly growing catego-ry of work marketplaces, otherwise known as talent platforms like Upwork, Toptal, Topcoder, and Tongal, do not just create highly efficient mechanisms for matching talent to work, but they also create transparency in the pricing of different skills, the training required to attain them, and, increasingly, access to reskilling opportunities. As these intermediaries increasingly usurp the role of the traditional organization in providing benefits and develop-ment, talent will be “unshackled” from the bounds of employment. IoP will enable mobility, transportability, and transparency, but will bring with it requirements for responsibility that are unprecedented.

The organizations of the future will be nimble, agile entities that orches-trate the work of many partners. They will continuously look to shift cost and risk as they optimize their speed to capability. As they do this, work will in-creasingly be viewed as a service. Work

and the organization will be decoupled and our long legacy of organization as the singular “home” for talent will be at an end. No longer will organizations connect people and serve as the only hubs for community and development. They will instead be solely the nexus for work. Whether that is the work of an employee, a free agent, or a robot. IoP, with its various enabling plat-forms and intermediaries, will ensure a more sustainable value exchange. It will create community, opportunities for growth, and security even as the Fourth Industrial Revolution acceler-ates and brings more change.

Ravin Jesuthasan is managing director at Willis Towers Watson. He can be reached at ravin.jesuthasan@willistowerswatson.com.

COUNTERPOINT

A Case for the Agile Workplace By Diane Gherson

There was a time when we thought all work could be deconstructed and disag-gregated and farmed out to freelancers on talent platforms, with just the “hub” work, such as project and client manage-ment, being retained by the traditional corporation. The “gig economy” was gaining momentum, as the “uberiza-tion” of entire industries became more commonplace, and work at home/from anywhere gaining traction as the global labor market opened and Internet and mobile computing became more pervasive.

For companies, this was a gift from heaven: Labor is purely elastic with de-mand, and pay is for output, not input. For employees, their needs for benefits were solved by new players like the Free-lancers Union and Stride Health, and their needs for training were met by new boot camps like General Assembly and Galvanize. Their need for colleagueship was filled by the emergence of cowork-ing facilities, complete with Starbucks for coffee breaks.

This moment has passed. With the urgent need for speed and innovation

in ruthlessly competitive industries, the industrial assembly line-like model for getting work done has been swiftly disrupted by a new model of work—one that demands co-location of agile, empowered teams, loosely coupled and tightly aligned to deliver outcomes val-ued by their end user. Most importantly, the new model demands teamwork and the intentional selection of teams that support it. Unlike the previous era of industrial work design, the agile work model is unsuited to the “gig economy.” It would be slowed down by the friction cost of constant reconfiguration of teams unfamiliar with each other and operat-ing as independent players.

At IBM, we’ve embraced agile work at scale, including co-locating employees to co-create with team members and cli-ents, crossing traditional functional lines to enable faster outcomes. Co-location is paying dividends in creating the condi-tions for the speed of trust, experimen-tation and iteration, and the accidental learning that comes from chance en-counters. We’re reengineering workspac-es to reflect how digital work actually happens. With an increasingly Millennial workforce, coming together in a lab or campus also benefits engagement. We’ve

invested in professional development to ensure our teams can make the most of the new work experience, including the tens of thousands now trained in design thinking and agile scrums. Of course, we remain firmly committed to the flexible work practices so important to a contem-porary and diverse workforce.

There is no doubt that the tradition-al employer role of matching demand to supply has been supplanted by talent platforms, just as the traditional role of the hotel—matching travelers

The twin forces of technology enablement and the democratization

of work are enabling rapid transformation

in how work is done, where it is done, and by

whom or what.

Co-location is paying dividends in creating the conditions for the speed of trust, experimentation and iteration, and the accidental learning that comes from chance encounters.

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to rooms—has been supplanted by platforms like Airbnb and Trivago. And there will always be “liquid” work that can be outsourced as micro-services to freelancers and other contractors, with agile teams back home assembling the pieces into a solution. For the majority, that is core work; however, the role of organizations as employers will continue, as the need for speed and innovation trumps process efficiency in the digital economy.

Diane Gherson is CHRO at IBM. She can be reached at dgherson@us.ibm.com.

The Age of Man–Machine Partnerships By Peter Mulford

As both a consultant helping Fortune 100 firms manage innovation and a World Economic Forum alumnus, it’s easy for me to understand the enthusi-asm for artificial intelligence, machine learning, and IoT (or what Klaus Schwab

calls the Fourth Industrial Revolution). These technologies have had a dazzling impact on virtually every aspect of peo-ple’s lives, and it’s clear they will con-tinue to do so. What’s less clear is that the Internet of people (IOP) will cause work and the organization to be “decou-pled” in a way that “organizations as the ‘home’ for talent will be at an end.” In fact, there is increasing evidence that the opposite may be true.

To begin, whether you call it the IoP or the on-demand economy (ODE), there is ample evidence to show that the number of employees and employers using per-project work is already big and getting bigger. The Aspen Institute found that 45.3 million people (22 percent) of the United States population has participated in the ODE; LinkedIn has predicted that 43 percent of the U.S. workforce will freelance by 2020; employers surveyed by Burson-Marsteller reported increasingly using independent contractors for flexibility (90 percent) and cost-saving (86 percent). And so on. At first glance, the evidence seems clear: the IOP is on the rise, and it will bring benefits to both employees and employers.

But, look more deeply, and there

are three potential problems with this narrative. The first is that it assumes that a majority of workers want to be decou-pled from organizations. A growing body of research suggests that employees see purpose as a way to bring meaning to

their work and to grasp the contributions they are making to society, and this is something they increasingly expect to get from their firm. A recent study by Gallup found that, to be fully engaged, employees need to find meaning in their daily work. PwC found that “purpose is also top of mind for employees across multiple generations and levels.” When organizations are at their best—which is not as often as they could—they provide this sense of purpose. But where does one find purpose in a TaskRabbit IOP world where workers move from project to project? True, one could argue people enjoy tasks for the love of the task (read

While participation in ODE is up in America, income inequality is at the worst it has been

since 1923.

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Marcus Aurelius) or that flexibility in work will serve a tangential purpose (consider, for example, caregivers look-ing for part-time work during set hours). But for most workers, it is unclear how the ODE will fulfill the human sense of purpose and connectedness that comes from being part of an organization whose mission exceeds the sum of its tasks.

The second problem is the assertion that the IOP will create “opportunities for growth and security,” isn’t supported by the data. In fact, the opposite seems to be true. While participation in ODE is up in America, income inequality is at the worst it has been since 1923. Moreover, 68 percent of ODE employees surveyed feel they do not have the same financial safety net as full-time workers. Elsewhere in the world, things don’t look much better. Despite advances in the IoP, the top 10 percent of best paid employees still take 25.5 percent of total wages in Europe, 35 percent in Brazil, 42.7 percent in India.

The third problem with this narrative affects employers. While the short-term cost savings for a firm in an IoP world are clear, less clear are the longer-term strategic implications of employee de-coupling. Here’s why: One of the crucial insights from Michael Porter’s work on strategy is that competitive advantage derives from the unique combination of activities that allow a firm to deliver a distinctive value proposition. Like any high-performing team, firms therefore depend upon a diversity of talent that work together as a team for their suc-cess, not on crowdsourcing tasks to the lowest qualified bidder. (It’s also inter-esting to note that in the same Future of

Work initiative cited above, 58 percent of employers surveyed said full-time hires are better for their company, despite the costs, because they provide more value over the long term.) The IoP model might be cost saving for non-essential tasks, but it seems unlikely to replace the organization as the “home” for a team of high-performing talent determined to compete, and win, in a hyper-competi-tive world.

So, now what? Rather that decouple workers from

their firms, advancements in technology might instead create the opportunities—and incentives—for firms to invest in developing deep man–machine partner-ships at the enterprise level, and at scale. In many places this is already happening. As Gideon Lewis-Kraus recently noted, “The most important thing happening in Silicon Valley right now is not disruption. Rather, it’s institution-building—and the consolidation of power—on a scale and at a pace that are both probably unprece-dented in human history.”

Peter Mulford is chief innovation officer at BTS. He can be reached at peter.mulford@bts.com.

Is This the End as We Know It? Not So FastBy Uri Ort, Reece Akhtar, Dave Winsborough

“We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” As futurist Roy Amara explains people disregard important lessons from the past, and take a narrow view to the latest new and exciting innovations, making it difficult to understand the present and even more difficult to pre-dict the future. The freelance economy is no exception.

More than two-thousand years ago, Plato first described the gig economy when he said, “All things are produced more plentifully and easily and of a better quality when one man does one thing which is natural to him and does

it at the right time.” Adam Smith, in his famous book The Wealth of Nations, and later, Fredrick W. Taylor, with his princi-ples of scientific management, contin-ued to promote the efficient subdivision of labor, leading many to believe it would forever change the world of work. Yet the traditional organization we have known for a long time has persisted. Why is this? Humans derive many bene-fits from belonging to organizations. As the Hawthorne studies and Hackman and Oldham’s Job Characteristics Model showed, meeting the psychological needs of employees through a well-de-signed employer-employee relationship is critical for employee well-being and motivation, and ultimately, organization-al performance.

Wide-ranging predictions of the future are often askew because they focus on technological innovations which evolve at a much faster pace than human behavior. According to Robert Hogan, three fundamental needs explain human motivation: the need to get ahead (i.e. competition, status and dominance); the need to get along (i.e. relationships, cooperation and altruism); and the need to find meaning (i.e. purpose, identity and life satisfaction). The satisfaction of these needs is provided for, in large part, by the traditional employer–employee relationship. At traditional organizations, employees often feel a strong sense of belonging to their organizations, derive meaning and purpose from the organiza-tional mission, and build a valuable social life with their colleagues. Additionally, many organizations invest in their full-time staff, providing development and guidance to help them progress in their career with the intent of building long-term bench and capability.

In contrast, freelancing is lonely, and often lacks meaning and higher pur-pose for employees. Gig workers have fewer opportunities to see the impact of their work and may not be able to connect to the broader organizational mission, which is critical for engage-ment, motivation, and performance. Beyond the tangible benefits of health insurance and support, the psycholog-ical payback that traditional organiza-tions provide to their employees will remain key to employee well-being and organizational performance, long after

The automation of knowledge work and

the growth of the freelance economy is very real, yet the science of human

behavior suggests that the impact of these

changes will not be so draconian.

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advancements in technology unlock the feasibility of alternate models of work.

On the other hand, while traditional organizations will persist, it is likely that individual differences in personality will drive a significant minority toward free-lance opportunities as technology lowers the barriers to entry. Research shows that people are drawn to jobs, careers, and organizations that match their per-sonality and values. Accordingly, people who value autonomy, get bored easily, and are highly opportunistic might do better as a freelancer. Whereas people who uphold traditional values, seek security, and are risk averse will likely struggle to succeed in a predominantly freelance economy and will do better in a traditional organization. Given that we know personality is coded by our biolo-gy, we believe these individual personali-ty differences and vocational preferences will not change even through sweeping technological changes.

The automation of knowledge work

and the growth of the freelance econo-my is very real, yet the science of human behavior suggests that the impact of these changes will not be so draconian. Although organizations may be willing to shift to a freelance model for spe-cific areas of work where capability is commoditized or where there is limited strategic value for the company, they are unlikely to make such trade-offs in areas that are critical to their business com-petitiveness or their succession plans. Organizational leaders should provide additional training and professional de-velopment to long-term employees who risk being replaced by freelance talent. Organizations who do this successful-ly will have a significant competitive advantage from the discretionary efforts of a committed and engaged workforce, more deep organizational knowledge, and a strong bench.

Uri Ort is an innovation manager at Hogan Assessments. He can be reached at uort@hoganassessments.com.

Reece Akhtar is a psychometrician at Hogan Assessments. He can be reached at rakhtar@hoganassessments.com. Dave Winsborough is vice president of innovation at Hogan Assessments. He can be reached at dave@hoganassessments.com.

What Role Do Companies Play?By Brian Kropp

Nearly every day, we see another news story or thought piece about how automation, robotics, and artificial intelligence will change the way we work. Some of these stories are fright-ening in that they predict significant job losses associated with these new technologies. We hear stories about automation eliminating employment in whole industries—ranging from truck drivers (why have a driver when you have autonomous vehicles?) to lawyers (why have a lawyer when you can have an algorithm predict outcomes based on historical precedent?). Others take a more positive view of the future and think that that these new technologies will create opportunities for employees in labor-intensive fields ranging from education to child care to the arts.

Both sides of this debate are ground-ed in truth— automation, AI, and ro-botics will both destroy jobs and create them—but the debate itself misses the bigger issue which is that employees currently working in the jobs that will be destroyed are not likely to seamless-ly transition into the jobs that will be created because the skill set differences are simply too big.

For example, look at the register-free grocery store Amazon is now piloting in Seattle. If this type of automated retail operation becomes the norm, it will kill a lot of cashier jobs. On the other hand, to run it, you will need different employees to design the systems, write the code, fix the machines when they break, and so forth. In terms of jobs created versus jobs lost, automated retail might be a wash, but will the cashiers who lose their jobs be able to write the code to run the robotics? With

time, perhaps, but they are highly un-likely to make that transition overnight.

The debate should not be over whether automation, AI, and robotics will kill or create jobs—it will do both. The more salient question is: What role do companies play in terms of manag-ing the parts of the workforce that are the most impacted by these changes? In fact, one financial services company that we work with has identified that 35 percent of the employees in the organi-zation can be replaced with technology, and they are struggling with what to do with tens of thousands of employees.

On one end of the continuum, some companies will be investing in new training and development to pre-pare employees for their next role. For example, Aviva has recently announced that if an employee is able to identify ways that automation, algorithms, or robots can improve the efficiency of the company, then they will provide the needed training and development resources for those employees to transition to new roles. This approach has the advantage of engaging the workforce in technological change in a way that helps employees and the company, but is more expensive as the costs of retraining the workforce and paying them through this process are significant.

At the other end of the continuum, some companies are decreasing head-count in parts of their business where automation is eliminating jobs and sim-ply hiring new employees with different skills, as needs arise in other parts of the company. This approach has the benefit of meeting your talent needs at a lower cost, but creates a greater sense of uncertainty in the workforce about the impact of technology. In addition, the loss of institutional knowledge, existing networks, and reputational damage are all significant.

Determining where they want to sit along this range will be the most important question that executives must answer about how to manage their workforce through technological change.

Brian Kropp is a practice leader at CEB, Gartner. He can be reached at brian.kro-pp@gartner.com.

Automation, AI, and robotics will both destroy

jobs and create them.