Organization design: the hot topic

I am speaking at a conference in Shanghai and Beijing, in May and have just been developing my presentation ‘Organisation Design: the hot topic’.

The conference is about the research, science and technologies that are changing organisations and the organisers have asked that my piece focus on the new technologies including AI, robotics and data tools and their impact on organization designs.

Most obvious is the view, typified in an article that ‘Every aspect of human life—our food, our work, our intimate interactions, our DNA itself—is, or will soon be, mediated by the technology we embrace. Machines can now recognize speech and written text; images will be next. Algorithms know your face, and the faces of millions of your fellow citizens. They can infer, with increasing accuracy, a person’s income, mental health, gender, creditworthiness, personality, feelings, and more from public data.’  This means what for organisation design?  Three questions stand out:

  • What is the  effect on jobs?
  • How do we protect employee/individual privacy as AI spreads?
  • What is the effect of AI on our competitiveness/competitive position?

It is not good enough to provide the answers to all three as: ‘it depends’ or ‘we don’t know’.  But this is, in fact, the case – look at the optimism v pessimism view of technology in the Zuckerberg (optimist)  v Musk (pessimist) discussion.

As one writer notes, ‘Leading a company in the years ahead is sure to be more challenging than at any time in living memory. AI will require bosses to rethink how they structure departments, whether they should build strategic technologies internally or trust outside firms to deliver them, whether they can attract the technical talent they need, what they owe their employees and how they should balance their strategic interests with workers’ privacy. Just as the internet felled some bosses, those who do not invest in AI early to ensure they will keep their firm’s competitive edge will flounder.’

Putting you on the spot.  What is your view of this description?

‘This is the local office of [US company] Humanyze … Its employees mill around an office full of sunlight and computers, as well as beacons that track their location and interactions. Everyone is wearing an ID badge the size of a credit card and the depth of a book of matches. It contains a microphone that picks up whether they are talking to one another; Bluetooth and infrared sensors to monitor where they are; and an accelerometer to record when they move. … The technology will allow the company to gauge their employees’ productivity and accuracy. JD.com, the Chinese e-commerce firm, is starting to experiment with tracking which teams and managers are the most efficient, and using algorithms to predict attrition among workers.’

Whether you are optimistic or pessimistic you can instantly see that there is an effect on jobs, privacy, and competitive position

Take the jobs angle first.  There are three organisation design aspects of this:

  1. Monitoring how employees are doing their jobs to increase productivity and control performance could mean designing jobs that focus on these two aspects at the expense of innovation, job autonomy, engagement, and social interaction.
  2. Replacing employees with automation that does the job instead of humans could result in fewer jobs being available to working age people, However, as the McKinsey Global Institute finds, ‘the extent to which these technologies displace workers will depend on the pace of their development and adoption, economic growth, and growth in demand for work. Even as it causes declines in some occupations, automation will change many more—60 percent of occupations have at least 30 percent of constituent work activities that could be automated. It will also create new occupations that do not exist today, much as technologies of the past have done.’ Either way – more, fewer, different jobs will result in different organisation designs.  (See also MIT’s Every study we could find on what automation will do to jobs, in one chart)
  3. Helping humans develop the new skills needed to work in a technology mediated society.  Here McKinsey says ‘Our scenarios suggest that by 2030, 75 million to 375 million workers (3 to 14 percent of the global workforce) will need to switch occupational categories. Moreover, all workers will need to adapt, as their occupations evolve alongside increasingly capable machines. Some of that adaptation will require higher educational attainment, or spending more time on activities that require social and emotional skills, creativity, high-level cognitive capabilities and other skills relatively hard to automate’.  Again, it is easy to see the job and organisation design implications of this statement as ‘right people, right place, right time’ take on new dimensions and urgency.  It also raises a question about who finances new skills development.  (See also the March 2018 OECD Report Automation, Skills Use and Training)

Additionally, the short Humanyze scenario above shows that we should all be concerned about indiviual/employee privacy and the ethics of surveillance in the workplace (and elsewhere).   This aspect of organisation design is moving up the agenda.  Many European organisations are redesigning business units and work functions to enable compliance with the GDPR (data privacy) requirements that come into force in May 2018.

On the AI competitiveness question, one writer suggests that ‘in the years ahead AI might contribute to the rise of monopolies in industries outside the tech sector where there used to be dynamic markets, eventually stifling innovation and consumer choice. Big firms that adopt AI early on will get ever bigger, attracting more customers, saving costs and offering lower prices. Such firms may also reinvest any extra profits from this source, ensuring that they stay ahead of rivals. Smaller companies could find themselves left behind.’  For organisation designers this could mean redesigning organisations to stay competitive – perhaps through forming consortiums, co-operatives or alliances that transform insular hierarchies into collaborative networks that collectively compete with any impending monopolies.

How do you think advancing technologies will impact organisation design? What are you doing about it?  Let me know.

Image: The technological citizen

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