I’ve been thinking about this on and off for a while, and as a result, the post is a bit longer than normal. I would welcome your thoughts in the comments section. What do you think? What rings true? Where do you think I’m nuts?
There are three questions I would like to address in today’s post.
- What does it mean to live and work in a time of radical technology disruption?
- Why is employee and customer engagement so important to surviving periods of rapid technology change?
- How do social, mobile, and cloud technologies revolutionize how we need to look at the question of customer and employee engagement?
Let's start by thinking about what it means to live in the period of radical technology innovation.
The first yardstick we usually use in thinking about technology change is Moore's Law. Moore's Law, originally stated by Intel President Gordon Moore in an article in the 60s, contends that our ability to lay down transistors on a semiconductor essentially doubles in capacity every 12 months. That was later increased to once every 18 months, but even at 18 months you can get a sense of the exponential impact of technology change on our ability to improve hardware.
In Race Against the Machine (which is a terrific read, BTW), Andrew McAfee and Erik Brynjolfsson make the point that the impact of Moore's Law is just beginning to hit its radical phase. Andy and Erik use the analogy of the fable of the invention of chess as a way to talk about what happens once the power of exponential improvement really takes hold of processes and people and technology.
The way the fable goes is as follows. Supposedly the inventor of the game of chess showed his creation to the Emperor. The Emperor was so delighted by the game that he allows the inventor to name his own reward. The inventor was a clever man, and so he asks for a quantity of rice to be determined as follows: one grain of rice is placed on the first square of the chessboard, two grains on the second, four on the third and so on with each square receiving twice as many grains as the previous one. The Emperor agrees, thinking that this reward is far too small for such a fabulous game.
He is reassured in his thinking during the early phases of the rice doubling because it really doesn't seem that impressive initially. Even after 32 squares, the Emperor has given the inventor only about 4 billion grains of rice. Now that's an awful lot of rice, but it is only about one large field’s worth. However, it is in the second half of the chessboard that volume of rice becomes overwhelming. In the second half of the chessboard the Emperor ultimately realizes that the number of grains of rice is equal to 2 to the 64th power - 1, or about enough rice to make a mountain the size of Mount Everest.
The point that Andy and Erik make with this fable in terms of technology is that we are now starting to move into the second half of Gordon Moore’s chessboard. It is in the second half of the chessboard that technology change accelerates. And if the changes and improvements in hardware technology (as represented by semiconductor capacity) are not impressive enough, our ability to create software and algorithms improves even more quickly than our ability to improve the hardware.
This leads to a situation in which technology gets sophisticated enough to be able to perform tasks that we previously thought machines were incapable of.
Here are some of their examples.
One way in which humans have been thought to be far superior to machines is in the ability to perform complex pattern recognition tasks, for example a task like driving a car. No sane person would have thought 10 years ago that a machine was capable of driving a car and performing all of the tasks that are required to do so. However we now have an experiment by Google in which a fleet of cars have been driven 1,000 miles without any human intervention intervention whatsoever and have been driven 140,000 miles with only minor human intervention.
Another example of a task that was previously thought too complicated for machines is the translation problem. We are clearly getting to the point where machine translation is a fairly good proxy for human translation. Andy and Erik cite an example in which Chinese and Spanish customers interact with an English-speaking customer service representative using chat and then were asked to describe their satisfaction with that process. Overall the experience was 90% positive.
A third area in which machines were often thought incapable of competing with humans was the area of sophisticated and nuanced interpretation of unstructured and unorganized information. Machines have long been great at performing rote tasks of analyzing and interpreting very structured pieces of information, but when it came to inferring intelligence from huge quantities of unstructured information, machines fell short. The Watson Jeopardy example illustrates that machines have gotten to the point where they are able to understand and respond to complex and nuanced inquiries -- think about the tongue in check kinds of questions you often get in Jeopardy -- and find the answers in vast quantities of unstructured and unorganized information.
All of this translates into rather astounding improvements in the nature of productivity moving forward. It also creates, as Andy and Erik discuss in the book, very important and overlapping sets of challenges with regards to winners and losers in our economy. These include the competition between high skilled and low skilled workers, the competition between superstars and everybody else, and the competition for resources between capital and labor. I will leave the policy prescriptions necessary in order to address these questions for another day.
For now, I would like to use Andy and Erik's platform of radical technology innovation and think about the nature of work and how value is added to the business in the face of all this technological change. So let me pose two concepts that I think every organization needs to think about if they are going to race with the machine rather than against it.
The first concept is the idea that one key to winning the race against the machine is the ability to engage our employees and customers in much more meaningful ways in the future of our business and its processes. In an increasingly automated -- and often seemingly impersonal world -- understanding what engagement means and why it is important will be an increasingly important success factor for organizations.
The second concept I would like you to consider is that the technologies we deploy will play a role in determining the degree of employee and customer engagement. Mobile and social technologies are at the core of what engagement will look like in the years ahead. And more importantly, we can no longer assume that engagement and collaboration will happen serendipitously in our organizations. We need to think strategically about engagement and the information systems that are necessary to make engagement happen.
So let’s first think about this rather amorphous thing called “engagement.” Is it important and does it impact the effectiveness of organizations?
Gallup has done some very interesting work in researching this question.
Gallup aggregated 199 research studies across 152 organizations in 44 industries and 26 countries. For each study, they statistically calculated the relationship between employee engagement and performance outcomes. In total, they studied 32,394 business units, including 955,905 employees. They studied nine specific outcomes: customer loyalty engagement, profitability, productivity, turnover, safety incidents, shrinkage, absenteeism, patient safety incidents, and quality. Some of their conclusions are as follows:
- Within the US workforce alone, the cost of actively disengaged employees is $370 billion per year in lost productivity.
- Fully engaged customers generate a 23% premium in terms of share of wallet, profitability, revenue, and relationship growth.
- In top performing organizations (as measured by productivity and profitability), the ratio of engaged to disengaged employees is 9.57 to 1. In average organizations, the ratio is 1.83 to 1.
- According to Towers Watson, companies with a highly engaged workforce improved operating income by 19.2% over a period of 12 months, while those companies with low engagement scores saw operating income decline by 32.7% over the same period.
- According to the Institute for Employment Studies, a 1% increase in employee commitment can lead to a monthly increase of 9% in sales.
- Per Gallup, organizations in the 99th percentile of engagement are nearly five times more likely to deliver high performance than those at the 1st percentile.
So if engagement -- especially among our employees -- is critical to success, how are we doing?
The reality is that much of the experience in the workplace is a lot like The Office, whether you are talking about the US or the UK version.
- Out of 10,914 workers surveyed by Blessing/White in the 2011 Employee Engagement Report, only 31% are engaged. Nearly 1 in 5 (17%) are actively disengaged.
- Per Gallup, 33 percent of workers are engaged in their jobs, 49 percent are not engaged, and 18 percent are actively disengaged. Gallup defines the categories as follows:
- Engaged employees work with passion and feel a profound connection to their company. They drive innovation and move the organization forward.
- Non-engaged employees have essentially “checked out.” They sleepwalk through workdays. They put in time but don’t approach their work with energy or passion.
- Actively disengaged employees aren’t just unhappy at work; they’re busy acting out their unhappiness. Every day, these workers undermine what engaged co-workers accomplish.
So what do we do about this? All organizations face a significant disconnect as they think about the nature of work in the future, and it’s a challenge that is as old as time itself, but is particularly exacerbated in times of rapid technology disruption. And that disconnect is that our decision-making tends to be dominated by those whose frame of reference is structured by past rather than future technologies.
Or in the case of our immediate disconnect, many current technology decision-makers tend to view the world through the prism of work that is done in an office. Decision makers of my generation tend to view collaboration as something that is centered around in-person meetings and email. We tend to worry about what our employees are doing when they are not in the office. We tend to still equate “social” with “Facebook” and worry about what domains we should restrict (except of course for those crazy marketing types, we’ll let them go wherever they want). We think about the question of “What might happen?” far more often through the prism of Sarbanes-Oxley and Enron and litigation and control than through the prism of opportunity and new business and flexibility.
It is clear that the young professionals in our organizations -- those of the mobile and social generation -- view work much differently than we in the email generation do. And if we are going to race with the machine rather than against it, if we are going to position our organizations for the future rather than the past, we best start paying attention to what they are saying.
A few months ago, Cisco did a very interesting report on what is going on in the minds of college students and young professionals. The Cisco World of Work Report was published in November 2011, and surveyed 1,400 college students (ranging in age from 18-23) and 1,400 young professionals (30 years old of less) from 14 countries.
Now one can say, particularly if one is of my generation, “Who cares what these people want. Just suck it up and work the way we tell you to.” But honestly I don't feel that's the way to approach it. If we buy the proposition that engagement is key to creating value -- and ultimately profitability and productivity -- then we really need to think about the social and mobile technology systems that create and foster engagement -- and how they connect back to the existing information resources of the organization.
So let me give you a couple of data points about how young professionals in the workplace view mobility and flexibility and social technologies from the Cisco report.
45% of young professionals would accept a lower paying job with more flexibility rather than a higher-paying job with less.
One in four young professionals say the absence of a remote access option for their jobs would influence their job decision.
30% of young professionals feel that the ability to work remotely with a flexible schedule is a "right.”
77% of young professionals have multiple computing and communication devices. 33% use at least three devices for work purposes.
52% of young professionals believe that they are not responsible for securing their work devices and data -- service providers and IT are. 15% of young professionals have had their mobile phone, laptop or other devices stolen in the past 12 months. 30% have experienced identity theft at least once.
73% of young professionals access Facebook at least once per day. 70% of these have “friended” either their colleagues, their manager, or both.
68% of young professionals believe that company-issued devices should be available for both work and play.
There’s a lot to digest here in terms of the future of our information management systems. Let me offer a few suggestions to get started.
If you are of the email generation, hop into the waters of social and mobile:
- Embrace engagement as a core strategic objective.
- Don’t ignore the “control” side of the control/engagement continuum, but also don’t allow it to always trump engagement.
- Work in a Starbucks for a day and see how well your “in-house” systems hold up.
- Access your critical systems on a smartphone and a tablet and a laptop and see if they work.
- Get off your high horse about Facebook and Twitter and your proclamations of “I don’t have time for that” find out what is so compelling about them.
- Get rid of prohibitive policies constructed around specific technologies by IT people and view the question of desired employee behavior in the world of social and mobile as an HR issue.
Lastly, assume that your employees will use multiple devices for work, some of which you own and some of which they own. Assume that those “this device is only for work use” policies are a joke. Against both of these assumptions, think about what the organization really needs to control, jettison old approaches that were based on manually controlling a finite universe of paper-based documents, and begin to think about how you will help your organization prepare for the future.
Of course, there is another side of this equation, which is, “What do young professionals need to do to future-proof their careers as the world drives toward the second half of the technology chessboard?” We at AIIM think that the Certified Information Professional program has a lot to do with that.
But I’ll save that for another day.
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