Adapt or die — 5 workplace changes that will impact every organization
The world is changing more rapidly than ever and technology is the key enabler driving this transformation. Although these changing forces affect society as a whole, perhaps their biggest impact will be how they reshape the future of work — a though that sounds ominous to many.
Why does this one buzz-worded phrase bring so much discomfort? The answer is simple.
Because, whether we like it or not, a transition in our workplace is coming and it will impact us all.
At Creandum we spend a lot of time thinking about what forces are driving this change, and how they will impact companies, employees, and societies as a whole. Not only because it’s an intellectually stimulating topic, but more importantly because labor compensation represents ≈60% of GDP in the US and Europe.
Hence, significant shifts in the labor market will have major economic impact and those companies who can serve new market demands will capture massive value creation.
In this article I hope to explain what changes we are seeing, their impact on the workplace, and the opportunities they create for entrepreneurs. We do this from the perspective of organizations and 5 changes which will impact and force them to adapt as well as a few opportunities created as part of it.
1) Freedom before safety.
There are 55M freelancers in the US, which equates to 35% of the US workforce — a percentage expected to grow to 40% by 2020. Although Europe is lagging behind, due to regulatory inefficiencies (see Uber’s struggles in for example Italy, Sweden and Denmark), the trend is the same.
This cultural movement is spearheaded by millennials who are optimizing for “happiness”, prioritizing flexible work hours, work-life-balance, and meaningful work.
The organizations of tomorrow will by default not expect talent to remain for multi-year careers. Traditional promotion paths, incentive structures, and job security are no longer ways to win and retain the best talent.
Instead, companies will have to learn to become more agile and dynamic around teamwork and human processes; providing tools and just the right amount of structure to become a “flexible” work environment while remaining efficient.
Organizations will not default to having employees, but rather on-demand bring in the right competence for a specific project. The ultimate ambition is to adopt a more “fluid organization” which efficiently can on- and offboard talent and combine employees and contractors.
- Redefined compensation services
- Marketplaces and digital channels to find contingency talent, across blue and white collar jobs
- Tools for more efficient talent on- and off-boarding
- Products to facilitate dynamic collaboration within fluid team structures
2) Enhancing the employee experience.
As organizations embrace how some talent will come and go based on their own freedom preferences, there will be certain core employees who represent a more permanent foundation of the company. Retaining these people will be imperative and employers will take a more proactive approach in shaping the individual employee experience within the organization.
This design thinking will lead companies away from structuring around function and processes, and rather center them around the employee, to create a compelling, enjoyable, and frictionless work environment.
The focus should be on employee’s growth as the millennial generation is putting greater emphasis on opportunities to learn and develop than anyone before them.
We will also see a development of alternative long-term career paths which don’t require a hierarchical climb up the traditional corporate ladder (towards management positions). More options will be provided for individual contributors and domain experts to continue to grow and receive recognition.
Employees will see their opportunity to quickly and easily move from job to job within a company grow, as strong internal mobility becomes essential for organizations to retain talent.
All these activities are centered around ensuring higher levels of employee satisfaction, greater engagement, and higher productivity for the company downstream.
- Intelligent, personalized and self-directed learning platforms
- AI-based employee coaching
- Data-driven intelligent career management and talent mobility
3) Redefining organizational structures.
This trend of flattening organizations will continue to spread in favor of empowering small teams and individual contributors.
Self-management systems such as holocracy, famously used by Zappos and Medium, will become more mainstream as digital tools create transparency in the workplace which lessens the need for management oversight.
As more of our work moves into the digital canvas, geographic proximity to colleagues becomes less important. Virtual teams will continue to evolve, eventually becoming the norm for how companies operate. All teams will default to using tools and processes that not only support but encourage virtual work, even if people happen to be working in the same place, because of the efficiency and flexibility it provides over time.
And most importantly, instead of hierarchies, managers and office buildings holding people together, organizational culture will be the essential glue for any team to be aligned and the key ingredient empowering companies to truly differentiate themselves.
- Automated/AI-based people management
- Tools to simplify and improve asynchronous and remote teamwork
- Digital services to manage corporate culture development and alignment
4) Reinventing Human Resources.
The general perception of HR isn’t all sunshine, and many see it as the evil bureaucrats who bring bad news to people getting laid off. But as the war for top quality talent intensifies, HR will transition its role to become a key organizational asset.
HR decisions and tactics around individuals will become more decentralized and sit within teams; every team lead will “work in HR” and will own their own talent management.
The central HR function will instead be more strategic as it will be responsible for ensuring the right tools and processes are being used by team leads, to help them manage their talent effectively and efficiently.
HR will also develop a proactive mindset around succession management, ensuring an organizational plan which optimizes for more frequent mobility of talent. HR will use software to automate talent sourcing and move away from job boards with emphasis on poaching passive talent (= people who aren’t looking for a new job). Furthermore, HR will continue to own the culture and the corporate social responsibility agenda of the company, becoming the true guardian of the brand.
Most importantly, HR will become more data-driven in its process and decision making. Advanced analytics will help predict future talent demands as well as measure and anticipate retention, burn-out, performance issues, etc. Automation of this will be essential and the field of HR analytics will go mainstream. Talent management made purely on subjective instinct will be long forgotten and no more human bias in the decision making.
- Automated candidate sourcing of passive talent
- AI-based succession management
- HR analytics platform
5) 🤖 + 👩💼 (machine + human).
The four points above all focused on the human — the number one key asset in any company. But what about the machines? Yes, some jobs will be performed by machines (= robots and/or artificial intelligence). This is nothing new, as humans have been replaced by machines since the industrial revolution.
It started with mundane and repetitive tasks in farming and manufacturing, but today it’s happening across higher skill jobs such as border patrol, dermatology and even recruiting. It’s fair to say that eventually, no job will go completely untouched from the impact of machines…and surely not the job of VCs.
There are big societal impacts from this, but for organizations, the obvious and immediate impact is they will try to understand what part of their workflow can be automated. The objective will not be to completely eliminate humans.
Companies will look at individual tasks as opposed to entire jobs. It’s unlikely machines will be able to do everything in the foreseeable future and instead, the winning model will incorporate machine + human where part of the value creation will come from machines and part from humans.
As AI is applied to everything, it will become essential to understand the value-added tasks humans can perform better than machines, and the skills required for them. Organizations will start adapting and optimizing around such a talent pool.
Overseeing machines and having the ability to edit and improve them will also be core skills, and the demand for technical talent will increase and expand across all industries. The supply of engineers will be far from enough, so we can expect compensation for tech talent to continue to increase.
And if we extend our time horizon further, we will start seeing true augmented human intelligence with embedded computational capabilities inside our bodies. Faster processing, increased storage, augmented vision and a host of superpowers will enable a completely new workforce…and the next phase of human evolution.
- Infinite automation
- Next gen engineering training
- Augmented human intelligence
Creandum is continuously following this space with great curiosity, and we’re constantly on the lookout for promising entrepreneurs innovating around these trends. If you're building something amazing related to this, let’s talk! 💪 👊