Every ten years or so, a futures-technology guru predicts the inevitable phasing out of the ordinary employee, to be replaced by machines. In 1982, it was ‘IT Year’ in the UK. The first cars had been assembled with the assistance of robots. Unemployment stood at 3.5 million after swathes of jobs had been lost to traditional industries. Trends seemed to be heading all in one direction. But life went on, and people soon forgot about it as services industries took off and unemployment plummeted.
A decade later the world wide web appeared. The mutterings began again. They reached a crescendo in the early 2000s with the rise of online retail. The traditional shop and shop assistant would disappear, we were solemnly informed. While online retail has indeed transformed many business models in the years since, many new roles for humans have been created. The picture is complex.
Now, we are told, this time is different, people really are going to be replaced by robots, and business columnists have gleefully reported the doom-laden predictions of the Second Machine Age, by Erik Brynjolfsson and Andrew McAfee.
The trouble is, these are the same business columnists who almost never report the actual practice of business management and have little or no understanding of the role of human capital and the value that it adds. Using human capital and relationship analysis, you can make a strong case that automation, far from being under-exploited, needs to be partially reversed. How many service companies check the rate at which existing or potential customers are lost through irritating automated phone services? Is there an exhaustive cost-benefit analysis of enabling customers to talk to a real human being?
Many of the dotcoms, having cheerfully removed phone numbers from the home page in the early years, quietly reinserted them, recognizing that people are best at the following qualities: common sense; taking the initiative when something unexpected has gone wrong; empathizing with the customer.
The technology gurus and their bean-counters typically make two false assumptions in advising business strategies based on maximizing automation:
1) The projected transaction cost is the actual cost,
2) Machines never fail.
This is not a missive against modernization; quite the reverse. We urgently need to modernize our business metrics, away from quarterly accounts and transaction costs (15th Century measurements) in order to account for the human contribution. Only then can we make an informed judgement on the proper role of machines and people.
- A Parliamentary seminar is to be held at the House of Commons at 2pm on Tuesday 11 March. Chaired by Barry Sheerman MP and Chartered Management Institute President Peter Ayliffe, it is organized by the CMI. More from philip.wood@managers.org.uk
Radical Shift 