Technology Changes

Susan Fowler’s willingness and ability to blog about her Uber experience is directly linked to her coming of age in a world with technologies for widely shared self-expression. Internet blog platforms, social media sites, and related transparency tools are among the technology changes raising the bar for businesses. Other technological developments now facing companies include:

Increased automation, which paradoxically is putting a premium on the deeply human characteristics of employees

Big data and the need for analytical chops and a learning mindset

Heightened digital connectivity, which is accelerating the pace of change and pressuring companies to decentralize decisions

Transparency Tools

Susan Fowler is far from alone in sharing her thoughts online. Overall, 69 percent of the public uses some type of social media platform, such as Facebook, Instagram, or Twitter. That’s up from about 50 percent in 2011 and just 5 percent in 2005. Combine that mass usage with people’s inclination to discuss work along with the rest of their lives online, as well as the ubiquity of cameras, and nearly everything that takes place in or at a company is at risk of being exposed.

Consider what happened when a passenger was dragged off a United Airlines flight by police officers in early 2017 when he refused to give up his seat. A number of passengers recorded the incident on their phones and posted video on social media. The video quickly went viral and was picked up by major news organizations. In an earlier era, before smartphones and social media, the incident might have been a small news item if it was noticed at all. Instead, the episode turned into a public relations nightmare for United. The day after the incident, United’s stock fell about 2.8 percent, wiping out about $600 million in market capitalization.

Increased Automation, More Humanity

Apart from the rise of technologies that effectively disrobe companies, the ongoing march of computing and automation are pressuring organizations to up their game in different ways. Much of the debate in recent years about the “rise of the robots” has been about the way they are reducing the number of jobs in America. That’s an important discussion for society overall. But a more immediate impact of automation on companies is counterintuitive: pressure to bring out the least-robotic qualities of the workforce.

In effect, our economy has evolved through agrarian, industrial, and knowledge phases to the point where the essential qualities of human beings are the most critical. Author Dov Seidman uses the term “human economy” to capture this transition. He notes that analytic skills and knowledge—chief traits of what have been called “knowledge workers”—are not advantages in an era of increasingly intelligent machines. Yet people, he writes,

will still bring to their work essential traits that can’t be and won’t be programmed into software, like creativity, passion, character, and collaborative spirit—their humanity, in other words. The ability to leverage these strengths will be the source of one organization’s superiority over another.

You can see this humanization of work in the shift away from customer service scripts in recent years. Leading hospitality companies, such as Hyatt, have abandoned the robotic responses to customer interactions that had been intended to optimize service levels. Instead, employees from front-desk agents to food service workers are encouraged to have authentic encounters with guests. A few years ago at our annual conference, Hyatt’s executive vice president Robert W. K. Webb told a striking story along these lines. A room service worker took a meal to a couple staying at a San Francisco Hyatt and struck up a conversation with them. He learned that they were staying in their room because the wife, in remission from cancer, was too tired to go out on the town that evening. The Hyatt worker, named Andy, also learned that he and the wife shared a love of music, and he began singing Frank Sinatra songs. The couple appreciated his crooning so much that they called for encores, hugged him as he departed, and invited him back the next night. He obliged—this time with Tony Bennett numbers.

The husband wrote Hyatt a letter in gratitude for these surprising serenades. Webb quoted the letter at our event: “The last thing that we were looking for was an experience with room service when we went to San Francisco. But it turned out to be the highlight.” The key to this lasting impression was that Hyatt has freed its employees to respond to guests with empathy, creativity, and passion. “Andy was himself,” Webb said. “It was magical for them in the moment.”

This shift in emphasis from “hired hands” to “hired heads” to “hired hearts,” as Seidman puts it, has important consequences for the way businesses manage people. The deadening, disheartening workplaces that most people experience will face an ever-larger penalty. The companies that thrive in the human economy will be the ones that make people feel alive, where workers feel they can bring their full selves, where people reach their full potential as human beings.

Big Data

So technology is pushing companies to make more-humane workplaces. But that’s not to say tech shrewdness is not important. On the contrary, firms have to be smart about using computing power to gain insights about all aspects of their business. “Big data” will only become a bigger deal in making savvy decisions about products, pricing, marketing, and people management. For example, assessing data about how employees experience the workplace under different leaders is crucial to making adjustments and optimizing performance. In general, the need to make data-driven decisions means business leaders will need a willingness to learn—that is, a measure of vulnerability, an open mind willing to forego intuition when the numbers show otherwise.

Digitization

A final technology change forcing companies to do business differently is ever-increasing digital connectivity. Even as growth in global trade has flattened, cross-border data flows have grown by a factor of 45 over the past decade, according to McKinsey Global Institute researchers. Those data exchanges are projected to increase another ninefold by 2020. These digital connections contribute to a faster pace of business, where innovations happen rapidly.

Hyperconnectivity also leads to greater uncertainty. “The competitive landscape is growing more unpredictable as digital platforms such as Amazon, Alibaba, and eBay are empowering companies of any size, from anywhere on Earth, to roll out products quickly and deliver them to new markets,” the McKinsey researchers wrote in a 2016 Harvard Business Review article.