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Talent Acquisition

SMART MACHINES: THE NEW “HUMAN” CAPITAL?

March 26, 2020 by John Boudreau

© Can Stock Photo / abidal

As algorithms and robots get smarter, workforce planning systems need to strike the optimum balance between people and machines.

Stephen Hawking and colleagues warn that “success in creating artificial intelligence would be the biggest event in human history.… Unfortunately it might also be the last.”

From self-driving cars, to intelligent assistants on smart phones, to IBM’s Watson beating humans at Jeopardy, to potentially autonomous military weapons, the effects of increasingly sophisticated automation are undeniable. With leading companies like Google spending millions to acquire artificial intelligence (AI) and robotics startups, financial markets are also betting that AI will become a bigger part of our lives and society.

When it comes to your strategy for people and human capital, the age of smart machines is often framed in traditional terms of job losses and gains. Oxford researchers predict that 45% of American occupations will be automated within the next 20 years. The first stage will be using computational power to replace jobs that rely on such things as pattern recognition, data gathering and distillation, and computational algorithms. Jobs like transportation/logistics, production labor and administrative support will go after that.

However, if you think your job is safe, the researchers also predict that artificial intelligence will eventually put jobs in management, science, engineering and the arts at risk.

Can sophisticated jobs in finance and investing be automated? Consider computer traders, once epitomized by hundreds of humans shouting on a trading floor. An Economist article titled “Dutch Fleet” notes that with the advent of trading algorithms in ultra-fast computer systems, some Amsterdam-based trading firms that formerly relied on traders and saw large bid-ask spreads now occupy a “high-volume, low-margin industry in which market-makers take a sliver of revenue from lots of transactions.” One firm saw a peak of 3,000 trades in 60 seconds. Trading is now the province of algorithms, software and decisions made in milliseconds by automated systems.

The analogy between commodities trading and human capital recruiting is obvious. It seems likely that planning and managing your people will be done more and more by algorithms, not humans. Algorithms can increasingly predict things like employee turnover and future job performance better than typical supervisors or hiring managers. An analysis of 17 studies on applicant evaluations concluded that equations outperform human applicant-selection decisions by 25%. A recent HR-technology conference provided stunning examples of the power of automation to improve and replace human processes in managing people, and admonished HR and organization leaders to prepare for a future driven by predictive analytics.

For CFOs and CHROs, it is tempting to focus on the job displacement and economic cost savings that future technology will produce. Yes, it will mean massive shifts in the balance between the humans and machines doing the work, with a resulting impact on productivity and costs.

Yet, beneath the surface of this issue is something more nuanced. Your concept of work and human capital may need to change, not simply to think about machines versus humans, but about a more nuanced future as humans and machines collaborate.

For example, algorithms can digest thousands of scientific articles much more efficiently than biochemists, producing promising hypotheses for scientists to study. The U.S. Sloan-Kettering Cancer Center estimates that only 20% of the knowledge that human doctors use to diagnose patients is based on published scientific evidence, because it would take at least 160 hours of reading a week just to keep up with new publications. IBM’s Watson computer has been trained to read the medical literature on certain cancers, search up to 1.5 million patient records, interact with doctors in real time with natural language, and present verbal opinions about the best treatment.

I have written that “deconstructing” work will revolutionize talent management by revealing new opportunities to get work done, ones that today are obscured by typical job descriptions or organization charts. The job of “software engineer” includes software coding, project management and team leadership. Rather than hire software engineers to complete a computer coding job, why not deconstruct the job, take out the coding, and employ TopCoder or other talent platforms to post your coding tasks to thousands of freelance coders worldwide? Rather than maintain your own R&D function internally, why not form an alliance with other firms to pool your R&D, as Eli Lilly and Immunocore did?

Scientists working side by side with conversational algorithms show the power of combining the idea of deconstructing work with the idea of the smart machine. The trick is to get the balance right. Today’s human capital planning systems are still largely built on a platform of job descriptions and organization charts, which can lead to a traditional mindset of deciding whether to replace humans with machines. Learning to creatively deconstruct the work and your organization chart can reveal ways to optimize your talent and your work that strike a more creative balance of humans with machines — essentially, an alliance with the machines.

The authors of “The Second Machine Age,” Erik Brynjolfsson and Andrew McAfee, point out that machines are unlikely to take over all jobs. “I don’t think this means that everything those leaders do right now becomes irrelevant,” McAfee told McKinsey Quarterly. “I’ve still never seen a piece of technology that could negotiate effectively or motivate and lead a team.” He suggested that an increasingly important skill for senior managers will be to figure out, “Where do I actually add value and where should I get out of the way and go where the data take me?”

Leaders not only should ask that question about their own jobs, they should partner with their HR leaders to answer it with respect to the full spectrum of current and future work. Deconstruct, automate and reconstruct.

Might the future bring a conversational computer with a seat at the strategic workforce planning table? Let’s just not name it after Toby on the television show “The Office.”

Previously posted on CFO.com

Filed Under: Artificial Intelligence, Automation, Future of Work, John Boudreau, Talent Acquisition, Technology Tagged With: recruiting, workforce planning

FUTURE HR ROLES & ARCHETYPES: LESSONS FOR SEARCH FIRMS & THEIR EXECUTIVE CLIENTS

February 29, 2020 by John Sigmon

Recently a long tenured human resources executive for a Fortune 500 company announced her retirement. With no successor in place, the CEO and Board began the vetting process for an Executive Search firm. During the consultation process several firms made convincing presentations of the talent landscape for HR leaders and the critical nature of the role of HR in achieving the corporate objectives. One vital common element of those presentations was the importance of the CHRO reporting to the CEO.  So, when the CEO informed the search firm candidates the new head of HR would report to the COO and a key first year deliverable would be evaluating and recommending changes to the human resources information system, several of the firms raised concerns.  In the end, the CEO selected a firm that committed to find a slate of candidates to meet his objectives.  This is a fictional account but very common in my experience.

Shaping expectations of key stakeholders by defining what is needed to move beyond today’s expectations (including those that are antiquated) of HR is a challenge that has been taken up by the Global Consortium to Reimagine HR, Employment Alternatives, Talent and the Enterprise (CHREATE). A key deliverable for CHREATE is to develop tools to diagnose and shape constituent expectations about HR. In 2014 a group of key CHROs and HR though leaders/stakeholders came together to accelerate the development of the HR profession to meet the dramatically rapid pace of change in business and society.  As a volunteer group, CHREATE identified several pivotal areas of focus; one of which is to shape expectations of HR key constituents. CHREATE defined five key constituent groups including Boards, CEOs, investment analysts, private equity, and search firms.  These constituents are key influencers in advancing beyond today’s expectations of the value creation delivered by HR. This essay, as you may have guessed, focuses on the search firm constituent group. 

Search executives operate in an extraordinarily competitive environment. They compete with each other, their potential clients (who may have robust internal talent acquisition functions), and external forces such as social media which support existing HR talent acquisition activities.  The competitiveness of the environment increases the stakes for securing search engagements. In our fictional account, the search firm may be correct- the CEO may very well need a strategist to serve as a top officer, to move the organizational culture forward. But the CEO does not see it that way. From the CEO perspective, people have always been paid on time, productivity is good, shareholders and proxy advisors are happy; why should the CEO spend valuable time being “sold something” that is not wanted? Pushing too hard could mean the business goes to another firm and the search consultant loses a valuable client and potential future revenue stream. 

I began this journey by asking three relative strangers to work with me to develop tools/resources for search firm executives designed to shape expectations of their clients around the human resources leadership role in delivering value. Further I asked this group to be prepared to present our findings at a national event in less than four months. The only promise I could make was that it would be messy.

Our collaboration, ingenuity, and common passion to develop solutions to advance human resources as the critical partner in meeting the rapidly changing needs of business was the driving force behind our development of a prototype application (app) for CHREATE as a possible solution to this challenge. This app, tentatively, called “Engage” provides a non-threatening vehicle for the search consultant to engage with the CEO around their needs and is based on input from the CEO. 

Other essays in this book describe how CHREATE teams defined four future roles needed to transform the nature of work:

  • Organizational Performance Engineer
  • Cultural Architect and Community Activist
  • Global Talent Scout, Convener, and Coach
  • Trend Forecaster and Technology Integrator 

The “Engage” app demonstrates how these might be used to diagnose the CEO’s needs. In the “Engage” app, the CEO provides a self-assessment of what they believe is needed in each of the four roles.   Here are examples of questions and their scoring from the prototype:

Organizational Performance Engineer
has clear roles and responsibilities and formal structures of governance1
uses ad-hoc teams to solve key business problems2
has a network of interdependent teams that proactively solve organization issues3
has organic communities of expertise that come together to address issues4
Cultural Architect and Community Activist
has a formal plan to understand how our employees currently view our culture1
takes regular actions to improve the culture2
empowers employees to solve organizational problems3
harnesses the best of everyone4
Global Talent Scout, Convener, Coach
uses traditional sourcing and external recruiting capability to fill positions1
has employees and managers actively involved in relationship recruiting2
uses a marketing approach to attract talent3
uses our customer base as a possible source of talent and referrals4
Trend Forecaster and Technology Integrator
has strong business acumen1
understands how business trends impact the workforce2
is able to “sense” and real time strategic responses3
systematically uses scenario planning4

Based on the responses the app displays one of eight different archetypes or personas of the HR leader. The archetypes/personas are adapted from “The Eight Archetypes of Leadership” (Manfred F.R. Kets de Vries, Harvard Business Review December 18, 2013) as follows:

  • The strategist: leadership as a game of chess. These people are good at dealing with developments in the organization’s environment. They provide vision, strategic direction and outside-the-box thinking to create new organizational forms and generate future growth.
  • The change-catalyst: leadership as a turnaround activity. These executives love messy situations. They are masters at re-engineering and creating new organizational ”blueprints.”
  • The transactor: leadership as deal making. These executives are great dealmakers. Skilled at identifying and tackling new opportunities, they thrive on negotiations.
  • The builder: leadership as an entrepreneurial activity. These executives dream of creating something and have the talent and determination to make their dream come true.
  • The innovator: leadership as creative idea generation. These people are focused on the new. They possess a great capacity to solve extremely difficult problems.
  • The processor: leadership as an exercise in efficiency.These executives like organizations to be smoothly running, well-oiled machines. They are very effective at setting up the structures and systems needed to support an organization’s objectives.
  • The coach: leadership as a form of people development. These executives know how to get the best out of people, thus creating high performance cultures.
  • The communicator: leadership as stage management. These executives are great influencers, and have a considerable impact on their surroundings.

For demonstration, the eight archetypes were derived from the answers to the questions by summing up the total of the scores for the four roles.  Because each role score can range from 1 to 4, the total score can range from 4 to 16.  The archetypes might be assigned this way:

“Engage” App Total ScoreArchetype/Persona Assignment
1-2Communicator
3-4Coach
4Processor
6-8Innovator
9-10Builder
11-12Transactor
13-14Change Catalyst
15-16Strategist

The archetypes/personas are not judgments, and one is not necessarily better than another.  The appropriate archetype/persona for each organization depends on how they match the organization’s needs.  So, they are designed to help the search partner and CEO understand the organizational needs, and to plan for what the CEO/Organization should expect of the type of the candidate the CEO is presented.  

I believe this or similar tools can serve as an important catalyst, capturing the organizational need in a non-threatening manner. Additionally, it provides a level of segmentation across HR leaders. For example, if the organization seeking a HR leader is a startup, the CEO is likely to select inputs that reflect this need and the app will respond by suggesting the archetype/persona of “builder”.  

The app is open source and available through CHREATE. I believe this is an excellent starting point for further discussion and development. During a recent presentation to a CHREATE community (including search executives), over 88% responded that they see the potential and want to learn more. Over 70% responded positively to the question “If the tool were fully developed and validated can you imagine it as something you would use?” 

The competitive nature of search notwithstanding, further development of the app is a project that should be undertaken in a collaborative, co-creation environment by the search community. It would be suitable for an innovation lab/hacking experience. Since the tool is open source there are multiple possibilities to individualize development or use the framework to create other tools. 

Some potential areas to be explored include:

  • Input validation
  • Use of maturity index from CEO working group
  • Programming of algorithms
  • Can the education/development component be developed and validated?
  • Is this app the best user experience, or is another platform (e.g., gamification) more appropriate?

I hope you also see the potential and value in this tool and will take up the charge to join CHREATE in helping to refine, adopt, and adapt this tool for your unique use. 

*note- the prototype app has been disabled in order to complete the coding work required. 

This article was published in Black Holes & White Spaces: Reimagining The Future of and HR with the CHREATE Project

Learn more about John Sigmon

Filed Under: Future of HR, Future of Work, John Sigmon, Talent, Talent Acquisition Tagged With: archetypes, executive search

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