2024: The Year of Automation

There was a time when the formula for business success was straightforward: Revenue - Costs = Profits. It was all so simple until the religion of Blitzscaling went viral in 2018. The markets urged us to "burn to grow," valuing revenue growth over immediate profitability. But as we navigated through the turbulent waters of 2020 to 2022, the narrative took an about-face. Companies zealously spent on growth were suddenly told to cut costs and increase revenue. The maxim of business returned to its original state, evident in the market responses to companies like Netflix and Meta this past week.

In this new (or rather, old) paradigm, HR and People teams have been handed a complex mission: do more with less. The expense line is screaming for reductions, with one of the most significant costs being human capital. Welcome to 2024: The Year of Automation.

First, let's start off with some data:

• A survey in HBR reported that over 90% of workers felt automation solutions enhanced their productivity, and 85% believed these tools fostered better collaboration among teams.
• A 2020 global survey by McKinsey & Co. revealed that 66% of business leaders across a diverse range of industries were piloting solutions to automate at least one business process, up from 57% two years prior.
• The global industrial automation market size was USD 191.89 billion in 2021 and is projected to grow to USD 395.09 billion by 2029 at a Compound Annual Growth Rate (CAGR) of 9.8%.

Automation Through the Ages

To appreciate the role automation will play in shaping our immediate future, let's hop through time "Loki-style," looking at its historical relevance. In the 1st Century BC, water wheels marked an early venture into semi-automation, with Greeks and Romans using them for grinding grain. By the 9th Century, windmills and watermills were mainstream, powering ore-crushing mills, paper mills, and other mechanical processes. The 17th to 18th Centuries brought us steam engines, steam mills, and automatic flour mills. These marked significant leaps in automation. The 1920s to 1950s saw factories embracing relay logic and electrification. In 1961, the first industrial robot, Unimate, was introduced in a die-casting facility. The proliferation of microprocessors and integrated circuits led to increasingly sophisticated automated systems.

So what are the pros and cons of automation?

Pros:

• Efficiency: Automation eliminates bottlenecks and optimizes business processes.
• Cost Reduction: Significant savings can be achieved by automating repetitive tasks.
• Scaling: Businesses can expand operations without directly increasing operational costs.

Cons:

• Initial Investment: Automation technologies can be expensive upfront.
• Displacement of Workers: Automation risks human job loss, creating societal challenges.
• Technological Dependence: Over-reliance on automation introduces vulnerabilities.

Automation provides businesses the ability to grow without escalating costs. Workflow automation enhances both efficiency and output. Companies can allocate resources more effectively, mitigating the need for human capital as the business scales. Coupled with AI, automation assists in data-driven decision-making, a crucial component in scaling operations without adding financial burden.

As we step into a future increasingly steered by technology, automation becomes not just a business trend but a business imperative. The data speaks for itself: automation enhances productivity, fosters collaboration, and unlocks scalability. While the initial investment and societal implications require careful consideration, the potential for transformative growth is too compelling to ignore. So, let's welcome 2024, not with trepidation, but with a forward-thinking embrace of automation as the catalyst for change.

Suggested homework: The New Automation Mindset: The Leadership Blueprint for the Era of AI-For-All by Vijay Tella , Scott Brinker, and Massimo Pezzini .