AI and the Rise of Digital-Human Work: 10 Trends that Dominated the Enterprise Landscape in 2023

Organizational shifts we saw in 2023 were progressive changes in the pervasive systems and structures that continue to transform organizations for the digital age and support the transition of workers and the workplace.?

We observed changes in leadership, policy, work practices, digital-human work advances, the augmented worker, employee wellbeing commitments, new organizational structures, and AI affecting the workplace.

Our Year in Review explores the challenges and opportunities of this movement from extraction to creation. Read on for what we collectively learned this year and to find out how these insights inform new priorities for digital leadership.

1. Augmented workforces expanded

This became a strategic initiative to optimize the value delivered by human staff by establishing a connective tissue that optimizes the use of intelligent technology, workforce analytics, and skill augmentation to accelerate and scale talent building.

What moved?

The augmented connected workforce was adopted as a strategy for optimizing the value derived from human workers. CIOs used augmented-connected workforce initiatives to reduce time to competency significantly for key roles.

What didn't move?

The need to accelerate and scale talent proved difficult, despite using intelligent applications and workforce analytics to provide everyday context and guidance to support the workforce’s experience, well-being, and ability to develop its skills.

2. Applied AI impacted the organizational structure

Organizations began to reimagine how to manage talent, processes, and organizational structures by using Applied AI to create sustainable, long-term talent pipelines, as well as improve ways of working and make faster, data-driven structural changes.

What moved?

Foundational models took assistive technology to new levels by bringing powerful capabilities to non-technical users. Nascent technologies, such as quantum computing, continued to evolve and show great potential for value creation.

What didn't move?

The wide gap between the demand for people with the skills needed to capture value from the tech trends and the talent available highlighted continuing shortfalls in the worker skills required across industries.

3. Generative AI Governance elevated

The exponential development of generative AI could not be ignored any longer. This attracted increased attention from both regulators and courtrooms.

What moved?

Organizations looking to build or deploy AI pondered how to mitigate the risk of not meeting compliance requirements later by adopting responsible AI frameworks.

What didn't move?

New laws and regulations aimed at containing the risks posed by generative AI failed to address the development processes used to develop these systems and the need to embed laws within the software itself.

4. True hybrid evolved

After the disruption of the pandemic, many organizations began to settle into amorphous technology-enabled arrangements that allowed most employees to work virtually from off-site locations for some or much of the time.

What moved?

Unprecedented shifts in remote work flexibility reshaped the workplace, with the dominant pattern being hybrid. Over the past year, an average of five out of every 10 employees worked part of their week at home and part on-site.

What didn't move?

Organization-wide mandates on hybrid work had a propensity to disengage employees who felt that the requirements did not work for them and that they were not trusted by their leaders.?

5. AI models influenced business strategy

As AI became more effective, it displaced established approaches to solve problems and helped industries to solve previously unsolvable problems.

What moved?

Taking strategy and long-term vision as a starting point, companies looked at the goals and aspirations and where AI can make an impact. Organizations even began to develop algorithms that can teach themselves winning game strategies.

What didn't move?

Many AI initiatives got stuck in proof of concepts and pilots, making a lot of companies struggle with the question of where to start and how to scale. Very few managed to capture the value of adopting this approach in real-life use cases.?

6. Companies combated the erosion of social skills

Organizations addressed the impact of social isolation resulting from the pandemic. Gen Z (those born after 1996) were particularly impacted.

What moved?

The development of soft skills, such as negotiating, networking, and developing the social stamina and attentiveness required to work long hours in an in-person environment became a focal point for many companies.

What didn't move?

Experienced workers saw their skills decline. New first-career workers had fewer opportunities to observe and learn workplace norms. Automation and new technologies also led to a decline in social skills among the modern workforce.

7. Sustainable technology moved forward

A framework of digital solutions used to enable environmental, social, and governance outcomes that support long-term ecological balance and human rights.

What moved?

The use of technologies such as AI, cryptocurrency, the Industrial Internet of Things, and cloud computing drove concerns about energy consumption?and environmental impacts, to ensure the use of IT became more efficient, circular, and sustainable.

What didn't move?

Organizational ethics boards – where these existed - were slow to develop roadmaps that usurped the pursuit of any perceived value in favor of improved overall organizational sustainability.

8. Leadership coaching strategies changed course

The past year saw an increasingly competitive talent landscape, an exhausted workforce, and responses to cost control pressures amid a potential downturn.?

What moved?

Managers employed leadership coaching strategies to build trust, emotional intelligence, and a better work/life balance to minimize quiet quitting.

What didn't move?

Micromanagement remained a leadership issue for many organizations, stifling creativity and autonomy, while also demonstrating a lack of conviction regarding employees' capacity to take on additional responsibilities.?

9. Climate change impacted the employee experience

The past year saw an increasingly competitive talent landscape, increased focus on employee retention, and cost control pressures amid a potential downturn.?

What moved?

Employees demanded safer and more healthful working conditions to force their companies into policy changes on well-being and investments to adapt to the ongoing effects of climate change.?

What didn't move?

Companies fell behind in tracking supply chain emissions and risked completely missing mandatory regulations on the environmental impact of supply chains.

10. Alternative organizational structures come of age

Non-traditional structures created via cross-functional participation and engagement needed to meet the human-driven new value creation required in transformative business models.

What moved?

There was recognition of the clear need to redesign or augment industrial-age institutional design models and practices to meet the challenges of innovation and operational excellence in a digital business structure.

What didn't move?

Leadership transformation to these new models and the creation of new reward and recognition systems for people continued to trail behind the innovative curve.

Our latest white paper Governance Strategies for business-digital Transformation describes a system of strategic governance that guides the redesign of vital organizational philosophies, relationships, systems, and processes in the highly fluid and complex environment of business transformation. We explore how strategic governance creates transparent rules and controls, guides leadership, and contains the structures, processes, and mechanisms needed to steer the organization through meaningful change. Download your copy now!

Read our entire 2023 Year in Review Series!

The Year of Digital Disruption: 7 Industry Advancements that Dominated the Enterprise Landscape in 2023

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Logical Design Solutions (LDS) is a digital strategy and design consultancy for global enterprises. We create experiences that transform business and help people work successfully in the new digital organization. Clients come to LDS because of our reputation for intellectual rigor, our foundation in visionary experience strategy, and our commitment to enabling digital transformation inside the enterprise. Learn More about how LDS has dramatically improved the way that some of the largest corporations in the world do business.