Disrupting Hybrid

“We are ending one period of significant consumer disruption only to start another.” General Mills CEO, Jeff Harmening. It feels like we’re in the midst of the “eye of the hurricane” with the dirty–most destructive–side of the storm imminently making landfall.?

As you battle back from a tough 2020, there are big earnings growth expectations.??However, hurricane force winds–inflation, elevated input costs, lack of workers, where employees will work, and increasing wages–could wreak havoc. And result in margin pressure, which will reflect on 2021 earnings statements, and beyond. Analysts expect Ebit margin to remain under pressure across firms due to the salary hike cycle.?

At the start of a new era of worker bargaining power, can you imagine doubling your employees’ pay? This seems like the most ludicrous thought, well that is unless you’re on the receiving end. Yet this is exactly what Henry Ford did in 1914. Right in the midst of a recession.

There are competing ideas about why he raised autoworkers pay to $5 from the industry average of $2.54. Urban legend credits his act to Ford’s desire to see his employees be able to afford the Model T that they were manufacturing.??After all, the vision behind the Model T was to make it available to everyone.??But with such low wages there was no way his workers could afford it.

The more prevalent premise is that Ford announced the $5 workday to curb his sky-high labor turnover problem that stood at 370% and be able to retain his best employees. In order to maintain his workforce of 14,000 each year he was forced to hire 52,000 new workers.??This was unsustainable and putting a drag on his profits.

And what did they do with this money.??They spent it right there in Detroit. All of a sudden, the men making the cars were able to drive them. He created Detroit’s middle class. His single decision to introduce the $5 workday lifted the entire economy and led to a booming market.?

He didn’t stop with increasing wages; Ford understood his responsibility towards the middle class and instituted programs to teach his employees how to spend their new high wages responsibly. He also steadily lifted the standards for cleanliness and safety. And cut shifts from nine hours to eight.

This seemingly ludicrous idea was actually a stroke of genius for the economy, rivals and Ford.??Initially, the moves were not popular with rival companies, although seeing the increase in Ford's productivity, and a significant increase in profit margin most soon followed suit. He changed the way business is done.?

I’m not arguing that you should rush off and double salaries. Ford was only able to do this because he pioneered the technology of the day and the resulting rise in productivity.?The real problem we’re facing is productivity, not pay, inflation or where people will work.?

Today, the evolution of AI is one of the most powerful forces in history. Especially the next generation of Human Activity Recognition (HAR) for knowledge workers, pioneered by enaible.

AI-powered solutions–like?enaible’s AI Productivity Platform –might be new, but they are proving a disruptive force in the market. Already, there is evidence to support the impact that the capabilities they offer are having on business, with Fortune 500 companies that use AI to measure productivity, experiencing double-digit productivity growth.?

The ability to generate such productivity growth will be vital in the world of hybrid work.?This is a once-in-a-century change, and you face a once-in-a-lifetime opportunity to rethink how we work and how we make that work productive.?Disruption is happening right in front of our eyes.

For many CEOs who’ve spent the past 16 months focused on how to prevent layoffs, this rise in resignations may feel like a slap in the face. Instead, it should feel like a wake-up call to pioneer the technology of the day: AI productivity platforms.