What leaders need to know about automation

Automation is a controversial topic - many leaders are enthusiastic about the potential to cut costs and increase efficiency, while others fear for their jobs and the impact on company culture. Both perspectives are flawed. It is dangerous to reduce the automation debate to simplistic cliches, whether it be defending outdated human jobs or wishing for an AI-powered utopia where all our needs are met. Automation, AI, and algorithms are here to stay. The real question is: how do we make sure the future of work fits the world we want to live in?

There is a lot of hype at the moment about Robotic Process Automation and for good reason. RPA can seem like magic. Our organizations are full of routine and repetitive tasks involving data entry, billing systems, claims management, or sales support. Rather than delegating these tasks to an army of humans or an offshore operations center - an automated system based on rules can do the heavy lifting for you. These systems have also rapidly advanced in the last few years, even incorporating unstructured data such as email, voice communications, or video footage.

You can thank the pandemic for an exponential increase in automation technologies. Rapid spikes in consumer demand, growing digital channel adoption, broken supply chains, and a shift to remote work all pressured traditional business processes to the point of collapse. For many, embracing automation became a matter of business survival. For others, it was an expedient opportunity: the coronavirus crisis providing useful cover to wielding automation as a weapon to dramatically restructure their workforce. That said, it is still early days.

In my view, there are three things leaders need to know about automation:

1. Automation redefines the capabilities of your workforce. Rather than replacing people, automation offers the chance to reimagine work roles. When a lawyer uses AI to read trust documents and contracts, or a financial advisor leverages an algorithm to create a personalized financial plan - they haven't made themselves obsolete. Quite the contrary. They have merely shifted the boundary of what human-shaped work should be. Enhancing capabilities through better tools rather than squeezing more effort out of your workforce - is the most sustainable way of achieving productivity gains.
2. There is a difference between complexity and ambiguity. Organizations are decision-making machines, but not all decisions are born equal. Some decisions are complex but inherently suitable for automation because they follow well-defined rules. Other decisions may appear simple but involve a high degree of ambiguity that requires human judgment. In this video, I discuss the difference between 1st, 2nd, and 3rd order decisions - and the role that AI and automation can play in each.
3. Automation is the start, not the endpoint of your journey. Deterministic automation is a powerful tool in getting your digital transformation started. The exercise of mapping your processes, linking your enterprise systems, and unlocking more insights about your operations will not only increase your internal clock speed, it will provide contextual data for more sophisticated machine learning tools to optimize and enhance your business. By all means, go for the quick wins offered by automation, but don't stop short of the real prize that comes with reinventing yourself as an AI-powered organization.

Despite the digital acceleration unleashed by the pandemic, most large enterprises still struggle with transformation because of the sheer complexity at the heart of their operations. Consider Celonis, one of the world's most valuable technology startups. They enable organizations to 'mine' their processes, view them on a real-time dashboard, and make adjustments on the fly. In other words, a very different approach to the infamous 'Business Process Re-engineering' trend from the early nineties that required teams of consultants and IT experts to get right.

My take is this: our goal should not be digitizing paperwork and virtualizing people. Instead, we should create digital twins of our organizations that allow us to creatively remix and redesign how we create value for our customers, clients, and communities.

If that doesn't sound like a real job - in a way, that's my point. There is no point defending jobs that no longer need to exist. As I've written previously - in the future, our real job is not to work; it is to design work.

Mike Walsh is the CEO of Tomorrow, a global consultancy on designing companies for the 21st century. A global nomad, futurist, keynote speaker, and author of the bestselling book, The Algorithmic Leader, he advises some of the world’s biggest organizations on digital transformation and disruptive innovation in this new era of machine intelligence.

A prolific writer and commentator, Mike’s views have appeared in a wide range of international publications including Harvard Business Review, Inc. Magazine, BusinessWeek, Forbes and the Wall Street Journal. Each week he interviews provocative thinkers, innovators and troublemakers on his podcast, Between Worlds.