Lynda Gratton - The Future of Work

A letter from Davos

Davos may be full of leaders, but that doesn’t stop them questioning how their roles could change. The pervading theme this year is of extraordinary change and challenge: ‘ we don’t have a moment to lose’; ‘we have to do things differently’; ‘this is a unique moment in history’; ‘there is a crisis of consent’ are phrases I’ve heard from academics, CEOs and politicians. Yet while there is broad rhetorical agreement, conversations about the means of action are less clear. In this Davos blog, I’m going to concentrate on what this means for leadership. In the panels I have attended and conversations I have had, there are two emerging themes which stood out beyond the normal leadership rhetoric of purpose, values etc.

These are:

• Leading in a multi-stakeholder world. There is broad agreement that leaders will increasingly be called upon to operate effectively in a multi-stakeholder world. These stakeholders could include governments, NGOs, citizen groups, and the other businesses in their ecosystem. To do this, leaders must develop networks across these stakeholders, and understand and deeply empathize with their position. The sheer complexity of these stakeholder relationships will also require them to operate successfully in ambiguous, often chaotic circumstances. These are complex times that will require patience when gaining commitment across multiple stakeholders.

• Leading in society. Leaders must also have a point of view about their role and the role of their business in society. Being a bystander will no longer be sufficient. How leaders engage will be determined by their unique personal values, as well as the core competencies of the businesses they lead. It could be reaching out into the immediate community, working actively on global issues such as poverty, or engaging employees in community activities. Though it’s true that many are already doing this, the call is to do more, to do it quicker, and to scale with speed. It’s about ‘thinking beyond’…

Reflecting on what these two themes mean for how leaders are developed, it strikes me that neither can be ‘bolted on’ to current leadership. Instead, they have to be ‘baked in’ to the very core of what a leader does and how they spend their time. For example, ‘leading in a multi-stakeholder world’ means making a significant and early commitment to spending time with people who are different. It’s only through these committed time periods that deep understanding and empathy can emerge. We know that empathic relationships and broad networks take time to develop. Similarly, ‘leading in the society’ cannot suddenly emerge from classical leadership training. Again, it requires a deep understanding and sense of empathy with the challenges and dilemmas faced. It also requires the courage to understand that, while the short-term stock market may require a leader to simply make a return on profits, the society in which they are a member requires much more of them.

Serial Monogamy

Sometimes questions about work and the future of work come to the top of the agenda. Take last week for instance when the news came out that Michel Balthazard who had worked for Renault, the French carmaker, for 31 years was fired after the group linked him to an alleged corporate espionage case. The company has now backtracked on the case, and says it may have been the victim of internal plot or fraud. 

The question the FT Judgement Call column asked was ‘Should three decades of company loyalty have bought him the benefit of the doubt? Or is loyalty an outmoded concept in the modern workplace? ‘

It is an interesting question since it touches on some deeply human emotions of loyalty and decision making. I was one of three people who were asked to comment and this was my pre-edited response:

Loyalty is dead – killed off slowly through shortening contracts, outsourcing, automation and multiple careers. Faced with what could be 50 years of work – who honestly wants to spend that much time with one company? Serial monogamy is the order of the day. But whilst loyalty is dead...long live trust. Loyalty is about the future – trust is about the present. Trust is core to the relationship between the employer and employee – without it relationships become simply transactions and work is mired and slowed through continuous checks and monitoring. CEO’s may not believe their executives to be loyal in the sense that they will be with them indefinitely – but they have to believe they are trustworthy. Trust is one of the most precious organisational assets – slow to build and quick to be destroyed. The precursor to trust is fairness, justice and dignity – demonstrated in how processes operate and how people are treated when the going gets tough. The challenge for Renault is not so much the impact on Balthazard, but rather the impact on many other employees who may believe he has been treated in an unfair or unjust way. And as their trust wanes, expect other precious organisational assets like collaboration and engagement to wane with it.  

Michel’s case touches on some important questions of human emotions. I believe that in the future it’s not that we humans will become any less emotional  at work – but rather that the nature of our emotions will change. Take loyalty for example. The argument I am making is that loyalty plays an ever less significant role in organisational life. However, it’s not that this has disappeared – but rather than it has been replaced with another human emotion – that of justice and fairness, which by the way, is hard to create and indeed to sustain.

 

Are there other human emotions you see changing over the course of the next couple of decades of work?

 

When Generations Fight

I have a fascinating insight into the future of work through the 45 corporations across the world we are studying as part of the Future of Work Research Consortium. Last month we asked 2,500 executives from these companies to rate the areas they believed would  be critical for the future, together with the extent to which they believed their company was currently competent. We gave them a list of 20 areas that an earlier study had shown would be important for the future. This list included for example ecosystems, open innovation, flexible working and networked leaders.

What was extraordinary is that almost a quarter rated ‘intergenerational cohesion’ as the most significant risk their company faced, and many more rated it as one of the top three risks. This was not an isolated area of risk, but rather was seen to be a risk by executives in both West and Asia companies, and indeed across all industrial sectors. Their concern was that the potential differences and conflicts between the generations could lead to poor cooperation and knowledge sharing, but might also flare into more open sources of conflict and dissatisfaction.

Five Unique Generations at Work. 

The potential opportunities and conflicts that are arising between generations are a recent phenomena and are a factor of both demographic changes (particularly around reducing birthrates and enhanced longevity) and accelerating technological and societal trends (particularly around the use of social media and family experiences). Over the next two decades, many companies will have potentially five distinct generations in the workforce: The Traditionalists (born around 1928 to 1945); the Baby Boomers (born around 1945 to 1964); Generation X (born around 1965 to 1979); Gen Y (born around 1980 to 1995); and Gen Z (born after 1995).

Generations fight for a number of reason. They don’t understand each other, they have differential access to resources and power, their working style and use of technology is in conflict, or they are not really sharing knowledge and experience with each other.

Of course generational conflict could also be great – really create innovation, remove some old style thinking, bring creative tension. However, if companies are to move to creative rather than destructive tension, it seems to me they have to ask themselves three key questions:

1. Does technology favour one generation? The generations communicate with each other differently and one potential source of tension is that corporate communication typically favours the Baby Boomers’ preferred mode of communication rather than the younger generations. Typically, Gen Z and Y use social media such as MySpace, Facebook, LinkedIn, and Ning to access information instantly, to multi-task, and to build valuable networks and stay connected; typically Gen X use portals; whilst Baby Boomers are most comfortable with e-mail as their primary technological communication tool. Yet many companies have banned Facebook and social media, which is the lifeblood for the youngest generations and by doing so have inadvertently favoured one generation over another.  

2. Has flexibility become embedded? Each generation would value greater flexibility. Gen Y would like greater work/life balance in jobs that can be overwhelming; younger Gen X’s would like maternity and paternity leave and time off to spend with their young children, the possibilities of sabbaticals, and to temporarily step away from frontline into less demanding roles, and older Gen X’s can find themselves with ageing parents who need care; whilst Baby Boomers would like sabbatical breaks and the opportunities to work more flexibly nearer the time of their retirement through part-time and reduced hours. What is clear is that the inflexibility of work will create ever greater conflict across the generations as those that need it most (typically Gen X) are denied it. There are many reasons why the rhetoric of organizational flexibility has rarely been delivered in practice: a focus on being present rather than making results, few if any senior role models prepared to work flexibly, and under- designed and over complicated jobs. But if generations are to work together, flexibility has to be a reality.

3. Is cross-generational mentoring taking place?  There are important exchanges to be made between generations; Gen Y in particular are keen to build strong functional skills and industry knowledge and insights that those more experienced can help develop and yearn for feedback; whilst Baby Boomers want to develop their expertise in the use of social media and newly developed technology. These can be crucial issues as Baby Boomer retire taking with them valuable knowledge, insights and connections. However, too often mentoring does not take place because executives are too busy, too stressed and feel overwhelmed and under skilled. Yet the generations have so much to teach each other if only the time and resources could be focused on this.

It seems to me that the creative tensions between the generations can be a real source of innovation and excitement. Have you experienced tensions between generations – and what do you think can be done to ensure these tensions are creative rather than destructive?

 

 

 

One of those weeks when the world accelerated

It has been a fascinating week. Sometimes the world seems to stand still – whilst other times it lurches forward at alarming speed. This has been a week when the world seems to have accelerated as we saw four of the trends we are watching in the Future of Work Research Consortium lurch forward. They are part of the portfolio of 32 trends we are tracking, and which we believe have the potential to significantly shape the world of work over the next two decades.

Two of the accelerating trends are clear from the joint agreement announced this week between Nokia and Microsoft. In this agreement we can see one of our trends, the development of ecosystems really moving forward. These ecosystems are the complex array of joint ventures and partnerships that increasingly define an industry sector. The agreement between these two giants is seen to be the basis for the emergence of a new ecosystem capable of creating the sort of value that has become so much part of the ecosystem surrounding Apple and its partners. The Nokia and Microsoft agreement also shows a second trend we are watching carefully – the emergence of mega-companies at the same time as the creation of ever wider clusters of micro-entrepreneurs who have the skills and knowledge to serve these entities. The agreement highlights the speed at which these future trends are re-shaping the business and work environment. They also show the challenges and opportunities they create.

From an internal perspective, the mega-company and ecosystem that will develop from the Nokia/Microsoft relationship will bring great opportunities to leverage complementary assets. But they also bring to the fore one of the areas of internal future proofed competency we have been studying – the capacity to work in a complex multi-cultural environment and to successfully build project teams capable of spanning functional and business boundaries. If the employees of these two companies fail to build these competencies, then the opportunities the new relationship creates will fail to materialise.

These are big challenges – in fact when we recently asked over 3,000 executives from around the world to rate 20 internal capabilities with regard to the risk they posed to the future of their business – many ranked ‘working across boundaries’ as the number one area of risk. So we can predict right now that the relationship will require a great deal of skill. 

What the Nokia/Microsoft relationship shows is the speed at which future trends are shaping our world of work right now. It also highlights that as the business world is re-shaped, the competencies that may have worked in the past look woefully inadequate for the future. Leading teams with a similar cultural background takes a fraction of the skills needed to lead a team made up of more than one dominant mindset. We will be watching the executives from Microsoft and Nokia with great interest – they have found their world rapidly re-shaped by the future trends that will have an impact on many others. Let’s see what we can learn from them.

And the other future trends we have seen played out this week? Well, readers of my blog know that one of the trends I am fascinated with is ever increasing connectivity and the impact it will have on work and social life. In Tahrir Square this week, we saw first hand the impact that connectivity from social media such as Twitter and Facebook had on the enthusiasm, courage and direction of people right across Egypt. It also shows another future trend we are following with interest – the rise of Gen Y and the extent of intergenerational-cohesion with Baby Boomers and Traditionalists. What is clear from Egypt is that when one generation is so far removed from another, and so unable to imagine their aspirations and hopes – then cohesion will ebb away.

It has been a momentous week for the 32 future-trends we are watching. I cannot wait to see what next week will bring.

 

Looking to the developing countries for the next CEO

Who will lead our organizations in the future? As the trajectory of the five shifts which will shape our work is becoming clearer – so too are the competencies that will sit at the heart of leadership effectiveness.

Those engaged in our Future of Work consortium believe that leading in the future will require two core competencies: the capacity to tolerate the ambiguity that many will face in this fast changing world; and intercultural sensitivity as the joining up of the world brings greater numbers of nationalities into the frame.

Both are fiendishly difficult to develop since they go way beyond the theoretical framing of much executive development. There may indeed be models and theories of tolerance of ambiguity and cultural sensitivity – but simply knowing these will not get budding CEOs very far. These competencies are not built through theory or classroom lessons – they are both fundamentally experience-based competencies. You have to experience it to learn it – and whilst role-playing and exercises have their place – the real developmental leap comes when you have to deal with these in your every day life. It’s way nigh impossible to become tolerant of ambiguity if your life has been structured and predictable, and it’s hard to become interculturally sensitive if you have only grown up with people just like you. I wonder to what extent structure, predictability and homogeneity is the day-to-day experience of many of the young adults growing up in the developing economies, and to what extent this narrowness of experience will potentially stunt their potential as future executives?

I was reminded of the puzzle of developing executives for the future as I sat with a senior team of Infosys last week in their campus in Bangalore. It began to dawn on me that becoming a leader in developing countries like India is essentially a daily lesson in the tolerance of ambiguity. In Mumbai, the choking traffic makes concepts of punctuality almost impossible; the power cuts in many Indian cities mean that it’s tough to plan with precision; whilst the growing chasm between the rich and the poor forces every executive to confront the ambiguity of the distribution of riches. Under these circumstances ambiguity is rife, and tolerance the most adapted response.

Often in these developing countries these every day situations are not black and white. I remember last year in Mumbai stepping out from one of the wealthy family apartments that are springing up across the city, to find myself confronted by a child no more than three years old sleeping on the pavement in front of me. Like all those around me I picked up my foot and carefully stepped over him. That is ambiguity with a capital A..  Whether of course one can tolerate it is another question. But the fact remains that these developing economies are awash with ambiguity and it seems to me that the daily experience of these ambiguities may go a long way to developing the depth of experience and understanding and the capacity to consider paradoxes that will be crucial for future leaders.

And it’s not just tolerance of ambiguity that developing countries like India may have a lead on. It’s also cultural sensitivity. As we toured the campus of Infosys, our guide told us that the canteen serves over 40 different types of Indian food. Those from Maharashtra for example will not eat fish or meat, the Jains will not eat anything that has been dug from the ground and could have a living insect on it – so potatoes, garlic and onions are out – the list is endless. Each region of India has its own language, own food, and own customs, even its own preferred deity. There is no one homogenous culture that envelops them all. So when young people join Infosys or Wipro or TCS from across the subcontinent they are put with people who may look superficially like them, but in reality are very different – and it is in working with these differences that cultural sensitivity emerges.

What this suggests, is that as we look for the talent pools where future CEOs may be developing, we would be wise to look to the developing countries. It is in these places that life’s daily experiences of ambiguity and diversity may well be creating the crucibles of experience from which the next generation of CEOs will emerge.

 

 

 

 

Are the kids all right?

I bumped into a girlfriend this week on the flight back to London after a New York meeting. Immediately she began to tell me about her 26-year-old son’s work hours. That week he had not made it home until after 1.00am in the morning and was needed in the office by 7.00am. She was proud of the salary he is earning, but also aghast at the pressure he is under.

I’ve been pondering on her words because I had been in New York to meet up with a team from the University of Southern California to talk about what we really know about the current aspirations and experiences of Gen Y. What we do know is that they are in a tough place. Some don’t have work – and many of those who do, particularly those working in investment banking, law or management consulting - are working ‘like slaves’ (that’s the phrase my normally hard-headed business women friend used of her son).

They are having a miserable time. Over promised, over worked – it’s a generation who don’t trust their leaders or big business, and who have seen wage differentials soar in the last decade. It’s no surprise that my girlfriend’s son says he will leave his company in one more year – and he is not alone. In companies around the world, turnover rates for talented Gen Y are running between 15% to 20%.

Why is this happening? It seems to me that the kids are not all right. Without really realizing it, we (that’s the Gen X and Baby Boomers of this world) are failing to look after the kids at the very time in their working lives when they need support and counsel. It seems to me that there are four ways we have failed them.

The first failure is a direct result of the joined-up global world that they are living and working in.  This hyper connectivity means that there is always a client, a project, or a task that has to be finished. When your clients work around the world – there is always one time-zone that buzzing. We have left them at the mercy of extraordinary pressures. There are no boundaries, nothing that protects them from constant work. We’ve failed them because we have not protected them from the demands of a hyper connected world.

The second failure is a result of income disparity. When I was working in my mid 20’s back in 1980, the average CEO in America earned 42 times more than the average worker. For many of the current Gen Y, the figure has increased twelve-fold to 531 times. That creates big problems because it sets out a ‘carrot’ that for most is unattainable if not downright unattractive.  It’s also confusing when few Gen Y’s are swallowing the ‘deferred gratification’ creed - work hard now for riches in some indefinable time in the future. It also sways the whole work deal from working because it is interesting and potentially meaningful, to a deal that has at its centre greed and acquisition. When the whole deal is ‘work here and you could be as rich as I’ – the other parts of the work that could be fulfilling and motivating somehow seem less attractive.

We are also failing them because we have obstinately refused to dismantle the traditional vertical, hierarchical structures that some of us designed, and others inherited. Its been over a decade since we realized that uniform pay systems, constant office based work and inflexible working practices are toxic to a generation raised on more flexible ways of being. Yet despite the toxicity, we have simply changed around the margins rather than completely ‘blowing it up’ and designing companies in a more flexible and agile way.

And we have failed them because we have marginalised, discredited and been mean-minded about Gen Y’s use of technology and social media. One of the most frustrating aspects of being a Gen Y in the employment of most businesses is the inability to bring to the office all the ways of being that are common place in their private lives. The way they link up with ease, or rapidly update each other on progress, or get members of their ‘posse’ to help them out, or use the whole world as a resource when it comes to getting things done.

Of course the truly awful aspect is that we have created socialisation processes within companies that are so pervasive and deeply embedded– that within two years these bright eyed Gen Y’s are harassed, sleep deprived and depleted of energy.

My advice to my girlfriend’s son? – run away as fast as you can. What would be your advice? 

 

Keeping up with transparency

The real challenge in our Future of Work research consortium is keeping up with the extraordinary speed of transformation that is taking place on a monthly – even daily basis. In the last couple of weeks I've continued to be amazed at the velocity of change – both in the way we think about companies, and indeed in the way we think about ourselves and our lives.

What’s been a real focus in much of the media this week are concerns about technology and transparency. A combination of technology and rapid distribution has enabled the publication of thousands of confidential documents on WikiLeaks. What will become of the founder Julian Assange and the hosting of the service is not yet clear. But what is clear, is that the age of transparency is well and truly upon us and we can expect it to become ever more a part of every day work over the coming decades. One of the implications in this joined-up, transparent world is that it will become vital for every government official, every CEO and every executive to assume that everything they say, everything they write, and every action they take will be leaked, videoed and shared. This has not always been the case. In the hierarchical top-down, command and control traditional that many companies (and indeed governments) worked on, the assumption was that information was power and was vertically traded. When information no longer follows this vertical and controlled trajectory, it will have a profound impact on who will be seen to be fit to lead, and indeed, whom under these circumstances – will want to take the mantel of leadership.

But it’s not just governments and corporate leaders who are under increasing scrutiny as transparency evolves. It’s also the many billions of people who are becoming part of the joined up communities of the World Wide Web. As I have mentioned in a number of blogs over the last year – one of the questions that intrigues me is this issue of connectivity. We can estimate that by 2020, at least five billion people will be connected to each other through their mobile devises, and many will be able to download both programmes and information from the Cloud at a very low cost. What will come from this unimaginable connectivity which will have its own inherent emergent properties?

 

It’s a question I have been asking pretty much everyone with an interest in the future, and no one really seems to know the answer. However, we do know something about the future, because already half a billion of these potential five billion are currently hooked up to each other through Facebook. In David Gelles interview with Facebook founder Mark Zuckerberg in Saturday’s FT, we heard Zuckerberg talk enthusiastically about ‘social graphs’. These are the intricate computer analytically enabled maps that will describe the connections between Facebook users and indeed to the websites they visit, the information they download and the service and products they purchase (and indeed to connect them to other potential suppliers of services and products). It’s what he calls integration and it will connect people (and indeed businesses) with similar revealed preferences.

 

So as we think about five billion connected to each other, so we also have to imagine that they will be able to create communities of people with common preferences with ease. It would be the sort of communities that the scenario planners at Shell have been describing as the ‘Blueprint’ in their 50-year forward projection. These are the bottom-up communities of people who join with each other to solve some of the big challenges of global warming. It could also that the communities that emerge are able to join up in order to create terror around the globe. Transparency and connectivity both have dark and light sides. But as Matt Cohler, an early employee of Facebook puts it ‘ Technology is an amplifier and enabler of human behaviors, so when you’re creating it you’d better have an optimistic view of human nature’. 

 

Creating Future Jobs

I’ve been in New York twice over the last couple of weeks – watching with interest the mid-term elections and what looks like a shift in politics in Capitol Hill. What is very clear, is that the frustration many people feel, is with the economy- and specifically the lack of jobs for the young and the old. A number of the commentators I spoke to talked of this recession showing signs of being a ‘structural shift’ rather than a simple dip in the economy.

As we begin the second phase of our Future of Work Consortium, some of the underlying forces that could be the basis for this re-structuring are becoming ever more apparent – in particular the globalization and specialization of work. These fundamental shifts have implications both for the economy and for those seeking work, or indeed in work and wanting to move to higher quality work.

The globalization of work.

It is not as simple as work in the west moving to the back-offices of India or the factories of China. This is not a one-way road. Instead the market for jobs is increasingly taking on global proportions. For example, the major Indian IT companies – Wipro, Infosys and TCS (all of whom are actively participating in our research), are looking to take on significant numbers of people outside of India over the coming two years. Add to that a labour market increasingly able to both advertise and select on a global basis – and it’s clear that the competition for talent and for work will be fought on the world’s stage.

The implications?

The most talented in any location, will increasingly join the ‘global talent pool’ and their remuneration will over time move to the average of the whole pool.

Similarly, those with few skills in any location, will increasingly join the ‘global unskilled pool’ and their remuneration will also over time move to the average of the whole pool.

In other words – the huge locational advantage enjoyed by previous generations (being born in Boston versus being born in Cape Town) will erode except for the most talented.

The specialization of work.

What has been seen as ‘human work’ is increasingly moving to work that can be outsourced to a computer – giving feedback, managing information, creating reports  - can now be achieved through a combination of micro-chips rather than a human brain. So to be a ‘general’, jack-of-all-trades is not a great place to be. Your competitor is not the kids next door – it’s Wikipedia or an ever smarter computer. So increasingly valuable and interesting work will migrate to people with deep, specialist skills that have been honed through great education and coaching. That puts a huge emphasis on the education system of a state to both up- skill, and as importantly, to create a context where people want to learn and are prepared to put in the time and effort that the acquisition of deep skills creates.

The implications?

Those with few or shallow skills will see their jobs migrate to areas of the lowest cost – unless these are jobs that are locational based (burger flippers, cleaners, shop assistants).

As a consequence, the propensity of a region to flourish will increasingly depend on the resources it makes available to educate the population. Moreover, as we know that many of the cognitive aspects of knowledge development are learnt at an early age – then this puts a real emphasis on pre-school education.

So where does this leave the USA and the frustration of many citizens about the economy and job losses? Simply put, it suggests that ‘Born in the USA’ is fast eroding as an individual source of competitive advantage. That means for those with limited skills, the future could be a lot bleaker as the market for these skills finds its global average. What it also means is that ‘Educated in the USA’ – will increasingly create a source of competitive advantage for subjects which have global currency.