Ravin is the Managing Director at Willis Towers Watson and recognised as one of the 25 influential consultants in the world. In this conversation he shares his thinking on a range of topics; impact of Covid-19 on jobs, decoding Future of Work, shifts needed in government approach, the need to re-imagine performance management and how to get started thinking on Future of Work. Read more on his thinking.
0:00:05.6 Intro: Welcome to Prepared, with your host, Hari Abburi. Join the conversations that will prepare you for a future yet to be discovered.
0:00:23.2 Hari Abburi: Hello everyone, welcome to my podcast. In this episode, we have a real global thinker on Future of Work, future of jobs, and he is Ravin Jesuthasan. Ravin is the managing directors Willis Towers Watson. He is a member of the World Economic Forum Steering Committee on Work and Employment. He’s been recognized as one of the top 25 influential consultants in the world, he is co-author with John Boudreau on the book, Reinventing Jobs: A 4-Step Approach for Applying Automation to Work, and numerous articles on work automation, human capital. You can follow him on Twitter @RavinJesuthasan. Ravin, welcome to the show. Thank you so much for your time and the conversation. I want to kick off with today’s context, we live in interesting difficult times with COVID-19, and I thought it would be best to start with taking your parts in on where is this headed, what is the impact on Future of Work, on jobs, on gig economy? Anything that you can share with to help us decode the present situation better.
0:01:33.9 Ravin Jesuthasan: Yeah, Hari, how are you? Thanks very much for having me on your podcast. And obviously, the circumstances we all live in around the world are incredibly challenging, it is fascinating though, to see how organizations and companies are responding and on March 31st, Willis Towers Walter and the World Economic Forum will be issuing a joint piece of guidance on the workplace and workforce implications in the near and… I beg your pardon, in the medium and long-term associated with COVID-19, and the idea is to build incentives and support for an ethical and responsible corporate response to the challenges we’re facing. Some of the things that we are observing unsurprisingly for the approximately 30-40% of the global workforce who can work remotely, obviously a massive acceleration in that direction, so a trend around the Future of Work that we’re seeing get, I guess in many respects, forced upon us as companies look to keep their operations going, albeit with a more distant, more remote set of operating practices, so that’s one example that I think of some of these trends are accelerating.
0:02:50.8 RJ: I think organizations stepping back and asking the question of what is an ethical response to the revenue challenges that many industries are facing, what does that look like, what does shared sacrifice look like, and how do we ensure that we take actions to preserve the business in the near term that don’t compromise its integrity for the long term? So a couple of really interesting things. And as I mentioned, this joint piece of guidance will be out in March 31st and Hari, I’ll be delighted to share that with you and your listeners.
0:03:26.6 HA: Thank you, Ravin. In 2008, when we had the downturn and the economy came back, the same level of jobs that were pre-downturn or in financial crisis did not get added back in the sense that there was possibly lesser employment in the formal sector, and the balance displacement went into automation or the gig economy, and it took a long time to come back to almost full employment in the sense, even though we still have about 70 million gig workers in the US. So in the present situation, as we recover again in the medium term, about a year to two, do you see more jobs moving away from formal sector to the gig economy and then automation kicking in at a higher rate?
0:04:15.1 RJ: That’s a great question, Hari. I think it’s probably gonna be a combination of a number of things. Certainly, as we come out of this period of turmoil, there will be yet more reinforcement on business leaders for the need for flexibility, and that’s what the gig economy provides, in addition to lower cost for certain types of work, it more than anything, it provides flexibility for organizations, and so I think you’ll see that continue to accelerate, but you do have some mitigating forces, particularly in the US around California’s Assembly Bill Five, and some of the challenges that that might present for a dramatic acceleration in the gig economy because of some of the uncertainty around regulations, but I think absolutely that and other similar regulations, we will see a greater focus on flexibility, I think we will see continued acceleration and automation. I think this crisis will perhaps increase organizations interest again, because greater automation drives work flexibility.
0:05:29.5 RJ: If I have a spike in mortgage applications, it’s much easier for me to spin up a number of RPA bots to handle some of the synthesis and integration of data versus needing to add on two or three more data analysts, and the cost associated with that, and then the cost associated with spinning them down versus spinning down a couple of parts, so I think you’ll see this premium on flexibility drive more demand for automation and gig workers. That said though, I do think as we’ve seen all along, as new work emerges, we will see a shift in structural employment towards talent that is perhaps most more in demand, whether it’s talent required to train robots, whether it’s data scientists, whether it’s developers. I think we will continue to see demand, or very different skill sets, and so that structural shift, I think is probably gonna be at the heart of some of these changes.
0:06:32.5 HA: In all your work, and a lot of research in the marketplace today emphasizes on Future of Work, is there a particular definition that you can share with the audience in terms of interpreting it and understanding it easily?
0:06:47.7 RJ: Yeah, so the way we think about the Future of Work is that it’s a fundamental change in how work is done, who it’s done, who or what it’s done by, the way in which it is organized, and increasingly I think the ways in which value is measured and very often when people talk about the Future of Work, they limit that conversation to the impact of technology, and yes, technology is certainly a very profound factor, it is increasing the pace and quantum of change, unlike anything that we’ve ever experienced over four industrial revolutions, but it’s not the only factor. There is a much broader set of changes, whether it’s greater transparency in the world we live in, whether it’s the democratization of work, our ability to take work that used to be bound up in organizations, pull it outside the organization, have it done anywhere in the world, and then reconstruct it within the organization, our ability to tap non-traditional talent and give them access to opportunity that they might not otherwise have gotten, there are a number of factors that are playing out, and of course, demographics. For the first time, and maybe forever we have five generations at work at the same time. So I think of the Future of Work is the confluence of all of these forces as opposed to just being a technology which is maybe the most visible of these forces.
0:08:25.6 HA: In the past about in 2017, GE had appointed a senior level executive to lead Future of Work, and it brought an interesting question as to saying, How are they organizing themselves, and we have Chief Digital officers, we have Chief Transformation Officers, we have Chief HR officers. And is the Chief HR officer role more of a Chief Future of Work role? How are companies defining this in terms of initiatives or how are they organizing themselves to really take advantage of this thinking?
0:09:00.9 RJ: Yeah, that’s a really good question. One of the things that has been truly enlightening for me is actually seeing the number of my clients who have a title of VP of HR for the Future of Work within the HR organizations, often reporting to the CHRO, and it’s this growing recognition that HR as a profession really does need to be at the forefront of this transformation of work and play a pivotal role in how work is organized and how technology is brought on board. In many organizations, the way automation comes in is often through the COO or the CTO, perhaps being interested in a new piece of technology, and they often lead with technology, but very often that brings a lot of breakage and disruption to the organization versus the organizations who are much more thoughtful tend to lead with the work and then figure out what is the optimal set up technology solutions to deliver on the work as opposed to vice versa.
0:10:07.8 RJ: We published a report, the World Economic Forum published a report for HR4.0: People Strategies in the Fourth Industrial Revolution. And I had the great privilege of co-authoring it, and it actually within the report, goes into some of the emerging roles associated with the Future of Work and how organizations are thinking about reorganizing themselves, because the traditional functional silos, right, Hari, that you alluded to, Chief Digital Officer, Chief Transformation Officer, often those roles were dedicated to a particular function or tied to a particular function, whereas in fact today in this very spirit of Agile, but we need our roles that cut across those traditional silos and functional disciplines to ensure that our response is one that is indexed to the work and not to a particular domain of employees or technology, etcetera.
0:11:06.3 HA: In the paper that you refer to, which is HR4.0: Shaping People Strategies in the Fourth Industrial Revolution, which you co-authored as part of the World Economic Forum Initiative, one of the call-outs or the findings was managing integration of technology in workplace. The challenge that I’ve seen with HR people is that, as you mentioned, the initiative on technology typically comes in from outside of HR. You mentioned robotic-process automation, we have chatbox at a very high intelligence level, you have voice technology, but within HR, what kind of talent or what kind of shift do you see to be at the center of it? Can strategic workforce planning be reinvented to actually drive this integration between humans and technology?
0:11:58.1 RJ: Absolutely, that is a great question, Hari, because workforce planning, unfortunately, just by its name and definition, has been traditionally limited to planning for employees, and the first area where that started to break down was where we needed to consider, not just employees, but other forms of talent, gig workers, independent contractors, the talent from managed services providers, the resources of out sources and alliance partners, and increasingly the… Now, when you bring in the automation dimension, whether that automation substitutes human endeavor or augments it or perhaps even creates new human work, it requires for what it… It actually creates a requirement for work planning. So how do I plan for work and then plan for how best to do that work, tapping into one of these eight different ways of getting work done, right? And so employees, independent contractors, gig talent, alliances, outsources, in some cases, volunteers, if you are in the consumer goods space, and then AI and robotics, and so I think the more useful phrase going forward is work planning and work strategy as opposed to the traditional workforce planning and workforce or talent strategy.
0:13:24.0 HA: Do you see companies adopting this fast enough, slow enough, what has been your research in terms of why do companies go slow or go fast?
0:13:36.5 RJ: So I think your question about fast enough or slow enough is a really good one, because companies are really quick to go experiment with automation or technology, they’re really quick and intrigued to go test a new piece of technology case, where they perhaps stumble or fall down is trying to lead with the work, it is what that requires is a much more thoughtful analysis of the work, it requires an agile approach that cuts across all of the traditional organizational silos. And it requires you to actually deconstruct jobs and processes to get at a very nature of tasks and skills, and then redesign or reinvent in a more optimal fashion, and that hard work, that heavy lifting is where I see companies really struggling, but the ones who do it and make the investments, who actually do it well, the gains that they are realizing are orders of magnitude greater than others who perhaps might take the more simple, straightforward route of starting with technology and looking for maybe more incremental gains.
0:14:50.8 HA: In some of the HR functions, and the leaders that I meet, including the Digital Officers, consider Future of Work to be really future in a sense, and there is a significant gap between today and getting there, and then they end up taking incremental bites at it. What is your advice to such thinking?
0:15:11.3 RJ: Yeah. In William Gibson’s great quote, “The future is here. It’s just unevenly distributed.” I think there are plenty of great examples of organizations for whom the future is a very real part of how they run their businesses today. One organization that I just have incredible respectful because they have been so thoughtful, is Unilever. Unilever was one of the coworkers of this HR 4.0 report, along with Willis Towers Watson and Saudi Aramco under the auspices of the World Economic Forum, and they were kind enough to actually share their framework for the Future of Work in this report, and it gives you a great sense of what thought leadership there is, and in understanding how work is going to evolve and work is going to change, and the implications for the workforce. And So Unilever has been incredibly progressive and thinking about the Future of Work. There are many organizations just like Unilever who have advanced the ball and the report has some of those case studies in there.
0:16:23.4 HA: Let me take you into the other side of the environment in which companies thrive in, which is regulation, legislation and government policy. You mentioned California Bill 5. There are number of experiments around basic income, universal basic income across the world, including Finland, State of Hawaii, we’ve had a little bit of a couple of countries in Africa. India is proposing one in a couple of states, and obviously this came to attention because one of the presidential candidates actively advocated universal basic income for all Americans. Now at an overall policy level, what are the big shifts you expect governments to do to support the Future of Work and the automation that you cannot necessarily stop after a point? And what are the big initiatives that you see around the world or shifts?
0:17:18.5 RJ: Yeah, that’s a really good question. Let me sort of unpeel this a little bit, Hari, into a couple of angles. I think on one level, there is a question of philosophy and belief, right? And this is an article that my coworker, John and I wrote at the end of last year. And there are many who believe that the automation is going to destroy more jobs than it will create, and so we need new mechanisms to continue to perpetuate a consumer-driven economy, which is what powers the world. So ideas like universal basic income, have a lot of appeal because the belief is that in the long term, there will be less people employed in traditional employment. The other belief is one that says, we will have a fair bit of disruption, but net there will continue to be more employment than before. And we just need to reinvent ourselves, and I suspect the truth, but most things in life will lie somewhere in between.
0:18:24.2 RJ: And so I think the most response is probably gonna be one that captures two things, one is the reinvention of traditional social safety nets, whether it’s through an idea like universal basic income, but something that recognizes we will go through a period of much dislocation and disruption, and we need to have mechanisms that allow people to transition through those periods. But I think equally, recognizing that human work may not entirely disappear, but in fact, what will change are shifting skill premiums that are going to shift and change very dramatically. And in that instance, what we need to have are the opportunities for people to upskill, reskill frequently and at much lower cost than whether it’s time or dollars than we currently have today. And I think in that regard, experiments… Not experiments rather than things that the Singapore government is doing or the Danish government has been doing for some time now, to ensure that talent has the opportunity to reskill and upskill with much lower frictional cost, I think equally as compelling as the experiments around universal basic income, I personally think that we probably need some combination of the two to ensure that society is prepared for multiple scenarios going forward.
0:19:50.6 HA: I do want to ask you on how you can help companies start up on thinking Future of Work, but before I get there, I want to take your thoughts on another influence. We see a large number of industries being disrupted by non-traditional players, Apple and healthcare, Amazon and healthcare, Walmart and primary healthcare, similarly with insurance companies, companies like Lemonade disrupting traditional companies. So there is a lot of technology at play, but there’s a lot of cross-industry thinking at play. How does that impact traditional talent thinking, how does it impact the Future of Work?
0:20:29.2 RJ: I think that’s going to be one of the things that really speeds up and accelerates our transition as a global society towards the Future of Work. The fact that you’ve got new companies coming in to legacy industries like insurance and disintermediating traditional players, where in certain industries, the presence of regulation perhaps has stifled innovation, to some extent. The new competition is always a creative to driving more innovation, as it forces the incumbent to think differently about their operating model, about talent and I personally know from the work I do with a lot of legacy insurers, there is some great activity going on, on companies thinking about how do we best use AI and RPA to reinvent some of our work? How do we make much better use of the talent we have across our global enterprise, but in a much more agile and nimble way, so that we’re working across the traditional boundaries? So I think it’s gonna be fascinating to see how these newer entrants force the older players to get much more creative and innovative. And as a result, I think accelerate our pathway towards the Future of Work.
0:21:48.7 HA: That’s fascinating, Ravin. So I want to lead you up to the last question I have for you, which is, imagine I’m a company that I hear a lot about Future of Work, I read a lot about it, we’ve been talking about it internally, but we really don’t know where to start and how to start and what the steps would be. How could you advice us?
0:22:10.0 RJ: Yeah, so I’ll share with you the advice I give all of my clients, which is, A, let’s start with the work. So something I’ve mentioned a couple of times in this call, let’s pick a couple of bodies of work where either you are facing significant disruption, you’ve got, as you say, new entrants into certain core processes that require us to reinvent that work, or you think your cost structure is out of whack with… Because of your legacy of… Wages only go up within companies, right? And certain types of work that have been embedded within the organization, you might find that the cost of your work is dramatically out of sync with the cost of the gig economy, with the cost of newer automation vendors, etcetera. So let’s pick two areas, one, where the cost is out of whack, one where there are opportunities to reinvent the work flow, and let’s actually start with the work, let’s utilize the methodology that was in my book, Reinventing Jobs, that you mentioned at the outset, and let’s actually quantify the gains and as pilots.
0:23:20.6 RJ: And what we found is, when you bring business leaders along with a couple of these experiments, when you show them gains of 60-80%, whether that’s speed, cost, capability gain, risk reduction, it sets the stage then for the organization to start to embrace a new way of working, a way of deconstructing jobs and workflows and asking the question of, “What is the optimal means for getting the work done, and how do we get to the optimal combinations of humans and machines, regardless of what those human relationships might look like, employment, gig, alliance, outsourcer, or whether the machine is AI or RPA, or collaborative robotics, etcetera?” And I think by starting with an agile approach that starts with a couple of these experiments, what you start to do is build the organizational muscle by learning how to do the work, and figuring out what the right automation is for a given set of circumstances. And I think it then sets the stage for you to reinvent subsequent workflows, once you’ve had a couple of wins under your belt. I’ve seen this work really well with many of our clients. I mentioned this World Economic Forum report, it has a couple of case studies there with the ROI, that I think lend credence and credibility to this proposed approach.
0:24:49.8 HA: I know I said that that could be my last question, but I’m really tempted to ask, When the nature of work changes, when the way we approach methods, etcetera, change, it has a significant impact on how we understand performance management and companies, top down. So how do we reinvent or reimagine performance management in the context that you’re describing?
0:25:17.7 RJ: Oh, I think performance management… Sort of, where to start, right, Hari? I think performance management is a core process, really doesn’t need to change very dramatically, and I’ll give you a couple of specific examples. I think one is, what is the purpose of performance management? If the purpose of performance management is mainly to distribute pay on the backend, then it’s going to look in a particular shape and fashion, versus I think there are broader opportunities, and maybe some might say, higher value opportunities to use performance management, to engage the workforce, to recognize, to motivate people, to behave in ways that are creative to the value of the enterprise, which might suggest it looks very different, I think that’s one example. The other area is, performance management needs to be much more sensitive to recognizing the unique characteristics of work. In most organizations today, performance management is largely homogenous and largely based on the belief that more performance is, generally, a greater value for the organization and that is not true at all, across the different types of work in organizations. My co-author, John and I wrote about this more than 10 years ago, based on research with thousands of organizations, that in every organization, there are at least four different types of relationships.
0:26:42.9 RJ: There are certain bodies of work where you’re looking to eliminate errors, there are other bodies of work where you’re looking to minimize variance, think transaction processing type work, there are yet other bodies of work where there is a incremental relationship between performance and value, think of much of the work of sales people, and then there is another body of work where there is an exponential relationship, where a small increase in performance can yield exponential value, and that’s… Think of that as much of the work of data scientists, of AI developers, where a small increase in performance due to creativity or innovation can yield massive breakthroughs. And so I think that’s another area of opportunity for performance management to be much more sensitive to the nature of work. And then lastly, having performance management recognize that the work is going to be continuously evolving. We’re going to be continuously looking to automate the highly repetitive rules-based work, often called the dirty, dull and/or dangerous. And the work composition is going to change. So how do we recognize that shifting work composition and ensuring that performance management is agile and responsive to the new face of work? So three opportunity areas I think for us to rethink performance management.
0:28:08.7 HA: Thank you, Ravin. Ravin, thank you so much for your time today. I really enjoyed listening to you. I enjoyed listening to you when I met you earlier last year, I think, on MIT campus as well. I was introduced to you many years ago, probably 2016 or 2017 through a mutual connection, and I’ve enjoyed reading your work. So always a pleasure. Thank you so much for your time and conversation. Where can people get to read more on your thought leadership?
0:28:40.5 RJ: Hari, they can see some of the ideas at… They can follow me on Twitter, so @RavinJesuthasan, also on LinkedIn is where I post regularly, articles I have written, I’m a contributor to Forbes, and when I write articles for them, those are shared on LinkedIn as well. And again, Ravin Jesuthasan CFA on LinkedIn.
0:29:05.8 HA: Would you have any closing comments or anything else to share?
0:29:10.1 RJ: Like I said, there’s a lot that’s going on for all of this global community. I hope all of your listeners and readers are safe, and there’s going to be much change for us. And I’m hopeful that these resources that we are producing will be beneficial to your listeners.
0:29:27.5 HA: Thank you, Ravin. I wish you, your co-workers, your family, and everybody that you know, a safe time in these difficult times around.
0:29:37.6 RJ: Thank you, Hari.
0:29:40.6 S1: Thank you for listening to Prepared with Hari Abburi.
0:29:47.5 S1: For more episodes and additional resources, visit preparedwithhariabburi.com. Let’s continue this discussion online. Follow along on Twitter @HariAbburi.