Upskilling boards to handle the new machine age’s benefits and pitfalls
The emergence of artificial intelligence and robotics – and their effect on the organisation’s capabilities – has elevated this issue a risk-management consideration for boards. Boards need to know their organisation has the right people and skills, or capacity to develop or acquire them, to support its transformation in the digital economy. Companies that lack skills for the new machine age could become easy prey for competitors or shareholder activists, such is the expected rate of automation in the next two decades.
Here are 13 considerations for boards on this topic:
1. Board composition
Does the board have directors who can ask the right questions of management on how technology will affect the organisation’s workforce, now and in the next five years? Do enough directors understand how artificial intelligence, robotics, autonomous vehicles and other emerging technologies will affect the organisation’s workforce?
2. Environmental scanning
Directors must be well read on technology and human-resource issues in the workforce. There is a growing body of academic and commercial research on how technology will affect labour markets in the next few decades and which industries are most affected. Directors should seek academic and industry reports rather than rely on popular media for this information, given its tendency to favour alarmist predictions.
3. Site visits
More boards of large organisations are visiting technology clusters, such as Silicon Valley, to understand latest tech trends. Visiting organisations at the forefront of robotics, drones and artificial intelligence, and hearing from their leaders on how this technology will affect the workforce, could give boards an edge.
4. Technology immersion
Like social media, there is no better way to learn about these new technologies than to use them. Some directors are enrolling in software programming “boot camps”; others are using drones for personal hobbies, such as photography; even digital personal assistants, such as Apple’s Siri, give directors valuable insights into artificial intelligence.
5. Alignment of strategy, people and culture
Good boards spend an enormous amount of time coaching, shaping and governing strategy and its implementation. Some might need to spend more time understanding whether the organisation has the right people, skills and culture to implement that strategy, as machines replace millions of jobs over the next two decades.
6. Human resource capability
The impact of technology on the workforce is elevating the role of human resources within organisations. Once seen as service-provision group, HR teams are a key part of transformation projects and often help lead them in large organisations. Working with the CEO, the board needs to understand the depth of the organisation’s HR capability.
7. A clear line of sight to the HR executive
High-performing boards are spending more time with their organisation’s HR executive. They want to understand their organisation’s current and future skills requirements, and how technology will change the shape of its workforce. Presentations from the HR executive, organised through the CEO’s office, at board meetings or strategy off-sites are needed as boards understand the alignment of the organisation’s strategy with its skills base.
8. HR data
Boards should ensure they receive sufficient high-level HR information to understand the organisation’s performance in this area and how it compares with competitors.
Aggregate data on employee turnover, performance-management scores, learning and development opportunities and so on provide metrics on the organisation’s capabilities and culture.
9. Deep dives
Choose one or two key topics and do deep dives into them via working groups that consist of a few directors and executives. For example, how is the organisation transitioning to big data? Does it have enough staff who can work with data? How will data be incorporated in jobs across the organisation? What does data mean for the organisation’s strategy and risk?
The board of an agriculture company might do a deep dive into emerging agricultural technology. For example, how will big data affect crop planting and harvesting and how will robotics and drones transform the organisation’s workforce requirements? This information should be reported to the main board.
10. A culture of continuous learning
Trying to predict the impact of automation of the workforce is almost pointless given the uncertainty of change. More important for boards is knowing their organisation can adapt to whatever is thrown at it by quickly developing or acquiring the right capabilities.
The key is an organisation culture of continuous learning, where staff have tools to develop skills rapidly and are encouraged to do so. Understanding the organisation’s learning and development platform, and whether it is appropriate for the digital economy, gives boards insights into how the organisation develops its people and capabilities.
11. Succession planning
The impact of technology on the labour market could influence board succession-planning strategies, particularly those for organisations with large workforces. Will internal candidates who are being assessed as future CEOs have sufficient skill to embrace artificial intelligence, robotics, big data and other transformative technologies? Can they successfully align the people, skills and culture with the organisation’s digital transformation?
Artificial intelligence, big data, robotics, drones and other emerging technologies potentially pose ethical considerations for organisations. Is the organisation using artificial intelligence responsibly? What are the ethical considerations of robots and human employees working side by side? Could excessive use of this technology affect the organisation’s social licence to operate? All big-picture stuff, but worthy of board debate as the technology is adopted.
As always, boards need to work collaboratively with management on issues such as technological disruption and not take a hands-on role in this issue. The HR area is the executive team’s responsibility. Boards add value by looking further out at emerging workforce trends, identifying patterns across the industry and assessing the alignment of the organisation’s strategy and transformation plans with its people and capabilities.
Good boards draw on the diversity of their skills and experiences to unravel complex topics. Few issues offer more threats or opportunites to organisations than technology in the workforce.
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