Pack a lunch, it's The Future of Work

It's been too long since we've posted a fouro-brand windy epic, and, hey, it's Monday--like you're really working anyway. A piece written for a multinational client executive team in February. They are pondering succession, major construction/relocation, and the future.

The Future of Work?

A few weeks ago, in Davos, Switzerland, about 300 international CEOs and thought-leaders gathered for their annual confab of networking and lectures. This year was different.

Instead of talking about third-world poverty or intellectual property or the balance of trade, they talked about creativity. How to operationalize it, how to mine it and, maybe most surprisingly, how it is coming to be seen as the marker for competitive advantage in the coming decades. Here’s how BusinessWeek described it:

The frenzy of sessions, workshops, plenary speeches, dinners, and parties that is the four-day World Economic Forum in Davos, Switzerland, is over, and two things, at least, are clear. First, top managers of global corporations are convinced that innovation and creativity are critical to the future success of their companies. Second, to make that happen, a massive hunt for creative talent around the world is under way.

If any single business theme emerged from the 22 sessions on innovation at Davos, it is that CEOs realize that their current corporate organizations and cultures need to be dramatically changed, and that new people with new skills have to be hired.

Sounds like quite an epiphany. But chances are those leaders were primed by a rising tsunami of books, articles and seminars all carrying a similar message: The Information Economy is losing steam to what Harvard Business School’s Joseph Pine calls the Experience Economy. Perhaps a lot of those leaders didn’t need to look any further than their own efforts to become believers. Just as automation and machinery replaced human muscle in the 19th and 20th centuries, business is in the midst of a similar change. This time, instead of blue-collar workers and factory floors being the ground zero of obsolescence, profound changes are happening in previously “safe” white collar zones like administration, analysis, IT, accounting and others. To compound the coming upheaval, as 2006 marks the first of the Baby Boomers turning 60, another set of Generations, X and Y, are coming into their most influential professional years with a very different set of values and expectations from their Boomer and Gen WWII parents and bosses.

The implications and suppositions coming from this shift could fuel several Davos sessions and have filled dozens of books in the last year or two, but let’s keep it simple:

• Workplace shifts like outsourcing and off-shoring are an effect, not a cause of the current fluidity.
• Traditional executive tools of cost-cutting and streamlining processes are losing punch as builders of shareholder value for reasons we’ll explain in a moment.
• Finally, in the words of Bruce Springsteen: There was fifty-seven channels and nothin' on. In other words, choice paralysis—a glut of undifferentiable products in so many mature markets, created by companies out of touch with the above mentioned shifts.

Quite a list, isn’t it? Well, it all drills down to that muscle between our ears. Many of the challenges mentioned above are not really evidence of failures, but instead, proof of success and mastery of one side of that muscle: The left brain. It’s been so proficient at engineering computers and software solutions, so deft at analyzing, automating and streamlining process and supply chain—so good at all that left brain stuff that the consensus from Davos was: Business’s pride and joy, execution, is increasingly more efficiently and cheaply done either by foreigners or by machines.

Yes, the surprising consensus was that we’ve gotten so good at routinizing so many previously analytical and professional tasks that we’ve refined and innovated half our workforce into being potentially unnecessary overhead. While, at the same time, productivity has tripled in the last 15 years. In the 1990s, Bill Clinton told anxious ex-rust-belt workers not to worry: Technology is the future. Go back to school and become a “Knowledge Worker.”

They did. And now they are anxious ex-knowledge workers.

A stark example can be had for the low, low price of just $39.95: An estimated 50,000 tax preparers and accountants are now florists or bakers or barristas thanks to Intuit Corporation’s Turbo-Tax® and Quicken®. Staying on a human scale, actuarial analysis and number crunching, legal research, reading of X-rays and assorted jobs Mom and Dad told us were sure routes to steady work and financial security can be done at 15% -25% of the stateside rate by a licensed professional in Mumbai, Guangdong, Buenos Aires, Moscow or Singapore. Yes, by Master CPAs, real Radiologists and Attorneys quite happily earning their country’s version of a middle class lifestyle. Ouch.

In only the last 5 years, Bureau of Labor Statistics numbers offer the picture of a remarkable shift. Paul Craig Roberts, assistant Treasury Secretary for Reagan and former Wall Street Journal Editor chased down some numbers in a recent column:

US manufacturing lost 2.9 million jobs, almost 17% of the manufacturing work force. The wipeout is across the board. Not a single manufacturing payroll classification created a single new job.

The declines in some manufacturing sectors have more in common with a country undergoing saturation bombing during war than with a super-economy that is “the envy of the world.” Communications equipment lost 43% of its workforce. Semiconductors and electronic components lost 37% of its workforce. The workforce in computers and electronic products declined 30%. Electrical equipment and appliances lost 25% of its employees. The workforce in motor vehicles and parts declined 12%. Furniture and related products lost 17% of its jobs. Apparel manufacturers lost almost half of the work force. Employment in textile mills declined 43%. Paper and paper products lost one-fifth of its jobs. The work force in plastics and rubber products declined by 15%. Even manufacturers of beverages and tobacco products experienced a 7% shrinkage in jobs.

The knowledge jobs that were supposed to take the place of lost manufacturing jobs in the globalized “new economy” never appeared. The information sector lost 17% of its jobs, with the telecommunications work force declining by 25%. Even wholesale and retail trade lost jobs. Despite massive new accounting burdens imposed by Sarbanes-Oxley, accounting and bookkeeping employment shrank by 4%. Computer systems design and related lost 9% of its jobs. Today there are 209,000 fewer managerial and supervisory jobs than 5 years ago.

Now, we raise this point not to get off on a tangent about Globalization but, instead, to highlight the opportunity these facts reveal. If the Left-brain has organized itself into parity status and is shipping its value off to points east and south, there is a glaring question that the Davos attendees courageously embraced: What now? Or, more accurately, what’s next?

What’s next is the Left-brain’s next-door neighbor.

That’s right, the oft maligned, touchy-feely, melodramatic and sensation-seeking Right-brain. Where the Left side of our head exists to packet things into consistent, logical sequences, facts and steps, the creativity and innovation that was the focus of Davos springs from the Right brain’s penchant for the unusual, for the vivid, for metaphor, for its spontaneous and big-picture view. Joe Pine’s “Experience Economy” mentioned earlier? Experience is job one for the Right-brain. In neuroscience speak, this hemisphere marries feeling states and their attendant value and worth to the world of experiences it encounters. As such, it’s also a fussy judge.

The Right-brain adores, excuses, or condemns experiences in the form of transactions, products, processes and messages based on metrics that our left, more reserved brain might call “soft” compared to its disciplined “hard” fact approach. The Left-brain is home to “mature” concepts such as language, logic and number sense. It does not like surprises. The Right is home to the more playful metaphors, feeling and images. It craves surprise and novel experiences. The irony of this is that our brains are much like a family or a trade union: Seniority matters. In this case, the right brain precedes the left in terms of evolutionary development. And predating even the Right-brain is what neuroscientists call the R-Complex or amygdala, the clustering our earliest mammal and reptile brains. Right and R-Complex brains, despite conventional mythology, hold veto power over the younger left-brain. In simple terms, an age-old salesman’s axiom explains the relationship: We buy on emotion, and justify with logic. In many cases, the Left is jobbed-out to rationalize a foregone conclusion reached by those more senior parts of the brain: I gotta have it.

Surprisingly, this knowledge is not new. Much of the foundational scientific research into what moves us, and what makes us exert for ideas or for our favored organizations was begun in the 1960s. At that time, two little known neuroscientists, Roger Sperry and Paul MacLean, were studying brain maladies like epilepsy and autism and the connections gone awry between our brain hemispheres. Specifically, they studied patients who’d undergone surgery to cut the cables that join our two lobes, a bundle of 300 million nerves called the Corpus Callosum. They isolated logic and feeling centers among other things. In doing so to varying degrees, they came to understand that creativity and nuance, fact and logic were team effort—left brain supporting right, or vice versa. Left supplying facts, Right rubbing them together in odd combinations to generate ideas and understanding—innovating. In the process, they found that impulsiveness (or courage) and emotional response resided even deeper in our brains, in an area MacLean coined the R-Complex. That began in the 1960s and carried on though the 80s. But only recently, with the advent medical MRI technology, and with a current development called functional MRI, have scientists been able to actually see the brain responding in real-time to things like the Statue of Liberty, or Coke versus Pepsi, or a virtual stroll through the Museum of Modern Art.

The results are startling and turn on its head our perceptions of who we are and how we engage the world or make “rational” decisions. It turns out we aren’t as rational as we thought. Nor are we as fair-minded as we’d like to believe. Recent books such as Malcolm Gladwell’s Blink or Steven Levitt’s Freakonomics persuasively show that even the proudest of Rationalists among us can truly be economic irrationalists when it comes to new ideas or challenges to our preferred models or orthodoxies. In short, these scientists and authors prove the saying: Seeing is not believing—we only “see” what we already believe and discard the rest.

And what we see—actually, what we revere and desire and expend energy for—is approved or disapproved by the only mental gatekeeper capable of assessing the world or a situation all at once: The Right Brain. It is the gatekeeper and it does this most efficiently by searching out good feeling and fending off bad. As the Davos group found out, when it likes you or your product or your company—when you make it feel good--it goes a long way to aiding your efforts and forgiving some otherwise major faults.

Now, this may seem like digression, but pause the left-brain impulse for one more moment. We’re drilling down to a point here that decides for us how we get and keep and house quality employees. And how we leverage and empower them via an environmental experience we can design and develop. Space can focus that Human Resource energy in search of compelling competitive advantage, or it can short-circuit it. To make the most of such an investment, it is important to realize that workspace—experiencing it, love or hate—is a Right-brain job description. The task is to take the lessons of Davos to heart and formulate, decide and design while keeping the gut-level benchmarks of the Right-brain firmly in mind. The reason is simple. What we might call our most primitive grey matter holds the keys to seemingly higher-minded things that business holds dear:

• Trust, and Customer and employee loyalty.
• Effort, engagement and intuition.
• Empathy, relationship-building and teamwork.

Lots of good things there. All in search of a home, a place to do their thing—to self-actualize and reach potential. And all granted or denied by what was, as recently as 100 years ago, the part of our brain that science thought was a neural appendix—a left-over from our pre-language beginnings. Which brings us back to Davos and Innovation/Creativity. Once again, BusinessWeek:

FINDING NEW PROBLEMS. Most executives, for example, were blown away by the first workshop on innovation and design strategy when a group of eight people steeped in that area competed for the best creative ideas. Google's vice-president for search products and user experience, Marisa Ann Mayer, won with her twin ideas of embracing constraints, rather than fighting them, while simultaneously "maintaining a healthy disregard for the impossible." This yin-yang approach focuses innovative efforts while opening up the realm of opportunities for solutions. 



Tim Brown, president of IDEO, the innovation and design consulting firm headquartered in Palo Alto, Calif, came in a close second with his idea: approach problems with a beginner's mind. "We learn our way to solutions," he said, and it helps to find a problem you've never worked on. Brown combines that perspective with fast prototyping techniques that visualize and build possible solutions, allowing them to make (and learn from) many mistakes very quickly. 



Both ideas jolted and energized the CEOs in the audience. In succeeding workshops, CEOs were asked to develop their own open-sourced innovation by diversifying the people in their organizations, globalizing their R&D and creative teams, and simply changing the framework of the problems with which they are dealing. For many, it was liberating to see that shifting the frame of a problem -- and solution -- could open new and very lucrative business opportunities.

Lucrative business opportunities. Diversifying people in organizations.

Those two statements carry the keys to the Future of Work. At least, they carry them for companies and leaders that enjoy the idea of going to work at a place that has a welcoming, exciting business purpose and community feel. The other Future of Work, and this is a fork in the road, is a bleak one: People you don’t know who are mostly free agents, and between them and you is a marriage of convenience. This second choice is a world purely about mobility, tech and laptops and an individual’s vision and energy hitched only to their personal growth not any particular company’s.

Those people who carry the key do so for two reasons. They are: Generational shift and an 80/20 world of parity/unique products that is approaching 90/10.

We mentioned earlier that the first Boomers are turning 60 this year. That milestone points our brains in one very important direction: Legacy. What have I created? What direction will I leave behind? As it turns out, many of us meant to do some things that we never got around to. Big things. Or, at least, bigger than we achieved. Well, guess what. Those Boomers are being replaced by two generations who are also hungry for meaning and transcendent experiences, except they want them now, at 25 and 40 years of age. “Now” is the operative word. These younger generations have had to less directly fend for themselves than any other in history. They are the first to grow up in front of the TV. They are the first to view computers and technology as the way things are, rather than scary or delightful innovations. Thanks to their Boomer parents’ relative economic wealth, they’re spoiled. They grew up immersed in a world of video games, Chuck-E-Cheese birthday parties, being shuttled to and from to dance lessons and soccer games and swim meets where, in many cases, they get a trophy for showing up. And there’s 150 million of them if you combine Generations X and Y.

Now, this matters to business on many levels. These individuals are impatient. They don’t much wait around to read the instructions, they dive right in. They have high experiential expectations. Their metrics of esteem and valuation call heavily on Right-brain sensibility. Ironically, they grew up in households containing more books per capita than at any other time in history. The only problem is, they don’t like to read. The reasons are well covered by George Mason University’s Thomas West in his breakthrough book, The Mind’s Eye. Education author Karen Gibson sums it up nicely for us here:

We are seeing higher incidences of learning disabilities, (dyslexia, ADD, etc.) because the brain is being hot-wired from birth to respond to and learn from visual stimuli than from text. At a very early age children are literally bombarded with fast-paced technological devices (television, computers, etc.) and their images (music videos, movies, image-based software, etc.). The end result of this bombardment is that children’s neural pathways are developing in a very different fashion from those of preceding generations. They become equally adept, and often better adept, at processing images rather than text.

Image over text. A distinct preference for immediate, immersive Right-brain experiences and priorities instead of patient, sequential left-brain analysis.

While this seems a down-beat description, it’s not, as the Davos summit wisely pointed out. These generations are right-brain experts. They know what they like and they know how to create it for themselves. And it leads to new categories and revenue channels based on experiences and empathy and creativity. It leads to iPods and Minis and Googles and eBays. In many ways, all this points to a generational shift that suggests this may be the first business generation to have an idealistic view about the idea of Customer Service. Yes, customer service, the burden-sharing, hand-holding and resourcefulness required to cement lifetime customer value is a package of Right-brain values. The differences in how it’s soon to be practiced will be bewildering. But the changed organizations and business models from which it springs will be gratifying.

Gratified. It is an important word, made more so, because of those Boomers in search of Legacy mentioned earlier. Boomers, like many of us, started out intending to change the world of their parents and instead got mortgages and deadlines and PowerPoint. The system, Left-brain directed, told them to settle down and get with the program if they wanted to get ahead. And for all their effort, Booz Allen or Boston Consulting Group are telling them that their creations are out of ideas and limping. The Department of Labor is telling them Financial Services will transfer 500,000 jobs offshore in the next five years, all the way up to MBA level.

Never fear. The aforementioned changes aren’t a death knell but, rather, a second chance at legacy. But it requires an open-mindedness and ambition on display at Davos. There, the term rapid-prototyping was thrown around a lot. It’s the relatively new innovation process that keeps the questions and the challenges coming, minimizing at early stage, the impulse to play devil’s advocate. That’s the knee-jerk urge the left-brain transmits when it encounters the unfamiliar, when we see a pattern that does not compute measured against our previous experience. And of course, previous experiences are not innovations. In the words of Henry Ford on his own breakthroughs, “if I’d have asked my customers what they want, they’d have told me ‘a faster horse.’”

Just as the Agricultural Age gave way to the Industrial Age, which gave way to the Information Economy, the Experience Economy is upon us, soon to be followed by the Transformation Economy. And it’s important to note: it took 5000 years before the Industrial Revolution (1800) surpassed Agriculture. And 150 years (1955) for Information to replace the Industrial. It’s taken only 50 years for Information to become the commodity of its predecessors. These are exponentially compressing time frames accelerating change that mirror the increases of Moore’s Law:

The observation made in 1965 by Gordon Moore, co-founder of Intel, that the number of transistors per square inch on integrated circuits had doubled every year since the integrated circuit was invented. Moore predicted that this trend would continue for the foreseeable future.

It has continued. And an industry/U.N. partnership is preparing to launch 50 million one-hundred dollar laptops at a hungry-for-progress third-world youth.

To sum up, let’s get back Davos. And to Legacy, and to leveraging those ascendant Gen-Xs and Gen-Ys. Those Boomer and Gen WWII leaders knew something was up culturally speaking. Their trip to Switzerland only confirmed what their direct reports had been mentioning at opportune moments. And it reinforced what they’d read when an ex-marine charged with turning GM around described his challenge to the New York Times:

It [has to be] more right-brain… I see us as being in the art business. Art, entertainment and mobile sculpture, which coincidentally, also happens to provide transportation.

That’s from Bob Lutz, the guy who helped save Chrysler with his unique mix of “think deep, and design ahead of the customer.” He did it with product borne of an analog sensibility such as the Viper, Prowler, PT Cruiser and round-fendered Ram pickups.

Analog versus Digital. It’s another way to look at the Right versus Left conundrum. To many of the smart people in Detroit it seemed Lutz was nuts. Didn’t he know the future was in CAD-CAM and Data-mining the wants of consumers? Wasn’t he worried about unleashing anarchy on the organization by bringing in sculptors and anthropologists and hot rod nuts? Didn’t he get how the car business worked?

Sure he did. Lutz believed that new car smell was the tip of a sensory iceberg that contained the idea and excitement, long buried in our minds, of getting our first car; of proudly picking up a date in your new wheels; of the first symbol of our own independence and possibility. A car isn’t transport, it’s a chariot for heroes. Detroit just wasn’t ready for that explanation. It didn’t compute. The numbers, however, did: Chrysler couldn’t staff enough shifts to make enough PT Cruisers. To use a phrase that was tossed around a lot in Davos, Chrysler “got it.” Still, many of those attendees arrived in Switzerland not sure if they could get it.

Of course they could. What they did get, ironically, was permission to believe. The irony is that they needed Left-brain, measured thinkers, to tell them in the style and approach they could respect, that the methods that got them so much success are losing traction and viability. That the right-brainers are coming. Well, actually what they were told is that Innovation, and its sisters, collaboration and mental diversity are coming. It’s useful to note here that all the harrumphing in the pages of business magazines and books about left and right brains is not to imply that one is better than the other or that logic is going out of fashion. Far from it. A convergent, focused mind is essential to herding the cats of creativity and to pulling the trigger—the only thing that takes “an idea” and marries it to execution to generate “innovation.”

But the Left-brain urge must step back into an unfamiliar role, that of enabler and supporter rather than merely director and decider. The Davos summit leaders and the profitable experiences of Apple, Starbucks, Intuit, Google and other value-forward organizations all agree that the old assumptions don’t play so well any more. Their conversations and initiatives imply that we may need to add a cousin to the idea of Mature Markets called “Mature Models.” They were not speaking in terms of decades for this coming change to assert itself but, instead, in chunks of time 3, 5 and 10 years out.

The mental diversity that’s mentioned is not the gender- or ethnicity-based understanding we’ve come to know. In this case, it means throwing new, unusual kinds of people and their fresh, even naïve, perspectives at old tasks if you want to wring higher margin futures out of something. According to Tim Brown of IDEO, it means adopting a cross-disciplinary whole-staff approach to innovating, and housing those innovators of varied talents and affinities in compelling, challenging and energetic environments. The conclusion of Davos was clear. Exalting innovation, and enabling it—going to seemingly heroic ends to find the hero in products and experiences—is the only viable American Future of Work in a left-brain world rapidly headed towards a Global Minimum Wage.

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©2006 Alchemy, LLC except where otherwise noted.

[If you sense any parallels to A Whole New Mind by Dan Pink, 2005, you're right. We included copies of Pink's book and Tom Kelley's 10 Faces of Innovation in our report package for the executive committee. Still, take a peek at the posts linked in the sidebar. The brain and business-shift concepts have been well covered here going back to 2003, pre-Pink. Thought I should bring it up in case of confusion.]