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In 1998, after a year-long study on the subject, McKinsey researchers declared that a “war for talent” was underway. In the years ahead, they said, organizations’ future success would depend on how well they could attract, develop, and retain talented employees–an ever more valuable asset in ever higher demand. Today, in a world full of many more Chief People and Chief Happiness Officers, that war nevertheless appears to have been lost on all sides. Of course, many workers excel in their jobs and make pivotal contributions to their organizations. But for every one employee who does, there are many more who are underemployed, underperforming, and just plain miserable at work.
More people than ever are dissatisfied enough with their current jobs to want to consider other opportunities. In the U.S., many people who dabble in freelancing say they’d love to quit their day jobs to work for themselves full-time, if it weren’t for income instability and other factors.
But it’s clear that the flexibility and freedom to pursue more meaningful work is pretty alluring. Interestingly, self-employed people tend to work longer hours only to earn less, suggesting that traditional jobs are under-delivering on what employees want to such a degree that many are willing to take pay cuts in order to get them.
Younger workers especially tend to be disenchanted with traditional career paths and are seduced by the idea of becoming entrepreneurs instead. Instead of winning a war for talent, organizations appear to be waging a war on talent, repelling and alienating employees more successfully than harnessing their skills. The result is a highly inefficient job market where most companies complain about their talent shortages while most employees complain about their pointless jobs. The definition of a bad deal is when both sides lose.
So what can organizations do to improve the situation? Three things.
- Get better at measuring and understanding talent. This means shifting from intuitive toward scientific assessment methods. It also means refocusing on the proven predictors of job performance, such as the raw ingredients of talent: being rewarding to deal with, and able and willing to work hard.
- Stop developing people’s “leadership skills.” Shockingly, research suggests there’s a strong negative correlation between the amount of money spent on leadership development (which in the U.S. totals over $14 billion a year), and people’s confidence in their leaders.
- A little more self-awareness can go a long way. The better people understand their own strengths, limitations, and interests, the smarter career choices they’ll make.
The war for talent, in other words, is at least partly personal: If organizations want to turn around current trends and start unleashing human potential, one good place to start is simply helping individuals understand their own talents–and limitations–a lot better.
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Until recently, artificial intelligence (AI) was similar to nuclear fusion in unfulfilled promise. It had been around a long time but had not reached the spectacular heights foreseen in its infancy. Now, however, AI is realizing its potential in achieving human-like capabilities, so it is time to ask: How can business leaders harness AI to take advantage of the specific strengths of man and machine?
A field that once disappointed its proponents is now striking remarkably close to home as it expands into activities commonly performed by humans.
Because AI systems think and interact, they are invariably compared to people. But while humans are fast at parallel processing (pattern recognition) and slow at sequential processing (logical reasoning), computers have mastered the former in narrow fields and are superfast in the latter. Artificial intelligence is no longer an elective. It is critical for companies to figure out how humans and computers can play off each other’s strengths as intertwined actors to create competitive advantage.
The naked algorithms themselves are unlikely to provide an edge. Many of them are in the public domain, and businesses can access open-source software platforms, such as Google’s TensorFlow. OpenAI, a nonprofit organization started by Elon Musk and others, is making AI tools and research widely available.
Let’s look at three examples of how AI shifts traditional notions of competitive advantage.
Data. AI’s strongest applications are data-hungry. Pioneers in the field, such as Facebook, Google, and Uber, have each secured a “privileged zone” by gaining access to current and future data, the raw material of AI, from their users and others in ways that go far beyond traditional data harvesting. By building, accessing, and leveraging shared, rented, or complementary data sets, even if that means collaborating with competitors, companies can complement their proprietary assets to create their own privileged zone. Sharing is not a dirty word. The key is to build an unassailable and advantaged collection of open and closed data sources.
Customer Access. AI also changes the parameters of customer access. Well-placed physical stores and high-traffic online outlets give way to customer insights generated through AI. Major retailers, for example, can run loyalty, point-of-sale, weather, and location data through their AI engines to create personalized marketing and promotion offers. They can predict your route and appetite—before you are aware of them—and conveniently provide familiar, complementary, or entirely new purchasing options. The suggestive power of many of these offers has generated fresh revenue at negligible marginal cost.
Capabilities. Capabilities traditionally have been segmented into discrete sources of advantage, such as knowledge, skills, and processes. AI-driven automation merges these areas in a continual cycle of execution, exploration, and learning. As an algorithm incorporates more data, the quality of its output improves. Similarly, on the human side, agile ways of working blur distinctions between traditional capabilities as cross-functional teams build quick prototypes and improve them on the basis of fast feedback from customers and end users.
In addition to reframing specific sources of competitive advantage, AI helps increase the rate and quality of decision making. In this new AI-inspired world, where the sources of advantage have been transformed, strategic issues morph into organizational, technological, and knowledge issues, and vice versa. Structural flexibility and agility—for both man and machine—become imperative to address the rate and degree of change
Scalable hardware and adaptive software provide the foundation for AI systems to take advantage of scale and flexibility. Winning strategies put a premium on agility, flexible employment, and continual training and education.
Companies looking to achieve a competitive edge through AI need to work through the implications of machines that can learn, conduct human interactions, and engage in other high-level functions—at unmatched scale and speed. They need to identify what machines do better than humans and vice versa, develop complementary roles and responsibilities for each, and redesign processes accordingly.
Executives need to identify where AI can create the most significant and durable advantage. We advocate looking at AI through four lenses:
- Customer needs - First, define the needs of your customers.
- Technological advances - Consider how you can use such technologies to transform your processes and offerings.
- Data sources - Third, create a holistic architecture that combines existing data with new or novel sources, even if they come from outside.
- Decomposition of processes - Finally, break down processes and offerings into relatively routinized and isolated elements that can be automated, taking advantage of technological advances and data sources. Then, reassemble them to better meet your customers’ needs.
Only when humans and machines solve problems together—and learn from each other—can the full potential of AI be achieved.
Occasionally, a new word or phrase breaks out of the confines of the business world and into the cultural conversation. Often, the word comes out of genuinely original thinking and can stimulate new practices. Without care, however, it can quickly spiral into overuse and achieve buzzword status.
There’s a word that is unlikely to join this list, though it accurately captures and communicates the essence of today’s leadership challenges. It is the common conjunction and.
The complex issues with which executives wrestle today — global supply chains, multigenerational workforces, and political polarization and instability, to name a few — are not solved through simple bifurcated choices. They require more nuanced thinking. And can provide the needed stimulus.
For example, imagine that a direct report asks for permission to work from home two days a week. If you respond, “I understand your desire, but I need to ensure coverage in the office,” there is an implied denial of the request. An alternate reply of “…and I need to ensure coverage” is an invitation to mutually solve a problem. The shift of one word acknowledges each person’s interests as legitimate and recognizes that there are issues to be resolved. It creates an environment for positive dialogue.
Milton Friedman’s theory on the social purpose of corporations was clearly predicated on an either/or choice between profit and social good: It was a zero-sum game with profit the only logical choice.Today, there is a different zeitgeist. Whether it’s called shared value, higher ambition, or conscious capitalism, these emerging approaches are centered on a belief in and as an economic imperative, a source of competitive advantage, and a key for engaging a wide range of stakeholders. What once seemed like an impossible paradox can now be reconciled with and.
As you lead, try substituting "and" for "but" as often as possible. Note what opportunities for collaboration and novel solutions emerge. When contemplating your next strategic move, think about "and" instead of "or." See what new perspectives this generates. "And" is one small word that can make a big difference in the way you think and lead.
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