News

The following are announcements and commentary from the institute regarding issues in the news and new developments at the institute. The commentary represents the opinions of individuals in the institute and this is identified in the by line.

The Future of Work: Automation and Continuous Change?

By Ken Eason

Predictions for the future of Work

Christmas saw the publication of another forecast of the number of jobs that are at risk because of the march of robotics and artificial intelligence. This time it was the IPPR (Institute of Public Policy Research) forecasting that up to 44% of UK jobs are at risk across wide sectors of the economy.

IPPR Report on Managing Automation

There are now many forecasts of massive job losses and attention is being focused on a world where a small proportion of people (the highly skilled ones) will be employed and the rest will be out of work and poor.

But there is also another common theme in the debate about the future of work. It is that we exist in a complex, ever changing, interconnected, global economy and that to survive organisations have to be flexible, resilient and adaptive. The cry is that:

The Only Constant is Change

 Who will manage the change?

How do we reconcile these two different perspectives on the future of work?  Our clever technology may be very good at doing the operational work but it cannot help us make sense of the messy world of international trade, market forces, competitiveness, social change, government action and technical innovation. And it cannot determine what we should do to take advantage of new opportunities and defend against threats. AI may be smart but it is a narrow intelligence with a clever understanding of a specific work domain. Indeed, such narrow AI is also known as weak AI because it cannot replace the breadth of capabilities of a human. However imperfect they may be, human beings are currently the only general purpose intelligent resource we have that can make sense of a confusing, changing world – sentience is known as strong AI.

How is a work organisation to manage in a changing world with a small labour force and a large and sophisticated technological base that may be difficult and expensive to change? The small labour force may have a big agenda: to manage the technology and make sure nothing goes wrong, to monitor the outside world and spot opportunities and threats and to design and implement new ways of working to meet changing requirements. And to keep doing all of these things all of the time. There are many reasons to predict that this model of future work organisations will be ineffective and could be dangerous. One of the reasons for this prediction is what we know about how work actually gets done.

People as the adaptive, coping agents in work systems

 Every study of how work actually gets done shows that it is rarely done strictly according to the formal processes specified that may be embedded in the technology. The people in the work system embellish the formal processes with their own knowledge, often tacit and undeclared, in order to give work delivery the flexibility to meet varied and emergent requirements. They are the ‘oil in the system’ that ‘keeps the show on the road’. They recognize what is new and different, learn how to adapt, and add new, often unspecified, procedures to the repertoire of the organisation. In doing so they often have to ‘work around’ inflexibilities in the formal system to get work done and meet customer requirements.

As a result in any well-established work system there are people who have a deep but often implicit understanding of how the system actually works and a learning capability that means there is a bottom-up process of adaptation and evolution in place that responds to local changes.

The danger of the current narrative about robotics and artificial intelligence is that it implies the replacement of this human resource with technologies that will produce the work on their own. If that is the case not only will work systems become less resilient and adaptive but all the collective tacit knowledge will be lost. And as the saying goes ‘you don’t know what you have lost ‘til it has gone’.

There is always ‘Organisational Choice’:  changing the balance of task 1 and task 2

 To their credit, the IPPR recognize that it is only some of the tasks that can be automated and there are many other parts of jobs that are best done by people. So instead of just assuming technology will replace people we have to ask how the new technological capabilities and the very different capabilities of human resources can be harnessed together for the long-term resilience and adaptability of work organisations. The solution has to be sociotechnical change not just technical change. There will be significant organisational choices to be made to find the right solutions and we need some principles to guide this process. Here are a few to consider:

  1. Immediate cost-effectiveness may be a dangerous objective. The key argument for automation may be economic – you get greater and more reliable productivity from robots and they are cheaper than human resources. That may be so, but you also have to consider what you might lose….
  2. Knowledgeable and skillful human resources provide a sense making resource that can cope with the unforeseen. We need to keep a general sense making capability at all levels within the organisation; to keep a watchful eye on our technology and to provide flexibility and adaptability wherever it is needed. But to be effective people need to keep their knowledge and skills up-to-date and that means actually doing the operational tasks some of the time. So, enabling them to ‘keep their hand in’ is an important design criteria for future systems design.
  3. Having people who understand the task domain means there is a double-task resource to add significant knowledge to planning future developments. Task 1– getting today’s work done – has dominated.

People also have Task 2 abilities – to step back and reflect, to review their performance, to see what can be improved etc. The more they can do this, the better chance the organisation has of coping with the need for continuous change.

Helping people and organisations develop their Task 2 capabilities is an important part of the Bayswater Institute mission. It could be that one of the consequences of robotics and AI will be that people need to spend less time on Task 1 and they can spend more time on Task 2 – in particular thinking about how the work system may be changed to meet new challenges and opportunities. Exploring the potential impacts up-front would seem a good investment in that this is a global challenge and will generate new requirements of the work force that could benefit from planning rather than reacting.

People are the key to sustainable growth – who knew?

Scaling up: the investor perspective

by Adam Hoare

Scaling up investor perspective bayswater institute adam hoare sociotechnical double task wisdom in groups

In a report “Scaling up: the investor perspective” released in November, InnovateUK reported on research undertaken, on their behalf, by Ebiquity. The goal of the research was to understand how innovators see the challenge of scaling up innovations in search of growth. This was compared with the view of investors from venture capital firms who are experienced in evaluating companies and their prospects for sustainable growth. The results show an interesting divergence in the value placed on the role of people in the business.

The importance of people in business

The results are based on qualitative and quantitative research with a total of 250 businesses and investors undertaken between June and September 2017. Four ‘perception gaps’ were identified as areas of divergence between investors and innovators. These are areas that represent deal-breakers for the investors.

  • 84% of investors identified Communication as a reason to turn down investment whereas businesses rated this at 46%
  • 87% of investors identified Adaptability and Resilience as a reason to turn down investment whereas businesses rated this at 58%
  • 78% of investors identified Chemistry as a reason to turn down investment whereas businesses rated this at 53%
  • 70% of investors identified Cultural Fit as a reason to turn down investment whereas businesses rated this at 50%

The research includes many other interesting outcomes related to products and services looking for sustainable growth. An underlying theme is captured in one quote from a UK investor:

 “If you’ve got a company with poor market traction and not a great product but an amazing team, you’ll probably be OK but you won’t be OK with the converse.”

The Bayswater Institute

At the Bayswater Institute, we are interested in people. As an institute built on putting social science to work we know that every business context starts with the people. We spend some of our time evaluating workplace situations where technology is disrupting work practice. Here, we repeatedly witness that the tendency is to see the sale as a Technocentric Push. To sell a capital item and let the organisation manage the transformation enabled by the technology. This rarely works as it ignores the embedding of technology in work practice. A sociotechnical perspective requires that the social and technical system is developed as a whole.

People are at the centre of any change and approaches that ignore the four areas of divergence identified are poorly equipped to address the challenges that brings.

In our work with small and medium sized enterprises we often see companies bringing in consultancy around the technology or market access and completely ignoring the four areas of: communication, adaptability and resilience, chemistry and cultural fit. The institute adopted and developed an approach, many years ago, based on the “Double Task.” This is specifically aimed at separating out daily activity, or task 1, of an organisation from the task 2 underlying practices that are working in the background at a subconscious level.

Surfacing and addressing some of the task 2 assumptions and practices provides people with tools and techniques that directly address the four areas of divergence identified.

We are running our new Wisdom in Groups residential in April 2018. Here we will empower eighteen people to recognise and work on task 2 as part of their daily activity. In 2018, we will be announcing single day workshops to bring the double task approach into organisations to assist in identifying opportunities to improve their task 2 capabilities. We believe, as the report above indicates, that getting your management team investor ready is synonymous with your ability to be ready for growth and sustainability as an organisation.

Productivity? – Don’t Just Fund the Technology Phil! A response to the budget of the 22nd November 2017.

By Adam Hoare

The Organisation for Economic Co-operation and Development has downgraded its 2017 growth forecast for the UK to 1.5% from a 1.6% estimate made in September, making Britain the weakest economy in the G7. The office for budget responsibility had taken the rosy view that after 2008 UK productivity growth would return to previous levels of around 2% It has now admitted, after years of getting it wrong, that it is likely to sit around 1.3-1.5% until 2020. Last week’s budget reverberated with the recurring issue of low productivity growth. The solution presented was an industrial strategy. Something that had fallen out of favour as Government interference.

The announcements based on borrowing came thick and fast:

  • Digital skills and startup funding to reinvigorate the UK’s waning productivity.
  • £3 billion to cushion the landing of a potential hard Brexit, the chancellor said: “This Budget is about much more than Brexit. For the first time in decades Britain is genuinely at the forefront of this technological revolution. Not just in our universities and research institutes, but this time in the commercial development labs of our great companies, and on factory floors and business parks across this land. But we must invest to secure that bright future for Britain.”
  • Last year’s £23 billion National Productivity Investment Fund was to provide £31 billion in funding over six years, compared to the originally planned five. R&D to receive another £2.3 billion investment, under the government’s Industrial Strategy aim to ramp up R&D spending to 2.4% of GDP.
  • To double the number of tech startups founded in Britain with the goal to see one created every half an hour.
  • A £10 million Regulators’ Pioneers Fund to help regulators find new ways to bring emerging tech – AI and 5G – to market.
  • Tech City UK, to be rebranded as Tech Nation, a body with a remit to spend £21 million on developing the UK’s various startup hubs.
  • In a bid to tackle the UK’s stark digital skills gap, the chancellor also outlined fresh cash to retrain people and provide a greater focus on maths and computing for children and teenagers.

The idea of a strategy and a long list of funding opportunities for new technology seems to overlook some very important evidence. Figures for various IT projects (some of the figures originating from the National Audit Office no less) demonstrate a persistent gap between the projected benefits and the reality:

  • Child Support Agency – £500m estimated loss;
  • DEFRA Rural Repayments Agency – £130m estimated loss;
  • Inland Revenue NIHS – £3-4 billion estimated loss;
  • Magistrates Court LIBRA – £232 million estimated loss;
  • HM Prison Service C-NOMIS – £690 million estimated loss;
  • Fire and Rescue FiReControl – £469 million estimated loss;
  • NHS NPfIT – £20 billion estimated loss.

As we borrow money to fuel a technological “hail Mary pass,” it would seem a good time to think about why we fail to convert so many such passes to a touchdown. The Bayswater Institute has been extensively involved in embedding and evaluating digital technologies in health and social care over several decades. Over the last decade alone there have been hundreds of initiatives to improve productivity in care provision by elevating the use of technology to 21st century standards. Although there has not been an overall assessment of the impact of these initiatives the experience of care provision points to low impact from these initiatives. From seeing these projects from the inside, we have developed a level of understanding of why they struggle – and it is not the technology. Two things work against the use of technology in many of these scenarios:

  1. The technology does not exist in isolation it is part of a system that involves the people using it and the people receiving services. If it does not work for them it is not productive.
  2. Where there is an increase in productivity it usually means a single person can handle more work or the workforce can be reduced. This inevitably generates resistance.

Both of these challenges are rooted in social science and the interface between people and technology. Understanding these sociotechnical systems is essential in successfully capturing the benefits the technology can bring. Looking back over the announcements we cannot see where this is mentioned. Throwing money at the technology and expecting social transformation is an interesting approach but the evidence is – it has been done before and it will fail.

A third issue that recurs in productivity considerations. To know a system is more productive than it was before it must be measured in a meaningful way. This links back to point 1 above. If it works for the professional but not the citizen – it does not work. Hence, the outcomes of productivity must include social value and social impact otherwise public money is spent on making the system happy and the service recipient unhappy.

We spend much of our time providing summative evaluations of where the barriers and challenges are in technology projects that are trying to embed into practice. We have a special interest in formative evaluations of interventions where we can draw on our experience and anticipate some of the problems ahead of the development and have the opportunity to have an impact on the NAO estimated loss. If the focus remains on the technology and not the combined scoiotechnical system the return on investment is likely to be negative. The last thing that Phil wants.