Category: Future of Work

Posts relating to changing employment and the future of work

Automating the back office

Walmart’s streamlining of back office processes is a warning to middle managers everywhere

US retail giant is to slash 7,000 back office jobs reports The Wall Street Journal as the company looks to focus on customer service. The process that’s seeing those jobs lost are part of a bigger shift in management.

The automation of office jobs isn’t new – functions like accounts payable have been steadily computerised since the early days of computers – but now we’re seeing an acceleration of white collar and middle management roles.

As increasingly sophisticated automation and artificial intelligence increasingly affects middle management roles, we can expect further changes to organisations’ management structures.

The opportunity to streamline and flatten management will be something company boards will have to focus on if they want to keep their enterprises competitive and responsive in rapidly changes markets.

For managers, there’s a lot more disruption to come for their roles. Those stuck in 1980s or 90s ways of doing things are very much at risk.

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Startups become a Sydney mayoral issue

Encouraging tech startups becomes an issue in the Sydney mayoral election

There’s a mayoral election pending in Sydney and the talk of the city becoming a startup hub is becoming one of the issues.

Over the next few days I’m hoping to interview each of the four major candidates on their policies regarding how they see Sydney competing against the likes of Singapore and Shanghai, let alone San Francisco or London.

In 2009, I was working with the New South Wales state government on their Digital Sydney project which looked at how the state capital could become a global centre, one of the things we found was that the city had many of the attributes successful creative centres had – diversity, tolerance and access to talent.

That project died in the face of bureaucratic ineptitude but the idea still kicks around with last week’s launch of the NSW Government’s Jobs For The Future report which, despite its opening thirty pages of buzzwords and waffle, contains some serious analysis of the state’s reliance on inward facing service industry jobs.

Refreshingly, the NSW Government strategy looks beyond the current mania around tech startups based on the Silicon Valley venture capital model – something the Federal government’s Innovation Statement failed to do – and discusses how to encourage growth and investment in other emergent sectors both inside and outside the inner city startup communities.

While Sydney can be an attractive place to live for the digital elite, it falls down in a number of areas with property being among the most expensive in the world, telecommunications being costly and unreliable coupled with a complacent corporate sector and a stingy investment community.

Making the city more attractive is going to take a number of initiatives that including easing the cost of doing business, improving links between academia and industry along with tapping into Sydney’s diverse immigrant populations.

Some of these factors are within the City of Sydney’s purview but most of them are state or Federal matters. By definition this limits what local politicians can do.

Which doesn’t mean they shouldn’t try to do them and it’s good to see these topics have become issues in the local elections. For Sydney though, one suspects it’s going to business as usual until The Lucky Country’s luck runs out.

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Japan’s demographic ruins

Japan’s urban ruins are a lesson for other countries facing an aging population

As Japan’s society ages and urbanises, the effects are being seen in buildings and communities being abandoned.

The Japan Times reports on how the nation is now becoming a magnet for urban explorers discovering what lies insides abandoned homes, hospitals, hotels and theme parks.

Many of the abandoned tourist attractions are legacies of the 1980s economic boom that saw a massive over-investment in property plays. With a shrinking population, those facilities were always doomed but in a growing society, there would have been economic reasons for redeveloping them.

In Japan though, those economic drivers don’t exist in much of the country as the Japan Times explains.

“Japan is in some sense uniquely blessed as a land of ruins. Its rapidly aging population, low birth rate, urbanization and lack of immigration have left a legacy of ghost towns and more than 8 million abandoned homes, or akiya. That tally could hit 21.5 million, one-third of all residences nationwide, by 2033, according to the Nomura Research Institute.”

Japan is the first of many nations that will face the consequences of an aging population, what they do will be a lesson to all of those who follow. Of those, China will probably the biggest experiment.

One big lesson is property demand changes and once valuable assets don’t necessarily hold their value in the face of a societal shift.

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The cost of the cloud: How the disrupters are being disrupted

Cisco, Autodesk and Microsoft’s cutbacks and pivots show technology companies are not immune from disruption

A common factor when talking to tech companies is their talk of disrupting industries, they themselves are not immune from change though.

This week networking giant Cisco announced they would cut seven percent of their workforce, nearly 5,500 employees, as the company deals with the shift to software defined networking equipment continues.

Industry commentators are warning Cisco are not alone as software and cloud based services change the tech industry with Global Equities Research’s Trip Chowdhry estimating the sector may shed up to 370,000 positions this year.

Today I had the opportunity to ask Autodesk’s Pat Williams, the company’s Senior Vice President for Asia Pacific, about the challenges facing companies transitioning to the cloud. At the beginning of the year Autodesk announced they would be cutting ten percent, over 900 jobs, as part of a structuring plan.

“I think there was a model that we had that as we moved to a subscription business that said we would see a bit of a drop in revenue and we realised our gross margins would be pressed,” he said.

“What we were trying to do was right-size the business,” Williams continued. “Sometimes you need to do that. It was a very intentional forward looking move we made.”

Autodesk and Cisco are far from the first tech companies to suffer from the software industry’s shift to the cloud. Microsoft have been probably been the business most affected by the change.

Cisco themselves have been dealing with this shift for a decade as well, with a major restructure in 2011 that saw 6,500 jobs cut.

What is clear in a transitioning industry is that Microsoft, Cisco and Autodesk are far from alone in making cuts. As Autodesk’s Williams points out, it’s probably best for managements to be doing this proactively rather than waiting for the changes to force their hands.

The stories of Cisco, Autodesk and Microsoft show all industries are facing changes. Assuming you’re safe in any sector is brave thinking.

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Burning the boxes

Employing technology staff may be a matter of burning, not ticking, the boxes.

“I cater to their crazy and the results are tremendous. Hire the crazy, because you need them. Those are the ones that don’t think outside the box, they burn the box and stomp on the ashes,” says Chris Pogue, Chief Information Security Officer at Nuix who I interviewed at the Black Hat conference at Las Vegas last week.

Chris was talking about hiring information security people and, as the attendees at the Black Hat and DefCon conferences show, show that philosophy is important in hiring good technology people who tend to be people who don’t recognise the boxes, let alone tick them.

That point though could be made for many occupations, many businesses that claim they value ‘creative thinking” should be thinking about burning the boxes.

In a much more competitive environment having management ‘thinking within the box’ may be one of the greatest disadvantages facing an organisation, not just in recruitment but also in identifying threats and opportunities.

Burning the boxes may well be one of the best things business leaders could do for their organisation in finding and cultivating the talent to compete in tomorrow’s economy.

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A need for better political leaders

As workforces are disrupted by technological change, we’re going to need better political leaders

Brexit, the rise of Trump and the unrelenting negativity of the Australian election campaign underscore the consequences of playing a negative game in politics.

For thirty years, the pattern in western democracies has been to belittle your opponent and demonise relatively powerless minorities such as welfare recipients, immigrants and refugees.

The rise of Donald Trump and the Brexit are symptoms of large segments of society losing confidence in their political leaders, something that isn’t surprising after thirty years of constant negativity from the political classes.

Exacerbating that distrust of the political establishment is the working and lower middle classes wore the brunt of the economic changes of the 1980s and 90s with their work prospects never really recovering. A reality that has not been acknowledged by political leaders.

As we enter another period of dramatic technological change that’s going to have massive effects on the workforce, we’re going to need better leaders.

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Employment and business in an era of ubiquitous robotics

McDonald’s former CEO inadvertently highlights the future of work in his comments about robot fast food kitchens

While robots threaten to take our jobs, they also promise to change the agricultural industry. That paradox describes how both the risks and opportunities in our increasingly automated word.

Brian Halweil, an ag-tech writer, describes how small farmers are using specialist robots to automate their operations. He lays out how the miniaturization of farm machinery will help encourage small, diverse farms.

The available of cheap, adaptable robots driven by almost ubiquitous and build in artificial intelligence is going to drive automation across most industries.

Ubiquitous robotics though means we have to rethink employment and social security as the workforce adjusts to new methods of working. Inadvertently former McDonalds chief executive Ed Rensi touched upon this in his somewhat hysterical response to the campaign to increase the minimum wage across the United States.

Rensi is right to point out that fast food restaurants will replace workers with robots where they can, indeed McDonalds led the way through the 1970s and 80s in introducing production line techniques to the food industry and the company will automate their kitchens and ordering systems regardless of minimum wage levels.

That relentless automation of existing jobs is why there is now a world wide push to explore the concept of a guaranteed minimum wage. We seem to be at the same point we were almost a century ago where the ravages of the Great Depression meant societies had to create a social security safety net.

As we saw with the Great Depression, the jobs eventually came back but in a very different form in a much changed economy. We’re almost certainly going to see the same process this century, hopefully without the massive dislocation and misery.

For businesses and industry, Halwell’s point about much smaller and adaptable robots giving rise to more nimble businesses is almost certainly true. For investors, managers and business owners adapting to that world will be key to avoiding being on the minimum wage themselves.

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