Beyond Automation

By Tom Davenport and Julia Kirby
In knowledge work, machines can be complements rather than substitutes.
 
The Great Decoupling – a Q&A with Andy McAfee and Erik Brynjolfsson
 
The Self-Tuning Organization

By Martin Reeves, Ming Zeng, and Amin Venjara
 
When Your Boss Wears Metal Pants

A roundup of insights from recent studies on the human-robot relationship

 
Description of the Articles
   
Beyond Automation

By Tom Davenport and Julia Kirby
People are getting increasingly anxious about advances in artificial intelligence – and with good reason. With automation now able to relieve humans not only of dangerous, dirty, and dull work – but also of decision making – the future fate of knowledge workers is unclear. In this article, Tom Davenport (Babson University, and long-time HBR author) offers the optimistic view that massive dislocations of workers are not inevitable. The key is for the people who want to keep working, and the employers who have work to offer, to reframe the relationship of computers to humans as one of augmentation, not automation. Automation means starting with what the worker does today, and then subtracting – allowing machines to take over whatever tasks they can perform more cost-effectively. Augmentation starts with what the worker accomplishes today, then adding – spotting the possibilities for combining machine and human strengths to do what neither could do separately. The article centers on five different “steps” individuals can take vis a vis advancing automation to ensure they continue to bring great value to the combination. Rich examples show people succeeding by stepping up, stepping in, stepping aside, stepping narrowly – and designing the step-changes in technology that will open up new possibilities for the future..
 
 
The Great Decoupling – a Q&A with Andy McAfee and Erik Brynjolfsson

 
Two-plus decades after the launch of the personal computer, new digital technologies are taking over the world on an unimaginable scale.  Look at recent developments in artificial intelligence, mobile devices, the Internet of things, robotics, and many other fields -- and it’s clear that this is just the beginning.  We stand at the dawn of the Second Machine Age, during which computer hardware, software, sensors, and the Net will transform knowledge work in much the same way that steam power and the internal combustion engine reshaped physical work during the First Machine Age in the 18th century.  
 
While this technological progress is going to be enormously beneficial, it is bringing in its wake one major socio-economic challenge.  Unlike the technologies of the First Machine Age, argue MIT Sloan School of Management’s Andrew McAfee and Erik Brynjolfsson, digital technologies may not benefit everyone equally.  In fact, recent data all show that median US household income is lower than it was 15 years ago, the middle class is being hollowed out in many developed countries, and total wages are going down in most countries around the globe.  
 
Thus, the Second Machine Age is playing out very differently than the first one did. The main technologies of the industrial revolution were, despite predictions to the contrary, complements to human labor: they greatly increased demand for the skills and capabilities of the average worker.  The evidence so far, however, is pointing to a different conclusion about the digital technologies of the Second Machine Age.  In aggregate, they’re acting much more like substitutes for human labor, reducing demand for at least some types of workers’ skills and abilities.  
McAfee and Brynjolfsson describe themselves as mindful optimists: optimistic about the advances and bounty that will come, but mindful of the challenges it will bring to some people who want to work.  In a wide-ranging interview, McAfee and Brynjolfsson analyze the latest macro-economic data; forecast what kinds of jobs will be available in future, and the kinds of skills that will be in demand tomorrow.  They point out that eventually, business and government will have to make decisions and choices that will determine the outcome of the Second Machine Age -- not technology.
 
 
The Self-Tuning Organization
By Martin Reeves, Ming Zeng, and Amin Venjara
 
Wouldn’t it be nice if an algorithm could tell you when to develop a new business model or whether to enter an emerging market?  
 
We’d be lying if we said that such an algorithm exists. It doesn’t, and we don’t imagine a time in the foreseeable future when algorithms (or other forms of artificial intelligence) will be able to answer the most difficult strategic questions. But the authors of this article – Martin Reeves and Amin Venjara of the Boston Consulting Group, and Ming Zeng, chief strategy officer at Alibaba, do believe that something almost as interesting is emerging: a way for organizations to make frequent, calibrated adjustments to their business models, resource allocation processes, and organizational structure – and to do this without direction from the top.
 
That’s a provocative claim, but they make it based on a close observation of two things. First, companies like Netflix and Amazon are now extraordinarily good at adjusting their product offerings automatically, in real time, in response to individual customer behaviors. It’s true that they use algorithms to do that work.  But the processes and technologies underlying those algorithms aren’t magic: it’s possible to pull them apart, learn what makes them tick, and use that learning in other settings.  Second, some of the same companies have started to do just that: apply the principles underpinning these algorithms to managing other areas of the enterprise. Extending beyond bits and bytes, these principles offer fresh insights on how to manage enterprises in dynamic and unpredictable environments.
This article will look first at how self-tuning algorithms are able to learn and adjust so effectively in complex, dynamic environments. Then it will look at how organizations are applying what they’ve learned about self-tuning – in the form of continuous, self-directed experimentation -- at the enterprise level, using Alibaba as a case example.
 
 
Research Roundup: When Your Boss Wears Metal Pants

As intelligent, autonomous, even life-like machines reshape the way work gets done, we’re going to need to rethink the way we organize and manage that work. Indeed, teams composed of both humans and robots will become more common, raising a number of new management challenges. Will morale suffer if you replace a robot? How do you convince your team to trust artificial intelligence? Is gender bias shaping the tasks you reserve for human workers? A diverse and growing body of research is exploring how we feel about working with robots, why we don't trust them as much as we should, and yet why we don't mind taking orders from them at least some of the time

The Launch Event for the Global Drucker Forum 2014 - sponsored by the Vienna UniCredit Learning Center - presented a flash-back to the 2013 Forum with its outcome and learnings and then introduced this year's theme The Great Transformation - Managing our Way to Prosperity. The panel discussion was followed by discussions within the audience where specific questions related to the subject were discussed. Some 120 participats including Drucker Socciety members, partners and media representatives engaged in this year’s Launch Event. 

The Financial Times and the Peter Drucker Society Europe announce a Media Partnership

The FT has supported the Drucker Forum with advertising in their print edition and on FT.com.

See FT ad of 26.6. and 28.8. in the European print issue.

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The Global Peter Drucker Forum 2012 - A Call to Action for improving Capitalism

November 15 and 16, Vienna, Austria

At the core of the agenda of the 2012 Drucker Forum lie key questions about the future of capitalism: How can the weaknesses of the system be repaired without crushing the innovative energies of free enterprise and competitive markets? And what is the role of managers in this transformation?

Nobel Laureate Dan Shechtman will open the conference with his vision of creating a more peaceful world through entrepreneurship. He will be followed by Roger L. Martin, one of the global leaders of the “Thinkers 50,” who will lay out the unintended consequences of an excessive focus on shareholder value and provide clues about improving capitalism. In contrast, Adrian Wooldridge from The Economist will defend the benefits of the maximizing-shareholder-value philosophy.

Lynda Gratton from London Business School, along with other leading academics, will delve into the future of management—Management 2.0. Leading executives from global companies will provide their views on the viability of the traditional corporate model and offer lessons from other models such as cooperatives and employee-owned enterprises. Paul Polman, CEO of Unilever, will tackle whether business can be a force for good. The full morning of Day 2 will be dedicated to the rise of social business and social entrepreneurship.

The younger generation will have a voice at the Forum as well: The winners of the Drucker Challenge Essay Contest will be recognized at the gala dinner and express their views at a dedicated session moderated by Julia Kirby, an editor at large for Harvard Business Review.

Access to the full program: http://www.druckerforum.org/2012/the-event/preliminary-program/
For registration please use the following link: http://www.druckerforum-registration.org/eventReg.php

The conference will be concluded by a fireworks of short “Vision Talks“ from leading thinkers: Umair Haque, Deepa Prahalad, Rick Wartzman, Roger L. Martin and Tammy Erickson.

Join us on November 15 and 16 in Vienna to participate in a global dialogue to shape the future of management and hence the future of society.

For further info: contact@druckerforum.org

PRESS RELEASE IN GERMAN (Pressemitteilung in deutscher Spreache)

Governor, Vice Chancellor, family and friends of the graduates and above all,

Dear graduates

I consider it a great honour to be invited to speak to you today. At the same time it is a great responsibility.

Ideally I should tell you something that you will remember for a while – and that you can tell your grandchildren in 30 or 40 years from now. When I talked to my grandchildren recently about my own graduation ceremony I had to confess that I did not remember anything other than the handing over of the document. Not sure if I can avoid this embarrassment to you – it is an uphill battle taking into account the Ebinghaus forgetting curve: much of what is being heard is forgotten within a day….the odds are against me.

Today marks an important day in your lives – yet, it is a beginning of a journey.

To get to this point was an important achievement in itself to which I commend you. The personal competencies that got you here – passion, commitment, tenacity, open minds to learn – will be important throughout your lives. Nurture them. They will be even more important than what you have learned.

When I graduated from the faculty of law in Vienna just a couple of years ago (rather a couple of decades ago….. ) the world was quite different. It looked predictable, stable, a career was pre-ordained, all indicators pointed upwards.

My second employer was IBM and when I joined it was like joining a family for the remainder of ones professional life – and indeed, I stayed for 32 years. You felt the commitment that the company was taking towards you in every step. One was taken care of – from a sports club, to culture, health insurance and pension.

Peter F. Drucker, one of the great thinkers of the 20th century (the Economist stated that he was not only a great management thinker but one of the greatest thinkers of the last century) pointed some 40 years ago to a sea change in the our society – he demonstrated that we are moving from a more protective and cosy employee society towards a more challenging and demanding entrepreneurial society. This does not mean everybody is an entrepreneur, but it means that wherever you stand (even when employed by a company) you have to act in an entrepreneurial spirit. It means that the social compact is changing and that you take responsibility for yourselves.

Should you be worried about this? Should you regret the gradual vanishing of the “golden cages” that corporations and public sector organizations were so great in building?

I frankly don’t think so. But you better get ready. Change is upon us and it is accelerating. Drucker was the master in bringing things to the point – “you cannot manage change, you must get ahead of it” – first in your minds and then in your practice and your lives.

Hence my message to you is not a feel-good message but a message of truth and encouragement.

The world you inherit is beset with great challenges. Change is upon us – if we want it or not. Yet – you have the greatest opportunity in generations: to be the architects and builders of a new world. You belong to a small group who have been equipped to take such a daunting a role. You may exercise it wherever you stand – but it goes beyond having a job in a company or any other organization – it means you are engaging in society. You will not just be a cog in a big machine (as many of my generation were) but you will be a node in a vibrant network of engaged individuals.

YOU WILL HAVE PURPOSE like no generation before you. Companies are currently struggling in defining this broader purpose for themselves and their constituents – but they have started to understand that they are not acting in isolation but as part of society.

Yet it all comes at a price – you will have to rigorously apply the thinking and reasoning skills (in particular critical thinking) and your emotional competencies.

You cannot be content to be an expert in a domain; you must constantly work on deciphering what happens in society and what it means. And you must act on it, in concert with others, wherever you stand. Just wanting to do good is not enough – achieving impact is what counts. Many NGOs pride themselves that they have the key to save everybody else – but by drilling deeper you will be able to differentiate those who are selling their single product (in many cases fear) and those who take responsible action in shaping society by providing true value.

In the good old days life was thought as a curve – in some way a Bell curve – with the various stages of education, moving up a career attaining a plateau and then gradually moving downwards.

I would suggest to look you at your lives in a totally different way – living your lives in growing gyres or rings, where you come back to fields where you have been before but you will be different and hopefully you will have grown during the years while you completed a ring.

There is a wonderful poem from Rainer Maria von Rilke: I live my life in growing gyres or rings…..cybernetics would call it circularity as opposed to linearity. It is a fundamentally different world view and it conveys a different meaning to what you do at a given moment.

There is a final point I would like to make though – to live fulfilling lives in this new emerging world and to become an architect of the future, you need to know yourselves. And you need to be ready to reinvent yourself throughout your lives – as Harvard psychologist and philosopher William James at the beginning of the 20th century distinguished those who are “once born” – who do not stray from the straight and narrow and those who are twice born – who embrace fundamental change. One thing I want you to take away from my short speech: read the article “Managing Oneself ”, a HBR Classic – again from my hero Peter Drucker. It reminds you that change starts with yourself. This article was for sure life changing for me – I am standing here in front of you because I read it some 20 years ago and changed my own life planning.

I wish you the best for your lives – embrace the challenges and get ahead of the change. Find your purpose and take your share in shaping the new world. The new world does not appear by any natural law but it is created but by connected thoughts and actions of myriads of individuals who are beset by the passion of making the world a better place for all. Become creators of the future. You can do it and my best wishes are with you.

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Dr. Richard Straub Präsident der Peter Drucker Society Europe erhielt am 3. September 2012, im kleinen Festsaal der Industriellen Vereinigung den Heinz von Foerster Preis für Kommunikationskybernetik.

DANKESWORTE DR. RICHARD STRAUB

The objective of the meeting is to create momentum towards the 2012 Forum with involvement of the Drucker Society members, partners and sponsors as well as selected media representatives. It will be an opportunity to share the outcomes and the learnings from the Forum 2011 and to present and discuss the outline of the Forum 2012. The success of the Forum the 2011 has enhanced the reputation of the Drucker Society Europe as a credible platform to discuss and explore the future of Management.
 
The discussion about the lead theme 2012 - Capitalism 2.0 is "red hot" at this point. The media abound with articles and special reports on the "Future of Capitalism" and what a better Capitalism should be like. With 2012 as the International Year of Cooperatives this discussion gets a specific focus on proven models beyond the capitalist corporations that could provide valuable insights for improving organizational and management capabilities to address the challenges of the 21st century society.