Founder Turnaround Talk
The future of work is a scary prospect for most companies. However, it is especially scary for companies that are in distress and cannot cope with the current demands that a technology driven future is placing on them.
It has become the task of BRPs – as turnaround and business rescue specialists – to manage this and make key recommendations to their clients about how to cope with these demands. I recently read a report by PricewaterhouseCoopers (PwC) which aims to predict what this future will look like and how companies should respond.
Consider the big questions
The PwC report points out that the future of work asks us to consider the biggest questions
of our age.
What influence will the continuing march of technology, automation and artificial intelligence (AI) have on where we work and how we work? Will we need to work at all? What is our place in an automated world?
The report adds that many commentators focus on technology and the role that automation is predicted to have on jobs and the workplace. We believe the real story is far more complicated. This is less about technological innovation and more about the manner in which humans decide to use that technology.
The shape that the workforce of the future takes will be the result of complex, changing and competing forces. Some of these forces are certain, but the speed at which they
unfold can be hard to predict. Regulations and laws, the governments that impose them, broad trends in consumer, citizen and worker sentiment will all influence the transition
toward an automated workplace.
The report points out that the outcome of this battle will determine the future of work in 2030.
When so many complex forces are at play, linear predictions are too simplistic. Businesses, governments and individuals need to be prepared for a number of possible, even seemingly unlikely, outcomes.
Megatrends
The report points out that the megatrends are the tremendous forces reshaping
society and with it, the world of work: the economic shifts that are redistributing power, wealth, competition and opportunity around the globe; the disruptive innovations, radical thinking, new business models and resource scarcity that are impacting every sector.
Photo by: Carl Heyerdahl via Unsplash
The report adds that businesses need a clear and meaningful purpose and mandate to attract and retain employees, customers and partners in the decade ahead.
The megatrends identified by PwC form the foundation for all our scenarios. How humans respond to the challenges and opportunities which the megatrends bring will determine the worlds in which the future of work plays out.
- Technological breakthroughs. Rapid advances in technological innovation Automation, robotics and AI are advancing quickly, dramatically changing the nature and number of jobs available. Technology has the power to improve our lives, raising productivity, living standards and average life span, and free people to focus on personal fulfilment. But it also brings the threat of social unrest and political upheaval if economic advantages are not shared equitably;
- Demographic shifts. The changing size, distribution and age profile of the world’s population. With a few regional exceptions the world’s population is ageing putting pressure on business, social institutions and economies. Our longer life span will affect business models, talent ambitions and pension costs. Older workers will need to learn new skills and work for longer. Re-tooling will become the norm. The shortage of a human workforce in a number of rapidly-ageing economies will drive the need for automation and productivity enhancements;
- Rapid urbanisation. Significant increases in the world’s population moving to live in cities. By 2030, the UN projects that 4.9 billion people will be urban dwellers and, by 2050, the world’s urban population will have increased by some 72% Already, many of the largest cities have GDPs larger than mid-size countries. In this new world, cities will become important agents for job creation;
- Shifts in global economic power. Power shifting between developed and developing countries. The rapidly developing nations, particularly those with a large working-age population, that embrace a business ethos, attract investment and improve their education system will gain the most. Emerging nations face the biggest challenge as technology increases the gulf with the developed world. Unemployment and migration will continue to be rampant without significant, sustained investment. The erosion of the middle class, wealth disparity and job losses due to large-scale automation will increase the risk of social unrest in developed countries;
- Resource scarcity and climate change. Depleted fossil fuels, extreme weather, rising sea levels and water shortages. Demand for energy and water is forecast to increase by as much as 50% and 40% respectively by 2032. New types of jobs in alternative energy, new engineering processes, product design and waste management and re-use will need to be created to deal with these needs. Traditional energy industries, and the millions of people employed by them, will see a rapid restructuring.
What does this mean for South Africa and distressed businesses within the country? There are a few highlights that provide a blueprint for our future growth. South Africa has a young population with a significant youth unemployment problem. We fall on the other end of the problems that developed markets – who have an aging population – have to deal with. We also have a significant rate of urbanisation as young workers move from rural areas to build their fortunes in South Africa’s major cities.
We need to resolve the problems that we have around education and we need to find a way for major city centres to become important agents for job creation. This will require companies to embrace technology and the advantages that it can offer them.
This will take a significant investment, but the potential long term gains outweigh this risk factor.
For distressed companies, it is about job creation and investing in a future that was not possibly on the company’s radar pre distress. BRPs need to encourage investment in future technologies and upskilling staff to become a part of this technology driven future.
Key interventions
it may seem a daunting task to companies who are facing the prospect of fitting into this new paradigm. The PwC report points out that there are key interventions that can be immediately put in place which would put companies on the front foot:
- Act now. This isn’t about some ‘far future’ of work – change is already happening, and accelerating;
- No regrets and bets. The future isn’t a fixed destination. Plan for a dynamic rather than a static future. You’ll need to recognise multiple and evolving scenarios. Make no regrets moves that work with most scenarios – but you’ll need to make some bets too;
- Make a bigger leap. Don’t be constrained by your starting point. You might need a more radical change than just a small step away from where you are today;
- Own the automation debate. Automation and Artificial Intelligence (AI) will affect every level of the business and its people. It’s too important an issue to leave to IT (or HR) alone. A depth of understanding and keen insight into the changing technology landscape is a must;
- People not jobs. Organisations can’t protect jobs which are made redundant by technology – but they do have a responsibility to their people. Protect people not jobs. Nurture agility, adaptability and re-skilling;
- Build a clear narrative. A third of workers are anxious about the future and their job due to automation – an anxiety that kills confidence and the willingness to innovate. How your employees feel affects the business today – so start a mature conversation about the future.
Agility is key
One of the biggest challenges when it comes to turning around a distressed company is that they are so fixated on existing systems and processes that they are blind to the future requirements which dictate that we are moving towards a world which favours agility.
This doesn’t mean that companies need to be creative in everything that they do, but it does mean that companies need to embrace a technology driven future and that they need to upskill their staff to fit in with this future. Skills are hard to come by, so the traditional casting aside of retirees needs to be looked at. Retaining these skills on a consultant basis will not only enhance the skills of younger workers, it will also mean that these skills are gradually transported and retained within the company rather than just lost.
Its about working smarter and harder. Perhaps the role of BRPs extends to beyond the implementation of the rescue/turnaround plan. Anticipating distress and resolving it before it becomes a major issue can only benefit companies.
