Blog Article

How is digitization affecting work and jobs – the bagel effect

Posted by Eric S. Pelletier

Eric S. Pelletier

Where are all the flying cars? Last century’s most exciting transport prediction never happened. Today, we’re still stuck in traffic jams. The problem is we’re not always very good at predicting where technology might take us. So how can we predict how digitization will change our organizations? Or what those changes might mean for the workforce? I take a look at today’s key disruptive technology trends and suggest some ways to respond.

Who would have imagined that cellphones would one day transform banking in Africa? Or that although they remain stubbornly earthbound, our vehicles can now find their way around courtesy of satellites?

It’s also difficult to predict how “digitization” – the disruptive impact of technology – might affect the world of work. In the early days of the web, for example, Internet enthusiasts imagined an explosion of choice. Yet today, we see “winner takes all” consolidation, with Google and Amazon dominating search and retail in the West.

These unforeseen disruptions are now likely to accelerate, driven by the relentless increase in processing power, connectivity and mobile devices.

In the workforce, the most striking digitization trend we’re seeing is what I like to call the “bagel effect”. It’s a hollowing-out of traditional structures caused by trends like automation of manual work and more organizations taking advantage of the power of networks. It happens when traditional middle management roles are outsourced to customers, vendors, programs or to clever apps via the Cloud.

With Uber, for example, there’s no need for fleet managers or taxi controllers – these jobs are now done, respectively, by drivers themselves and by software. Inventory management is unnecessary when huge retailers like Alibaba don’t hold any inventory. Journalism becomes less necessary when bloggers – and even bots – willingly write content, 24/7.

Where it hits, the bagel effect tends to create two classes of jobs: cognitive and manual (1). From a workforce perspective, this drives a need for highly skilled talent and new roles at one extreme, and a way of motivating and managing a large low-wage workforce at the other.

Digitization also reduces cycle times in business, meaning decisions have to be made faster. Traditional command-and-control hierarchies lack the agility to think this fast or take direct action quickly enough – reorganizing people can be a large and slow decision in many companies, which isn’t enough to respond to rapidly arriving threats and opportunities. It’s one of the reasons that these traditional structures are struggling against new, networked players. Banking and retail, in particular, are reeling.

How can you prepare to be the kind of organization that thrives on digitization?

We think it’s about becoming more adaptive – acting and reacting in real time.

This means:

  • Understanding your “legacy” workforce (where you are now) and the degree of strategic freedom this gives you
  • Constantly identifying where new skills are needed
  • Using simulation and scenario planning to predict your workforce needs in a fast- moving environment
  • Create a strong employee value proposition that balances training, long-term employment and access to external skills
  • Placing a premium on system thinking and collaboration

It may be an unpredictable world, but with the right approach, you can adapt, evolve and thrive. We’re working on the flying cars. But we can’t promise anything…

If you’d like to find out more about the impact of digitization on the workplace and workforce, I’ll be speaking about it at Icon’s SWP and Talent Analytics seminar in Brussels at the end of May – find out more here

(1) Benedikt Frey, Carl and Osborne, Michael A (2013): The future of employment: How susceptible are jobs to computerisation?


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