In the next five to 10 years, we will see businesses of all sizes impacted and challenged by a combination of technology advances, including artificial intelligence, global digital connectivity, the Internet of Things, Big Data, increasing computer power, Cloud AI SaaS Services, 3D manufacturing, smart robotics and the beginning of artificial emotional intelligence.
These technology advances combined will likely:
- Transform how most businesses are staffed, operated and managed
- Change the nature and availability of work in our society
- Infuse smart technology and data science into every business function
- Commoditize operational excellence
- Make innovation and human performance the primary value creation differentiators
Another likely result is the demise of the dominant business and leadership model built for the Industrial Revolution — the factory model of business, with the inputs being materials and people managed generally by a command and control hierarchy, and leadership model designed to direct and produce high efficiency, standardization and reliability.
In recent times, we have seen a different type of organization evolve. An organization built upon technology and human excellence designed to continuously innovate and adapt through experimental learning — which is the antithesis of reliability and standardization. What is about to happen is evolutionary — the organizational design commonalities of those companies (e.g., Amazon, Pixar Animated Studios, Google, Apple, W.L. Gore & Associates, Bridgewater Associates, Starbucks, etc.) will become dominant because businesses in a technology-enabled world will need to be more agile, adaptive, responsive, innovative and humanistic than was needed in the Industrial Revolution.
Technology will reduce the human headcount in many companies, but human beings will be needed to do the type of work that technology won’t be able to do well. That is, at least for the near future: higher order critical, innovative and creative thinking and high emotional engagement with other humans. The challenge for humans is that for most of us, it is very hard to excel at those skills by ourselves — we need to collaborate with others to do them well. And that requires a different system than the one built for the factory model of business.
Yes, technology will dehumanize businesses through headcount reductions. But, ironically, for those humans still needed in business, technology will require businesses to become much more humanistic — much more people-centric environments designed on psychological principles and the science of learning to enable the highest levels of human cognitive and emotional performance. That humanistic, people-centric environment will be based upon three psychological principles: Positivity, Self-Determination Theory and Psychological Safety. Those principles will drive the design of an internal system (structures, leadership model, culture, processes, measurements and rewards) that will enable the mindsets and behaviors that result in the highest levels of human cognitive and emotional performance. And that will require leaders who excel at the desired mindsets and behaviors and who role model the types of thinking, emotional engagement and collaboration — the team play — that will be needed.
Those effective leaders will not be domineering, all-knowing, elitist or self-absorbed. They will be leaders who are comfortable with “not knowing” because they know how to effectively navigate and operate in environments characterized as VUCA (that is, with conditions of volatility, uncertainty, complexity and ambiguity). I believe they will be leaders with quiet egos and high emotional intelligence who embrace and enable “otherness” — connecting, relating and engaging with other stakeholders in the pursuit of a meaningful, purposeful organizational mission.
They will be leaders who excel at managing daily their own thinking, emotions and behaviors and who have tamed their egos and fears of insecurity, failure and not being liked. These leaders will genuinely care about people and helping them develop to their highest potential. Those will be the leaders who can enable, orchestrate and inspire the highest levels of human cognitive and emotional performance that will be needed in the Smart Machine Age.
I believe the CEO of the future will be better described if she or he is called the chief enabling officer. Leadership will become enable-ship. A main responsibility of the chief enabling officer will be to enable the highest levels of human performance in the pursuit of continuous learning and innovation in order to continuously add meaningful value to stakeholders. And to do that, the CEO and other senior leaders must role model the right mindsets and behaviors — the 4 Es:
Engage the world with a quiet ego and as a lifelong learner.
Embrace uncertainty, ambiguity and complexity like a courageous scientist.
Excel at managing self and “otherness.”
Enable the highest levels of human development and performance.
In the Smart Machine Age, who wins? I believe in most industries it will be the organizations with the best thinkers, creators and innovators who excel at creating stakeholder value together through diverse multifunctional, multicultural teams. Leading those organizations requires a new story about leadership. The development of human excellence story.
Ed Hess is professor of business administration and Batten Executive-in-Residence at the Darden School of Business and the co-author of Humility Is the New Smart: Rethinking Human Excellence in the Smart Machine Age (Berrett-Koehler, January 2017). For more of the ideas detailed in the book, please see this article’s companion piece, “The 4 Es: The CEO Is Chief Enabling Officer.”