NHO HR-dagen, 21. september 2017

Vegard Kolbjørnsrud

Assistant Professor, BI & Senior Research Fellow, Accenture

Hvordan lede fremtidens

organisasjonOm å lede intelligente maskiner og mennesker

2

A new division of labor between managers and machines

• The rise of Artificial Intelligence (AI) and robotics is

predicted to drive the biggest technology disruption in the

workplace since the Industrial Revolution

• 33-50+ % of jobs estimated to be computerized

• Artificial intelligence combines multiple technologies into

applications that can sense, comprehend, act, and learn

• Prior waves of new technology in the workplace have

mainly impacted workers, rather than managers

• This is different. Artificial intelligence will radically change

knowledge work incl. core management tasks

Source: Bataller and Harris (2015), Brynolfsson and McAfee (2014), Frey and Osborne (2013), Kolbjørnsrud, Thomas and Amico (2016), Simon & Newell, 1958; Winston, 1992

3

• New organizational forms,

deconstructing hierarchies

• More worker autonomy

• Technology enables (near) free

flow of information

• Collaboration across internal and

external boundaries is the norm not

the exception

Management isn’t what it used to be

Facsimiles from: economist.com, qz.com, forbes.com, and slate.com

4

What should managers do when

intelligent machines do much of their

work and workers increasingly lead

themselves?

5

Are you ready for a machine your leadership team?

• In 2014 the Hong Kong VC firm

appointed the intelligent algorithm

VITAL* to its board and gave it voting

rights in investment decisions

• Has voted on a number of investments

• Tieto announced similar initiative last Fall

Source: fastcompany.com

6

Managers spend most of their time on tasks that

intelligent machines will do in the future

Time spent on categories of management tasks

Source: Kolbjørnsrud, Thomas and Amico (2016) "The promise of artificial intelligence: Redefining management in the workforce

of the future," Accenture Institute for High Performance Research Report; Accenture Cognitive Computing in Management Survey, Aug-Sept 2015

Coordinate & control

53 %

Solve problems & collaborate

30 %

People & community

7 %

Strategy & innovation

10 %

7

What's special about this financial news article?

…would you like it

to draft your next

management

report?[Article is edited shorter]

It is written

by an

intelligent

reporting

engine

8

AI helping you write your management report is closer

than you think…

Example: Tableau and Narrative Science partnering to provide

narratives for data charts

9

The greater the presence of machines, the greater the

need for human judgement

• It is amazing what AI can do

with information, but some

decisions require insight

beyond what a information can

tell

• This is the sweet spot for

human judgment – applying

experience and expertise to

critical business decisions and

practices

?

People power

Source: Kolbjørnsrud, Amico, Thomas (2016) "The promise of artificial intelligence: Redefining management in the workforce of the future," Accenture Institute for High Performance;

Shanks, Sinha, Thomas (2016) "Judgment calls: Preparing managers to thrive in the age of intelligent machines," Accenture Strategy

Creative intelligence

High

Creative work

Low

Routine work

So

cia

l in

tell

ige

nc

e

Hig

hLow

Human advantage

Machine

augmentation

Machine advantage

Machine augmentation

and automation

Coordinate

and control

work

Solve problems

and collaborate

Develop

people and

community

Shape strategy

and lead

innovation

Human and machine advantage

in performing cognitive tasks

10

Managers recognize need for digital, creative, and

analytical skills – ignoring people skills?

New skills needed to succeed*

Source: Kolbjørnsrud, Amico, Thomas (2017) "Partnering with AI: how organizations can win over skeptical managers," Strategy & Leadership, 45(1)

* Which new skills will someone need to learn in order to succeed in your role in five years’ time? Please select up to 3 skill areas.

Social networking 21%

Planning and administration 23%

Strategy development 30%

Data analysis and interpretation 31%

Creative thinking and experimentation 33%

Digital/technology 42%

Performance management and reporting 17%

Sharpen skills within my

current domain of expertise

21%

20%

Quality management and standards 20%

Collaboration 20%

People development and coaching 31%

18%

28%

23%

32%

31%

26%

17%

14%

25%

30%

#1

#2

#2

#4

#5

#7

Global Nordics

Pe

op

le

sk

ills

#6

11

"I fear that intelligent systems will

threaten my job."**

Somewhat agree45 %

Strongly agree39 %

AI stirs both excitement and fear

Opportunity & Threat"Will make my work more effective

and interesting"*

84%

Somewhat agree23 %

Strongly agree13 %

36%

Source: Kolbjørnsrud, Amico, Thomas (2017) "Partnering with AI: how organizations can win over skeptical managers," Strategy & Leadership, 45(1)

* Intelligent systems will help me to become more effective in my work and focus more on interesting and impactful tasks.

** I fear that intelligent systems will threaten my job.

12

Lower level managers are much more skeptical about

taking advice from machines than their bosses

Trust in and comfort with…

Strongly agree

First-line managers

Middle managers

Top managers

"Trust system advice in

business decisions"*

Strongly agree

15%

26%

42%

"Comfortable with intelligent system

monitoring and evaluating my work"**

Source: Accenture Cognitive Computing in Management Survey, Aug-Sept 2015

* I would trust the advice of intelligent systems in making business decisions in the future (e.g. an investment decision or deciding whom to hire or promote).

** I am comfortable with an intelligent system monitoring and evaluating my work.

14%

24%

46%

13

Are we so skeptical in the Nordics that we will be

leapfrogged by emerging economies?

Source: Kolbjørnsrud, Amico, Thomas (2017) "Partnering with AI: how organizations can win over skeptical managers," Strategy & Leadership, 45(1)

* I would trust the advice of intelligent systems in making business decisions in the future (e.g. an investment decision or deciding whom to hire or promote).

** I am comfortable with an intelligent system monitoring and evaluating my work.

APAC 42%

Europe 18%

Strongly agree

Americas 30%

Nordics 8%

India 56%

Finland 6%

Max/Min Observations

19%

Americas 28%

Nordics 14%

Strongly agree

APAC 42%

Europe

China 61%

Sweden 8%

Max/Min Observations

Trust in Advice from AI* Comfortable with System Monitoring

and Evaluating My Work**

14

Managers want machines to explain their logic before

they will accept it

What it takes to trust artificial intelligence

Source: Kolbjørnsrud, Amico, Thomas (2017) "Partnering with AI: how organizations can win over skeptical managers," Strategy & Leadership, 45(1)

* What would allow you to trust advice generated by an intelligent system? (Choose up to three)

Nothing would allow me to trust advice

generated by an intelligent system6%

Advice is limited to simple rule-based decisions 33%

People I trust use such systems

61%

33%

The system provides convincing explanations 51%

The system has a proven track-record 57%

I understand how the system works

and generates advice

What would allow you to trust system advice?*

15

If the rate of change on the outside

(of an organization) exceeds the rate

of change on the inside, the end is

near….

Jack Welch

16

What is an encyclopedia and how is it made?

17

Near future

Past

Expanding the boundaries of your workforce

Human

Machine

Internal ExternalWhere?

Who?

18

• Most businesses were not “born digital” or "liquid"

• Conventional models of governance are geared to stability and

control … not agility, speed, and boundarylessness

• More elastic governance and management is needed

Conventional "frozen" governance doesn't work well with

the "liquid" digital workforce

19

Guidelines for designing agile and collaborative

organizations

Develop and agree on the rules of the

game early—they are hard to change

later

Peer review: Quality control by peers

rather than bosses

Incentivize sharing and guard the

contributors and commons from

exploitation

Build commons of shared knowledge and

resources

Formalize rules (not authority structures)

to enable scalability

Maximize transparency to enable self-

organization and trust

Nurture openness and diversity to boost

variation and improved collective problem

solving

Provide flexible and scalable

infrastructures that are compatible with

your collaboration principles (rules of the

game)

§ § !

Source: Kolbjørnsrud (2015) “On governance of collaborative communities,” BI Norwegian Business School, Series of Dissertations 12/2014

20

The next-generation manager and agile organization

The manager

Focus on judgment work

Be a leading practitioner

(not administrator)

Source: Kolbjørnsrud, Thomas and Amico (2016) "How Artificial Intelligence Will Redefine Management," Harvard Business Review, Nov 2; Kolbjørnsrud, V. (2017) "Agency problems and

governance mechanisms in collaborative communities," Strategic Organization, 15(2)

Leave administration to AI

The organization

Default to open

(secrecy as exception)

Strategy as structured

experimentation

Govern by simple rules

(not a rigid structure)§

21

Reports and media coverage on the study

Reading more….

https://www.accenture.

com/us-en/insight-

promise-artificial-

intelligence

http://www.emeraldinsight.com/d

oi/full/10.1108/SL-12-2016-0085

News media (Norway)

«Skeptisk til kunstig intelligens»

https://www.bi.no/bizreview/artikler/skeptisk-til-

kunstig-intelligens/

«Er vi klare for en robot i ledergruppen?»

http://www.aftenposten.no/okonomi/Er-vi-klare-

for-en-robot-i-ledergruppen-424570b.html

«Roboter får lederambisjoner»

http://www.dn.no/grunder/2015/12/06/2052/Arbei

dsliv/roboter-fr-lederambisjoner

Social media

• Twitter: @vegardko

• Linkedin: Vegard Kolbjørnsrud

https://hbr.org/2016/11/how-artificial-

intelligence-will-redefine-management

Link to video

New article in Magma, coming Sept 26