Note: some of the linked articles below require an FT subscription to read
When robot recruiters outperform people, and other human failings.
The big HR question that won’t go away—can a robot do your job—is well illustrated by Leslie Hook, the FT’s San Francisco correspondent, in this article on robot recruiters. She refers to a chatbot named Mya that screens high-volume applications for hourly-wage jobs. Its initial filter uses simple questions that require straightforward answers, such as: can you work in the evenings; are you comfortable with the pay range, and how soon can you start? One benefit for applicants is that they get meaningful (if limited) feedback rather than falling into the typical HR black hole. That is not to lay the blame entirely with humans: job hopping is now more common and the internet has made it easier to pump out applications at scale, massively increasing the job of sifting through CVs.
The recruitment process for low-skilled, hourly-wage jobs will be the first to be automated. But machine learning can also assist with searches and matches for more skilled jobs, especially among LinkedIn’s half a billion profiles. Recruiters themselves probably won’t become extinct anytime soon, if only because in cultural terms, ‘you still need a human to evaluate whether someone is a good fit for a job.’ Nevertheless, the focus may shift to a more ‘sales-type personality’ who can persuade the best candidates to take a job. And when it comes to senior-level recruiting, where personal relationships are vital, the old-fashioned approach seems sure to continue.
Another, amusing example of the clash between human fallibility and high-speed automation can be found in Pilita Clark’s amusing column on the etiquette around email errors. It doesn’t require such egregious examples as the Deutsche Bank staffer who accidentally transferred $6bn to a customer, or the central banker who mistakenly emailed a secret study to a journalist, to elicit concern. Usually, such gaffes generate embarrassment rather than commercial damage, though Ryanair’s email launch of a 24-hour sale ‘to celebrate remaining in Europe’, just before the Brexit vote was particularly humiliating. But sender beware: most attempts to recall an email sent in error merely draws attention to a mistake that most recipients would otherwise have overlooked. In short, Ms Clark advises: ‘just apologise and move on.’
What keeps you going in your job, or makes you want to leave?
Insecurity is a desirable attribute according to this FT article on ‘insecure overachievers’. Although problem-solving, creativity, intellectual curiosity, energy and passion are deemed desirable traits for ambitious executives, especially in professional services firms, few mention ‘insecure over-achievement.’ Yet companies have found that ‘praise-hungry perfectionists’ tend to be particularly productive. So much so that one HR director, interviewed in Cass Business School research, admits acting ‘like a drug dealer, deliberately seeking out vulnerable people and getting them hooked on the high-status identity.’ If there’s one lesson about how best to harness anxious energy, it’s to avoid undermining the executive's self-esteem and potentially ruining a career in the quest for ever greater output.
Whether similar insecurity applies to executives looking for a career change is touched upon in these FT profiles. Mainly in their 40s and 50s, these executives express a range of fears and emotions, but all embrace change as a means of self-realisation—something that HR professionals might bear in mind as they try to engage and enthuse their staff. A forex trader who became a costume designer is following a long-held interest and is more excited than worried about the life change. A well-paid Google employee left to establish a technology consultancy, and ‘swings between self-doubt and almost manic enthusiasm.’ A supermarket manager overcame the shock of redundancy and wants more family time though worries about her next job. Meanwhile, a 33-year-old rock musician who is retraining as a software developer thinks he may be too old. Finally, a science graduate and full-time mother retrains to be a lawyer but questions if it’s the right for her young family.
Ms Merkel’s underwhelming election victory
Despite Angela Merkel’s fourth general election victory, the German Chancellor will find it harder to build a stable coalition and lead radical change in the EU. Corporate strategists may have to adjust their long-term assumptions. The FT’s excellent analysis of the results in charts and maps show how centrists parties—Ms Merkel’s Christian Democratic Union (CDU), its Bavarian ally the Christian Social Union (CSU), and the Social Democrats (SPD)—performed so badly. The CDU lost votes to the liberal Free Democratic party (FDP), while the SPD lost much of its traditional working class support. (As in the UK, the main leftist party attracted more young voters and those in high-quality jobs). The SPD will not join a centrist coalition, leaving a CDU/CSU bloc, the FDP and the Greens as the most realistic option.
The biggest shock of recent years has been the rise of the right-wing nationalist Alternative for Germany (AfD) which captured 12.6% of the vote, many from previous non-voters. The four-year old, anti-immigration party will be the first right-wing group to enter the Bundestag for half a century, with some 88 seats. Its supporters are ‘typical of the new crop of European rightwing parties that have emerged as reactions to new problems [such as asylum abuse and Islamist terrorism] which haven’t been dealt with by the traditional parties,’ according to German-Israeli historian Michael Wolffsohn.
The AfD also introduces a sharply Eurosceptic element into the German legislature. Ms Merkel will now find it more complicated to support plans for EU reforms, including a larger eurozone budget, a euro finance minister, a European monetary fund, and a common bank deposit insurance scheme, advocated by France’s new President Emmanuel Macron. Any new euro pact will have to be modest, and not require a treaty change. Ms Merkel will also come under increasing pressure to address the EU-wide migration issue, shoring up Schengen with tougher external border controls. However, a fairer distribution of legitimate refugees is likely to intensify tensions with Hungary and Poland. As for Brexit, Germany is much less likely to lean on the EU’s negotiating team for a softer line on Britain's negotiating team, as the latter has long hoped and assumed.
Managing the flow of weak ideas and fake news
How do we decide what to believe and what to reject? Or to put it differently, what should busy executives make the time and effort to read? Three recent FT articles encapsulate much of the difficulties involved: from the fake news that undermines our sense of objectivity, to the energy-sapping ‘thought-leadership’ of pseudo consultants, to the hubris and vanity of CEO books.
The FT’s management editor Andrew Hill, as usual, skewers the surplus of quacks with their barely-formed or reheated ideas that face executives like ‘a great river of swill flowing towards them as they struggle to work out what is important in their world.’ He notes here that half a million LinkedIn users claim to be thought leaders, too often motivated by marketing or public relations rather original thinking. Mr Hill argues that the ‘best thought leaders should recast themselves as “thought-provokers”’—a simple idea that itself probably qualifies as genuine thought leadership.
What we read is not unconnected with how we read it. Research suggests that executives prefer their thought leadership in feature-length reports and books. The latter might well confer a sense of greater scholarship, but according to another FT opinion piece, ‘CEOs and investors should beware the curse of authorship. Books by the chief are often an indicator of over-confidence.’
The article notes how former General Electric chief Jack Welch’s memoir marked GE’s peak, while Conscious Capitalism, by Whole Foods Market co-founder John Mackey, preceded a 60% share-price collapse. Part of the risk lies in long, 12-18- month publishing lead times during which a lot can go awry for a company. But perhaps more damming is the observation that: ‘When CEOs believe their “principles” can help “anyone” to “achieve their goals”, hubris has set in.’
A final and ever-growing concern about the value and efficacy of the published word relates to fake news. The FT’s editor Lionel Barber in a recent Oxford alumni address provides important historical and professional context for understanding the danger of us failing to ‘attend to the facts and to pursue the truth.’
50 ideas that could change the world
The FT’s quest to find ‘50 ideas with the power to solve the challenges facing the world’ will be a fascinating and ongoing discussion that L&D and corporate leaders should follow in detail. The subject categories—skills and education, population, energy and resources, health, nature and the universe—will affect the global business environment in almost every sphere, including how we learn.
Predicting the successful innovations is no science. History tells us that it’s not always the most dazzling invention that gets widely adopted, and it may be the incidental benefits not the initial purpose that truly change the world. As Tim Harford notes, it was seemingly mundane innovations such as toilet paper, barbed wire or shipping containers that did so much to shape the modern world. Companies understand only too well that bringing a new product to market is an unpredictable process. It’s why many embrace rapid failure and apply numerous commercial reality checks along the way.
However, we can still make educated guesses about what the future might hold. As the FT evolving list of scientific breakthroughs suggests, we already know what capabilities exist, even though they may take a generation or more to bear commercial fruit. We might also consider past experience of the social backlash as a guide to future reactions—as the debate over ‘job-stealing’ robots illustrates. And of course, there is science fiction, which at the very least has been a lodestar for the dreams of scientists and entrepreneurs, as is evident from our growing fascination for space travel.
For business to ignore such speculations would be a failure of imagination as well as strategy. One only has to look at the FT’s own expert recommendations, especially in healthcare, such as wearable MRI scanners with potential mind-reading capabilities, holographic computers used to teach anatomy, and self-learning neuromorphic chips that can identify heart abnormalities, to imagine the impact on that sector alone. Not only is the list of potential breakthroughs staggering in its breadth and implications, we have yet to consider how they might interact with each other, multiplying their potential impact.
Should central planners with big data be given another chance?
Three thought-provoking FT articles, on seemingly unconnected subjects, share a common theme: whether a liberal economic order always gives us the best chance of a secure and prosperous society. Such debates increasingly frame our public discourse, one in which business plays an increasingly important role.
John Thornhill, the FT’s innovation editor, writes in The Big Data revolution will not set the planned economy free, that one plausible reason why authoritarian regimes with planned economies such as the former Soviet Union collapsed is because of their failure to process market data. ‘How could any central planner sitting in Gosplan’s offices in Moscow hope to understand all the moving parts of the Soviet economy across 11 time zones?’ he writes. But might the explosion of data now enable central planners to process market information more effectively, allowing a planned economy to ‘rise again in a radically new form?’ China, for example, ‘is developing one of the most vibrant data markets in the world.’ Two Chinese researchers suggest that ‘the freer flow of data could counter many of the ills that disfigured planned economies.’ Would it be so different from, say, the way an airport operates, directing market-driven traffic? But Thornhill counters that accumulating data is a very different proposition to being able to use it effectively (as numerous failed government IT projects attest); and he questions ‘how innovative such an economy could ever hope to be. It is hard for consumers to signal a data demand for a product that does not yet exist.’
Those who believe that, thanks to such potential efficiencies, old-school socialist planning should be given another chance, might read Philip Stephens’ reflections on UK Labour Party opposition leader Jeremy Corbyn. Efficiency is not the issue. His apparent neutrality on many of the world’s nastiest trouble spots suggests an organising ideology that ‘is not pacifism but anti-Americanism’. He adds: ‘For Mr Corbyn, hostility to a US-led liberal order counts above human rights.’
A better case against the principles of a liberal western order, however, is made in this illuminating FT interview of Rwanda’s highly authoritarian President since 2000, Paul Kagame, by FT editor Lionel Barber. ‘In poor countries, democracy is more about access to calories, schooling and healthcare than about periodic voting exercises,’ say Kagame supporters. As the country strives to heal itself following the 1994 genocide, the capital ‘Kigali is now among the safest and smartest cities in Africa. … Growth in gross domestic product has averaged 8 per cent a year, among the best on the continent’ Life expectancy has also soared. But even Kagame supporters fear that these achievements will disappear when he leaves office.
Interestingly, Mr Kagame sees himself as ‘CEO of Rwanda Inc.’ The government is ‘an extremely serious bunch of technocrats, obsessed with collecting data, setting performance targets and fine-tuning policies.’
What dissatisfied customers really want
Understanding the customer journey has always been a critical challenge for marketing professionals, especially as online commerce has altered the way consumers and producers interact. One important aspect of this is how companies respond to dissatisfied customers. Marketers often view such situations positively—and as an opportunity to put right problems and thereby engender more loyalty than before.
But Andrew Hill’s entertaining column, ‘How to deal with customer gripes’, questions whether the so-called ‘Service Recovery Paradox,’ which holds that a well-handled complaint will enhance the company’s reputation, still applies. The FT’s management editor argues that it probably does so long as ‘the service failure is not that severe, it has not happened before and the company had little control over what went wrong.’
He quotes Roland Rust, founder of the Center for Excellence in Service at the University of Maryland’s business school, who turned a poor experience on Unite Airlines into a case study. Among the lessons learned (‘apart from the self-evident one: never upset a customer service professor’), Professor Rust observes that companies focus too much on efficiency at the expense of customer experience; overrate the value of cash compensation; and suffer a ‘negativity spiral’ that encourages others to add their bad experiences to social media. (An article reader also mentions the importance of overcompensating customers to ensure a positive feeling.)
The more proactive companies have reacted by answering online customer gripes individually, thus helping ‘to damp down the initial complaint’ and ensuring their responses ‘stay on the record for future customers hunting for online guidance,’ Hill writes.
It’s an approach that certainly contrasts favourably with the response of an irate restaurant owner, reported in an earlier FT article which concluded that ‘slagging off a reviewer is both pointless and counter-productive,’ though in some cases it’s only fair to consider the company’s perspective too.
UK employers fear a hard-line definition of immigration
The Brexit question that, arguably, most exercises talent managers relates to immigration. In the great ‘tariffs versus talent’ trade off, it remains unclear where EU-UK negotiations are headed and the implications for foreign workers filling much-needed positions on both sides.
The FT reports that employers are urging clarity on the post-Brexit status of EU nationals after new data showed that immigration has fallen to its lowest level in three years, with net migration to the UK at 246,000 in the year to March, compared with 327,000 the previous year.
‘More than half the change was driven by a decline in net migration among EU nationals, and in particular, a 59 per cent rise in emigration among people from the eight eastern European countries — including Poland, Slovakia and Slovenia — that joined the union in 2004’ the FT writes.
Although the fall might satisfy certain members of the UK government, employers are anxious about potential labour shortages should the trend continue. Some organisations are already reporting declining applications by EU nationals to work, for example, in nursing, while the National Farmers’ Union reports a 17% drop in seasonal workers this year. With unemployment at just 4.4%, a four-decade low, and the highest employment rate on record, employers fear a major skills shortage.
However, the UK premier, Theresa May, has shown few signs of relenting to business pressures. As the FT points out: ‘For Mrs May, who spent six years at the Home Office, immigration has never been an issue of economics.’ She was one of few cabinet ministers to fully back attempts to reduce net immigration to the tens of thousands.
Much of this debate has centred on whether to include foreign students in the statistics, and in particular how many of them are overstaying their study visas. Flawed survey sampling had estimated the number of over-stayers at around 100,000—underscoring the hard line, anti-immigration, positions in government. But this figure has recently been debunked by new Home Office checks that now suggest a figure of just 4,600. Whether this prompts the government to take a softer line, at least on overseas students, remains unclear.
What do we want? Less work, lower pay!
If it’s true that no-one ever regrets spending too little time in the office, that message appears to be spreading, at least in the UK. In this article Chris Giles, the FT’s economics editor, notes official data showing that 3.3m workers would now prefer to work less for lower pay, compared with only 2.7m who would prefer to work longer for more—the largest such gap since the financial crisis in 2008.
The aggregate effect of this ‘overemployment’ may be less dramatic than it seems, as those seeking to reduce their hours only want to do so a little, while those wishing to work more, want to by a significant amount. Nonetheless, the figures reveal a significant proportion of the working population wanting to do less work—and that should sound a warning for human resources managers. Surprisingly, the tighter labour supply hasn’t increased workers’ bargaining power. This may be because of a residual fear of unemployment, as reflected in an uptick in the ‘index of unemployment fears’ in the wake of the Brexit referendum.
HR leaders might also consider what lies behind this trend and how it might apply to their own staff: It could be a sign of general disengagement, a rebalancing of work-life priorities, the need for more flexible employment, a question of tax disincentives, or simply the best way to preserve one’s job. Could it even be a sign of a more prosperous workforce—at least for those whose bills are readily met? More generally, companies might factor in the potential impact on future labour supply, particularly given the effect of Brexit on the supply of EU labour.
The true face of Artificial Intelligence
For companies pondering the transformative nature of technology, particularly Artificial Intelligence (AI), several FT articles provide valuable context. ‘Mapping the contours between humans and machines is becoming one of the most intriguing, and at times creepy, challenges of our times,’ writes John Thornhill, the FT Innovation editor. ‘You shouldn’t anthropomorphise computers because they don’t like it,’ he quips. His interaction with a robot called Sophia which (or ‘who’) possesses ‘mesmerising lifelike facial features’ shouldn’t be viewed as anything more than ‘technological tools or digital slaves designed to do our express bidding.’ The ‘cutesy human stuff’ is nothing more than ‘false advertising’. Today, robots function as security guards, nursing assistants, teachers and sex toys; but a decade hence, they will be smarter, and could even include some moral agency. ‘Algorithms in self-driving cars, for example, already indirectly involve life and death decisions, prompting some car companies to employ philosophers to devise ethical settings in their systems.
Understanding how artificial neural networks make judgments is important particularly for doctors and the military but also companies. According to Richard Waters, the FT’s US West Coast editor ‘even the experts cannot tell exactly why robots come up with the answers they do.’ He points to the Tesla car driver killed when the ‘autopilot’ software failed to identify a white truck on a sunny day. ‘It’s a big black box — it can’t engage in a conversation with you.’ Researchers are now looking to employ teachers to train AI systems as if they were normal students, starting with simple concepts. It’s an approach that might work well for the human/AI workforces of the future.
Tim Hartford, the FT’s economics leader writer, is less fearful of AI’s impact on jobs. He believes that it will enhance rather than replace human activity, improving pay and creating more interesting work for humans. Indeed, his concern is that the AI revolution isn’t happening fast enough, and writes mockingly: ‘Sorry: this robot takeover could not be completed at present.’
In another, fascinating article, ‘What we get wrong about technology’ Hartford argues that ‘the most influential new technologies are often humble and cheap.’ It wasn’t the Gutenberg press that changed the world as much as the invention of paper on which it printed, giving rise to everything from wall decorations to toilet paper. Similarly, the invention in 1874 of barbed wire enabled American settlers to protect their crops from roaming bison, while the simple shipping container, invented in the 1950’s, transformed global trade.
In our rush to understand AI, corporate leaders should not overlook the modest innovations whose impact might be just as dramatic.