How will we work tomorrow? Organizations of the future | Markus Reitzig | TEDxViennaSalon

Summary

Highlights

• Artificial intelligence will continue to evolve, focusing on tasks beyond routine abilities. 🤖
• Workforces will increasingly value creativity and interdisciplinary skills. 🎨🔬
• Flat, decentralized organizations will encourage empowerment and autonomy. 🌍🔄
• Economic inequality is rising, shifting workforce values from monetary to meaningful rewards. 💸➔💡
• Organizations need to balance centralized and decentralized elements for efficiency. ⚖️

Key Takeaways

• AI and humans will coexist, emphasizing creativity and dexterity. 🤖🎨
• Traditional organizations will face challenges as work demands become less routine. 🏢💼
• Decentralized, flat organizations offer new opportunities despite inherent problems. 🌐🚀
• Novel workplace structures emphasize autonomy and accountability. 🔄🧩
• Increased work satisfaction is becoming more important than higher salaries. 💰➡️😊

Overview

Chapters

• 00:00 - 01:30: Introduction: Predicting the Future of Work The chapter starts by discussing various techniques used for predicting the future. However, it acknowledges that prediction is not a guaranteed science. The narrator, an organizational scientist, highlights that scientists often look to the past to anticipate future events. Although predictions can sometimes be inaccurate, there are occasions when it is possible to make relatively accurate forecasts, especially when the conditions or variables are familiar and comprehensible.
• 01:30 - 04:30: Trends Influencing the Future of Work The chapter "Trends Influencing the Future of Work" dives into trends that are currently manifesting rather than speculating about potential developments. It references a key perspective from renowned management thinker Peter Drucker, particularly from his 1989 article in The Economist titled 'The Futures That Have Already Happened'. Drucker discussed five global economic trends of that era, asserting that these trends should be seen as conclusions based on existing developments rather than as mere predictions.
• 04:30 - 09:00: Impact of AI and Workforce Changes The chapter discusses the anticipated impact of artificial intelligence and trends in the labor market. The speaker emphasizes following Peter Drucker's method by examining current trends that are gaining traction and projecting their future implications. This approach seeks to predict how work will evolve and differ from past experiences. The chapter raises the question of what specific labor market trends will shape the future, acknowledging that while some impacts have already occurred, the full extent is yet to be realized.
• 09:00 - 11:30: Challenges for Traditional Organizations The chapter discusses the paramount challenges faced by traditional organizations, with a primary focus on the growing impact of artificial intelligence (AI). It highlights the media's pre-COVID-19 obsession with AI and machine learning, noting the frequent news about new AI startups. While acknowledging that narrow AI is becoming more powerful, the chapter suggests that certain domains may remain beyond its reach for now.
• 11:30 - 15:00: The Rise of Novel Organizational Forms The chapter titled 'The Rise of Novel Organizational Forms' discusses multiple trends shaping the future. Trend one suggests that humans will continue to govern activities requiring dexterity, perception, and creativity. Trend two emphasizes the prolonged existence and influence of the information age, highlighting the continuous production of research and the increasing abundance and complexity of knowledge. Trend three addresses the ongoing growth of the world population, implying potential impacts on organizational structures and society.
• 15:00 - 19:30: Challenges and Advantages of Flat Organizations The chapter explores the structure of flat organizations, examining both the challenges and advantages they present. Key trends impacting these organizations include the rising economic inequality seen globally, which is restricting the ability of salaries to facilitate wealth creation beyond mere consumption. This trend exemplifies the difficulty of gaining financial stability or advancement, such as owning property, in such economic climates.
• 19:30 - 24:00: Super Scaling and Traditional Organizational Elements The chapter discusses the impact of four trends on the workforce and organizational structures. As these trends begin to interact more intensely, there is anticipation of a significant shift in the nature of work. One major concern is the potential divide in the workforce, where some individuals may find themselves disadvantaged by advancements in technology. The text calls attention to the societal responsibility to integrate those who might lose to these technological advances. Overall, the chapter examines the need for adapting organizational elements and potentially rethinking the integration of affected workers into the workforce.
• 24:00 - 29:15: Conclusion: The Future of Work and Organizations This chapter discusses the future of work and organizations, focusing on individuals who will continue to be part of the workforce. It emphasizes the importance of investing in skills that will remain valuable, such as dexterity, perception, and creativity. While creativity is encouraged, the author advises against exaggerating its importance.

How will we work tomorrow? Organizations of the future | Markus Reitzig | TEDxViennaSalon Transcription

• 00:00 - 00:30 there are great many techniques of predicting the future i just don't master any of them i'm an organizational scientist and as scientists we tend to look to the past in order to predict what might happen in the future and admittedly many times we get it wrong but sometimes we stand a fighting chance and that is particularly the case when all unquote we have to do is we have to
• 00:30 - 01:00 elaborate on trends that are already manifesting themselves while we speak instead of speculating about what might happen um nobody put this more beautifully than management mastermind peter drucker in an article entitled the futures that have already happened published in the economist in 1989. having elaborated on five global trends and the economy at the time then he summarizes and i'm quoting now the trends that i've described above are if you will conclusions everything discussed here has already
• 01:00 - 01:30 happened it is only the full impacts that are still to come so in trying to draw a picture of the future of work for you i would like to adhere to drucker and spirit by elaborating on trends and extrapolating trends that are already gaining momentum while we speak but once which once they fully kick in will change the face of work as we've seen it in the past so the first legitimate question is what are these trends there are many trends in the labor market
• 01:30 - 02:00 but four i think are paramount in the context of today's talk and trend number one how could it be any different these days has to do with artificial intelligence so prior to the covet 19 pandemic taking over the media there wouldn't be one single day where you wouldn't be reading about another machine learning based startup in the news and yes it's true you know narrow ai is becoming more powerful um but it's also part of the truth that there will always be domains not always but at least in the
• 02:00 - 02:30 foreseeable future when humans will still govern the activity and those are domains which require dexterity perception creativity trend number two we've been living in the information age for a long while we continue to do so we produce research and development every day knowledge is becoming more abundant and it's becoming more complex it's a no-brainer trend number three the world population continues to grow and with the world population growing
• 02:30 - 03:00 so do markets and finally and very importantly in the context of today's talk trend number four economic inequality is rising dramatically in almost every part of the world and there are already loads of economies out there in which salaries these days can only pay for consumption but they don't allow you to create wealth anymore so that you could live of the rents as epitomized by this beautiful metaphor of jumping on the property ladder
• 03:00 - 03:30 so if i assume now that these four trends start to fully kick in and you know interact with one another how does that potentially change the phase of work i think when trend number one starts to kick in really heavily we will be seeing that there will be a great divide in the workforce unfortunately there will be some who will lose out in the race against the machine and those um you know we will have to think about as society how we want to integrate them
• 03:30 - 04:00 those people who can no longer productively contribute to society in a traditional sense but that's not the topic of my talk today topic of my talk today is about those who will still be part of the workforce and here i assume that they will invest in abilities and skills that will still make them valuable in the near future so they will invest in their dexterous skills they will invest in their perceptive skills and they will try to be creative now i think we shouldn't exaggerate here right you know when i say that people will try to be creative
• 04:00 - 04:30 it would be presumptuous to believe that we can all go back and be the yuan wolfgang fonguita types or the leonardo da vinci types spanning distant domains of knowledge such as you know arts and medicine and physics and literature the fewest of us can most of us will be specialists but we will be different specialists and the specialists of the last 30 or 40 years we will no longer you know be rewarded for carrying out routine tasks complicated routine tasks instead i believe we will become something that i would call creative niche generalists spanning
• 04:30 - 05:00 and recombining knowledge from adjacent domains of knowledge as we already see for example in modern drug design between microbiology chemistry and information technology now one thing is very clear this type of staff is going to push traditional organizations to their limits and why is that so traditional organizations are great at managing routine output through managerial control but when the output is no longer routine
• 05:00 - 05:30 managers would have to be in the know of a lot of detail which they don't have they would have to constantly engage in exception management something which you know doesn't work so the answer to the question of can traditional organizations of this type here still coordinate the type of staff that will likely emerge from these trends is probably badly but what is the consequence of this then will we all go back as traditional writings would suggest to a market-based
• 05:30 - 06:00 society in which everybody sits at home with their computers and 3d printers you know everybody being an entrepreneur all us of all of us being magically coordinated by some price mechanism of procurement prices and sales prices and so forth it takes a trained neoclassical economist preferably with a phd to believe in something that unrealistic jokes aside every scientist with a sense of realism including selected economists will immediately say this won't be the case because there are at least two reasons as to why individuals will still flock
• 06:00 - 06:30 into organizations the first one comes in the form of trend number three which i highlighted before with increasing demand people will need to pool their resources in order to cater to the market size but much more importantly as we've shown in decades of research individuals want to be part of a group they want to be part of a private group but they also want to be part of a work group and so it's the sense of belonging which will ultimately you know make them flock again in organizations in the future
• 06:30 - 07:00 so the future of work is going to be a future of organizations the question is just which type of organization okay and uh here i think it's important to bear in mind what i said about trend number four so trend number four uh ultimately will mean that your generation earlier than any other generation before you will reach the point where an additional five percent 10 15 of increase in salary is not going to mean much to you anymore and why is that because once your consumption needs are fulfilled you know what do you do with the money well let
• 07:00 - 07:30 me put this slightly differently whereas your fathers mothers aunts uncles big sisters big big brothers you know could still legitimately hope that in exchange for working the better parts of their bodies off for 10 15 years they would be buying their country house or their city apartment that's not going to happen for you let me break the bad news for you salaries won't buy city apartments in vienna in the near future so it's obvious that it's a very rational response that people will look for other types of rewards than money
• 07:30 - 08:00 and yes of course we already see that now you know they ask for work life balance they ask for other types of rewards but i think an important point has been neglected and the point is that you want to work in an organization which actually you know sort of make sure that your ideas and your power you know make it to the top and that obviously won't be happening in these rigid multi-layered hierarchies of the past so instead i think you know what is going to happen is you will be looking for places that give you something which is important has always been important to any
• 08:00 - 08:30 generation of worker but is going to be earlier important to you than to any other generation of workers before you'll be looking for work satisfaction work satisfaction is going to become paramount and it's precisely for that reason that i predict that the well-trained of you will eventually flock together in organizations which i would call novel forms of organizing and these novel forms of organizing are organizations that essentially have the following feature this traditional managerial output
• 08:30 - 09:00 control is increasingly giving way to a decentralized way of decision making or let me visualize that for you you will be far less likely winding up in a scenario of the left-hand side there where managerial authorities people who can legitimately demand obedient behavior from you within a certain domain and stacked systems there of hierarchies will govern the work that you conduct and much more likely will you be winding up in a scenario of the right-hand side from your perspective where teams of people
• 09:00 - 09:30 peers equals potentially together with temporary team leaders legitimized by competence and so forth will be conducting the work now let me put in an important disclaimer here let's not be so naive to believe that these organizations there on the right side are without problems they have their own problems okay but the reason why i still predict that they will be taking over and will be paramount is because despite all the problems they have they at least offer a chance for you to attain the work satisfaction that you would want to have
• 09:30 - 10:00 okay and why is that so well because they address the five fundamental problems of organizing in a way that permits creating motivation for employees of the type which we just discussed before what are these five fundamental problems of organizing they're always the same no matter which type of organization you look at because organizations need to make sure that jointly the individuals will attain more than the sum of you know the individuals so they have to divide labor and integrate effort and
• 10:00 - 10:30 in order to do so they have to ask themselves the following question how do we split the work who does what who gets how much who needs to know what and how do we resolve an argument if there is one and what i would like to discuss or maybe rather showcase for you over the next couple of minutes is just that these flat organizations despite all the issues that they have at least offer the potential through the decentralization along these questions of giving you the motivation making the firm more effective and potentially even more efficient than a traditional organization so let's
• 10:30 - 11:00 start with the first question you know how we split the work if you think of a traditional organization a manager may dream up a project okay so let's say she comes up with a project of creating watches and then she decomposes that big goal into subtas and she comes up with her task list of producing the face the case and the arms of a watch in a non-traditional organization that may look very different first of all peers may have different ideas and secondly they may come up with different task lists now your question is why might this be good and my answer to you is because of the nature of the creative niche generalist we described
• 11:00 - 11:30 above if the person actually knows better what the demand would be what the technology can do let them decide so that not only makes the firm more effective but as a matter of fact also and that's the reinforcing cycle may instill a sense of autonomy and motivation among the peer and make the firm a better place same logic holds for task allocation and a traditional organization a manager would based on her best knowledge what people are good at and what they want to do allocate the different tasks
• 11:30 - 12:00 in a non-traditional form usually you know this kind of choice is left to self-selection because people know better what they're good at and people know better what they like and again the same logic of a reinforcement cycle of effectiveness and motivation starts to occur but let's not only focus on the employees let's also think about the managers for a second here okay so managers at least to the extent that they redefine their roles of no longer wanting to see the troops march and feeling great but it's you know managers who actually perceive of themselves as facilitators
• 12:00 - 12:30 arbitrators coordinators and so forth may actually gain a lot from these flat organizations in the sense that it reduces workload for them okay how can this reduce workload for them let's start with the simplest example salary setting one of the notorious problems when you want to assign bonuses to team members is that as a manager you need to know who did what if you don't have that detail you may end up with an outcome which is being perceived as unfair that's why novel forms of organizing
• 12:30 - 13:00 have very successfully experimented around with democratic voting rules where peers actually vote on each other's salary it's this lack of knowledge on the part of the manager which also makes otherwise super efficient information hierarchies where information is being disseminated top down inefficient yes if a manager knows precisely what a subordinate needs to know hierarchy is the most efficient way of disseminating the information but what if the top agent doesn't know what a certain member within the organization may need to know
• 13:00 - 13:30 at a given point in time then you end up with an ineffective outcome and there's no more efficiency consideration that's why novel forms of organizing usually rely on peer-to-peer information a very laborious exchange time taking for the employees but leading to more information aggregation and nicely taken away some work for the manager but nowhere is this efficiency and taking a liberating time for the manager for other things more visible than in a context of conflict resolution anybody who's ever dealt with you know
• 13:30 - 14:00 employee disputes knows that it is one of the most laborious tasks to engage in mitigating between you know sort of sorry in deciding on disputes between two employees b there's an incentive conflict where people may actually really have different preferences or a coordination conflict where they may want to do the same thing but they have different views on how to get there novel forms of organizing therefore rely on peer-to-peer resolution mechanisms and these peer-to-peer resolution mechanisms are those where
• 14:00 - 14:30 usually peers initially discuss with one another then use an extended board and only as sort of an ultima ratio case will rely on the intervention of an authority which is usually legitimized by a lot of competence and just decides on one case so hopefully you know these last examples these fictitious examples have made one point clear you know at least there is the potential for flat organizations to create motivation
• 14:30 - 15:00 be effective and efficient but hopefully they've also highlighted a different point which i think is very important you have the choice to decentralize or centralize along at least five dimensions and that's why there's not going to be one flat organization as a matter of fact there's going to be a plethora of different flat organizations some of which will work better in the context of one organization some will work better in the context of another some won't work at all but my credo and coming to the end of this
• 15:00 - 15:30 presentation is the future of work will be colorful okay it will be colorful there will be many different types of flat organizations i dare to predict which all have one thing in common that they thrive on well-trained staff well-trained staff who appreciates autonomy and the ability to participate and in exchange is willing to put up with a burden of being accountable because there's no such thing as a free lunch as you know so being accountable for your actions is part of the equation and that's also why in this color scheme
• 15:30 - 16:00 there's going to be light gray pale gray dark gray black so the traditional organizations are not going to disappear why because of course you know there will always be people who prefer to follow orders and delegate responsibility than be responsible themselves admittedly there's also another reason why traditional organizations will survive and that's because they are superior at one thing and that's what we call super scaling so when we're talking about really large organizations you know you will almost always see that some hierarchical
• 16:00 - 16:30 element will prevail and that's because the information costs just explode when you move to a lot of people so let me just visualize that here if you only think about an information exchange among nine peers okay it takes 36 information exchanges for everyone to talk to one another and you can achieve the same thing in a two-layered hierarchy with just eight information exchanges now talking about this size of organization that's not a problem talking about 10 000 employees you may run into limits so that's why there will be hierarchical elements out
• 16:30 - 17:00 there but within them there will be pockets of flat organizations and that will aside from those be flat organizations autonomous of significantly large size so what i'm trying to say is you know novel forms of organizing will increasingly matter and that is because decentralization can be very powerful and let me stress the can be part here as i said before it's not that they are without problems as a matter of fact they have all sorts of problems jostling for power creating in-group biases what have you but these are problems that can be overcome and once they are overcome
• 17:00 - 17:30 they offer opportunities that other organizations can't i'm sure that the future workers that is you will be able to overcome them so and that spirit more power to you and thank you for your attention you