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Preparing your organization for the boundless potential of AI in the workplace and its impact on jobs.
On the grand scheme of technological advancements, AI has been the festival headline for the past two years and will likely continue to be for the years to come. Already now, we see that frontrunner organizations are scaling their AI efforts for tangible results. In the Deloitte State of Generative AI in the Enterprise Q3 survey, two-thirds of the organizations surveyed (67%) said they are increasing investments in Generative AI because they have seen strong value to date[1]. These frontrunners are moving from Proof of Concept and Pilots to large scale deployments where they see AI value being created. Although improved efficiency and productivity are the most important benefits these organizations highlight, only 4% highlight shifting workers from low-value tasks to higher-value tasks as a benefit. AI is the shiny new instrument everyone is desperately trying to get their hands on, but only 20% of organizations rate themselves highly prepared in the Talent area with respect to broadly adopting generative AI tools / applications. In this article, we aim to make the case for the long-term organizational view on integrating AI across the enterprise - as a step on the journey towards AGI - where the workforce composition can look fundamentally different than today. CIO’s and CHRO’s should work closer than ever before to integrate AI and tech strategy with Workforce planning and strategic change management.
Imagine an orchestra, which represents the enterprise. The musicians are the workers, each playing their part in creating harmonious music, representing the successful operation of the business. The traditional instruments, such as violins, flutes, and cellos, symbolize the familiar tools and software workers have been using for years, like office suites and ERP systems. When introducing new instrument(s) to your orchestra, you still want to ensure that the orchestra has the right balance of musicians and instruments, aligned to the same musical score in the symphony. AI, as a headliner instrument - with the potential capabilities of a human - poses several novel challenges for executives acting as conductors of the orchestra.
AI, as a headliner instrument - with the potential capabilities of a human - poses several novel challenges for executives acting as conductors of the orchestra.
Where Generative AI is a subset of artificial intelligence technology with a captivating ability to create human-like content, Artificial General Intelligence (AGI) is a type of AI that surpasses humans in most regards, across tasks. Although opinions differ, Sam Altman, the CEO of OpenAI thinks AGI can be reached sometime in the next 4-5 years already with an impact far exceeding what we have seen from even Generative AI so far [2].
At Deloitte we advocate for a three-horizon view on integrating AI across the enterprise: The "here and now" use of AI to automate and augment the work already being performed today, the "what comes next" in redesigning today's work through new combinations of human and AI interaction, and the distant future "what if" scenarios for embracing the dynamic interaction of AI and humans to achieve net new work outcomes not possible today. We encourage CIO’s and CHRO’s to together go beyond the here and now and get your start exploring the “distant future”. Enabling and accelerating the journey towards AGI requires strategic and intentional focus, today. This means moving beyond use cases focused on automating and augmenting today's work, to creating new combinations of human and machine interaction to redesign and transform human work for tomorrow and unlock net new value and competitive advantage.
Getting AI embedded into all aspects of your organization will take time. Nevertheless, AI is already truly showing potential to revolutionize human work, reshape business units and the experiences and outcomes that workers and organizations can create. Like Klarna, the Swedish fin-tech company whose AI customer service solution could do the work of 700 FTE’s within a month of release [3], or IKEA who is re-skilling call center workers to become interior design advisors as AI solutions can handle the bulk of customer queries [4]. This is just the beginning and forces the question of when is the appropriate time to start to talk about the human implications and the future of human work – the Human Agenda? Our view is immediately.
Through our holistic AI “lab” series, we at Deloitte recommend embedding the Human Agenda into an integrated approach for AI as an initial step towards AGI, focusing on the long-term business vision and aspiration at the core. A core step in our approach is to assess the potential AI “disruption score” across the business. In an innovative yet practical way we use AI to decode the potential disruption AI can have on each role in the organization so you can take informed proactive steps towards integrating AI into the workforce. As addressed in the Deloitte Human Capital Trends 2024 we ask how we can unlock human performance (human and business outcomes with a multiplier effect on each other in a mutually reinforcing cycle) through harnessing the boundless potential of AI. AGI should be a part of this business vision. Looking at the organization’s vision and aspiration from this perspective accelerates necessary changes to work, jobs, tasks, and skills and even culture and operating model to unleash the potential [5].
In the same way that the orchestra faced disruption through the introduction of the piano or saxophone, AI offers new capabilities and possibilities for innovation and efficiency in the enterprise. Like the emergence of jazz, as a new genre of music, AI can spark improvisation and create a culture of continuous learning and playful learning as new instruments give opportunity for new notes, dynamics and play between instruments – in the corporate world the IKEA example shows how the notion of “work” can evolve. However, integrating this new instrument presents challenge such as fear of the unknown, perceived threat to existing processes, ethical considerations, challenges in coordination, etc. that need to be managed through the vision set by leadership.
In the same way that the orchestra faced disruption through the introduction of the piano or saxophone, AI offers new capabilities and possibilities for innovation and efficiency in the enterprise. Like the emergence of jazz, as a new genre of music, AI can spark improvisation and create a culture of continuous learning and playful learning as new instruments give opportunity for new notes, dynamics and play between instruments – in the corporate world the IKEA example shows how the notion of “work” can evolve. However, integrating this new instrument presents challenge such as fear of the unknown, perceived threat to existing processes, ethical considerations, challenges in coordination, etc. that need to be managed through the vision set by leadership.
Although the AI of today still have limitations on hearing, touch and sight compared to humans, one of the fundamental advantages of AI is that it is not constrained by physical limitations such as the ten fingers of a human hand. Additionally, AI can operate continuously without experiencing fatigue, thereby boosting productivity and facilitating uninterrupted operations. These fundamental features of AI underscore the potential of AI to not only complement but also enhance human capabilities, leading to a more efficient and innovative workplace and more importantly, net new possibilities of work. Indications so far are, that rather than replacing jobs, generative AI augments them, changing the skills and tasks needed to get work done and shifting the focus towards human-centric skills [1], creating new opportunities for workforce development and talent strategies. This is not a plug-and-play scenario; it's more akin to orchestrating a symphony, where every musician and instrument plays a crucial role in creating the perfect melody.
To explore this further, we will look at three aspects of the orchestra:
Introducing AI in the organization is like introducing a novel instrument (that can also take a role as a musician) to the orchestra. On a basic level, as AI replaces manual tasks, we need to think about what competencies people need, what kind of reskilling is needed, and how roles will evolve. Take MetLife, the American Insurance company that introduced AI coaches in their Call center to analyze voice interactions between call center agents and customer with real-time coaching. This is empowering call center agents to enhance their human capabilities, leading to a sense of professional growth and accomplishment as well as increased job satisfaction and decreased stress levels. Call duration times have decreased, and customer satisfaction has increased by 13% [6]. Furthermore, Deloitte has recognized through experience that AI bots can routinely complete 40-60% of customer business queries without escalation to human support, with it even reaching as high as 90% on targeted use cases (Deloitte experiences). The results are there, but long-term value creation requires a decision grounded in the vision around what “work” in a call center will be, and the outcomes that “work” aspires to achieve through net new combinations of humans working together with the technology. Or to continue the metaphor; where, when – and with who - should the leaders organize the orchestra when a new instrument has the potential to create new enticing types of music, never heard before?
The Deloitte Human Capital Trends 2024 call out an ”Imagination deficit”; Only 10% of today's workforce have the imagination and curiosity needed to keep pace with the rapid advancements of AI. Extrapolating the technological advance further, towards AGI, AI could not only function as instruments and musicians, but also as composers, using massive amounts of data to create new business strategies and plans with superior information to the Conductor himself as the leader of the orchestra. This accentuates the significant role leadership has in taking a deliberate approach around the capabilities that people will need when AI takes over manual labor.
The deliberate approach executives need to take revolves around key questions like How will you ready the workforce for AI? Strategize and reskill for augmentation? Or even start from a “zero base”, rebuilding organizational capabilities from scratch? What should change with regards to the organizational design, operation model, leadership capabilities, ways of working and culture? If the lead instrument (the AI technology) ends up taking over other instruments role, you end up having tactical and strategic considerations around 1) How/if to scale down your orchestra 2) Change the composition of instruments and/or introduce new instruments 3) Invest in upskilling your workers abilities or 4) Re-write the entire play to create the musical experience that aligns with your instruments, your strategy and what customers want to hear. And in some instances, old instruments and musicians won’t fit the new melody.
The deliberate approach executives need to take revolves around key questions like How will you ready the workforce for AI? Strategize and reskill for augmentation? Or even start from a “zero base”, rebuilding organizational capabilities from scratch?
Without telling people what their new work in the orchestra will be or how to play in it, the music can end up off-tune. The various organizational elements all have a role in the orchestra and help the orchestra perform. Akin to the musical score and notes in front of musicians in a play, there are specific elements for organizations to follow to repeat their successes, guided by the conductor as the leader. In daily terms this is represented by process documentation, process handovers and how these work with current systems and - or in a more modern connotation; “Work” - how work should get done and led by leadership.
Having a deliberate future ambition around Work, the outcomes it must create, and how it should get done and planned will be critical when integrating AI in the workplace on the path towards AGI. We see various combinations of tasks 1) Solely performed by AI with no human intervention, 2) Task performed by AI with humans “in the loop” and 3) Tasks fully completed by humans, but the commonality is that leadership needs a deliberate approach to them all and their balance. Today, most processes are created with humans in mind or at the center. This will change as the combination of tasks mentioned above shifts. The sum of these changes will alter the melody of the orchestra over time as processes are rewired with AI as the starting point and humans in new, different roles.
We see various combinations of tasks 1) Solely performed by AI with no human intervention, 2) Task performed by AI with humans “in the loop” and 3) Tasks fully completed by humans, but the commonality is that leadership needs a deliberate approach to them all and their balance.
Governance - serving as the overall nomenclature and “rules” on the sheet of music – becomes crucial in creating guardrails, structure, and coordination. Only 23% of organisations feel highly prepared for the challenges Generative AI brings to Risk Management and Governance. On the positive side, 51% are taking action and establishing governance frameworks for the use of GenAI tools/applications[1]. Without strong leadership, direction setting and governance from the conductor, the symphony risks slowly descending into a cacophony over time, with individual off-tune instruments representing silo AI implementations that do not fit into the wider vision, aspiration, and operating model. Furthermore, governance will need to evolve towards increased focus on ethical oversight and accountability, transparency and explainability of AI outcomes as AI handles more critical tasks with less human intervention. The implications can deceive customers and create lawsuits. Air Canada experienced this when a Chatbot went awry and gave incorrect discount information to a customer and was later sued and found liable to pay damages to the customer [7]. The governance frameworks of today need reengineering to not only maximize the benefits of AI-Human collaboration but also to mitigate the associated risks of integrating AI into various functions.
Then, there's collective harmony of the orchestra over time. Less visible, but perhaps more important, it’s represented in daily norms, symbols, language, and actions – in “microcultures” that ensure that the organization repeatedly can deliver world-class music that customers will enjoy. The Deloitte Human Capital trends report 2024 highlights that organizations that embraced “microcultures” are 1.6 times more likely to achieve desired business outcomes, emphasizing the importance of understanding the influence of AI – a new instrument that can also take the role as a musician – on the orchestra and organizational culture [6].
As the rate of AI solutions in the orchestra increase, together with inevitable organizational changes, the dynamics of the organization will change and an active approach to culture is needed. The Conductor plays the essential role in ensuring the right combinations of routines, processes and symbols in the symphony that can elevate the notes on the paper to a symphony where workers and AI jointly elevates performance. Similar to Fisher vs Abbado’s interpretations of Mahler’s symphonies the Conductor has to set the pace and live the expression of the cultural shift this requires.
The Conductor plays the essential role in ensuring the right combinations of routines, processes and symbols in the symphony that can elevate the notes on the paper to a symphony where workers and AI jointly elevates performance.
There is a significant untapped opportunity ahead for Conductors to inspire and create new value for workers to enrich human capabilities and well-being in the organization and in society at large. The right culture can even foster human sustainability that leaves workers with stronger skills and employability, greater sense of purpose, meaning and growth through work. It's not enough to simply introduce AI into the workplace; AI must be integrated across the organization and how work gets done. In short; how the conductor sets the scene for how work, workforce and workplace will look like on the path towards AGI, in an AI powered future. A future where the Conductor leads an orchestra where AI can shine as a leading instrument without taking the sound away from other instruments and musicians, but rather, elevating the musical synergies across the instruments in the orchestra.
In 2024 HC Trends we highlight that 75% of organizations globally plan to accelerate their use of AI in the next five years YET only 13% of workers have had any AI related skills training in the last 12 months [6]. The data is clear, the lightning-fast digital advancements are outpacing the capacity and imagination of many organizations to have a long-term view on the new combinations of machine and human collaboration to realize the boundless potential of AI.
As the Conductor of the orchestra, the executives – led by the CIO and CHRO - will need to make the decisions of the future state of the orchestra (organization) as they see the instruments being used in the latest hit songs. In the context of AI, the focus question has so far mainly been about the use cases: "Which AI use case provide most value to implement?". However, the long-term success of the organization will hinge on a renewed focus on humans that embrace an integrated approach that considers what “work” will be in an AI powered future and how to reimagine jobs, skills, tasks, operating constructs, and culture. To get started on this, we recommend the CIO and CHRO to lead the charge and take three initial steps:
Only with an integrated approach can AI and these innovative technologies truly transform the workplace over time. After all, a symphony is not just about the lead violinist's solo; it's about every instrument and musician interlocked in a captivating harmony where the sum becomes larger than its individual parts.
Sources:
[1] Deloitte US, “The State of Generative AI in the Enterprise”.
[2] TIME, “CEO of the Year 2023: Sam Altman”.
[3] Klarna International, “Klarna AI assistant handles two-thirds of customer service chats in its first month”.
[4] Ingka Group, “AI and Remote Selling bring IKEA design expertise to the many”.
[5] Deloitte Global, “Generative AI and the Future of Work”.
[6] Deloitte, “Human Capital Trends Report 2024”.
[7] BBC, “Airline held liable for its chatbot giving passenger bad advice - what this means for travelers”.
John Eikland | Director Human Capital, Deloitte Norway
Nic Scoble-Williams | Partner Human Capital, Deloitte Japan
Kazufumi Yamana | Specialist Lead Customer AI Hub, Deloitte Japan
Servio Cabrera | Senior Manager, Deloitte Denmark