Reframing the Future of Work

When it comes to the future of work, many organizations are missing the point. Executives are creating new future of work initiatives every day, but to what end? Many of these initiatives suffer from being too reactive. For instance, managers may feel pressure to reduce costs by 20%, or the board might ask what the company is doing with machine learning and AI, but there are bigger and better goals leaders can aim for, and it’s a critical time for organizations to focus their efforts. Imagine the benefits of a future of work strategy aimed at generating more value and meaning for the customer, the workforce, and other partners, and greater earnings for the company over time.

Yet, far too many initiatives are focused on incremental gains or efficiency-boosting activities. Robotic process automation, AI, and machine learning are treated as shiny new tools, ones that companies can implement for cutting costs and doing work faster and with less human labor. When organizations subscribe to this narrow perspective, the work of tomorrow will be the same as the work of today.

The real opportunity presented in the future of work goes beyond doing more of the same labor faster and cheaper. The big opportunity for companies is to expand notions of value beyond just cost to the company. Companies have additional levers to explore new sources of value and meaning in order to remain competitive amid rapidly changing market dynamics.

To succeed at this vision of creating greater and varied types of value, organizations must shift in two ways. First, moving beyond cost as a driver to value and meaning expands the kind of impact to aim for. Second, by shifting focus from company to customer, workforce, and company, companies can expand the scope of impact. This framework (see “Future of Work Drivers”) illustrates the drivers that guide decision-making and action (for example: How do we redesign work and workplace? How do we leverage alternative workforce arrangements? How do we implement AI?), and help determine how much time, effort, and attention is directed to particular future of work strategies.

Future of Work Drivers: Balancing Cost, Value, and Meaning

Today, most organizations are focused primarily on costs for the company, which puts them in the bottom left section of the Future of Work Drivers framework. We propose that there is untapped potential in moving both vertically and horizontally, to consider not just costs, but value and meaning, and shift from a company-centered perspective to one that considers customers, the wider workforce, and other stakeholders as well.

This isn’t to say that companies must balance all of these drivers and perspectives all the time — to do so would be unrealistic. But organizations should recognize the broader range of actions that may affect the customer and the workforce in ways that ultimately drive financial results for the company. Customers drive economic markets, while workers drive talent markets, and companies must adapt to each. Future of work strategies and the benefits derived will be a function of costs, value, and meaning creation. Organizations focused on implementing technologies to create newfound growth, value, and meaning will be the front-runners in the future of work.

Let’s examine this new approach from the three future of work drivers.

Cost. From the company perspective, cost means: How do we use the future of work as a way to operate faster and cheaper to the benefit of the organization’s bottom line? The focus on faster and cheaper might support a strategy where the customer is also exclusively focused on cost. By assuming the customer cares only about cost, this becomes a game of diminishing returns, where today’s gains are quickly competed away. Within these types of companies, the cost-focus and scarcity mindset extend into the workforce, where individual workers seek to reduce their own effort and time against a given amount of work, not necessarily to the benefit of the company. Decisions are top-down, and workforce interactions are transactional and unlikely to lead to new opportunities or innovations.

Focusing only on cost for the company, customer, and worker is a zero-sum game. As discovered in previous organizational performance research, you don’t drive profits by cutting cost. Instead, companies should find ways to earn higher prices or higher volume, which requires additional levers to be pulled. As decades of research suggest, solely competing on costs will leave organizations wanting in the future of work.

Value. Value is an additive driver that seeks to expand opportunities. For companies, value often means revenue growth through entering new markets or expanding margins with less price-sensitive customers. However, by considering what might drive value for the customer by answering key questions: What needs aren’t being met? How might those needs evolve or new ones emerge over time? Companies may uncover ways to increase loyalty and strengthen the customer relationship. For many in the workforce, focusing on value to others, rather than the tight prescriptions of faster or cheaper, also opens up space to work differently and be less transactional and more collaborative.

From the perspective of the workforce, people are afforded additional nonmonetary value when they are given opportunities to learn and develop new skills that will help them advance in their jobs, now and in the future. Consider the financial services company that made a deliberate decision not to aim for reductions in head count as it transformed its back-office finance and IT functions. Finance staff were given tools to automate and streamline much of their current work (data collection, metric calculation, report generation), and they were encouraged to use freed-up time to engage with the business partners they supported to identify more useful metrics and valuable insights to support decision-making. At the same time, the customer-facing workers were trained to be better at understanding customers and finding ways to better serve them over time.

These steps led to major shifts: The company changed sales targets, shifted retail staff from pushing products to building customer relationships, and equipped loan officers with tablets so that they could serve customers remotely. By changing how they worked, rather than reducing jobs through automation, this organization created more engaging work for their employees. This approach allowed the organization to solve more interesting problems, which in turn led to better engagement than previous roles focused on routine reporting.

Meaning. This is an aspirational driver that seeks to support others in making a difference that matters and motivates people to continue to do better. How do we define this driver for companies? To start, it’s about more than creating a qualitative mission statement or purpose. Also, it goes beyond corporate social responsibilities, and doesn’t necessarily equate to doing something “good” or socially desirable. It starts by asking: What are the aspirations of our customers, employees, and partners?

As a future of work driver, meaning refers to connecting the work back to a deeper understanding of the participants involved — customers, workers, and other stakeholders — and the bigger impact the work will have on helping them achieve their aspirations. Wharton management professor Adam Grant found call center employees were 171% more productive when they had the opportunity to spend time learning about the impact their services had on end customers. In this instance, the simple act of putting a face to the name helped create meaning in an otherwise routine job. At the same time, meaning also derives from the day-to-day work: Am I using my strengths and capabilities? Am I working with people I respect to deliver something of value?

Understanding and driving meaning is critical for companies because it is a key motivator and helps sustain effort over time. If you can articulate a purpose that matters across stakeholders, you will get an impact, but if you can also tap into the purpose and meaning for the workforce and connect to what matters for the customer, you’ll get an amplifying effect. By seeking a better understanding of the underlying aspirations and sources of meaning for the customer, companies can also more effectively anticipate the evolving needs of the customer. The catch here is that meaning is more nuanced than cost or even value — it cannot easily be pushed; the individual worker or customer will ultimately decide if something is meaningful. The goal for business and talent leaders is to explicitly consider what meaning can be derived by customers and workers based on the design of products, services, and jobs too.

The Imperative to Move Beyond Cost

Organizations are wired for short-term thinking with outsize focus on next-quarter results. Consequently, much of employees’ attention and resources goes to incremental, efficiency-boosting activities. Given how few organizational leaders feel ready for the longer-term impact of the future of work, many continue to pursue reactive digital strategies — either executing a few visible but symbolic initiatives or bolting new technologies onto existing processes. For many organizations, these fragmented efforts leave much on the table — for their customers and workforce, as well as the company itself.

So, what can leaders who feel trapped in short-term approaches do? We recommend they begin by zooming out. Zooming out means focusing on the broader, long-term forces that are reshaping our global economy and providing a context for understanding how work is likely to evolve. Leaders can develop a shared understanding of how these forces are likely to affect their own markets over 10 to 20 years and a vision for how they will succeed in that future. This can help them look beyond the immediate, see the potential opportunity on the horizon, and set better strategies anchored in the long-term. Considering the longer-term can help pull us out of the narrow view that work is essentially static. This in turn allows us to rewire our thinking about near-term initiatives — What will help us develop the capabilities needed for the zoom-out vision? — without falling into a pattern of introducing incremental, reactive strategies. By utilizing the various dimensions outlined in the future of work drivers framework, leaders can help focus, and even accelerate, near-term initiatives to get much greater impact.

As market dynamics and the business environment become less stable and predictable, adopting this broader, more inclusive understanding of how cost, value, and meaning drive performance becomes an imperative. Those stuck in a cost focus will find diminishing returns with little upside, and the technologies defining the future of work will deliver one-off performance improvements. Ongoing cost reduction is an essential part of operational strategy but as our and other’s research shows, sustainable business value is primarily a function of market differentiation and revenue and market share growth.

The dynamic nature of the future requires us to move behind the one-size-fits-all approach to strategy and open our eyes to the possibilities of achieving aspirations that were otherwise impossible. Using the two dimensions of this framework, leaders have the potential to develop a broader perspective of the future of work that can help define near-term initiatives that will have greater impact. Further, they can avoid the risk of spreading resources too thinly across too many initiatives with only marginal impact.

There is no launch date for the future of work. Organizations must be fluid and flexible for adjusting to the current and future impacts of emerging technological and economic forces on the way we work, organize, and compete. However, by zooming out to gain a broader understanding of the opportunities ahead, leaders can better define the series of stages and initiatives that will make up the journey. Companies will glean more from the near-term initiatives they undertake, and leaders can make sense of the many activities and efforts underway. The future of work is human-driven, and it is up to us to set our sights on the future we want to create. So, to what end will you start designing the future of work in your organization?