Issue 12 : Management in the Digital Age
... and its obesity problem
Back on track today after an eventful few weeks. I’m really happy to be writing this and hope you like this weeks’ discussion. As I mentioned in the recap Issue a couple of weeks back, this Issue is about a thought I’ve have had for quite some time. In fact, if I’m honest it started some time in the 1980s. I was on a day trip from school visit to an automated car assembly line in the West Midlands in the UK. We were asked to think about how automated manufacturing was likely to change the workforce. But I couldn’t stop thinking about how … well, let’s get in to that in this Issue.
The technology that changed everything
Since man started building things to sell for profit, he’s found more ingenious ways to accelerate the task, which in turn generates more revenue, better profits and larger sales distribution. In early manufacturing more people meant more productivity, a simple equation that brought immediate returns. The mills of the north of England are testament to that simplistic philosophy, as the mills grew bigger so did their output. Their slow automation during the Industrial Revolution and the introduction of technology like the Multiple Spindle Jenny (invented in 1764) increased the production capacity of a single worker. Richard Roberts’ power loom first appeared in 1830 and provided a semi-automatic loom that took productivity even further. By 1894, even this loom had been modified to become almost fully automated with extra functionality invented and tacked on.
As technology advanced, we were able to design and build human replacement robots to assemble products. Some of the most revolutionary of the time were semi-automated car assembly lines like the one I visited in the 1980s. They required less manual staff and more skilled workers to operate, control and optimise the robots that were, in place of humans, picking things up off the supply rack, positioning and finally welding.
Welding robots in a Ford plant in Germany circa 1980 - Source CNN
We see here the first shoots of my argument; semi-skilled workers have all but replaced skilled/specialised workers to operate the machines.
These types of robots were installed at a cost of around $100K each but had a long lifetime and were able to work shift hours much longer than humans, allowing an amortisation over just a few years, despite high maintenance costs. Unimation was the first company to commercialise industrial robots in 1962, the fruit of work from John Devon who in 1954 patented the first designs of what were then called Programmable Transfer Machines.
Robots were quickly popularised in Europe by the likes of ABB Robotics and KUKA Robotics in about 1973. Use cases at the time included bending, polishing and grinding pipes. They were particularly useful in cleanroom environments where they could operate without all the constraints that are placed upon humans to prevent dust ingress. ABB’s robots were the first to be controlled by electrical microprocessors (see Issue 2) but soon the entire robotics industry caught up, producing fully software-controlled robots in the early 1980s.
Advanced Manufacturing Robots
Despite their having many successes in manufacturing and other manually repeatable tasks, robots have had and continue to have notable failures. One that comes to mind is the beautiful plant Steve Jobs had built to assemble his new computer, called the NeXT, in Palo Alto, a stone’s throw away from his old employer Apple.
Just take a look at this promotional video produced by NeXT, entitled The Machine to Build the Machines.
NeXT’s Surface Mount technology Industrial Robots in action - Source: NeXT
All very impressive, but multiple failures and the personal capriciousness of Steve Jobs rendered the plant inefficient with it not fully living up to its promise of beating the Japanese plants of the time. Declining sales hit the final nail in the coffin of the futuristic plant without it ever being tested to capacity in real life production. It did show however, that it was possible and in a few short years robotic manufacturing plants became virtually fully automated. This had the effect that jobs in the lower-skilled bracket were displaced and abandoned, with high skillsets required to operate and maintain assembly lines.
However, in typical Apple fashion the latest generation robots used, not in the building process, but in the destruction and recycling process, are second to none in the world and subject to study by academics and other businesses researching how to better recycle modern electronics goods. This article at CNET talks about it in detail.
Software Is Eating the World
In the Wall Street Journal on August 20th in 2011, Marc Andreessen of Andreessen Horowitz wrote an essay entitled Why Software Is Eating the World:
More and more major businesses and industries are being run on software and delivered as online services — from movies to agriculture to national defense. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures. Over the next 10 years, I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.
Why is this happening now?
Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale.
As humans, we’ve gone from fully manual processes being developed and standardised, moving through semi-automated systems aiding humans perform tasks more efficiently and effectively, to semi-automated robots replacing manual tasks right up to today’s fully software driven robots eliminating, in many cases, the need for humans in the manufacturing process. The next level of automation is in the use of Artificial Intelligence (AI).
At the two levels top and bottom the source components and finished products have essentially stayed unchanged — of course the products produced today have no relation to those products hundreds of years ago — but the fact that humans had stuff and made stuff has not changed in thousands of years. The layer in between, the manufacturing layer, has conversely seen change upon change as technology has developed. I’ve attempted to depict this in the diagram below:
The Change in the Manufacturing Layer
This change in manufacturing layer has brought about a change in company structure. Low-skilled low-pay jobs are being replaced by highly skilled jobs paying higher salaries. But it’s not just salaries, responsibilities have also increased. As a line manager for a spindle maker, the responsibility was limited to the line and the workers occupying it. In the new plants, managers are responsible for much more and decisions have more implications for both productivity and efficiency, with knock-on effects that may cause the loss of hundreds of thousands of dollars. And, being that there are no low-skilled workers anymore, everyone has essentially become a manager. This is what I termed Management Obesity, a factory with only managers and no workers.
We’ve gone from a pyramid structure of management and workers to one with a portlier girth.
The old management structure versus today’s
It’s not limited to only manufacturing either. In much of the service industry, offices have become more and more staffed by managers of things and processes and not necessarily people. Many of today’s tasks in modern offices didn’t even exist 5 years ago, Marketing, Social Media Manager, Community Manager, Technical Officers, Environmental Departments, I could go on. These jobs often involve skills that are, as we can see in the table below, ripe for replacement by AI.
Potential for automation - Source: Fortune.com (McKinsey&Company)
But it’s not all bad news. Truly human skills are still desired, and it is in these that you need to develop alongside your Digital Transformation process as referenced in the table of desired skills and threatened skills in the AI age.
Wtih thanks to JF Nantel, ESSEC Business School
It’s been a long-winded way to say that today’s Management Obesity is about to be disrupted by AI and it is the management layer that will take the brunt of the change. With much of the manual labour already removed, the next layer up in the stack is the natural target. And because software is eating the world, anyone who is not developing, supporting or otherwise facilitating the use of software will find it increasingly more difficult to find employment in the future. This is what I saw back in the 80s.
Side Note - Issac Asimov’s Robot Laws
The science fiction writer and scientist Isaac Asimov invented what he termed “The Three Laws of Robotics”. A novel entitled “Runaround” introduced the rules and they subhave subsequently been used as underlying themes in all of his robotic tales, like the successful film adaptation “I, Robot”.
First Law: A robot may not injure a human being or, through inaction, allow a human being to come to harm.
Second Law: A robot must obey the orders given it by human beings except where such orders would conflict with the First Law.
Third Law: A robot must protect its own existence as long as such protection does not conflict with the First or Second Laws.
Player Piano, Kurt Vonnegut. It’s a novel about this future, I’ll let you discover it.
Speaking of robots, I couldn’t pass up on this article that clearly articulates how, in some cases, robots can have an extremely positive effect. Sit back and enjoy the article.
A thoughtful piece about the impacts of technology and specifically AI in going economies. Worth your time.
SightLine is a really good resource to learn about Internet Infrastructure related news. This article is a great report on the recent ARIN meeting held in Barbados on the 10th to the 11th of April 2019.
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