Why Timeless Principles Outlast Transient Technologies
While many organizations are chasing new technologies and applications, they may be losing focus on the core elements of a successful workforce, like employee engagement.
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When I think about the year that just was, my mind immediately turns to UBS Group.
UBS is one of the world’s oldest and most successful financial institutions. Founded in my home base of Zurich, UBS has always been a forward-thinking organization and a model of innovation.
So, it was not surprising that UBS was among those financial institutions to launch an automated asset allocation solution to serve its high-net-worth clients. The UBS Robo-Advisor debuted in 2016 with great expectations in an industry already experiencing major disruptions from automation and Artificial Intelligence.
Less than two years later, however, the UBS Robo-Advisor is no more.
UBS discontinued the service this past year after determining that it had “limited short-term potential.” The proprietary technology behind Robo-Advisor was sold to another firm. UBS has not said it is turning its back on AI solutions, but it is taking time to regroup and find an application that is more aligned with its customer base.
I believe that the decision to set aside automated asset allocation says a lot about the maturity of UBS leaders.
The investment bank sector has certainly moved quickly to embrace new ideas and technologies. But as the sector experiences growth challenges, it is just as important that these banks promote a culture of “productive mistakes.”
In other words, they need to look for new ideas, technologies and paths forward. And if things don’t work out, they need to have the courage to take a step back and regroup. Organizations that cannot tolerate productive mistakes will ultimately kill innovation and progress.
Although billions of dollars are being managed worldwide by automated asset allocation applications, it is hardly a perfect solution. Many financial institutions would admit that, while it’s a good source of basic investment advice for less complex portfolios, robo-advisors are not for every investor.
The UBS story highlights one of the stories of the year for me: the increasing risks faced by businesses as they try to sort out technology fads from genuine solutions.
More than ever before, I think business leaders seem motivated by fear of missing the next great wave of technology and being left behind as competitors find and deploy some magic bullet.
Given that the upfront investment in this technology is so immense, and that strategic missteps can have dire consequences, the ability to sort the winners from the fads has fast become one of the most important skills for business leaders today. Rushing too quickly into a bad decision can have catastrophic consequences.
Fortunately, business leaders are showing they have the capacity to sort the fads from the real winners in other areas as well, including avoiding the roller coaster of emotion that has surrounded the issue of cryptocurrencies.
Just a year ago, cryptocurrencies like Bitcoin were all the rage, and businesses of all kinds were looking for ways to cash in. Today, most investment analysts and observers believe the Bitcoin fever is over.
Axios, a highly regarded newsletter, recently reported that there had been a precipitous decline in the use of terms like “blockchain” or “Bitcoin” in earnings calls and presentations by executives from S&P 500 companies. The theory was that there was so much hype around cryptocurrencies that most publicly traded companies wanted their investors to know they were trying to get in on the leading edge of a new technology.
By Q4 of 2018, however, the crypto gold rush seemed to be waning. Many of those individuals and organizations that rushed into cryptocurrencies early and often were now reporting enormous losses. “The hype,” Axios reported, “was just that.”
As I traveled the globe talking to our clients and business leaders from a wide variety of industries and sectors, I certainly heard my fair share of commentary about AI and cryptocurrency. It’s hard not to get drawn into the hype and excitement of a new and not entirely understood technology.
But interestingly, I also heard a lot about issues that are very traditional in the human capital field—like engagement.
In most regions of the world, there is a critical shortage of talent. The United States continues to experience a historic shortage of skilled workers. In fact, the U.S. Bureau of Labor Statistics reports that there are one million more job openings than people looking for work. That is a dynamic many of us in the business world never thought we’d have to contend with.
When I talk with business leaders, I hear more and more about how they can’t find qualified people to fill jobs. And that, as a result, they’re afraid to let anyone go. They want to know what they can do to keep their best people at a time when talent is mobile, and the demand for skilled workers has never been as intense.
In other words, they want to know how to keep their workers engaged. Not only to retain talent, but to boost productivity.
It’s telling that even in an age when we are obsessed with the future of work and spend so much of our time discussing the potential for machines to replace human beings, we are still trying to figure out the best ways to engage our employees.
The big concern for me is that, while many organizations are chasing new technologies and applications, they may be losing focus on the core elements of a successful workforce, like engagement.
Engagement is necessary to create effective, accountable leaders and a productive workforce. It never goes out of fashion, and although there are always new theories and updated practices on how to build engagement, there is no way to be successful without committed, motivated employees.
Technologies come and go at breakneck speed. To be successful, we definitely need to be able to embrace and test those technologies that can improve what we do. But we need to be careful not to ignore the core, timeless principles of a successful, productive workplace—principles like engagement and accountable leadership.