Is your organisation ready for the

future?
With rapid technological, social and environmental change, boards should
be preparing for the future. We outline the major issues directors need to
consider.

01 December 2018
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One of the most significant changes directors need to prepare for concerns the future of work.
Which tasks will still be required? Who will carry them out, and what skills will they need?
What environments will people work in?

The impact of these changes on governance is profound. The way organisations are governed
must adapt and directors will need to take informed and considered steps to take advantage of
the opportunities presented. Governance must be flexible in its response to the changing
nature of work as well as providing oversight and strategic direction for new ways of
working.

Read more on future-proofing below:

 • Why your board needs to implement a future proofing strategy
• Taronga Zoo takes hold of its future
• Is your future proofing strategy up to scratch?

The impact of the future of work varies across industries, geographies and business models.
To give structure to this complex topic, this guide considers the future of work from three
perspectives — the nature and type of work being done, workforce capabilities and
composition and the physical, digital, cultural and structural environments required to carry
out the work.

The impact of these changes for directors needs to be examined through six lenses based on
the key roles of the board:

• Strategy development
• Allocation of resources required to achieve the strategy
• Monitoring organisation performance against strategies and targets
• Legal and regulatory compliance
• Risk management framework
• Accountability reporting of progress and aligning the collective interests of
stakeholders.

The work

New technologies and shifting consumer behaviours are redefining what work tasks are
required to create value. Manual or physical tasks are still necessary in many industries, but
these no longer require as much human input. Instead, employment is more concentrated in
service-based tasks. As a result, tasks and roles are less focused on technical and mechanical
requirements. Work tasks increasingly require a combination of technical and soft skills to
create value.

Evidence (or data) is becoming the basis of more tasks, particularly those that include
elements of decision-making or judgement. This evidence is complemented by a growing
recognition of the need to look beyond the balance sheet to longer-term value generation.
Many businesses now look to align work tasks to an overarching “purpose” and demand is
growing for companies to operate in a socially and environmentally responsible way.
Five questions to consider

• Have we quantified what work is being done and how it might be affected by
developments in technology?
• How is our data protected against misuse, damage, loss or theft?
• How do we incorporate considerations of purpose into decision-making?
• How do we develop the existing workforce to build capacity in alignment with skills
needs?
• Do we recognise development and use of soft skills in our incentive and reward
frameworks?

The worker

The new workforce includes human and mechanical workers, varying qualifications and
skills, and new models of working.

Automation is one of the most commonly discussed topics in the future of work, but
augmentation better describes the reality. With technology increasingly able to do manual,
repetitive tasks more efficiently, new jobs will be created.

Human workers will focus on higher-value-add roles reliant on skills such as emotional
intelligence, judgement and empathy — and their ability to do so will be enhanced through
augmentation. Individuals and workplaces will need to invest in continuous learning, rather
than “set and forget” qualifications and ad hoc training.

Contingent work, in particular, has become more popular. Simultaneously, workplaces are
becoming more diverse across gender, age, ethnicity and sexuality.

Five questions to consider

• Are frameworks in place to support workers as more machines come into the
workplace?
• What external education/technology/advisory partners can help support the transition
and sustainability of this new workforce?
• How will we maintain workforce culture as more independent contractors begin to
replace the traditional full-time workforce?
 • Do we need a workforce advisory panel or other mechanism to give insight to the
board?
• Have we defined our current skills needs and forecast how these might change?

Top 10 skills in 2020

• Complex problem-solving
• Critical thinking
• Creativity
• People management
• Coordinating with others
• Emotional intelligence
• Judgement and decision-making
• Service orientation
• Negotiation
• Cognitive flexibility

The workplace

The physical, digital and organisational context of work occurs includes facilities,
infrastructure and technologies, as well as components such as culture and structure. Several
of the trends influencing the form of workplaces have been evolving for some time. For
example, most large organisations already recognise the costs of silo structures, and remote
working has been on the rise for over a decade. It’s also now widely accepted that leaders
who display personal power rather than just “pulling rank” are more effective in their roles.

Other trends, however, are still emerging. With consumer preferences evolving rapidly, there
is a new focus on organisational agility, and the ability to react quickly to external change.
Many of these trends pose challenges for business. Boards are typically not designed for
rapid response and remote workforces can make it more difficult to monitor performance,
security and health and safety.

However, directors who successfully embrace future workplaces can foster more innovation
and informed risk-taking. It can mean better staff engagement and a stronger pipeline of
future leaders.
Five questions to consider

• How do our policies, processes and systems encourage or discourage silos in the
business?
• Are our high-level strategic goals distributed across the performance framework in a
way that incentivises collaboration?
• Is innovation on our board agenda and do we have the data we need to discuss it?
• How do we measure innovation and is it incentivised and rewarded?
• What is our attitude to failure as a business?

Access the full report here.

Five trends for the board agenda

1. AI and outsourcing

The current trend of outsourcing labour to other parts of the world may reverse. With
new AI developing each day, demand for cost-effective labour may fall. Freight costs
and proximity to other parts of the supply chain may drive decisions about where to
locate workforces. These technologies are most effective when they complement, not
replace, humans.

2. Human capital

Human capital is a core asset for businesses and boards will need to recognise its
value. Only one in 10 businesses nominate staff as a top priority for future planning.

Retraining enhances a company’s public reputation and makes economic sense. At the
2017 World Economic Forum, 80 per cent of CEOs investing in AI pledged to retrain
existing staff.

3. Purpose

Purpose-led businesses are more successful, more likely to grow in revenue and
expand into new markets. Directors should seek to define, codify and monitor the
impact of business purpose.
 In 2017, 88 per cent of Australasian businesses said practising social responsibility
helped them build their reputation; 78 per cent said it helped brand positioning.
Institutional investors expect companies to have a solid long-term vision. Businesses
that don’t pay attention to community expectations may be penalised by investors,
consumers and governments.

4. Wellbeing at work

Boards must consider how their decisions impact employee wellbeing, position it as a
performance issue and make resources available to managers. Businesses with the best
wellbeing programs see fewer sick days per year and higher productivity.

5. Move the metrics

Directors should consider new ways to align the organisation to its purpose and social
and economic impact and check whether traditional metrics impede innovative
approaches.