/ Spring 2019/Issue 94

How robots will transform the C-suite

Senior executives need to lead a workforce that seamlessly blends human talent and automation.

A version of this article appeared in the Spring 2019 issue of strategy+business.

Robots will play a critical role throughout the modern workforce. A recent PwC study (pdf) of 29 countries estimated that on average, the proportion of jobs at high risk of automation will be roughly 20 percent by the late 2020s, and 30 percent by the mid-2030s. For employees around the globe, such shifts could mean preparing to share space with robots as colleagues or learning new skills as robots take over the most repetitive or dangerous tasks.

When we talk about robots, we are essentially referring to two kinds: industrial robots and service robots. Industrial robots are found in factories or work environments that use assembly lines or similar approaches to build products or pick and pack orders at a fulfillment center. Service robots stand in for humans and are not necessarily machines; in certain cases, they are applications of artificial intelligence (AI) or robotic process automation (RPA). Both varieties of robots will be transformative for many workers, depending on their industry and role.

The introduction of robots into the workforce will also reverberate in the C-suite. Not only will top executives lead the charge for automation in their business operations, but they also must be prepared for their own jobs to change. Heading up a hybrid workforce of people and robots will require a different type of leadership, one that blends quintessential human skills such as empathy with a tech-savvy and data-driven mind-set. Moreover, new roles may emerge, such as the chief robotics officer or leaders in charge of technology ethics.

How will functional leaders manage a hybrid workforce to ensure a harmonious existence of human and robot workers?

Given these urgencies, C-suite leaders need to start planning a five- to 10-year road map of their career and organization today. Senior leaders must objectively assess not only their own strengths, but also where they have knowledge or experience gaps — areas where they need to build new skills. A recent PwC study (pdf) found, as one might expect, that those in senior management roles are less likely than, for example, those in factory or clerical roles to be entirely displaced by automation. But the nature of leaders’ work will undoubtedly undergo major shifts. These shifts will open up more time for forward-looking activities; executives will be helped further here by the presence of increasingly sophisticated data. Meanwhile, leaders in customer-facing roles need to figure out how to best serve customers, taking advantage of automation to provide customized products and services on demand.

Functional leaders must consider the following matters as they define their role in the age of robots: What actions will they need to take now to prepare for the ways that robots will transform their industry and business? Structurally, what has to change in the organization? What type of people do they need, how will they work together, and what will their roles and responsibilities be in this new world? How will functional leaders manage this hybrid workforce to ensure a harmonious existence of human and robot workers?

Chief executive officers. Responsibility for sound management begins at the head of the C-suite. CEOs will need to provide their company’s vision and leadership, driving the change and guiding the company through its digital transformation. CEOs will also need to demonstrate personal commitment to this effort, holding themselves and others accountable. And, with respect to robots and related applications of AI, the chief executive must make sure the board of directors has the expertise to oversee proper governance and guide decision making. CEOs will also be involved in helping foster a culture in which humans and robots coexist with trust, respect, and dignity.

Chief financial officers. CFOs will have to embrace this change. At the same time, they will have to keep their eye on whether the investment in automating finance-related tasks — and tasks in other departments as well — is paying off. CFOs will oversee compliance activities and take steps required to build trust with regulators and investors by ensuring that financial output from automated systems can be explained, and the risks of automation can be mitigated. CFOs in the robotics age will need to understand both physical and digital relationships (for example, a relationship with a third-party vendor that uses robots to fulfill its service agreements) and put necessary controls in place.

Finance leaders will oversee the transition as robots take on more and more back-office functions — such as trade settlements and daily trade reports — freeing people to grapple with high-level analysis and decision making that add value rather than ticking off to-dos. CFOs will need to ensure that people are able to build the automation, interpret results, and maintain control.

Chief operating officers. COOs will play a key role in managing the transformation to a human–robot hybrid workforce. They must close any gaps in their knowledge of the technology as they develop a keen sense of how the changes are affecting the business.

Specifics may differ by industry. In manufacturing, for example, automation’s primary value comes from creating capacity, lowering costs, improving safety, and injecting the manufacturing environment with flexibility and agility. Automation should not be done for its own sake. COOs should incorporate robotics and AI in line with an overall digital strategy. Investments in automation must have a clear role in reshaping the manufacturing footprint and streamlining the supply chain, which may also involve technologies such as blockchain and the industrial Internet of Things.

Chief human resources officers. CHROs will also see their role greatly affected by robots. Like their C-suite counterparts, these leaders will need to expand their skills to succeed. A recent PwC survey of business and HR leaders found that 41 percent of HR executives are confident that their departments are up to speed in advanced technologies, but only a quarter of other business leaders have similar confidence about their HR departments.

In addition to increasing their technology acumen, HR leaders must address a number of cultural issues, including how best to manage robots and train people to do the same. HR leaders also need to assess their employees' current capabilities, with an eye toward upskilling and re-skilling. And at the same time, they have to ensure that future employees are being adequately educated and trained to enter fields that look different today than they will look in five or 10 years. In other words, leaders need to consider the skills their people have now, as well as the ones the company will need to recruit moving forward.

Most important, HR and talent leaders have to embrace the idea that in the new world of automation, it’s not the jobs they need to protect as much as it is the people. It will be up to these executives to help employees understand how they’ll benefit from automation in the long run, while also developing the leadership capabilities of managers so they can effectively guide employees through the changes ahead. They must encourage employees to embrace the idea that automation will help make their jobs more fulfilling — and make those employees even more valuable to the company.

Chief marketing officers. In this environment, marketing will be seen as less of a cost center and more of a source of revenue. This has critical implications for the CMO, whose role will become increasingly driven by data analytics. Customers will expect to have the ability to personalize products and content, so in sectors such as retail and media, marketing leaders will work closely with sales to be sure they can deliver on customer demands. Advanced analytics — performed mostly by robots — will give executives more time to plan product road maps and set strategy.

Chief information officers, chief technology officers, and chief digital officers. Finally, no discussion of how the rise of robots will impact business leaders would be complete without addressing technology executives. CIOs, CTOs, and CDOs may in some companies and industries be joined by CROs, or chief robotics officers, who will work closely with finance executives as they navigate a new landscape of risk and compliance. Tech leaders will have a lot on their plate: cybersecurity, data management and analytics, and the myriad ways that automation technologies will impact all parts of the business. They will need to shift their focus from managing cost to generating revenue. And they have to collaborate more with tech, robotics, and AI players and startups in order to enhance infrastructure and up-skill IT capabilities.

 
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It’s also possible that we will see convergence of these various tech leadership roles, with some expanding and some being absorbed into others, as teams and functions become more deeply integrated.

As with all business transformation, companies will not integrate automation overnight. However, given the pace of adoption, the C-suite has to adapt as emerging technologies quickly gain prominence and scale. If you, as a senior leader, want to come out ahead, you should start discussing these changes with your fellow functional leaders today to lay the groundwork for your long-term strategy.

As you begin these difficult conversations, don’t lose sight of your ultimate purpose; recognize how the decisions you make today will be perceived tomorrow. It’s all too easy to allow data-driven thinking to overshadow commitment to purpose, and leaders will need to be proactive about incorporating both ways of thinking. The reality is that your workforce will integrate robots soon if it hasn’t already — and if it hasn’t already, you may be falling behind. Are you prepared to guide your people through this transformation?

Author Profiles:

  • Stephanie Hyde is a partner with PwC UK. She is the global clients and industries leader at PricewaterhouseCoopers International Limited.
  • Wilson Chow is a partner with PwC China. He is the technology, media, and telecommunications (TMT) industry leader for PwC’s global network, and is also the TMT industry leader for the firm’s China and Hong Kong practice.
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