Why Companies Don’t Need Knowledge Workers Anymore

[michael_rander]

The days of the knowledge worker are coming to an end. As businesses are gearing up to handle a mind-blowing amount of information, the sheer amount of data, the speed at which we need to process it, and the way we need to act on it to stay competitive is vastly surpassing the ability of traditional knowledge workers. For years, they have gathered information, analyzed it, disseminated it, and enabled organizational decision making, but the future of work is rapidly evolving as new technology emerges. And the job roles that cannot fully embrace and adapt to these changes are quickly becoming obsolete.

When Peter Drucker  established the concept of the knowledge worker, his foresight that information-driven employees would be the key to the future development of successful and innovative companies was spot on. In fact, it still holds true today when you consider that relevant, actionable information will remain the essential competitive parameter for businesses of the future.

What has changed since Drucker first formulated this concept is the growth of data, which exceeds a volume that any given group of employees can possibly analyze on their own. At the same, global businesses need to consistently react in real time. So while the underlying construct of the knowledge worker has been exceptionally important and valuable, companies now demand a new type of employee that can replace the knowledge worker and enable business decisions in the moment.

Enter the digital worker

The digital worker assumes a role enabled and driven by technology. With anytime, anywhere access to actionable, live data in a hyperconnected economy, the benefit of running a Live Businesses can be realized, where internal and external factors and influences are acted on exactly when needed for maximum competitive advantage.

Digital workers can bring a new level of operational speed, flexibility, and insight, which, in turn, frees up time to take on new responsibilities in the organization and to become a critical resource for decision making, learning, productivity, and management. From an executive perspective, this also provides an opportunity to delegate strategic decision making throughout the organization; reduce organizational bottlenecks, and complexity; and increase time spent on innovation.

Whether you are a knowledge worker and run an organization that employs a few, now is the time to consider their impact on overall goals and transition them into digital workers. If not, your competition surely will.

To read more on the major trends affecting the future of work and the impact of the digital worker, see my white paper on “Live Business: The Rise of the Digital Workforce.”

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This blog originally appeared on digitalistmag.com

[Sharathmg]

Hello Michael,

Brilliant!

You are really highlighted the shift in the nature of work in a tangible manner.

Regards,

Sharath

[michael_rander]

Hi Sharath,

Thanks much - I am glad you enjoyed the blog.

Cheers,

Michael

[former_member186576]

Let the time prove the accuracy of this forecast.

[VeselinaPeykova]

I can only partially agree to that.

If you take out the analysis of the data and the critical thinking associated with that from what Digital workers do, then why you need them at all?

Somebody or something (probably some clever person wrote the algorithms) provides him with that prognosis and he uses it to make a decision. The algorithm can be really good or not (especially in cases when you don't have sufficient data yet), this is not the point.

If a decision is based on prognosis, without somebody evaluating and adjusting them when needed, then you can replace that Digital worker with a script, this is so much cheaper.

[Colleen]

In addition to Veslina's point... won't you still need the knowledge worker to do the original analysis and create the models for the digital worker to use?

I get the idea is to (and HANA helps this), shift working attitudes from analysis and preparing to on-the-fly strategic decision making.

The bigger questions is how easily can the workforce transition from being knowledge workers to digital workers?

I sat in a CIO forum one time talking about changing the desktop/network admin teams to outsourcing to managed services. The diagram showed the team would no longer do the nuts and bolts work of troubleshooting and analysis but instead focus on client relationships, strategic thinking, etc. My initial thoughts was what a completely different, unrelated skill set. There is no way you can take that type of worker and overnight turn them into an account manager - at least the majority of the people won't transition.

It will be interesting if this prediction is right that the person who is used to sifting through information and disseminating it can trust the analysis given to them in a dashboard without the underlying detailed they are used to living in.

At the same time, there are still plenty of companies out there operating like they are in the 1990s yet to embrace dot com boom. I doubt they have too many digital workers or are close to starting their digital transformation journey to the digital worker.

[michael_rander]

Thanks for your comment Veselina -  and the question if we take analysis out of the equation do we need workers at all is a great one.

For some jobs, an algorithm may indeed be able to process whatever data, go through any number of scenarios and make a decision based on the script and yes that has a human consequence on jobs. My point is though that there is still a need for human decision-making in a lot of roles where we cannot script or predict all the possible outcomes. What the digital worker does is having all available data at the fingertips which allows for that virtually instant decision making and that is a step forward towards a truly live business. If e.g. you are project managing a large IT implementation project, and have instant and live access to your total HR allocation and performance, your 3rd party vendor supply chain, and predictive financial impacts of any changes in end-product, timeline or resources, you can make decisions that not only optimize the overall timeline and performance of the project, but also ups transparency and stake-holder satisfaction with the project.

I am not suggesting that critical thinking goes out the window, but rather that speed of information is a critical competitive differentiator, and we cannot stem that trend. As such the digital workers are at the forefront of making strategic decisions for their companies, and what distinguishes them from the knowledge worker is their ability to use technology to achive that competive edge.

[michael_rander]

Thanks Colleen for your comment.

No doubt that it will be a transition for a lot of people and for a lot of companies and knowledge workers are not dissapearing overnight. There are indeed companies that are still far behind and the rise of the digital worker may be the last thing on their mind.

However, I would argue that it is still a discussion worth having with even the most lagging company. We are currently doing a study of 4,100 executives and employees around the world entitled Leaders 2020 and while not published yet, I can tell you that the results show that the digital leaders are seeing significantly better results in terms of growth, profitability, employee satisfaction and overall management. Digital workers fall squarely into that category and from my perspective the gap will only get wider in the coming years.

Whether or not you then trust the data you get from a dashboard is another issue that in the end becomes a question of trusting the underlying technology but more important showing significant results for the business through the technological edge.

[VeselinaPeykova]

If you have good analytical skills and understand the logic behind, then learning how to leverage new technologies, to complement your abilities, is not really an obstacle (I have one truly inspirational example of that at home).

I believe that, if you wish to be successful in what you do, you do not have to choose between the 'digital' and the 'knowledge' approach, you need to use both.

Quoting a former finance expert, experiencing SAP for the first time:

This is just software, no need to fuss about it.

The best IT project managers I have had, were the ones, capable of looking behind the numbers, new technologies just give them one more tool in their big arsenal, that is all.

[michael_rander]

Veselina I do agree with your comment. For some it will be an evolution not a revolution of skills (and maybe an easy one at that) but for others though, the transition will be harder. Technology is a tool indeed. The question is when it becomes a truly indispensable tool in our arsenal and if we then have the skills to get the most out of it from a competitive perspective.

[Jelena]

So essentially Digital Worker = Knowledge Worker + Google - Brain? I sure hope their Internet doesn't go down...

[michael_rander]

I sure hope it doesn't go down as well.. :smile: Just as an example, think of our financial markets of today which couldn't operate without the algorithms and automated contextual analysis that provide the decision-making background for most trades (some admittedly even without human interaction). The digital worker is all about having information in the moment and making decisions when needed, so in the end it's about competitive advantage enabled by technology.

[Jelena]

Yes, technology has evolved quite a bit, but this did not change the workers into different species. These are still the same people, just with better tools.

What companies really don't need IMHO is the research sponsored by a for-profit company telling them what to do with their workforce and pointing out the obvious. But what do I know.

[Former Member]

"Job roles that cannot adapt to change are becoming obsolete."  I think the first time I heard that was in the 1980s. It is true: I am no longer pulling up bank customer account information at a dumb terminal, and I no longer upload accounting journal entries via modem to a mainframe at the end of the month, and several days later print the financials on greenbar, and I no longer work on a standalone R/3 system that is safely tucked behind a firewall.   They also used to say that computers would do away with our jobs; now it takes an army of people to keep the computer systems up and running, patched, secured, upgraded, integrated, and extended. Yes, technology has evolved and no doubt will continue to do so, and clever people will continue to ensure that their job skills adapt.

[michael_rander]

I appreciate your comments Jelena and I don't think we disagree on whether this is a different species. As I mentioned above it is a transition which some are ready to make and others are not. What I am pointing to is the fact that the speed of the digital economy is transforming the workforce across industries (not just in IT) whether we like it or not and creating opportunities for competitive advantage. That has happened throughout history of course, but just like some companies adapted to the first industrial revolution while others perished so it will be the case for the digital economy and the digital worker. Obvious? Maybe. But the research shows that while many companies talk the talk, few are currently taking the steps they need to secure their leadership position.

[former_member185280]

No real comment. Just sharing some links to the best simple? article on the impact of Big data I have read so far (3 parts) that came to mind as relevant while reading this blog.

http://www.cringely.com/2016/07/05/thinking-big-data-part-one/

http://www.cringely.com/2016/07/07/15306/

http://www.cringely.com/2016/07/11/thinking-big-data-part-3-final-part/

Regards,
Christian

[Matt_Fraser]

With all due respect, Michael, I think you have described knowledge workers as adapting and transitioning into... knowledge workers. A knowledge worker is commonly described as someone who "thinks for a living," as opposed to someone who works with their hands to manipulate physical objects. It is also commonly understood to emphasize "non-routine problem solving" (https://en.wikipedia.org/wiki/Knowledge_worker).

Architects and engineers are knowledge workers, scientists are knowledge workers, and yes, accountants are knowledge workers. The digital age has brought about ever more powerful tools to assist these professionals to be ever more productive and to enable greater insights into patterns, but the digital components remain tools; the user of the tools remains the most important component.

You have described digital workers as "critical resource(s) for decision making, learning, productivity, and management," yet I would posit this is what traditional knowledge workers already are and have been. You stated that what has changed is the growth of data, but I would counter that data has always been growing, and always exponentially -- we're just seeing a later and steeper part of that curve than our predecessors.

Knowledge workers have always adopted new technology to enable themselves greater effectivity. Galileo was a knowledge worker who adopted, adapted, and improved upon the technology of glass lenses to further his astronomical research. Charles Babbage took the technology of gears and levers of his day and adapted it (on paper) to create the concept of what we would certainly recognize today as a computer, and Ada Lovelace then built upon his foundation to create the world's first programming language. They were both knowledge workers who improved their ability to create knowledge and create value from that knowledge by adapting existing technologies into new technologies.

If digital workers are driven by technology, then they are a poor substitute. Knowledge workers are not driven by technology. They drive technology, and they are empowered by technology. A true knowledge worker will never be daunted by the rapid growth of big data. Instead, she will adapt to the technologies that enable her to use that big data for new insights not previously possible.

The digital worker will be her line employee.

[ChrisSolomon]

haha....the first person I thought of when I saw "digital" bolted on as a prefix to yet another long established term was you, Jelena. By the way, how is that *new* job as a "digital application developer" working out for you? :twisted:

[Former Member]

A very interesting point of view Michael and excellently explained.

[VeselinaPeykova]

What many blogs fail to address is, why companies do not jump instantly to the 'latest and greatest' and secure their leadership position. I believe, that it is not that they are unaware of what is going on around the globe.

Sometimes the initial investment is too big, so some companies cannot afford it, sometimes the available tools/technologies do not fulfill well their specific business needs and such investment outweighs the benefits, sometimes it takes longer to implement changes in bigger organizations with complex processes (complexity is not always artificially introduced by software limitations).

Not all industries benefit equally from what is introduced as latest innovations/trends, so the result of this research can also be interpreted differently - companies do want to innovate, but they see no compelling use case to take advantage of the 'latest and greatest'.

I am aware of the fact, that I am stating the obvious, but I have no scruples to point at the elephant in the room.

[michael_rander]

Matt, thanks for your thoughtful reply including the historical context - I appreciate it.

You state that a true knowledge worker will never be daunted by the growth of big data and will adapt to the technologies that enable her to use that data for new insights not previously possible and I agree with you. To me though, that is part of what makes that person a digital worker.

What stands out from our research, however, is that many companies are not at this level yet where they are technically enabling their knowledge workers to make those insights which in turn put them at a competitive disadvantage. From an employee perspective we can argue that knowledge workers should be able to create knowledge and value by adapting to new technologies, but it is as much a question of their employers having the tools, making them available across the organization, having the education programs to create optimal usage and the overall strategies in place to pursue this line of thinking. Far from everyone is there yet though and we are seeing that companies who are digital leaders are seeing significantly better results across a number of areas (profit, growth, engagement, productivity, etc.)

Digital workers are an evolution of the knowledge worker rather than a new "species", but not every knowledge worker is in a position to make the transition which creates the difference between the two groups.

[michael_rander]

Thanks Hashsham.  Appreciate the comment.

[ChrisSolomon]

You really just said "digital leaders" AND "digital workers" in the same response?!?! Sorry...I am going to have to bow out....my boots only go knee high and I am not about to wade out deeper in this.

[Former Member]

I think some people that read the paper fully understood the meaning but refuse to accept it. We have been knowledge workers all along since the university. Unless you were born in the 90s and such. We can't deny the powerful impact of new technologies and how much is impacting every single profession. The term is not new and is very accurate. Thank you Michael.

[Former Member]

Just for the sake of marketing new ideas or new technology, we are dumped with heaps of information of these kind, leading to unnecessary confusions. Of course, the digital transformation is here to help make real time decision but the knowledge worker is the key to feed data into these digital workers to give us real decision. These technologies will help cut down the amount of time spent on making critical decisions.

[Jelena]

Imthiaz Shabeer Ahmed wrote:

Just for the sake of marketing new ideas or new technology, we are dumped with heaps of information of these kind, leading to unnecessary confusions.

Exactly. "Digital" is just blindly added to everything these days by SAP marketing to align with "digital transformation" brand. Digital data powering digital economy with digital workers and digital leaders digitally transforming digital currency into digital SAP revenue. Yawn.

[ChrisSolomon]

jelena.perfiljeva.... you sound like a "Digital Debbie Downer".     :razz:

[Jelena]

Lol, Chris. :smile: I guess it's a disadvantage of aging that you can no longer be excited about repackaging of the same old things. We've already been through "digital revolution" back in the 80s, I think, but who remembers that but a few dinosaurs. "Digital transformation" sounds like just a remix or a sequel to me but it must be brand new to someone. Oh well, I'll just go back to chasing the kids off my lawn. :smile:

[former_member42743]

Jelena,

I was once basically a compter tech.  Then a Tech/programer, Then a Tech Analyst. Then they made us System programmers and System Analysts.  Then we made a Systems Analyst II.  Then it became a Systems Consultant.  Then a System Architect. Then we went to Functional Consultant.  Everytime they changed these terms it meant I got a raise.

Please... I beg you!!   Let the man do his job!!  I think a Digital Functional Consultant is worth at least 10% more. Or maybe a Digital Knowledge Consultant 20%?

Craig

[lbreddemann]

What I find interesting here is not so much the new name tag that is pinned on the "workers", but the picture you just drew of who owns and decides on this development.

Instead of making employees more independent, allow for broader oversight of what they work on/for/with and enabling them to "think like an entrepreneur..." it's the full form of Marxian Dystopia where "the company" provides and controls the means of work (aka the capital).

To me that sounds like the actual disadvantage compared with fast moving and adapting companies (these were called "disrupters" I guess?).

[Martin_H]

Imthiaz Shabeer Ahmed wrote:

Just for the sake of marketing new ideas or new technology, we are dumped with heaps of information of these kind, (...)

Yep, exactly. Let's just not forget that

• this is an SAP platform here and
• what the intent of this blog and the whitepaper is... (yes, you all got it: marketing and advertising)

Regards

MH

[Martin_H]

<sarcasm>

It's only a matter of time until you will be able to get certified as "Digital Consultant (QM,MM,...)"... Oh and by the way: your old certifications will become invalid and you will have to take all the courses again...

</sarcasm>

Regards

MH

[ChrisSolomon]

Will it be a digital exam? (*sorry....had to! :razz: )

[former_member42743]

After reading some of the comments, and redigestng the blog again, (which should be credited with formenting some interesting discussion), I worry about the direction this massive data overload will actually take us.

I see two paths for companies and managers.  The first is where they enable their employes to use and access this data at a low level and let them become the true digital employee the blog envisions.  Making decisions based on the modeling and presentation of virutally real time data brought together from hundreds or thousands of disparte sources.  This envisions a very decentralized model where decisions are pushed down.

The second path, is one where this massive data information structure is controlled by a handful of top people, never allowing lower level managers or people access.  Simply because they can now view, analyze and act on the data with little to no help from anyone.  The data is used to actually drive the decisions of these few into operational activities void of almost any "on-the-ground" expertise.  Most of the employees become virtual human bots reacting to their data systems pre-programmed prompts and workflow streams.

Upward flow of information is suppressed and discouraged.  To make change, it all has to be done through rigoorously documented and approved channels, requirements gathering, review, approval,  integration review, approval, team approval , upper managemnt approval, etc. etc..  Simple changes take 2-3 months.  Major changes up to a year.  Truly game changing, innovative changes never happen.

In our business world of today.  Path One is the exception. And it can never happen in big companies.  Since sucessful small companies get bought by big companies, path one can only happen in small companies.

In big companies, the data streams and workflow streams will continue to isolate the individual employee more and more from true decision making.  Power and money will continue to be consolidated in the top 10% of the corporate structure and the divide will become greater and greater between those that can make real decisions, and those acting on those decisions.

Since power corrupts, it is inevitable that mega companies, manged by an isolated handful of people, will always act on the data, whether moral or immoral.  Unethical and even criminal behavior will have no natrual enemy in this structure.  It will be why our largest instutitions, including government will never end the corruption that exists.

If power corrupts, and data is power, then control of data is absolute power.

Craig

[Matt_Fraser]

Craig, after reading this comment, I find myself incredibly depressed. I think you just described how we turn some typical dystopian SF tropes into our reality. Welcome to Brazil.

[raphael_almeida]

Jeez, do not speak ill of my country ... We have really many corrupt politicians and corruption problems, but we are fighting it :smile:

[ChrisSolomon]

haha have you seen the movie, Raphael? One of my favorites....a bit "out there" but VERY enjoyable!

[raphael_almeida]

About the comment, really Craig, you were not happy in what you wrote... Corruptions exist everywhere and will always exist, but it is up to ourselves (leaders) prevent this get out of hand... Of course, now you may be thinking, and how to control it in such a large company?

Simple... we are multipliers, it is our duty to take the information to the people and forget that we see only ourselves... Corruptions arise when there is a lack... I joked up talking to Matt about my country, but it is a perfect example... It is a country of great opportunity, we have everything here that no country has yet left to chance, it is the same as occurs with companies that... information is the key to it all, lose it's wrong...

P.S.: I'm sorry to escape the context :smile:

[raphael_almeida]

No, but I will watch :razz:

[former_member42743]

It wasn't my intent to depress!  Nor to single out any country, industry or company.

I can speak for the US and we have a lot of corruption.  A lot in politics that is well hidden and insitutionalized.  But it's there.

Stock trading is a perfect example of data control.  No investor has the data the stock brokers and investment houses have.  It's practically impossible to compete with them.  Programs that buy and sell on minute changes of prices in seconds of happenning.  Small currency fluctations around the world that they take advantage of that no single investor could.

Banks and corporations now deemed "to big to fail".  Anyting "to big to fail" probably should be the first candiate to be broken up somehow.

Note: I still wouldn't want to live anywhere else!

Craig

[former_member42743]

I'm very much in agreement with you Raphael.  It's why people need to remain actively involved.

To the point of the blog however, I don't see the future digital employee being an empowered digitial employee.  But I do see the ability of the digital data further empowering the decision makers and making them more entrenched and consolidated.

Craig

*Dang, I sound like a liberal!!!*

[Matt_Fraser]

Sorry, Raphael, I wasn't talking about your country at all, in fact. I was, as Chris said, referring to the movie of the same name (in which I don't recall that they ever talk about what country they are supposed to be in, so the name is somewhat random). I recommend the film! But it's a bit depressing to watch, even though it's also very darkly humorous.

[raphael_almeida]

HEHE, okay, I wrote joking about it (And I will watch it soon) :wink:

[Matt_Fraser]

Nope, but I took your point very well. Large corporations now act in ways that are seemingly completely independent of the thoughts, ethics, morals, or leanings of any of the individuals within them, including many of the directors and executives. There is a built-in "code of conduct" for corporations that, by law, requires them to take actions to "increase shareholder value," and sometimes those actions can actually be detrimental to the welfare of people, including employees of the corporation. They could potentially be detrimental to the economy of the host nation of the corporation (if there even is one anymore in this day and age of multinationals), or to the environment. They can even be detrimental to the corporation's own long-term outlook, as the "rules" built in to the system reward short-term actions that may not even be related to profits or R&D or re-investment, etc.

[Jelena]

And I'm the one called Debbie Downer? You guys are depressing the heck out of me. :sad:

[raphael_almeida]

Do not feel so Jelena, you are my favorite functional-developer :cool: :wink:

[Former Member]

My thinking of 'digital worker' is a further breakdown of the application modules such as FI, SD, MM, and even do without the boundries of CRM, BI, SCP, etc. Granted companies all desire a solid corp of such cross functional experts but even in real life it is a wild dream for anyone to get certified in law as well as medicine, finance, human resources, logistics, etc. Even God has different angels for different tasks. This 'digital worker' surpasses angels. At the end it's the quality of the decisions and actions, not the speed.

[Anmol_Kumar]

Good one!

[DouglasCezar]

Hi Michael, congrats for the article.

You've said: "Digital workers are an evolution of the knowledge worker rather than a new "species", but not every knowledge worker is in a position to make the transition which creates the difference between the two groups.".

Can you please which are the difference between the two groups exactly? What a knowledge worker that is in a position to make the transition is or has that the others don't?

Best regards,

Douglas