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The new acronym you need to know : RPA (Robotic Process Automation)

Robotics are starting to transform the industries. In an interview, Xavier Lhuer, a principal associate in McKinsey’s London, speaks with Leslie Willcocks, a technology, work and globalization teacher in the London School of Economics, about his works on the RPA issue and its effects on work and how companies can take advantage of RPA strategically and financially.

 

McKinsey : Can you start by defining the RPA (Robotic Process Automation) ?

 

Leslie Willcoks : The RPA removes systematic process tasks to focus your resources on exceptions, where the human is still indispensable. Every worker involved in back-office processes has to perform a lot of repetitive and boring tasks. The RPA is similar to a software that replicates human activity and takes in charge some steps of the process. It can do these actions more quickly and precisely than humans and at any time of the day. Its use allows employees to free time and focus on their missions with real value added.

Softwares are very light in the sense they do not require a lot of development to be operational. Operational employees can learn very quickly how to configure and use the robot. It is also light because it only uses the information system. It does not interact with underlying systems such as logical systems.

 

McKinsey : To what extent does RPA differ from cognitive intelligence ?

 

Leslie Willcocks : RPA deals with simpler tasks. It mainly supports actions that do not require any particular knowledge, understanding or perception. These are the actions that can be performed by introducing simple rules the computer will be able to follow.

With the cognitive intelligence, you impinge on the knowledge base of a human being and on other attributes unique to mans beyond the mere ability to do things. Cognitive automation can deal with language, reasoning and judgment through contextualization. It can establish the meaning of things and give a special perception.

Thus, there is a big difference between both.

In addition, whereas RPA is an advanced technology, this is not the case for cognitive automation. I did not see a wave of powerful tools of cognitive automation appear on the market and few companies use it.

 

McKinsey : What are the benefits of using RPA?

 

Leslie Willcocks : The main benefice we found among the 16 surveys we did is a return on investment which varies between 30 and 200 percent the first year.

But it would be wrong to focus only on short-term financial gains, especially if they are due to a saving of working time. This approach does not reflect the power of the software as the benefits are numerous.

For example, companies evolving in highly regulated industries such as banking or insurance show that automation is a cheaper and quicker way to resolve compliance issues. You also improve your customer service because you have more control over the process. A company that receives a lot of customer demands, for example, can enable its team to focus only on the more complex ones.

There are also benefits for employees. In every case we studied, employees thank the technology because they hate the tasks that are henceforth taken in charge by the computer. It relieves them of some work pressure. Every organisation that we studied reports that the robot intervenes on large workloads. I think there will be an exponential creation of work to align with the exponential growth of data (50% more each year). There is also a significant increase of the bureaucracy. We need automation just to relieve the stress accumulated by the companies. An e-commerce website measured the success of the RPA according to the number of hours which could have been reallocated to the business. Thus, it is not just shareholders, senior managers and customers who will benefit, but also employees.

 

 

McKinsey : What are the most important considerations for those who want to adopt the RPA?

 

Leslie Willcocks : The most important consideration is the strategy. You can use automation intelligently to decrease your costs. But if you use the RPA as a considerable strategic tool you will benefit much more from it.

The second consideration concerns the launch. You need to have all the managers involved and a very competent project manager to implement the right processes. The project must be stable, mature, optimized, normed, repeatable and used with large volumes. Start with a control test on a difficult part of the process.

The third consideration is to adapt management by integrating automation. This is the key to the launch.

The fourth is to build a company able to use RPA for a long time. By using RPA as much as possible, you will build centers of excellence over time that will be the source of new techniques and processes for your development.These centers are at the origin of employees which will configure robots, install and develop them. They are also the origin of people who will turn those robots on and off, who will planify their actions and their relation with the Human.There is continuous innovation in IT, governance and security services. Organizations committing to RPA must immediately think about building a center of excellence.

 

McKinsey : How does a company choose to implement a RPA solution or an IT solution? And how do these departments interact?

 

Leslie Willcocks : When an organisation considers a test phase for the RPA, it looks at the customer case and compares it to a computer science solution. It is often the advantage of RPA. In an organisation we studied, the ROI due to the RPA was 200% the first year and the solution had been implemented 3 months. The IT solution had the same ROI but with a repayment term of 3 years and a setup which lasted 9 months.

In addition, many operational managers find that the implementation of a computer solution is too time-consuming. They prefer something lighter and more adaptable. So, a useful, inexpensive RPA solution that does not require special computer skills to install it is a walk in the park for a business. IT departments are worried because they know the disruptive nature of RPA. Nevertheless, it is necessary to convince them from the beginning of the process.

 

McKinsey : What do you think will be the most visible effect of RPA in the long run?

 

Leslie Willcocks : In the long run, RPA means that people will have a more interesting job. For 130 years, we have created unskilled, repetitive and boring jobs. Not all jobs will disappear, but only the least interesting for the human. It will be disruptive but companies should be able to absorb this change. The relationship between technology and people must change in the future for the best, and I think that RPA is one of the key tools actor of this change.

(FAKE) DILEMMA FOR BAD BOSSES: CHANGE OR DISAPPEAR! (PART 3)

The transparency of information is a key principle

 

Digital principles which are a meritocracy, transparency and open-minded must progressively take part in the organization. A lot of digital startups relay these values and even transform them into a mechanism of intern gestion. For example, VALVE is a 300 employee American company which develops softwares. In this firm, there is no chief, when a new employee comes in, they are given a manual to explain the singularity, the particularity of the company and they are told “here, you won’t have a job with high responsibilities, you will have to find a project, the team with whom you will spend this journey…Many don’t make it to the end of that very journey, but those who do are real entrepreneurs in the company, real intrapreneurs”. Buffer is also an American company, where salaries and public reports are published on their blog. Automatic, Worldpress company has 250 workers spread in 37 countries in the world. Nevertheless, they organize video conferences each Friday to allow their employees to meet, discuss and confront their ideas which generates innovation.

 

 

The importance of autonomy

 

In 2017, when two partners were on the verge of a financial ruin, as mentioned in the first part of the article, we made the decision not to lower our head in front of a customer, it was the beginning of an internal process of deep digital transformation. It was a digital company when seen from the outside but not innovative when seen from the inside. Thus, we decided it was necessary to apply these new principles, the autonomy of the employees had become our priority. Sometimes, I talk with the directors, the CEO of the company, about autonomy, liberty, and it is always the same thing, “yes, yes” they all agree but in the end they hold your hand and guide you to what you have to do, and people take advantage of it. This behaviour couldn’t work in this company, the knowledge also being distributed in the different areas of the company. The direction had to delegate, it had to grant its confidence to people it hired.

 

 

The meritocracy, at the heart of preoccupations

 

Obviously, “a high power involves high responsibilities” as Spiderman’s father told him. In this company, meritocracy is radical.

Every worker evaluate each other, pressure comes from colleagues, not from the top to the bottom. The employees are encouraged to create links which will enable them to be supported by their colleagues to make them feel the importance of their role, whatever their job may be. When somebody is not up to the task, they are invited to leave. Currently they have 100 employees. In 6 years, they hired around 300 people. In the 200 who are not here, only 25 left on their own free will. But the ultimate aim is to transform these digital principles into concrete mechanisms. We have implemented home office, which give employees the freedom to work at their own pace. Everything is based on trust. They don’t have predefined schedules, and they don’t have a limited number of vacation days. This freedom allows employees to be more involved and share their ideas.

 

The sharing of ideas is vital

 

Conversation and the sharing of ideas are essential in modern business. Everyone has their voice and their ideas which should be heard. We schedule a meeting, each Friday at 9am, a breakfast where an external guest comes in to share his experience and ideas. Now, it is considered inappropriate to schedule other meetings from 9:30 to 10:30 on Fridays, neither for customers, nor with salesperson. A lot of people love these meetings. They often say, “Wow, what a great idea” when in reality it is a very simple idea. The newcomers are often impressed by these conversations which are so open and honest and where everybody can give their opinion and say to the boss what is on their mind. There are no restrictions, no fear.

 

 

Keep this kind of leadership when the company is growing

 

Growing and expanding is a very difficult thing to accomplish. It will be difficult to maintain this type of community, to maintain this type of leadership when they grow. However, there is no other option; with the digitalization imposed on companies, tcompanies that do not put humans at the center of their focus, it will not give them autonomy, confidence, and they will not obtain the necessary motivation to follow this frenetic rhythm of innovation. We are saying that one of the first causes of resignation is the bad bosses. Obviously, bad bosses are a huge cause of misfortune at work. So having a boss who has time to focus on the climate of the company, due to their time saved from using certain digitized tools can lead to a more successful company overall.

 

Last element which seems important to precise. We are talking a lot about company liquidation due to poor payment practices of customers or even temporary causes. But wouldn’t the  truth be that one in two companies which shut their doors is the direct result of a bad boss management ?

 

If you didn’t read the first part, click here !

 

If you didn’t read the second part, click here !

 

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(FAKE) DILEMMA FOR BAD BOSSES: CHANGE OR DISAPPEAR! (PART 2)

The young talents, a central issue

 

Let me show you that innovation gets rid of the bad bosses ! As you already know, we are facing a fierce battle for the young talents. Where do the new generations want to work ? In general, they want to work in the major banks, in the cosmetics major groups… But the digital start-ups are accelerating the destruction of the major firms, as specified in the first part of the article, by the roots, recruiting the best talents.

Currently, the major Europeans companies do their utmost to try to reinvent themselves. They started to get rid of the tie wearing, remove the leaders’ privileges. They also deleted several positions. You certainly know this ranking which pompously publishes the presentations of the companies and chooses “the 10 most coveted companies where everybody wants to work in”. It could look like this ranking, don’t you think?

 

The entrepreneurship, more than a passing fad

 

A London interim agency stated that 50% of the under-30 year olds want to leave the company where they are working. This agency offers jobs which bring a feeling of gratitude for those who apply. It also helps the young talents start their own business. We often talk about entrepreneurship, which seems to be a trend, a solution to the crisis. But the willingness to undertake a project is a significant aspect that the digitalization accelerates too.

A study from Telefonica about the Y generation states that 1 young person out of 10 in Spain, in Europe, or in the USA, could turn to entrepreneurship in the 10 next years. However, in several countries such as Colombia, only 1 young person out of 4 will undertake in these 10 next years. This shows the changes in vision that there may have been in the most developed economies.

 

Give a meaning to your job

 

This transformation in the ambition of our young talents shows us that they want to give meaning to their job. The new technologies give us new possibilities to start a project. Indeed, they facilitate the access to the labour market which is drastically evolving. For your information, 53 millions of Americans are auto-entrepreneurs (freelancers), 34% of the American workforce is self-employed. According to the previsions, by 2020, it will be true for half of the American workers. The world is moving and the digital start-ups, the entrepreneurship, the freelancers are making things happen. The companies that want to survive have to eliminate the authoritarian management. They need to reduce the intermediates and adopt the principles of self-management and/or collaboration.

 

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What is self-management ?

 

Let me give you an example that I really like: a Brazilian textile company, which a family’s friend inherited from his father in 1995.

After really tough acquisition phase of the company, he decided that it needed to stop. He had to transform the corporate culture. He started by removing the privileges from the senior managers: cars, parking spots, personal secretaries, exorbitant salaries. Then, he decided to grant a decision process to the workers and to the employee representative committee by creating committees. Besides, the employees could decorate their workspaces as they wished, choose the color of the walls etc. He then initiated the schedule flexibility, and finished by implementing the principle of “test and learn”. This allowed him not to loose the focus on the customer.

Twenty years later, the company is now one of the most fruitful industrial companies of the Brazilian market, while managing to survive different financial crises.

 

 

The end of the hierarchical organizations

 

This is a company where the level of self-management is very high and where the employees decide themselves the amount of their incomes. The redundancies are decided collectively. There is no hierarchy, only autonomous and independent groups, where a person is a coordinator, without it being a definitive position. Every year, there is a democratic vote to elect the coordinator. If the person appears to be not so great at his work, then the workers will have to vote for a new one.

This company is not the only one using the self-management. The autonomy at work is today accepted in a lot of surveys as a strong asset for the companies.

The researchers of the Cornell University did a study on 320 SMEs, where half of the companies were giving a lot of autonomy to their employees while the other half were more bossy. Those which left the most of autonomy to their employees developed 4 times faster and have ⅔ of turnover less than the others. But the self-management alone is not enough. We also talk about principles and digital values. It is a sweet utopia and today it can’t always be set up because of the lack of collaborators’ engagement.

 

 

The bad bosses won’t resist the transformation

 

Indeed, during the transformation of a company, the role of the different bosses (CEO, executive officers, intermediate management) will take a significant importance. Unfortunately here, the bad bosses will get lost, showing a lack of empathy, of emotional intelligence, or adaptability. The fear of change is a fact and in general, the companies don’t think enough about this point before boarding into major projects of recast.

The CEO must gather these different directors and managers, explain the strategic goal and the way this new culture will be implemented. The objective is clear: all the collaborators move in the same direction to face the new market challenges. This “education” phase is unfortunately not taken enough into consideration by the management. This can jeopardize the firm. We come back to a mantra that is dear to my heart… The bad bosses dictats, the good bosses educate and help.

 

And if you didn’t read the first part, click here !


(FAKE) DILEMMA FOR BAD BOSSES : CHANGE OR DISAPPEAR! (PART 1)

Work is evolving

 

In May 2017, a company I was supporting was once again about to bankrupt. It had been founded 12 years ago and they ended up not being able to  pay their employees anymore. Everything was collapsing. A project in which they had all invested ended up spinning out of control, and all of that, because of a bad customer. Nevertheless, they were reaching a turning point. I remember that this evening, tears in their eyes, the two partners promised each other they would never humble before a customer’s feet ever again. And to succeed, they would have to change, to restart, they would have to redefine their principles and stick to them. Why? because it’s the only solution to stand tall. Without entirely realizing it, this day, we were about to reinvent the corporate culture of their company. We clearly defined the principles, to make sure they were as fair as possible. The final result was that human was their most important resource. It had to be their focus again.

 

 

Innovation : the death of bad bosses ?

 

To be straightforward, the new culture defines the main mission which is “Human-first” and a vision : a world where a company is able to focus on the human, even before its own ambitions. But the idea is not a “flower power” motto, far from that !

 

Evolutions in terms of computer sciences between the years 2000 and 2010 taught us that digitalization gives people superpowers, huge possibilities to learn and develop. On the other side, companies, to grow or even just survive in this century, will have to learn how to maintain different relationships with their customers and especially to train their teams around a key objective : satisfaction of their customer while defending their offer. The role of a boss will, more than ever, be a key role and will have to change. Stop with sharks, stop with autocrats! The collective intelligence goes way further than the solitary mind.

 

 

Change or disappear!

 

The rhythm of digitalization imposed by innovative companies is frenetic. Companies which do not adapt will die. But to innovate, companies need to adapt their human resources. The idea is to build complementary and motivated teams. Besides, the problem that companies face today is linked to their structure which is not ready for this innovation. Why ? Let us consider an ordinary person in the company we will call Paul.

Paul doesn’t have a sufficient motivation in a hierarchical structure which was built on efficiency only. If we take a closer look at the current structure we see that intermediate managers dictate to their employees what they have to do. These decisions which were taken by other people, higher in the hierarchy, with whom they may not agree. It is almost impossible to maintain the motivation in this context. Unfortunately, this is the plague of 2018. A sadly well-known survey from the Towers Watson office states that only 1/8 person feels motivated by their job. In addition to being serious and critical, it is deeply sad. 

 

But let us come back to the original problem : if to survive in this digital world it is primordial to innovate and that to innovate you need a motivated team, then how can we create a new way of managing that will help us to innovate and develop motivation ?

Read more here!

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