A recent RBC report is challenging Canadian businesses - but is it going far enough?
After I read the March 2018 RBC report “Humans Wanted: How Canadian Youth can Thrive in the Age of Disruption”, I felt both elated and frustrated.
Elated because, finally, a major institution both recognized a major problem (the ‘quiet crisis’ of young Canadians unprepared for the changing workforce), and came up with an innovative, forward-thinking method of looking at it (clustering jobs into a more a dynamic, skills-based matrix).
But frustrated too, because they only tackled half the problem.
And that worries me.
And it should worry the Royal Bank too.
Like Moses escaping Egypt, they stopped just short of the promised land - and it’s that 2nd half of the problem that, if not addressed, could leave the Canadian economy starving in the desert.
Picture a bridge between two islands. One on side is the current Canadian economy. On the other, the future economy, the one depicted in the RBC report - full of automation, artificial intelligence, robotics, engaged and dynamic workers, and innovative companies (probably running on some yet-to-be invented blockchain-based financial system).
The Royal Bank report tackles a big part of it- get those kids ready! Build a diverse, globally aware, adaptable, digital, collaborative, dynamic, smart, career mobile, skills based generation: “we need to make this our national mission, to build a skills economy to connect a new generation with all the opportunity and ambition the world has to offer.”
But what about the backbone of the Canadian economy? The Small and medium-sized enterprises (SMEs) that make up 99% of the Canadian economy?
Because if they aren’t crossing that bridge at the same time, what is going to be there on the other side when this new generation gets there? Who are they going to work for?
With rare exceptions, there are two types of companies that are gearing up for this new economy and walking across the bridge: Fortune 500 companies with the resources to adapt, and young, 21st century businesses that are being created now, and will be ready to take this challenge on in 3-5 years. Those businesses are going to take this RBC report and run with it. I’m not worried about those businesses.
I’m worried about the middle - every other business in Canada. They are looking over at the island on the other side, with no idea how to get there, caught up in their own day-to-day struggles, terrified of change, and absolutely not ready for the journey. (We’ve written a few of their stories, check it out).
The average small/medium sized business owner reads that report and it scares the crap out of them. They don’t know where to begin and can’t even comprehend what needs to be done to attract, deploy, and retain the talent that will help them succeed into the 21st century. The RBC report concedes “even as some employers lament young Canadian’s skill gap, they remain stuck in the habits of the jobs economy”.
But I’m challenging the Royal Bank to dig deeper and push harder. The real problem is so much more than just adapting to the new generation and moving from a jobs economy to a skills economy - it will require a much more fundamental change. The company itself must evolve to take on these new workers and the technologies that they are emerging along with them.
Take the rapidly emerging reality of blockchain. In the report, RBC says, “it’s anyone’s guess” how long it takes before a given technology renders current systems obsolete, and says some change may happen over decades and some will happen virtually overnight.
I think that is too conservative. I think current systems will undergo change at an unexpectedly rapid rate, perhaps even faster than what is imagined in this report. For example, a recent blockchain technology report by McKinsey & Company predicts that blockchain will disrupt a wide range of industries, and predicts commercial deployment of blockchain technology at scale by the year 2021 - just 3 years from now.
By its very nature, a blockchain system requires a deep understanding of how the business functions. More than ever, technology makes things invisible to the human being. It takes over ‘middleman’ functions, the everyday processes that run the business. My question is whether SME’s even know what processes are running in their business? Do they have a deep understanding of how these processes interact with the human beings in their company? What are the emotional and behavioural dynamics at play as the work place adapts?
As the baby boomers get set to retire or transfer out of their businesses, are they ready to transfer their hard-earned wisdom and knowledge to the next generation, in a way that not only captures what they know, but does it in a way that is future-ready, blockchain ready, detailed enough for an automated, robotics-enabled system to take over?
Because if they’re not, then they are going to be broadsided by the next Amazon, the next UBER, the next Tesla, that will scoop up all the talented young workers who are eager to work for a future-ready company that will offer them the kind of jobs they’ve trained for.
This is a challenging report. It is innovative. But it is only half finished. I live in BC. I wonder if I could find 20 medium sized companies in Vancouver ready to embrace the thought processes in this report. I wonder if RBC could.
Because to truly embrace what this report means and challenges us toward, requires much more than a cursory re-design of HR practices or even taking a bold re-look at our career education and training models that RBC is rightly advocating for.
Canadian SME’s must cross the bridge at the same time as these up-and-coming workers. We must equip them with the knowledge, skills and systems to take the journey to the same promised land.
Otherwise, what will be there on the other side? Without equipping and mentoring these boomer-owned SME’s, we face a massive risk. The backbone of our economy depends on these businesses, and they are stagnant. They don’t know what to do. The knowledge they have to pass on does not reside in academia. It resides within them, and with the workplace changing so quickly and so rapidly, they don’t know what wisdom needs to be retained and passed on, and what needs to be let go or morph into something new.
As I said, technology makes things go ‘invisible”. I am working with a chocolate producer who is automating his factory. He is a master at his craft. While some parts of the overall process are cookie-cutter, there are unique ways he does things that we have to ensure we understand, document and quantify before we hand it over the invisibility of the AI and robotics systems that are taking over. Otherwise, when he retires, when the machines take over, when things go wrong (which they inevitably do), who will know what makes those particular chocolate bars so damn delicious?
There are companies out there who are going to read this report and ask themselves: “what is AI?” “what is blockchain?” , or “we can’t even get our old-school accounting software to run properly, how they heck are we going to tackle this?”, and put themselves into a tailspin of anxiety and stress.
If they throw in the towel, quit or fail, they may take the whole Canadian economy with them. And if we get bailed out by some future Amazon type company, it’ll be on their terms, not ours. I’d rather not wait to be rescued. My suggestion is boldness.
The bread and butter of the Canadian economy, of the Royal Bank’s customers, are SME’s. We have to ask them, clearly and without hesitation: what is the possibility for your company to be a match for the kinds of workers coming into the marketplace? To adapt to technological change? Are you ready? Is there a match?
If there is a disconnect, if they don’t know what we mean or they aren’t ready, then I suggest they have two choices: adapt or leave.
If they’re in, then they adapt. They create bold new visions with things like re-tooling, re-designing, getting growth financing, moving into new business models such as franchising or licensing.
If they’re out, then they leave strategically, not in bankruptcy or in a firesale, but with a profitable sale or handed over to the next generation with a future-focused, reality-based succession plan. These choices form what I’ve called the 4 Pathways of Change.
For current economy based SME’s in Canada, it really does come down to these simple choices.
Underlying all of these change pathways is not only a sense of urgency, but also a profound belief that the answers are there, they lie within the people and the systems, and that solutions are possible. I believe in possibilities, in hope.
At Hume Chalk, we’ve developed the toolkit for this change - a Possibility Process that digs into a company’s processes, system, and people and gets them ready for change. Rather than sitting on opposite sides of an issue blaming each other, or staying stuck in anxiety and fear, this process allows people to become aligned. They begin to find mutually beneficial solutions to complex problems. They take multiple perspectives into account. New visions arise and breakthroughs happen.
It is deeply connected to both behavioural economics and systems theory and it works.
As RBC made clear in their report, this up-and-coming generation are looking for something more. They are articulate, dynamic, passionate, fedup with ineffectiveness, and spring loaded for possibility and change.
We better have a net ready to catch them or they are going to shoot on past and have nowhere to land.
Let’s cross the bridge together.
David Chalk, CEO of Hume Chalk, is an award winning Entrepreneur, Technology Futurist and Cyber Security Expert. He has received the Entrepreneur of the Year designation by the Young Entrepreneurs Organization. In 1997, he was selected as a Top 30 Entrepreneur by The Massachusetts Institute of Technology and in the same year founded Chalk Media, which he later sold to Research in Motion [Blackberry] for 23 million dollars. David is recognized as one of the world's most gifted minds.
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