The COVID-19 pandemic has accelerated the changes to the Future of Work. Many of the trends we expected to develop over the next year have come to pass quicker than expected. CHROs, as a recent article in the economist highlights, are at the fulcrum of an organisation's response to the crisis just as the CFO was in the global financial crisis.

Indeed, this crisis makes the main topic of this week's episode with Ravin Jesuthasan on the role of HR in the Future of Work even more important. Ravin is one of the lead authors of a fascinating recent study called HR 4.0, shaping people's strategies in the fourth industrial revolution, which is a collaboration between the World Economic Forum, Unilever, Saudi Aramco, and Willis Towers Watson, where Ravin is Managing Director.

You can listen below or by visiting the podcast website here.

In our conversation, Ravin and I discuss:

• The six imperatives that comprise HR 4.0 which include building an agile learning culture, developing new leadership capabilities, and enhancing the employee experience

• Examples of organisations who are already experiencing benefits from an advanced approach to managing and developing people

• The key skills required by the Chief People Officer and how these are changing

• Why HR decision science or people analytics is the key underpin of the future HR function

This episode is a must listen for CHROs and other HR leaders as well as those working in people analytics, workforce planning and employee experience roles.

Support for this podcast is brought to you by Insight222. To learn more, visit https://www.insight222.com

Interview Transcript 

David Green: Today I am delighted to welcome Ravin Jesuthasan, a Managing Director at Willis Towers Watson and global thought leader and author on the future of work, automation and human capital, to The Digital HR Leaders podcast. Welcome to the show Ravin, it is great to have you here.

Ravin Jesuthasan: Thank you, David I am absolutely thrilled to be here.

David Green: Can you share an introduction to your background, your role at Willis Towers Watson and some of the other activities that you are involved in as well?

Ravin Jesuthasan: Sure I will be delighted to. So I have been with Willis Towers Watson coming on just over 25 years now. I have played a variety of roles at the firm, have been privileged to have covered virtually every aspect of the HR life cycle through that time in terms of helping develop new intellectual capital, lead businesses etc.

I have also written three books on the future of work, all with my good friend and colleague John Boudreau. I also play a number of roles for the firm externally, I sit on the World Economic Forum steering committee on work and employment and have had the privilege of working with them over the last five years in a variety of projects related to work and digitalisation and automation. I also lead a number of our different research efforts, some of which we are going to be talking about today.

David Green: We are. You must have seen a lot of change in those 25 years because HR has really changed a huge amount?

Ravin Jesuthasan: It absolutely has. I started off my career, then Towers Perrin, in executive pay and them went into broad-based rewards, went into talent management and it has been fabulous to have been able to learn and grow in one organisation in that way. But it has really been an opportunity, opportunity both within and externally as our profession has just changed so dramatically.

David Green: Great and obviously John Boudreau has been a previous guest on the podcast, so it is great to have his co-author on three of the books that he has produced over the years with us.

So you talked about the research with the World Economic Forum. You have led numerous research projects for them over the years and we are going to spend most of the time in our conversation today talking about the study that you have actually recently presented at the World Economic Forum in Davos.

The report is called HR 4.0, shaping people strategies in the fourth industrial revolution. And to those of you listening who haven't already checked out the study I would definitely recommend you doing so, we will provide links so you can do that.

What can you share with listeners about what the study is comprised of? The headline finding and some of the partners that work with you on research as well?

Ravin Jesuthasan: So we were just so incredibly privileged to have partnered with Unilever and Saudi Aramco, two outstanding organisations, as part of this project that the World Economic Forum initiated and it is truly fascinating. Someone asked me how Davos and the Forum’s annual meeting has changed over the last five years that I have been there and when I first went, there were virtually no CHROs. In the last two years we have had an extensively and rapidly growing presence of CHROs at the World Economic Forum, the content has become much more HR oriented over the last two years. So this particular study was, I think, absolutely at the right time in the sense that for the last three years the Forum has been talking about the fourth industrial revolution and this magnitude of different forces that are reshaping every facet of human life. And certainly HR is probably at the bleeding edge of so many of these changes.

That is really what this report does, it reflects on the rapid advances in digitalisation, the changing social norms that we are seeing around the world, dramatic globalisation and integration of supply and human value chains. How do all of those forces come together to fundamentally ask them very different questions of both work within organisations and the HR profession.

David Green: Yes, the study is absolutely fascinating and what I really like about it is the way it is set out. Firstly, why is it such a great opportunity for HR? Then the six imperatives that we are going to talk about in a minute, and then what we're going to talk about after that, some of the case studies that really bring some of these imperatives to life, which I think is so important and makes it really real for the listeners who are going to read the report afterwards.

So six imperatives that formed the basis of HR 4.0 let's take each of those in turn. I will let you talk through the imperative and why it's important and then we will talk about some examples after that. So the first imperative is in developing new leadership capabilities.

Ravin Jesuthasan: Yes and that was first for some very good reasons. Those forces of change that I touched on a second ago David, they are changing organisations in fundamentally different ways. Often in my various speeches and presentations around the world I often say for the first 20 years of my career I spent lots of time helping clients deal with that eternal question of, are we a centralised organisation versus a decentralised one?

And the last three or four years that question has absolutely come off the table because every organisation recognises it's a distributed enterprise, you're either the hub and or the spoke of a digital ecosystem and with that comes some dramatic and very significant new leadership capabilities that are required to orchestrate the distributed enterprise. The types of skills demanded of leaders to run businesses, to run businesses where control is multifaceted, control looks very different than it did in the past. The skills required really couldn't be more different than the ones that are required of centralised versus decentralised organisations.

Skills around learning agility, skills related to soft controls, skills related to influence and coaching, being present. Being present in a world where presence is increasingly at a premium. So how do you shape behaviour every day when you might never be seen or see your workforce?

David Green: And that's a real challenge for leaders in some of these big complex organisations obviously HR can help play a part in helping equip them and train new leaders as well.

Ravin Jesuthasan: Absolutely. We are seeing with many organisations HR stepping up and changing the profile of what leaders look like, changing the traditional models, the traditional view of what successful talent would look like and I think it feeds beautifully into diversity and inclusion, I think there is greater recognition for the power of diversity in leading some of these distributed models.

David Green: This is great and then the second one, I guess another huge change that we are seeing, a lot of this is being caused in many respects by the accelerating progress in technology and I think the second imperative is around managing the integration of technology in the workplace. I know that this is part of one of the books that you did with John, that actually this is an opportunity for HR to lead the way in actually helping this happen.

Ravin Jesuthasan: Absolutely, it is fascinating. So when John and I wrote Reinventing Jobs, the book has about 120 case studies of examples of how organisations using the framework in the book can get to the optimal combinations of humans and machines and the thing that is really fascinating about the book, as well as this particular imperative, is the point about legacy that we make at the intro to the book. That legacy is the fundamental obstacle to the digitalisation of work and the future of work. What we are seeing in organisations that are really progressive is that they lead with the work as opposed to starting with a neat piece of technology kit, and then working and trying to start with the technology and get to the talent versus starting with the work and figuring out how do I get to the optimal combination? So this is actually a tremendous opportunity for HR to play a leadership role in helping the business start with the work and lead to what that optimal combination is versus having the tail of technology wag the dog of the organisation.

David Green: Yes when John and I were talking on the podcast he said that that might mean organisations going at a pace that the workforce can cope with rather than just running ahead too fast.

Ravin Jesuthasan: Absolutely right it's the pace thing. It also is the thing that we find when organisations lead with technologies, they miss the nuances of the work and there's almost inevitably in all of these examples that I have seen in the work I've done with clients over the last five years, significant breakage in the organisation when technology leads.

David Green: It is such a fundamental change in how we look at work, isn't it? Where we would have previously looked at jobs, now the technology is, as you said, we have already got to get down to the nitty gritty of the work and actually look at tasks and everything else.

Ravin Jesuthasan: And that is so true David, because you know what happens when you lead with the technology, we've done some research on this, we went out and talked to some 1200 companies in our pathways to digital enablement survey last year, and what was fascinating was we started to see the appearance of this maturity curve.

So companies that have really gotten automation have done it for a long time, lead with the work and because what it lets them do when you lead with the work is you end up with potentially three outcomes. Where does the technology substitute, where could it augment, and then what new human work does it create?

Versus, if you lead with the technology 90% of the time you end up with one outcome, pure substitution. Because you're looking to take technology and match it to the job of a person and you and many organisations that do that often chase cost reduction and often that comes with theadcount. But the breakage and the consequences and capability loss are probably three to four times greater than the cost savings they might have realised.

David Green: That's two really meaty topics for the first two imperatives. Let’s move on to the third one. It is something that arguably is the biggest topic in HR at the moment around enhancing the employee experience.

Ravin Jesuthasan: Again it goes back to all of those forces, the speed you talked about and this recognition that the employee experience of tomorrow really needs to be something that looks very different from the one that from the inertia, if you will, that has carried us from the second industrial revolution to where we are today.

If you think of the things that have changed, that deal was predicated on a world of significant stability. A world where people studied for maybe 12 years, worked for 30 and then retired for 20 versus the world we are in today where learning needs to be perpetual because the half-life of skills are shrinking, our lifespans are at least thirty years longer than when that original deal was formulated. So what you are seeing with the employee experience is that it's one that's much more agile. It's one where keeping talent relevant is really the centrepiece of the new deal. I think the promise from thoughtful organisations is, I will keep you relevant in a rapidly changing world either within or without, and so that employee experience is becoming just so tremendously different.

Plus you have also got all the technologies we just talked about shaping that experience with the employees every day.

David Green: Well it is two things really, isn't it? So firstly, employees want a very different experience because they want consumer like experiences, like you get with Netflix and everything else. But then for HR having to move away from this idea of one size fits all to far more personalised and based on what people want to do with their careers or what they want to learn and when they want to learn it etc.

Ravin Jesuthasan: Yes, absolutely right. That lack of homogeneity, if you will, in that experience is a tremendous challenge for most organisations because HR’s legacy was based on standardisation and consistency versus now it's not three or four additional new deals It's a spectrum and how do we accommodate a variety of diverse needs within a continuum of solutions that we might provide

David Green: Again employee experience the whole concept of it is an opportunity for HR to do things with and for the workforce rather than doing things to it.

Ravin Jesuthasan: Indeed. Indeed.

David Green: So the fourth imperative, actually very closely related in fact to enhancing the employee experience, is around building an agile and personalised learning culture.

Ravin Jesuthasan: Absolutely and it ties back to my point, David about learning and keeping talent relevant, really becoming the centrepiece of the new deal, and this pivot from a mindset of I learn, I do, I retire over a 30 year working career and maybe a 60 year life to a mindset of learn, unlearn, learn, unlearn, maybe relearn, take a sabbatical, come back to working and perhaps doing that over potentially a 60 or 70 year working life, as has been talked about. So this idea of continuous learning as the half-life of skills shrinks as new technology comes in, work is going very rapidly be substituted and augmented and new work being created. How do we ensure that talent can keep up with that and the responsibility of the organisation to actually ensure the continued relevance of talent?

I think you're seeing that play out with the massive investments that many organisations like AT&T, Amazon, Starbucks, and others are making in ensuring the continued relevance of their workforces.

David Green: And I guess as well with the work we do here at myHRfuture, we did some research last year around how people want to learn. That is changing as well, so this idea of big organisations just providing classroom training is, granted that's still part of it, but actually most people want to learn in an entirely different way. That is the agile part I guess of the culture that you talked about.

Ravin Jesuthasan: Absolutely right. You are seeing such a diversity of methods as we learn and understand what is going to be most efficient in different cultures and different situations with different talent pools. The area that I am personally really intrigued by, because I think we are really starting to see the gains and the benefits from it, are the use of virtual reality and augmented reality to ensure that we don't have the legacy cycle of the gap or the gap between learning and doing. Versus today in a number of different manufacturing and operating environments we are seeing talent with VR goggles and different pieces of equipment actually learning as they are doing. If you don't know how to do something on the equipment you can sort of plug in a virtual coach that can guide you through something or you could tap into the manual and I think closing that learn do cycle in this era of great speed is going to be absolutely essential.

That's really where VR and AR, I think would be very powerful.

David Green: I think you are right and I think the other thing is around linking learning towards workforce planning, understanding the attitude of people to learn new skills or unlearn and relearn. That then links in quite nicely with the fifth imperative which is around establishing metrics for valuing human capital.

My personal area of interest, as you know, would you like to expand on that part.

Ravin Jesuthasan: Oh absolutely, because it is difficult to engender the sort of investment we are talking about here if human capital is not at least on par with physical capital and financial capital and customer capital.

And so having the metrics that can create a more uniform view of return I think is essential. So we have a number of cases in the report and we are seeing lots and lots of interests in terms of identifying what are the right metrics that are going to give that visibility.

This is really where the automation and the new technologies have been really powerful. So the applications of machine learning and predictive analytics in the development of new measures of human capital, in demonstrating business outcomes and economic returns has been again a really powerful force.

David Green: And we are starting to see a shift towards that. We saw the ISO standard for human capital reporting come out. We are seeing the second in the US actually talking about having meaningful human capital metrics in reports. Shareholders are interested more and more in this.

I can see it happening more in merger and acquisition discussion, because we want to understand the human capital before we move forward with this. Then of course we saw the Business Roundtable not just talking about value for shareholders but now we're talking about values for employees, values for consumers or values for the environment as well. It's far more multifaceted than it's ever been.

Ravin Jesuthasan: Yes it absolutely is. At Davos this year, on the heels of this report, we did have a conversation about what might a path forward look like?

Because to your point, there's so many wonderful efforts, how do we leverage them and connect them so we can benefit from all of the good work that's being done as opposed to reinventing the wheel in one part of the world or reinventing the wheel or perhaps a regulator in another part of the world starting from scratch.

There is so much great work out there.

David Green: And we are seeing with the metric stuff you talked about the predictive analytics, that the growth of people analytics is quite phenomenal, which indeed we are very pleased about. But a lot of the big organisations I know that contribute to this report have very significant people analytics capability and teams. I know obviously what Leena and her team are doing at Unilever is particularly interesting. I think that we are seeing this now that people analytics is moving on from a few years ago being something nice to have in HR to now being something that is absolutely essential.

Interestingly bringing that back around to analytics, you guys at Willis Towers Watson published something towards the end of last year around the value of employee experience and its relationship with business results. This is a particularly interesting thing that probably fits in quite well here.

Ravin Jesuthasan: Yes it actually fits in beautifully and thank you for sharing that piece of research on your monthly release of articles. I must say, just as an aside, that that is one of my absolute look forwards to every month to just actually see all the new stuff that is coming out is really very helpful.

But back to your point about the high performing employee experience HPEX, at the firm Willis Towers Watson we are blessed with getting millions and millions of data points because of our employee insights business. My colleagues have just done an outstanding job of over a multi year, 30 year period actually, looking at what does that high performing employee experience actually look like and quantifying its return, looking at differences between high performing organisations versus the lesser performing organisations and what that experience actually looks like. It's fascinating to see the very discernible differences, it’s not surprising but it's great to actually see the data. Because again, to that point about equal visibility, now it has equal visibility as does measures of capital investment or measures in customer relationships.

David Green: Great. So we have had leadership, integrating technology in the workplace, starting with the job rather than the technology, enhancing the employee experience, building an agile and personalised learning culture, people analytics and metrics, so that's five. Then the sixth imperative is around embedding diversity and inclusion.

Ravin Jesuthasan: Indeed and it goes all the way back up to the first imperative around what does it actually mean to lead and work in this fourth industrial revolution? I think the growing recognition that may have started as largely a compliance movement many years ago around diversity and inclusion is actually a mission critical imperative for organisations if they are in fact to stay relevant in this new world of work.

The legacy silos and boundaries that we might have artificially set up just don't work and are such massive impediments to the success of organisations. So, diversity and inclusion in many ways is almost an underpinning for all of this change going forward.

David Green: So we have looked at the six imperatives now, and as I was saying in the introduction, I think one of the things I really like about the study is it provides several examples of organisations who are already responding to this need for change.

I thought it would be great if you could share a couple of examples with listeners now, we won't share them all because we want them to read the report as well, so just share a couple.

Ravin Jesuthasan: So just a couple that jump out, we started off talking about what leadership looks like, John and I have this example in reinventing jobs and it is in this report as well, but to me one of the great examples of this pivot in leadership from the second and third industrial revolutions to the fourth is Haier.

Haier is the largest appliance manufacturer in the world based in China and it's truly fascinating. They acquired GE’s appliance business which is a 110 year old company. So two organisations that were built for the second industrial revolution, but in a very short amount of time their CEO has pivoted the company from a traditional assembly line with manufacturing processes where the gap between the employee and the end consumer really could not have gotten much further, to creating a set of 200 micro-businesses with the goal of closing the gap between the employee and the consumer.

So now you have an organisation that is perpetually innovating and developing new ideas around appliances. They have developed some of the most leading and amazing technology associated with turning the refrigerator into a portal effectively so think of food as more of a service. You might not know David, that you are going to run out of milk in two days but your fridge knows and your fridge has placed that order with Tesco's, Amazon, etc and all of a sudden milk shows up because you are gonna run out tomorrow. It's absolutely brilliant.

With that though the ask on leadership because leadership at Haier is not there to supervise, manage and control they are there to make allocation decisions. Allocation of capital and allocation of talent to the parts of the business that are run by self-governed employee teams. So coming up with new ideas and those ideas being pitched to the business and the business then makes decisions to allocate capital and the best talent to the best ideas. So it's a fascinating example of what it means to lead a truly distributed enterprise.

David Green: I think they are rightly recognized, really leading the way, if you pardon the pun, in this new leadership model and I think it's something that a lot of companies are trying to emulate.

Ravin Jesuthasan: Yes, absolutely, but as we are seeing it is really tough to do. Again I will go back to my earlier points about what gets in the way, and it is legacy. I think what should give many organisations heart is Haier was able to break a hundred plus year old legacy and move forward in a fundamentally different way.

David Green: So if they can do it any organisation can. Have you got one more example you could share?

Ravin Jesuthasan: Sure. The other example I would share is Unilever. We were really privileged to have Unilever as one of the partners in this report and they are doing so much work across all six of the imperatives. But the thing that I think Leena Nair and her team are doing best is preparing Unilever for the future of work.

There is a great detail of that framework for the future of work that we were privileged enough to work with them on. How they think about this continued investment in the workforce, the re skilling, the up skilling, and the redeployment of talent as more automation comes in as the half-life of skills shrinks, how do we ensure that we have got an agile enough way of managing the employee experience in a way that's responsive to these changes so that talent can still be relevant in a variety of different ways and in a variety of different relationships with Unilever.

David Green: Two great examples and I think it leads on quite nicely to another report that you have been involved in, you must have been a very busy man the last few months.

The picture that you have painted with the six imperatives and The World Economic Forum report really tells us that a different version of HR is required from what we have traditionally been used to. That means a new type of Chief People Officer or Chief HR Officer and Leena is a great example of the new breed.

This report which is a collaboration between Willis Towers Watson and SHRM’s HRPS, on the future of the Chief People Officer, another great report which is available for everyone to read.

Without going into too much detail in this study can you summarise the key findings and also a quick overview of the five pivot points.

Ravin Jesuthasan: Sure, so the two reports parallel each other surprisingly well.

David Green: Well it does help that they both had the same author.

Ravin Jesuthasan:  Although the lenses with which each were approached is quite different. You know the WEF lens around the fourth industrial revolution and perhaps a much bigger vision versus HRPS and SHRM’s lens around the future of that role of The Chief People Officer. And so as part of the report we talked to over 500 Chief HR Officers from around the world, CEOs and board members so we really did get a multi-stakeholder view, did lots of virtual focus groups and the like. What was really fascinating with the five pivot points was not only do they line up but I think they set the stage for the reinvention of the role and the profile of talent coming into that role. Going back to your point we have seen some outstanding successes with the likes of Leena Nair, Diane Gherson at IBM of what that prototypical CHRO role might look like.

But very quickly let’s get back to the five pivot points for your viewers.

The first was pushing the boundaries on organisational agility. The second was unleashing digitalisation. The third was embracing perpetual work reinvention. The fourth was rethinking culture and leadership and with that diversity and inclusion. Lastly the fifth was elevating HR decision science.

David Green: You can see straight away how they dovetail really well with those six imperatives and on the HR decisions side. So I was quite interested, I can't remember the exact figures because I haven't got them in front of me, but that shows that there's a huge opportunity that still hasn't really been realised.

So I think there's a recognition that the data that people have available isn’t what we need to be able to really take the decision science to the next level.

Ravin Jesuthasan: Yes and David that point about decision science is really important. I will go back to work that my colleague John Boudreau has done when he unveiled his talentship model back in Beyond HR from almost two decades ago.

This profession has had a decision science about it, there has been a method to the madness. We know what drives engagement. We know how to shape behaviour. We understand the psychology of organisations and how the different dynamics of teams work and yes we are blessed with lots of new tools and methods and a lot more data today but how do we ensure we anchor all of those new methods in the decision science that we have had that has served this profession quite well and not substitute that decision science with data. I think there is that great TS Eliot quote “what wisdom have we lost in the pursuit of knowledge and what knowledge have we lost in the pursuit of information”

David Green: I think that is a very good quote. Actually this has just come to me but the five pivot points are almost the enablers to help deliver the six imperatives.

Ravin Jesuthasan: Indeed that is really well said because the pivot points really are what we see as being the capabilities of the Chief People Officer and by default then that the HR team and the function, which are then required to actually deliver on these imperatives for human capital.

David Green: So like me, well probably even more so than me, you are fortunate enough to spend a lot of time with some of the real pioneers in our field. You mentioned Leena and Diane as two great examples of that and John is obviously another. For those that aspire to reach the Chief People Officer role can you provide examples of a couple of current Chief People Officers who are effectively combining the six imperatives and five pivot points within their organisations.

Ravin Jesuthasan:  I always turn to Diane, we were former colleagues about 20 years ago at then Towers Perrin, so a good friend and someone I've respected and admired for a long time. Some others though that are in that next generation, if you will, I would say Zoe Hart at Upwork she is incredibly thoughtful and insightful. Zoe contributed to the HRPS report as well.

Then I think a couple of others would be Scott Pitaskey at Amazon Consumer, I have been a huge fan of Scott for many years he is incredibly thoughtful and bright.

Also Melissa Kramer at Target, which is a retail organisation in the United States for those of your viewers who are not familiar with the organisation, but in the face of just tremendous competition from the likes of Amazon, Walmart and others Target has just done exceptionally well. Actually I think the CEO was just recently named CEO of the year, it's no small part due to Melissa and her team's efforts. She has built just an incredibly thoughtful, bright team that is pursuing all of these imperatives.

David Green: And again an example of a legacy type organisation that can thrive if it is prepared to adapt and adopt a different mindset.

Ravin Jesuthasan: Indeed to get beyond its legacy.

David Green: So this leads onto the question that we will be asking all of our guests on the show in 2020.

AI and Automation, we have talked a little bit about it today. Do you see them as an opportunity or a threat to HR?

Ravin Jesuthasan: So I see it mostly as an opportunity. I say mostly because I think there is a tremendous upside for HR as a profession so let me give you a couple of data points David.

If you think back to the second industrial revolution, well actually back to the first, 100% of work being done by humans. Our latest future of work study indicated that that number is today down to about 75% and in the next three years will continue going down.

So what we will have is this plurality of means for work so different human relationships, employees, gig talent, independent contractors, outsourced employees and different forms of automation, RPA, AI, etc. I think the big opportunity for our profession is to shift its mandatefrom being a steward of employment to being steward of work and helping to orchestrate all these different means.

That really is kind of an underpinning for both the HRPS study as well as the HR 4.0 study from the WEF. So I see it as a tremendous opportunity for HR to not only stay relevant but to dramatically increase its impact.

Now I think between here and there, there will be a tremendous amount of dislocation and change.

I think we will see significant disruption to business models, a lot more unrest more than we have seen even in the last five years. I think particularly from a social perspective, as ideas like universal basic income become critical elements in enabling the workforce to transition to this new model.

Also in writing Reinventing Jobs, get HR leading the way in helping organisations get beyond the job to more seamlessly connect talent to work is going to be imperative and again a massive opportunity.

David Green: Brilliant answer. Thank you for being a guest on the show Ravin it has been fantastic to speak to you about all the great research that you have been involved in. How can people stay in touch with you, both on social media and other means?

Ravin Jesuthasan: Absolutely. So my email address is Ravin.jesuthasan@willistowerswatson.com, longest email address in the world, I am also on Twitter @ravinjesuthasan and on LinkedIn as well. I would be thrilled to have as many followers as possible.

David Green: Fantastic. Well I definitely recommend that you all follow Ravin and thank you very much for being on the show.

Ravin Jesuthasan: Thank you David, again such a privilege and an honour. Thank you.