Episode 9: What the Stock Market Reveals About the Future of Work

July 21st, 2021 by Yvonne Harris

In this episode of Welcome to the New Normal, we discuss how the stock market may be the best indicator of the future of work, as investors bet for (and against) tech companies that are trying to make remote work as easy as possible. Research shows that there’s a lot at stake for CEOs, who need employees to be present to justify their positions, and managers, who are in growing competition with robots.

Tune in to the Welcome to the New Normal audio podcast now and follow along with the script below.

News

How do you picture the future of work, in five years,10 years?

How it will shape up hinges on the extent to which we get back into the office.

But how is that evolution getting on?

Well, there are some insights in the Financial Times – it seems there is a battle going on behind the scenes, between those who want us in, and those who want us to continue working from home.

And presumably, some that are somewhere in between…

And the stock market may well be the best indicator of what’s going on.

In an article by the FT’s companies editor Tom Braithwaite, he says that CEOs are desperate to get people back to the office.

Why’s that? It’s because remote work leaves them out of the loop, hurt by the revelation that they are irrelevant to workplace productivity.

Ouch!

On one hand, these forgotten souls might just be winning the battle…

And the key indicator is the stock price of some of last year’s pandemic winners.

Let’s have a look at how some of these have performed…

Zoom became a mega-popular app during the lockdown, as people started a wave of parties, meeting with friends and families…

and of course, using it for work meetings, hosting webinars, and all that fun stuff 😊

In June this year, Zoom was not doing too well on the stock market and was down a third from its lockdown peak.

Zoom’s not alone, RingCentral, an app that redirects landline calls, was down 40% in June.

And peloton, the company that makes those workout bikes that were a huge lockdown hit, was down by a third.

What does it all mean? Well, it means that investors are betting that as life returns to normal, these lockdown stars will inevitably fade…

But, not all the lockdown winners are suffering….

That’s right, cloud storage companies Box and Dropbox are doing fine.

As is messaging app Slack.

These are all solutions that helped employees work from home.

They are doing as well as ever.

And as Braithwaite concludes: these companies, as well as the stock market losers, are plotting strong resistance to a return to the office, pitting them against those anxious CEOs who desperately want their people back…

Could the ambitions of these companies herald the demise of the CEO?

Probably not, but it’s an interesting gauge of how things are shaping up for the future…

Research

If CEOs are in a supposedly existential wrestle with technology, things are definitely looking scary for managers.

Because there is a ruthless Terminator out to get them, and it’s stopping at nothing.

According to research by Lynn Wu at the Wharton University of Pennsylvania, ROBOTS could spell doom for many managers.

But surprisingly, for everyone else, it’s a largely positive experience.

As we’ve seen in previous episodes, the changes to the way we work, and tools that make it easier to organize teams,  are making many middle management jobs less relevant.

Wu’s study, titled “The Robot Revolution: Managerial and Employment Consequences for Firms” has some surprising conclusions.

Contrary to popular belief, robots are not replacing workers.

Yes, there is some shedding of employees when firms adopt robots

But the research data shows that increased automation leads to more hiring overall.

Why is that?

it seems that companies that adopt robotics and automation become so much more productive, that they need more people to meet the increased demand in production.

And any loss of employment came from companies that don’t adopt robotics

Wu said these companies became less productive, lost competitive advantage and, as a result, they had to lay off workers.

But what about this robogeddon for managers?

Well, Robotics make much of a manager’s job redundant.

That’s because as businesses increase automation, and as different tasks and processes are automated, human error is drastically reduced.

And that means close monitoring, the traditional role of management, is no longer needed.

But does it mean middle managers should be jumping ship? Asking to be demoted? Taking on the roles of the people they used to supervise?

Well, not necessarily.

Wu writes that “Highly-skilled professionals are very good at what they do, and they don’t need managers to tell them how to do their jobs or make sure they arrive to work on time,”

But in the new paradigm, “Managing high-skilled workers is much more like coaching or advising. Managers advise them to help them to achieve the best they can at work, and that kind of skill is very different from supervising work.”

This means that managers have to stop being box tickers, and need to think more about making better relationships.

And that can’t be a bad thing.

Number

5

This week’s number is 5

5 working hours.

Research shows that 5 hours may be the perfect number of hours to work in the day.

It sounds too good to be true.

And in a way, it is…

To find out why let’s have a look at why 8 hours became the norm in the first place…

It seems to have come from that great production-line innovator (and somewhat dubious personality) Henry Ford.

Ford wanted his factories to turn out their famous Model T 24 hours a day. So the company split the day into three 8-hour shifts, and we’ve been following the lead ever since.

So why move to a five-hour week?

Here’s what Alex Pang, founder of Silicon Valley consultancy Strategy and Rest, told Wired:

“Research indicates that five hours is about the maximum that most of us can concentrate hard on something,”

“There are periods when you can push past that, but the reality is that most of us have about that good work time in us every day.”

There have been successful experiments.

Employees at Californian eCommerce business Tower Paddle Boards were skeptical.

But they quickly adapted to cram eight hours of work into five, innovating like “Real Productivity Experts”, according to the company’s CEO.

German management consultancy Rheingans also tried it out, with staff working from 8 am to 1 pm, without breaks, and banning smartphones from desks and ditching apps like Slack.

Productivity went up 50%.

But it isn’t without its downsides. Rheingans CEO Lasse Rheingans told Wired his company had lost something on the relationship level.

It had impacted loyalty and team culture.

And it hit the relationships people form when they have time for chatter and small talk and coffee together.

And as we’ve seen again and again in this series, it’s that chat and relationship building that oils companies’ human wheels, especially for newcomers getting their first foot on the ladder…

Thanks very much for tuning in. You can follow us on Twitter, LinkedIn, and YouTube for the latest news on the podcast, and don’t forget to subscribe to us on your favorite podcast streaming program.

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