The Future of Innovation: How Companies Will Balance AI and Human Skillsets to Win Lynda Gratton | Professor, London Business School

Innovation gets a lot of hype at the organizational level but is hard to execute. It’s why many companies that are not built as innovators rely on acquisition to support innovation. Similarly, on an individual basis, creativity is challenging to define. And yet, the skills that support creativity and innovation are ones that are inherently human. Empathy and connectivity (in terms of human networks) are also distinctly human traits that can exist at the organizational level.

Meanwhile, technologies that support connectivity of work and production of work are gaining huge adoption. From a connectivity perspective, the pandemic forced hybrid and remote work as everyone who could was using technology to maintain communication with the “office.” These “connection” technologies affect where work takes place – namely, untethered to an office. And “productivity” technologies, developed in parallel, have increased workers’ abilities to produce more and better work – even cognitive work.

As I addressed in a recent Harvard Business Review article, the future of work is largely undecided, not because of where the workplace will be, but because of how leaders pressure test their long-held assumptions about how work gets done.¹ That decision set now includes what work gets done by humans versus the technologies that make work better, faster and more efficient. As organizational psychologist Kurt Lewin put it, organizations will “unfreeze” their established assumptions and norms when faced with an external threat (like COVID), leading to a period of uncertainty and transition as we see now. That means an opportunity to “refreeze” into new norms and assumptions.²

While technology can certainly enhance productivity and efficiency, it is people who ultimately drive innovation, collaboration and creativity. Where the balance nets out as these technologies gain wider adoption in the business world is a challenge for executive leadership to tackle – and fast.

Accelerating Human Skills

Human skills (or soft skills) like empathy, creativity, communication, collaboration, emotional intelligence and social skills enable individuals to build relationships, communicate effectively and achieve success. These people skills are so critical in the workplace because they enable us to connect with others on a human level. Consider the importance of empathy in healthcare, where providers must marry their expertise with human-centric care for patients. One study cited that “The empathetic professional comprehends the needs of the health care users, as the latter feel safe to express the thoughts and problems that concern them.”³

People skills are essential for effective leadership, problem-solving, innovation, and adapting to change. Human skills are necessary for building trust establishing clear lines of communication and fostering a culture of openness and creativity. Additionally skills like resilience, creativity, and curiosity enable us to embrace change to become more flexible, adaptable and innovative. How critical were these skills for leaders in March 2020 at the onset of the COVID-19 pandemic as companies moved from in-person operations to virtual overnight?

Human-centric skills enable us to create value for others. In today’s world, value is created not just by producing goods and services, but also by creating experiences, solving problems and making people’s lives better. Human-centric skills like empathy, listening and problem-solving enable us to understand the needs and desires of others and to create solutions that meet those needs. By cultivating these skills, we can become more effective at creating value for others, which is the key to success in today’s economy.

While computers may network impersonally, human networks – relationships that are a uniquely human phenomenon – are important drivers for innovation and creativity for business. When diverse groups work together and combine their unique perspectives, the results can be extraordinary and extremely value-additive to their organizations.

Companies understand the network ecosystem and have networks with whom they collaborate. Diverse networks empower organizations to find out what is happening in the world to stay ahead of competition and drive innovation. One of the reasons incubators and co-working spaces have become so popular is because they empower companies (and the people within them) to learn from others. These collaborative activities spur individual creativity and curiosity and enable leaders to see problems and opportunities in a new light.

Capitalizing on Technology’s Skills

If you look at how people innovate around work practices, they do it through experimentation. I run a research group that networks into 50 companies and enables our team to see which companies are doing interesting experiments. When we are seeing disruption in the workplace, like what we are currently experiencing, it’s hard to know where things will net out, which furthers the need to experiment and learn. This inflection point, to harken back to the “unfreezing” of Lewin, is where technology practices come to light.

Growing technologies like artificial intelligence, virtual reality and more have seen massive adoption in recent months, but we are only scratching the surface of how these transformational technologies can impact the how, when and where of work. Already, companies like Accenture are implementing VR into the workplace to support onboarding and socialization with the firm for new associates (with 150,000 associates being onboarded in the metaverse in 2022 alone), as well as extending VR into their practice to support clients.⁴ For many companies, the virtual space will be the space of innovation where they can experiment with a lower cost of failure. For example, it makes much more sense, ethically, financially and practically, for early-stage healthcare workers to train using VR over human patients.⁵

The fact that adoption rates for these technologies have been so steep (100 million people started playing with ChatGPT in the first two months after launch, giving it among the fastest adoption rates of any emerging technology)⁶ is indicative of the workplace need for productivity and how this tech can change work more broadly. In a tight labor market like that in the U.S. in 2021-22, companies need these technologies to make up for unfilled positions. Even before the pandemic, a study from Korn Ferry found that a global talent shortage could lead to an $8.5 trillion lost revenue opportunity if not addressed.⁷

AI applications have had a major impact on the technology of work in recent decades. Consider how manufacturing facilities have used robots for auto manufacturing, with more than one-million robots now employed in the industry.⁸ Now, these applications are impacting cognitive work in the same, simplified manner. While editing tools like Grammarly use basic machine learning and natural language processing to improve editing and make writers better, ChatGPT takes things to a new level. For example, I recently asked ChatGPT five questions and it came back with six pages of tightly argued analysis. Moreover, it was written in my style because I asked ChatGPT to do so (granted, I’ve written 11 books so there is a lot of writing for it to draw from).

When technologies like VR and AI begin to affect cognitive work, there are two potential outcomes. Either workers will down skill and get paid less, which has happened in the U.S. with some automations in production and clerical work, for example, or workers will upskill and rely on technology to enhance their human skills.⁹ We’ve seen how companies like Amazon have recognized that, as the tasks they are asking of their employees become more automated, they need to find ways to upskill their workforce.¹⁰

The Intersection of Human Skills and Technology Skills

We’ve reached a critical junction where distinctly human skills are coming head-to-head with the technologies impacting them, but these two assets, if leveraged correctly, should mutually reinforce one another in the workplace to create a more beneficial impact for the organization.

The interaction of these skills is of particular importance in certain industries such as healthcare. In this space, technology is rapidly changing the way care is delivered, with new technologies such as telemedicine and wearables enabling remote patient monitoring and personalized care. However, it is the human skills of empathy and communication that are critical for building trust and rapport with patients. Healthcare professionals who can leverage technology to deliver high-quality care while also demonstrating strong human skills will be highly valued. In the financial industry, individuals who can communicate data-driven decisions are highly valued. In both cases, humans are asked to use uniquely human skills while leveraging better technology to achieve better outcomes rather than being asked to perform rudimentary tasks that, as we’ve seen, can be done by machines.

The way humans learn from each other is different from machines because machines learn from the data put into them – which requires the creativity and foresight humans bring. Think of how important it will be for algorithms not to have inherent biases, for example (something even Congress is looking into).¹¹ Humans can think about the future and exhibit creativity where they bring different ideas together to develop something new and different. It takes a high level of functioning to do these things. Organizations already see the benefits of these workers and label them “top performers.” That being said, ChatGPT can operate at a level that’s better than most poor performers.

Curiosity sits at the heart of creativity. Much of this novelty comes from the connectedness of diverse networks. If everyone in your network is like you, you’d hear the same thing over and again. You can have specific conversations about things you know but can often end up in an echo chamber. On the other hand, when you engage with people from different professions, ethnicities, age groups and industries, you hear something new – these human conversations spark creativity.

Technology has undoubtedly transformed the workplace, but people skills remain essential for success. It is people who ultimately drive innovation, collaboration and creativity. By recognizing the importance of people skills and investing in their development, organizations can ensure that they are well-equipped to navigate the challenges and opportunities of the modern business world.

The Future of Engagement

When I teach classes at London Business School on the future of work, we think about global technological trends, but by the end of the course, we talk about what it means for the students. It’s a combination of curiosity about the self and the world. This curiosity helps connect the different levels these future business leaders will be operating in. Now, the intersection of technology and human skills is one of those levels.

The intersection of human skills and technology in the workplace is a complex and constantly evolving topic. Technology is transforming the way we work, creating new opportunities and challenges for employees and employers alike. While many fear that automation and artificial intelligence will make human skills irrelevant, the reality is that these two skillsets are increasingly intertwined.

By way of example, portions of this essay are taken directly from ChatGPT responses for an essay in the style of Lynda Gratton on technology vs. people skills in the workplace.

The fundamental question is: what is it that humans do better? We have identified the list of things humans do better than machines, but these inherent human skills are not part of the DNA that defines most companies. Moreover, not just any old human is empathic with good judgment and foresight. That human is a top performer.

We are in a disruptive period with regard to work and related technology. Just a few years ago, Zoom made it possible for many people to work from home. It changed the norms, and norms are really important – companies are having to backpedal and rethink what we do and when, face-to-face or remotely.

Business leaders are facing questions of how to manage hybrid, including what tasks people should do in the office or at home and how to leverage emerging tools like AI and VR. My guess is these technologies will be used on an individual basis. People will become “augmented,” using these technologies to improve their skillsets and become much better performers.

The hope for many humans is that they can upskill or reskill, as we’ve seen with frontline workers, but what technologies like ChatGPT have shown is that AI can impact cognitive work in similar ways to manual work. What this shift will mean is either workers are forced to down skill and their job is to essentially check the work of the algorithm, or they upskill and do the creative ideas and thinking about the future. What it’s doing is taking away easy stuff and leaving humans to do hard stuff (creativity), leaving the workplace with only high-performing humans with extra tools in their belts. This transition will take years to implement – but it will lead to a more efficient, innovation-centric future for businesses.