Article by Clive Black: Coriolis’ growing relevance in the deeply foggy political UK economy

May 2, 2017 12:13 pm
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Businesses continually try to explain to politicians that the best thing they can do to create conditions to thrive is deliver economic stability. Such stability rarely comes by chance, reflecting as it does the combination of a sound macro-economic position, calm times, good governance, and a society comfortable in its own skin.

Politicians of course, are both a symptom and outcome of their own policies and the way that they listen to, reflect upon,  engage with, and represent their constituents. For some years now, the listening part has been a serial weakness of the political classes. This has allowed an increasingly divided Britain to emerge where, in the end, frustrated elements of society across these Isles have bitten back. The outcome is anything but clear and stable.

An example of politics and business overlapping is immigration; a delicate subject that requires a calm, balanced and accurate assessment of matters. Arguably, liberal policies under Blair served to keep the supply of labour high, giving many industries an easily accessible pool of highly motivated people helping to deliver sound economic growth in the UK for many years.

Indeed, that migrant workforce, largely from the EU, has often covered the fundamental cracks and deficiencies of the UK’s indigenous labour market. An inconsistent education and training system as well as an unbalanced relationship between welfare benefits and low paid work has encouraged a work shy and unskilled community.

Combined, these forces have also served to deteriorate the UK’s labour productivity, albeit many firms have been very rational in deferring capital expenditure on machinery and automation over manual processes from a profitability perspective. This is something which is too often overlooked by politicians and City economists, who collectively produce very little for the economy themselves.

David Smith, sensible economic commentator at The Sunday Times, recently compared France’s 35-hour week and restrictive labour laws to the UK’s more flexible labour process. Unemployment in France is more than 10% compared to the UK which is less than 5%. Labour productivity is much higher in France than in the UK,  perhaps because businesses automate to avoid employing people. So what do society, politicians and business folks prefer; high productivity or high employment?

Over-liberal immigration has, it turns out, revolutionised British politics. It is a prime factor in why the UK is leaving the EU. The leaving process is very difficult to predict; early signs suggest the EU is unhappy with the UK despite a democratic decision, and is also keen to discourage other departures. As such the probability of no deal between the UK-EU cannot be dismissed, which will pose considerable challenges for business.

Labour processes will be a prime area of focus because British business, individually and collectively, will be competing on changing stages in future years. Some firms will see their domestic position strengthened with import substitution opportunities, others may be challenged by new international competitors from outside the EU that operate on very low cost bases. Some firms may see bridges raised in their EU markets whilst others may seize the pressure and opportunity to seek to access the wider world as the Leave proponents suggested. Many firms, of course, will experience all of the above.

Either way, change will require entrepreneurs to be on the ball to their cost bases and particularly the role of labour and automation to a degree perhaps not seen before; noting that it is clearly the case that most businesses understand their markets, customers and competitors in this respect.

As the UK leaves the EU, new competitors and markets may require additional insight. Assuming competitive products and services whilst another debate rolls on on the knowledge economy, innovation, research and development, UK business folk will need to be well connected to the virtues and vices of international trade. Being noisy to trade association and governments alike as to the supply-side policies that they need in order to meet the claims and calls of politicians that Brexit will be alright on the night.

At the moment, the political economy is distinctly foggy as the political classes awake from their deafness and start dealing with the more direct demands of their electorate; both sides of the Atlantic and the Channel intact too. For UK business, the Scottish Referendum, the EU Referendum, and now another UK General Election represent chaos not stability.

While predicting the future is less straightforward than ever, change and volatility also brings opportunity. If the UK will be facing the wider world more so than the EU in future, businesses need to be thinking about the threats they need to confound and the opportunities that they can seize upon for future profitability. At a strategic and operational level, Coriolis faces into the emerging environment effective, determined and aligned to the needs and wants of its client base because global markets require global perspectives and competitiveness.

Written by Dr. Clive Black, Advisor to Coriolis

Are we losing our own intelligence in favour of Artificial Intelligence?

May 2, 2017 9:54 am
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I grew up thinking that on August 29th 1997, an automated system called “Skynet” would destroy all life on Earth. Whilst the apocalyptic predictions from the movie Terminator may not have happened after all, artificial intelligence certainly has. From the self-driving cars of Tesla, to the algorithms tailoring specific advertisements to your web browser, today’s automated systems are more clever, agile, intuitive (and intrusive) than ever before.

Born out of a need to satisfy the skills gap left by an ageing and shrinking population, early this year a large Japanese insurance firm announced that it was replacing the functions previously performed by 34 employees with IBM’s revolutionary Watson Explorer AI. It’s an incredible achievement and a giant leap in automated systems that will forever change the industry in perhaps the same way that the autopilot system revolutionised the airline industry. But whilst we continue to be amazed by automation and the opportunities these technologies provide us with, should we be so quick to adopt these systems without considering the broader impacts?

In order to predict how increasingly automated systems will affect our working lives in the future, we need to first learn the lessons of the past. In the 1950’s, Professor James Bright studied the human impact of automation in industry. Despite being heralded as a way of upskilling employees and boosting productivity by removing routine manual tasks, Bright found that automation was actually deskilling and demotivating employees. He concluded that the positions no longer required skilled operators as the “skill” could be built into the machine. As a result, skilled employees became bored and their skill level inevitably withered over time. Evidence is mounting that AI and automated systems are now having the same deskilling effects on the workers of today, including highly trained professionals, managers and specialists.

In 2007, British aviation researcher Dr. Matthew Ebbatson theorised that airline pilots were experiencing “skill fade” as a result of an over-reliance on autopilot. Ebbatson conducted experiments in a Boeing flight simulator where he asked pilots to perform a variety of manoeuvres under different conditions typically performed by the autopilot. The results of the experiments led Ebbatson to conclude that “Flying skills decay quite rapidly without relatively frequent practice”. As the standard industry indicator of an airline pilot’s competence is measured in “hours of flight” rather than “active flight time”, and given that up to 85% of flight time is controlled by the aircraft’s autopilot system, it’s hard to believe that airline pilots are getting “frequent practice” they require.

Minor skill fade in airline pilots can be disastrous. Autopilot-related pilot errors have been implicated in several recent air disasters, including Air France Flight 447 in 2009. The pilot incorrectly responded to system prompts after the autopilot was disengaged due to iced up wind speed sensors, ultimately sending the Airbus A330 into a stall before plunging into the Atlantic.  The conclusions from the investigation of this incident prompted the Federal Aviation Administration to issue a warning that pilots “have become accustomed to watching things happen and reacting, rather than being proactive” and urged pilots to spend more time flying “by hand”.

Whilst the importance of Ebbatson’s findings cannot be overstated, they should not be viewed in isolation to the airline industry. Physicians can miss critical details when they rely heavily on software prompts to guide them through a patient exam (rather than following the patients narrative thread). Architects and designers can lose the aesthetic sensitivity of their craft when they rely heavily on computer aided design over more traditional, tactile methods. Engineers using automated systems can mistakenly allocate resources to the symptom of an asset fault, whereas a trained plant engineer would have first identified the problem through a root cause analysis.

Our skills get sharper when we regularly use them to overcome a diverse range of complex challenges. However, the primary goal of automated systems is to eliminate the need for us to be faced with this complexity, leaving us to complete passive, mundane tasks such as monitoring and data entry. Whilst it all sounds bleak, the choice between improving our skillset and increasing our exposure to automation doesn’t have to be mutually exclusive. In his book “The Glass Cage: Automation and Us” Nicolas Carr introduces the concept of “human-centered automation” Where the talents of people take precedence. Systems are designed to keep the human operator in what engineers call “the decision loop”—the continuing process of action, feedback and judgment-making. That keeps workers attentive and engaged and promotes the kind of challenging practice that strengthens skills.

Machine learning algorithms and augmented reality have given birth to a significant development in the human-centred approaches known as adaptive automation (AA). AA monitors people’s physical and mental states and makes decisions to shift tasks and responsibilities between them and the computer. For example, if the system senses that an operator is having difficulty with a procedure, the system intervenes and reduces the workload to allow the operator to focus. When the system senses that the operator is paying less attention or becomes bored, it ramps up the person’s workload to capture their attention and build their skills.

It’s natural to be amazed by the development in automation and the power of machines, but we must also take care not to underestimate our own talents. If we continue to allow our own skills to fade by relying on machines to do our work, we are going to become far less capable and competent, resulting in a world better suited to machines than us.

Written by Sam Byrnes, Coriolis Ltd

References

Nicolas Carr “The Glass Cage: Automation and Us.”

Wall street journal – Automation makes us dumb

https://en.wikipedia.org/wiki/Air_France_Flight_447

Image source: http://www.informationweek.com/iot/google-developing-panic-button-to-kill-rogue-ai/d/d-id/1325783

Robo GP – a practical reality?

April 25, 2017 11:15 am
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During my University days up in the North East of England, I remember a particularly challenging seminar where we were tasked with writing a Knowledge Based System, the detail of which is now lost to me. But what I do recall is that the challenges were ample; I’m not a naturally gifted writer of code, and my brain capacity was possibly more focused on where you could buy the cheapest beer. The following sentence will show my age; when I was at university studying Business & Information Technology, the internet had been conceived but was not yet in use by the general population. Whilst I remember another seminar on a fanciful idea about “electronic mail”, I don’t recall any further discussion on the World Wide Web and how it would change the known universe.

I do recall the enthusiasm of the Lecturer for the topic at hand.  The idea being that a computer could be programmed to understand a decision tree and the rules around a topic in enough detail to work out the right answer based on a series of Yes/No answers.  But I’m pretty sure my imagination ended at tasks like helping people buy the right product for their DIY ventures; tasks that were disconnected from feelings and emotions.

Such software is now prevalent in many aspects of our lives in various forms. Online searches for loans or insurance help us quickly identify the best options for our needs, but ultimately the human factor is still the deciding factor.

Now it seems that we are ready to let robots diagnose medical issues in place of humans. Babylon Health are at the forefront of this development. Alongside their existing scheme in Essex allowing NHS patients to book webcam consultations with private doctors, they are now piloting a smartphone app in five London boroughs as an alternative to the NHS 111 urgent but non-emergency helpline.

The 111 service is staffed largely by non-medically trained personnel working through a series of questions with semi scripted answers. The service has previously been heavily criticised for the speed of responses and for potentially increasing the number of patients visiting A&E.

Babylon Health’s ‘chat-bot’ is definitely not a human, but it’s bedside manner is surprisingly sympathetic from what I’ve seen. The artificial intelligence (AI) app, which is still in development, gathers information from the user in a series of questions with pre-defined responses to choose from. The responses are matched back to a vast database that is said to contain over “300 million items of knowledge”; the largest of its kind. The app then makes a recommendation as to the best course of action, for example you should make an appointment with your GP, go to A&E, a pharmacy, or settle in on the sofa.

So whilst the Essex trial allows users to access private medical care and raises many concerns about access to timely, affordable health care for all, the pilot of the AI App sits alongside the NHS and aims to improve access to basic health care information and take pressure off existing services.

Reports suggest that 85% of face-to-face consultations with GP’s are unnecessary. Tests focusing on triage cases where the app is focused found that it was accurate in 90.2% of cases. Doctors diagnosed 77.5% accurately, and Nurses hit 73.5%. The app was also much quicker, averaging around 67 seconds (approx. 12 questions), compared to Doctors who averaged more than 3 mins to reach the same conclusion.
Robots are already heavily utilised in operating theatres, allowing doctors to perform more intricate procedures less invasively than before. Video conference type technology allows doctors to review patients remotely but this hardware-based bedside manner seems unlikely to hit the mainstream NHS any time soon.

In an era where AI/robotics are theoretically “threatening” thousands of jobs in other industries, wouldn’t healthcare be a natural beneficiary? With the potential to free up NHS resources under continued pressure will allow highly trained and skilled humans to focus on healing, rather than listening to slightly off-colour patients seeking a little reassurance.

An app might not appeal to everyone, but the advances in voice directed AI are enormous. Have you spoken to Siri recently? Sometimes it actually knows what you’ve said. Surely once this type of AI app proves itself, it could be switched to a more traditional voice-based service that would have a greater appeal.

But for those of us that love an app and currently rely on the internet as the first port of call for any of life’s queries, why wouldn’t you want to avoid the full blown panic of a google based self-diagnosis when you can access credible advice from your phone at any time?

Written by Charlie Woodward, Coriolis Ltd

References:
http://www.telegraph.co.uk/technology/2017/03/07/robots-will-soon-able-diagnose-accurately-almost-doctor/
https://techcrunch.com/2017/01/04/babylon-health-partners-with-uks-nhs-to-replace-telephone-helpline-with-ai-powered-chatbot/
http://www.wired.co.uk/article/babylon-nhs-chatbot-app
https://www.engadget.com/2017/01/05/nhs-chatbot/
https://techcrunch.com/2015/03/06/the-future-of-voice-activated-ai-sounds-awesome/
http://www.thedrum.com/news/2017/02/06/the-ai-doctor-will-see-you-now-how-babylon-getting-people-trust-chatbot
https://www.theguardian.com/sustainable-business/2016/dec/29/im-a-gp-will-a-robot-take-my-job-in-2017

Image source: http://www.b2bnn.com/2015/12/10-ways-robotics-is-transforming-the-healthcare-industry/

Is work life integration the key to effectiveness?

April 18, 2017 9:46 am
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Let’s start with the most common analogies. Throw out the image of your work and life balancing on a set of scales, and picture instead, a pendulum. As a pendulum swings, it spends a split second at the equilibrium point, and most of its time at the extremes. The old scales analogy implied that your time should be allocated equally between work and life. The pendulum better reflects not only reality, but a blueprint for how effective people try to integrate their work and life.

Life doesn’t stop when you’re at work’;

work doesn’t stop when you’re ‘at life’.

Carving out enough time for a meaningful home and social life alongside high priority work assignments often leaves people feeling like a failure in both camps. To tackle this, we try to impose boundaries on our time. Where we can/can’t take our phones/laptops, when we should/shouldn’t allow ourselves to bring our work home, and when we are/aren’t allowed to check emails. If you find that you consciously leave your work at the office you are conceding to the idea that all work is pain and all life is joy. Maintaining these distinctions between work roles and home roles might actually be exacerbating the issue.

If this sounds like you, you may well be struggling with the effects of cognitive role transition. Psychologists define this as “discrete episodes in which an individual is engaged in one role and experiences off-topic thoughts regarding a different role”. We’ve all experienced it. It’s suddenly remembering an email you need to send whilst you’re out with your friends at the weekend. Or remembering a family member’s birthday while scheduling a meeting at work. If your goal is to separate your work and home life, these transitions will consume significant cognitive energy as you push them from your mind. Previous advice would have been to minimise their affect through disciplined boundaries. However, researchers at St Louis University have found that blurring these lines may better equip us to handle these transitions. Focusing on integrating your work and life could even drive better results in both. If we return to the pendulum analogy, you don’t need to put work at one extreme and life at the other.

Work life integration is the strategy for work life effectiveness.

Sometimes when we’re at work we get to do the fun things that provide us with purpose and make us feel valued. If you force yourself to treat work and life as one entity you can focus on each task more effectively, applying yourself where the pendulum swings. Work life integration is the measure of how freely and frequently your pendulum swings from one to the other. By orienting yourself in this way you can consciously seek out ‘two-way wins’, achieving success in both domains without sacrificing one or the other.

What have I learned?

I’m not writing this article having seamlessly integrated my work and life. I still have some way to go to achieve this. But I do write this having seen the benefits of finding the opportunities to integrate. As a consultant, I dip into my bank of life experiences daily when leading client teams. At work, I challenge myself to break the ‘working hours’ boundaries I have built in my mind. As a result, I’m flexible on early starts and longer hours when the need arises, and know which working environments suit the tasks I undertake and utilise my time there accordingly (the living room sofa being the chosen workplace for the task at hand). While I struggle with the energy depleting effects of transitioning between roles, doing so now serves a purpose, reminding me that the roles in my life are competing not integrating.

 

Written by Jack Cheesbrough, Coriolis Ltd

An evolving labour process – Article by Dr. Clive Black

April 13, 2017 1:45 pm
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Geopolitics is the order of the day; any student of political science must think all their Christmases have come at once. On the other hand, I sense most entrepreneurs have probably had their fill of politics for the time being. It’s worth noting that volatility can also bring opportunity, as people seek to run their businesses to best effect in these changing times.

Times are changing so rapidly that few can predict or plan how the United Kingdom (UK) is going to leave the European Union (EU) with much certainty. This in turn begs the question of what the composition of the UK is going to be and how the UK will be trading with the Rest of the World. Will the ultimate deal maker turned politician Donald Trump be true to his word and oversee a relatively prompt and mutually beneficial trade deal with the UK?

The geographic scope for challenge appears extensive, with Gibraltar emerging as a potentially additional spanner in the UK’s path to a sensible exit, nay trade deal with the EU. The other material procedural minefield may be in Ireland, where all participants understand the need for more tempered dialogue than that of Michael Howard on ‘The Rock’, albeit the Northern Ireland Assembly is not helping matters through its own shambolic state.

Whilst all this is so, business seeks to press on. In this jigsaw puzzle of politics, perhaps the major post-Referendum concern for British business was the security of labour supply, particularly so in competitive and low margin industries like HORECA, agriculture, health and social care. Whilst there is a parallel wider debate about British living standards with inflation creeping higher against relatively stable private sector wages and salary movements, the fact remains that the UK has record employment levels with unemployment running at relatively low participation rates.

Securing the right labour in such a market is challenging at the best of times. Doing so when there is a skills shortage and an international workforce facing uncertainties over their status as residents and workers in the UK is all the more concerning.

Commonsense suggests that guaranteeing the rights and responsibilities of those from the EU working and living in the UK should be a relatively straightforward component of the UK-EU divorce negotiations. Over 2m Britons live in the continental EU, and a mutual respect should be at the fore here as folks and their employers face uncertainty.

Whilst this is so, one senses that the aggregate labour process is evolving, ever more from the business side than the local supply side. What do I mean by that? Well, it would be encouraging indeed if the steps through education and welfare policy, amongst others, were producing a domestic labour force universally motivated and skilled. In the evolving world there is the need for the UK government to genuinely listen to business on the supply side labour force priorities; and business from the CBI, but perhaps more importantly the organisations representing SMEs, need to be much more vocal and clear of their labour force needs too. I only say this because I see and hear little evidence of a clear message.

As usual, however, businesses tend to just get on with things, rather than waiting at the stop for the bus that rarely arrives. So, I also see evidence of businesses reassessing their own labour processes which may be leading to a nudge up in permanent rather than temporary staff. This could also mean a reassessment of their own training and instruction programmes, including graduate recruitment, with the Apprentice Levy also conditioning thinking. Quite whether this thinking means more UK nationals participating in the labour force remains to be seen.

Equally, under George Osborne, it can be argued that the UK labour market was upwardly repriced. In addition to the Apprentice Levy, the National Minimum Wage was introduced whilst National Insurance remained a material tax on labour (all domestically applied initiatives it should be said). That upward adjustment in labour costs which serves to attract international labour can also be expected to lead businesses to consider more automation to my mind. Indeed, functions and projects that were previously undertaken by people, rationally so, are now under consideration for automation across industries. How collectively such programmes pan out could be significant for labour demand and the employment trends mentioned above.

Whilst not wishing to overstate anything, if the supply of labour is short, the price too high, the labour quality too low, then automation in all its forms in people-centric industries can be expected to be reprioritised.

 

Written by Dr Clive Black, Advisor to Coriolis