30
May

CEO Dilemma: Invest in People or in Automation?

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Prominent CEOs often say something like “Our people are our greatest asset.”

I saw this on the back of a diesel truck while driving through Colorado recently.

Is this just lip service? I wonder how many CEOs actually believe it.

How many CEOs consider their employees their single most important asset–a resource to be valued, protected, developed, invested in, and rewarded? To be prioritized above everything else, and preserved at all costs?

On the other hand, how many CEOs consider their workforce to be dispensable, their single greatest expense, a liability, a necessary evil, which they will gladly shed as soon as robots, machines, automation, and artificial intelligence can advance enough to replace them?

How many transportation companies are eager to replace all their drivers with self-driving cars and trucks?

Wouldn’t they be crazy not to?

How about investors? Do investors care about company employees as assets?

If investors own stock in a company, and the stock is declining, won’t they put pressure on the CEO to reduce the size of the workforce, and to replace people with machines and software? Can you imagine a group of activist investors demanding that the CEO keep all the employees and retrain them if necessary to keep them onboard, to keep them in the family, since they are, after all, the company’s most important asset?

I wonder how many CEOs are in the “can’t wait to replace them with machines” camp.

I wonder how many more CEOs will be hired precisely to preside over and even accelerate the elimination of human labor as machines rise and software and AI eat the world.

I wonder how many millions, tens of millions, or hundreds of millions of workers will be displaced in the coming decades as more and more jobs can be done better, faster, cheaper by machines.

This is one of the most important topics in the world today.

There are serious financial pressures on CEOs whose industries and companies are being disrupted, to increase automation and cut costs.

Against that stark reality, here’s some really great news from a venture-backed startup in New Jersey.

Boxed CEO Chieh Huang may have the perfect answer.

He is doing both.

Boxed has recently invested millions in robots and software to automate the picking and packing of shipments.

This is a mobile e-commerce company, designed to compete with big box retailers but with no membership fees. Just download the Boxed app, select your products, and buy them in bulk, with fast and easy delivery directly to you.

 

… a son of immigrants… grew up poor … has done at least two things to invest in his employees that merit attention and imitation.

 

But

could have replaced 75% of his picking and packing workers…. but instead is retraining all of them for different roles

  1. Is paying college tuition for the children of his warehouse workers

Use the quote about “have enough money, couldn’t ever spend it all”

How did he get his board of directors to agree to this….they aren’t even profitable yet?

I’ll be blogging regularly about CEOs, then and now, who chose to invest in their employees, because they truly believed they were the most important resource the company would ever (OWN/have/have stewardship for).

Can you nominate a CEO that you think invests in his/her employees?

What does that look like? How can we encourage more of this?

 

 

WhatsApp employed 55 people when it was acquired by Facebook for $19 billion. In a sense, it disrupted the telecommunications industry. Remember AT&T employed 400,000 (check) operators at its peek, when moving cables manually was required to route calls.

When startups use software and machines to do things at a fraction of the cost of human labor, larger companies need to respond.

 

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1 Response

  1. Pablo Riboldi

    Paul,
    This is a really important topic in every industry, and not only for CEOs, but for product managers, and mid-level managers as well that need to define the products and the processes for creating products and will be the ones implementing the directions from the CEOs.

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