253 Leadership in the Future of Work with Joseph Fuller, Professor of Management Practice and co-head of Managing the Future of Work Project at Harvard Business School | Partnering Leadership Global Thought Leader

***DISCLAIMER: Please note that the following AI-generated transcript may not be 100% accurate and could contain misspellings or errors.***

Mahan Tavakoli: Professor Joseph Fuller, welcome to Partnering Leadership. I am thrilled to have you in this conversation with me. 

Joseph Fuller: I'm delighted to be with you and join your audience. 

Mahan Tavakoli: I have learned so much from you. Read every one of the papers that you have put out, love Managing the Future of Work podcast that you and Professor Bill Kerr of Harvard Business School do together.

But before we get to some of your work, would love to know whereabouts you grew up, Joe, and how your upbringing impacted the kind of person you've become. 

Joseph Fuller: In many ways Mahan, it is not a very interesting story. I'm the child of two Harvard professors, including a tenured member of the Harvard Business School faculty, my father.

I was born in Cambridge, Massachusetts. I was brought to my first home by my family in Cambridge, Massachusetts. I went to college in Cambridge, Massachusetts. I went to business school right across the river in Austin, Massachusetts, and I will be buried in the Mount Auburn Cemetery in Cambridge, Massachusetts.

Setting aside a lot of plane travel in that of Boston, it hasn't been a very long journey. 

My parents taught things like organizational behavior and when my father left the Harvard Business School, he became the Chief Human Resources Officer at General Motors Corporation in the seventies.

So in some ways, I'm both back in the family business and studying the family's topic, which is human assets, their productivity, how to manage them more effectively. 

Mahan Tavakoli: I love the involvement that you've had in the Future of Work project. What got you started looking into future of work? 

Joseph Fuller: When I joined the HBS faculty after 30 years of being a founder and a C E O in the management consulting business, we had a project that was still fairly new at the Harvard Business School about the US economy and its competitiveness.

This was started by our then Dean, Nitin Nohria, right after the Great Recession. And in looking at the data with some of my friends, people I had collaborated with historically who were running the project, what jumped off the page at me was the degree to which the decline in the workforce of the United States as a source of American competitiveness was widely cited by our alumni, who we had for the first time canvased on these issues. And it certainly fit, Mahan, with what I was hearing from my clients and had been hearing from my clients. 

Going back now to 2012, we started this project, and I must admit, had I known how popular it was gonna get, especially over the five or six years when I seem to be laboring in the field in a lonely way, I might have trademarked some of the phrases that they were using back then because they'd become quite widely applied.

Mahan Tavakoli: It has become really popular and it's, on the forefront of the conversations and thinking of a lot of CEOs that I interact with and I hear from Joe. They were struggling with finding good talents before the Covid crisis and post covid, there is a struggle with talent.

A couple of nights ago I was at an Economic Club of Washington Dinner. The Fed chairman was talking about the fact that we have 5 million fewer workers in the US than number of jobs. And that problem is going to continue. 

So what are you seeing with respect to some of the challenges you said you saw early on, and those trend lines, are any of them getting better or are they getting worse?

Joseph Fuller: It's hard to know quite yet about how these trend lines are gonna resolve. Cause we're still in the aftermath of covid and we've already seen, for example, some adjustments in wage growth levels for lower-skilled workers. And in things like the mean time it takes to fill certain positions, historically in the United States, it's taken about a month to fill an open job on average. It's gotten as high as 43, 44 days. And one may say, oh, that shifts another couple of weeks. That isn't so bad. Anything that is increasing by 50%, that's a pretty big variation. 

I think though that there are several long-term trends which are very perilous and show no sign of changing. Let me just name a few. If there's one number that I'd suggest your listeners keep track of to understand the health of the labor force and of economic opportunity in the United States. It's called the Workforce Participation Number. What percentage of adults are either in work or actively seeking it?

That's been declining in the United States for over 20 years. United States has moved from a leader in workforce participation in the post-war year. So one of the highest workforce participation rates among the developed countries to now having a workforce participation rate's almost three percentage points less than the EU. If you want to upset a bunch of patriotic American executives who don't spend much time outside the US, you can tell them that we have a workforce participation rate that's lower than Italy's, distinctly lower than France's. 

So that continues to be bad up to and including today. And we don't fully understand what drives that. But it's a very serious consideration because a second thing to consider is economic growth in developed economies is almost purely a function of two variables, growth in productivity and growth in the workforce. And we are going from an era when our workforce was growing in absolute numbers by a couple of percentage points a year to one where it's growing by marginal tenths of percent a year

So that means we were more and more reliant on productivity to drive overall economic growth. So if one of your listeners saying in a good year in my career before I, let's say became a CEO, in a good year we grew 6-8% and a lot of that was primary demand growth but then we gained market share introducing new markets.

Most of them will have noticed that historically the US in good years has been driving growth at twice the rate of Europe and in bad years shrinking at something like half the rate of Europe. That's because Europe is a more demographically mature place. They've been suffering from a stagnant workforce side sooner than we were. That's gonna continue. 

The biggest one though is that the velocity of skills development and technology development has so outstripped the capacity of our skills-providing system, whether that's community colleges, K-12, universities, that it's no longer arguable. And that we have to revisit how we impart skills to people and where we expect them to pick them up because the notion that we're going to take this increasingly, furiously rotating flywheel called technology development and link it up to this glacially turning gear in the kind of Charlie Chaplin factory of modern times called the education system is completely spurious. It's not gonna happen.

We can't tell the big turning gear to turn at 50 times its current rate. That trend is not gonna abate and therefore we have to come up with some innovative responses and we have to do it quickly. 

Mahan Tavakoli: That's really interesting that you mentioned that, Joe, being that you are associated with Harvard Business School, so you are spending your time at an institution of higher learning.

I've had conversations with many university presidents where they feel like they're trying to adjust. I just had a conversation with Anne Kress. She's president of Northern Virginia Community College, which is one of the largest community colleges. 

Joseph Fuller: And one of the outstanding community colleges in the United States.

Mahan Tavakoli: And one of the things that Anne was mentioning is the frustration that the community college has in the lack of involvement of the businesses in setting that agenda for what they need. So the businesses, I spend a lot of my time in the business community, they complain that we don't have access to the right talent. And then, here is Anne, who has done an outstanding job, as you mentioned with NOVA, but she says, we need more of the businesses at the table to tell us exactly what they need so we can do that development. So how can that bridge be built and that gap be filled? 

Joseph Fuller: This has been a recent area of my research because that story that you're sharing is one that I hear both from outstanding community colleges like Northern Virginia, but also from less well-renowned schools where community colleges are just anxious and dedicated to the proposition they need to partner with employers, but they find the receptivity of employers to be mixed, their employer's willingness to really engage and invest in the relationship to be limited and throw up their hand because they're caught in a vice. 

On the one side, they have changing work requirements, not for all jobs, but for more and more decent or good paying jobs. And then they have declining enrollment, declining per capita state support, increasing skepticism on people's part, that the economics of tuition based on student loans is going to work out for them or their child, or their spouse. And this is creating an economic bind for community colleges that's going to be difficult for them to escape. 

Now, why aren't businesses more responsive? Some businesses are and you will find great partnerships if you go to Eastern Mississippi Community College, which is in what's called the Golden Triangle, have terrific partnering relationships with the manufacturing plants that are being built down there to take advantage of Tennessee Valley authority, power and development monies.

And that group has had a history now of 20 years of success or Dallas College, the Dallas system, Dallas, Texas, San Jacinto Community College and Lone Star College in Houston. There are bright shining lights, but they're the exceptions that prove the rules. 

First of all, employers have gotten a proliferation of sources of talent that didn't exist 20 or 25 years ago. So before the.com boom, most companies didn't have a whole lot of places to go other than the newspaper. Your newspaper's a lot thinner than used to be cuz they're no one ads and no local educational resources. And if they're high-middle skills jobs, they'd go to the community college. Now they have indeed LinkedIn, lots of online solutions. Also, the ability to cast their net widely, which is gonna be even greater because of the advent of remote work in about 30% of job descriptions. 

Businesses also, speak a dialect which is only partially comprehensible by educators and vice versa. So that when they talk about your graduates don't really fit our requirements. The employers often talk about very specific requirements, be completely unreasonable for them to expect the community college to provide. But when that employer goes out and hires somebody from a competitor, which is the next best alternative, that person they've hired has those highly specialized skills the community college can't anticipate or couldn't afford to impart anyhow.

Similarly, when an important community college goes to an employer says, we want you to consider our candidates, often with a little bit of a tinge of we service first-time college students, minorities, immigrants, you really ought to be giving our graduates an extra look, and we're a little concerned that you're not looking our way because there's some implicit or explicit bias going on here.

The employer is sitting there saying, I'm delighted you're here. I wish your graduates were what I needed. I don't really want a lecture about my business ethics. And if you really cared, you'd be asking me how I can make my students more job ready. And what do I as an educator have to do to deserve the employer's business as opposed to what I should be doing to help you miss the mark by less.

And so there's a lot of conversation and not a lot of communication. And that's why in my research, I portrayed a need to really lead to a new kind of partnership imperative if we're going to solve this skills gap, relying on the single biggest skills development infrastructure in the country, which is community colleges.

Mahan Tavakoli: Joe, in these last couple of minutes, you capture dozens and dozens of conversations that I have had, and I've heard the exact same things be said on the business side and on the educator's front. So it does require those partnerships that you talk about. At the same time, as I mentioned, I've been involved in the business community in Greater Washington for many years.

And when America Online was a huge presence, growing really fast, at the time they were planning on buying time Warner, they initiated some of these conversations in the Greater Washington DC region where there was a conversation about there is untapped talent, we need to bring the business community and the colleges together and make this happen.

25 plus years later, we're still having those same conversations, Are there examples of communities where businesses and educational institutions have come together and actually made these partnerships work? 

Joseph Fuller: There are and a good example would be in Orlando, Florida, where obviously Disney is a very large employer. They have worked with the exemplary community college system in Orlando called Valencia in very innovative ways. 

For example, Valencia works with Disney to identify opportunities for staff at Disney to get training that will enable them to leave Disney's employment in favor of going to a better-paying job that is available in the Orlando area.

Now, why would Disney be doing that? Because Disney World has a very large number of entertainment staff and low-level maintenance and custodial staff for a huge hospitality site. And they realize that if you've got ratios of 30 workers to one supervisor moving up and getting to an attractive level of earnings inside Disney, while not a possibility, if statistically remote for a large number of particularly the young workers that work in kind of cast staff, the entertainment staff, dress as characters and things like that, or running rides or taking tickets.

And Valencia, understanding a huge part of the working learner population in Orlando, and about more than half of community college rollies at any given time are also working to help pay their way, pay their rent, whatnot, has built a terrific partnership with Disney. And that with Amazon working with vendors like Western Governor's University to get their warehouse workers and other workers who have high hourly wage jobs, but they're only so many hours in the week. And for them to progress once again, just like Disney, they're not all gonna get into corporate or all gonna get into supervisory roles. So providing them fully paid for opportunities to take college-level work which has in Western Governor's case, because it's all competency-based and outstanding record of moving people from gaining a credential directly to employment in field of study related to that credential.

So a number of large companies who are doing clever things like that. And let's also be candid, they're doing it both because they're doing good, but they're doing well by doing good. They're reducing turnover, they're increasing employee morale and satisfaction, and they're creating alumni who now believe that those companies, whether it's Disney, whether it's Amazon or a few other I could cite, are going to think back on their work experience with my company as something got them their start as opposed to was a dead end job that they resent having taken.

Mahan Tavakoli: That's a great way to think about it. Those companies are looking at a much broader community and many more stakeholders, including the communities they're involved in. So that is great to hear. In addition to that, you've written a lot about a couple of things.

One, early research on the degree inflation we've had in the US. 

So how did this degree inflation happen and how can we overcome that and tap into a broader talent pool? 

Joseph Fuller: The degree inflation is often misunderstood, and there are a lot of conventional wisdom around it that's wrong. For example, it did not start because of mass unemployment after the Great Recession. It started a little after that, about 2010, 2011, and I think it started for several reasons. 

One is that people always have to remember that hiring is a relative phenomenon. It's not the first pass, first post. So that the first applicant I have who has a certain minimum skills qualification, I'm just gonna hire them. You solicit a bunch of resumes, then those get filtered. Certainly in a large company, but most companies by some form of AI. I'm left with some candidates now I've got five candidates. And because of the filtering process, many of them have met most of my criteria for hiring. Now I have two that have college degrees and three that don't, and I'm gonna pick one of the five.

Would I rather have someone with a college degree? Maybe. Why? Companies use college degrees as a proxy for things like capacity to learn social maturity, self-efficacy, high executive functioning. How do we know that? We have looked in my project at working with the Burning Glass Institute to look at how job descriptions changed when companies removed a degree requirement which has been a growing trend. What happens on the job description, the language changes. What shows up? A lot of discussion about what are called social skills, communications capacity, written and oral, ability to deal with strangers, ability to negotiate. Not negotiating contract with a new outfielder, which I hope my home team, the Boston Red Sox do as soon as possible. But if there's a potential tension-filled conversation, how effective my dealing with the ability to go into an unfamiliar group and be productive? 

So that shows that now that I've taken the degree requirement, I wanna stipulate I'm looking for that because now that I don't have the degree requirement, I may have lost that in my candidates. And this is all inevitable for a couple of reasons. What's happened in the developed economies is automation and offshoring, digitalization, cloud computing, massive improvement sensor technologies have put immense stress on what we think of as routine work. So whether it's validating that a contract a vendor has set is compliant, or painting a car in a car assembly factory, all done through automation now. What's left if the routine work is going away, the work that's hard to automate, what are those types of jobs? They only come in three flavors. They require lots of ability to deal with the unexpected, mostly as provided by other human beings. They are highly cognitive and non-routine in nature, or they don't pay well enough to be worth automating.

And those three things are contributing to a barbarization of the United States workforce in the private sector, not the public sector. So you have a very large population of people stuck in jobs that are just, it's not economical to automate that job away. You can get a burger-flipping robot, but why would you spend $250,000 for a high-maintenance high-tech machine when I can hire part-time workers for that role?

And you have Harvard professors, you have high-level professionals. You have physicians, nurses, over the road truck drivers. We now all accepted that autonomous driving a.) may not be such a great idea, but we don't have to worry about it until a long way off.

And so those jobs all which are hard to get at with technology or to offshore and jobs that don't pay very well, are left over. And degree requirements really fit with that second category of high social skills, likelihood of digital skills, ability to learn new skills, to keep up with that flywheel of innovation we were talking about earlier.

Mahan Tavakoli: It's being used as an indicator of having those social skills, but removing it and asking what are the exact skills we're looking for opens up the opportunity to a lot more people. Because you've also done a lot of work on hidden workers and the opportunity to pull more people into the workforce.

Who do you categorize as hidden workers that can be pulled back into the workforce, Joe? 

Joseph Fuller: Hidden workers are a very large subset of the people that are disadvantaged in getting a job through the policies of companies. And this isn't because of bias or discrimination. It's because of the way processes work.

When technology was applied to recruiting. And people could apply online. There was a massive increase in how many applications companies got. And so companies working with technology partners started to work about how do I winnow down 350 applicants into a digestible number of people to consider.

And they applied at the beginning, very simple-minded AI, now still not very intelligent AI, but better than it used to be, which was empowered to look for attributes, specific words, using natural language processing, specific experiences, also descriptions of your life experience, which could be a positive one, I don't want anybody with less than five years experience. Or a negative one, I don't want anybody in my candidate pool that admits to a criminal conviction. 

What that did was start essentially setting up screens that hid, creating hidden workers candidates to, might have one tiny imperfection or one thing missing, but hid them from consideration because the potential employer had told the AI criminal conviction, exclude. Lack of any one of the following 10 skills, exclude. Lack of these keywords in their description, exclude.

There are multiple types of hidden workers as a consequence. So for example, a big group is Veterans. Veterans are extraordinarily meticulous in not exaggerating what they did in the service. It's really a point of pride among veterans and they use a military taxonomy. So a staff sergeant in the Air Force has been a frontline supervisor, but if the application may say Staff sergeant, as opposed to I was a frontline supervisor of 30 workers. 

Caregivers are a big part. Why? Because many of the filters over half for both high-level jobs and middle-skill jobs in the United States, half of the companies rank or exclude candidates if they have a gap in their employment history of more than six months. 

So let's imagine you've got a sick parent. Let's imagine that you, yourself are sick. You have a lot of depression. God forbid you had cancer. You quit your job, or you were looking for new work, then while it came down with it, you're better now. The AI doesn't auto-dial you at home and say why were you out of work for 38 weeks? It just says exclude. 

Obviously in big categories are people with criminal convictions, and by the way, I know you have policymakers to list this. It'd be helpful if we knew how many they were. We have no accurate way of measuring that in the United States. We're guessing it's 40 million. But also people that have basically no education to speak of, didn't complete their high school. Certainly don't have a post-secondary degree or credential. 

So there are probably on the order, 30 million Americans who are hidden from work. And this is part of a propensity that employers have suffered from, of trying to make their hiring and recruiting process hyper-efficient such that they actually create a false shortage. 

Ordinarily, you have to rely on the federal government to create an unnecessary shortage of something, but employers do it to themselves by having these overlong job descriptions, these hugely complicated, applicant tracking systems, all these requirements that aren't related to job success. And my research showed that in jobs occupied by both college graduates and non-college graduates, usually on the order of 70% of the time, except in finance and professional services, the employers ranked the non-college graduates as better workers, or equally good workers than college workers, but also said the non-college graduates were more productive, more engaged, and were more reasonable in the economic demands and less likely to quit voluntarily.

Wow. That's a Quadra fecta of bad outcomes if you're gravitating toward college graduates when a non-college graduate could fill the role ably. 

Mahan Tavakoli: Joe, this is what I love about what you are doing and shedding light through your research on these things, where in some instances it is our biases and determinations that if someone has a gap, therefore there is something wrong. If they have had a criminal conviction, therefore rule them out. All of those things and in other instances, I've been interviewing some great people on artificial intelligence, which I believe will have a significant impact on all of our lives. The past data sets that artificial intelligence is trained on contribute to the ongoing bias of the ATS.

So if all the people that were hired or succeeded were college graduates, then by default, it's not that the bias is programmed into the artificial intelligence, but it picks up that these are the people that succeed. So we continue doing things the way we had done it before. What you are asking is to challenge those assumptions, whether individually or through the ATS and AIs that we are using.

Joseph Fuller: What I find very regularly, Mahan, in my research and my work with my colleagues here at Harvard and with some of my research partners, is that companies and employers make very sensible decisions based on an incomplete and sometimes inaccurate understanding of their own circumstances.

An example of that is that a lot of companies act as if high wateringly, high levels of annual voluntary turnover among their workforce is written in invisible ink in all the great works of religion, that it's in the Old Testament, it's in the Tom Mud, it's in the Quran as opposed to it's just a function of the way you've set up your job, how you compensate people and whether or not you create pathways for them to move forward.

But if you are absolutely confident that the pantheon of God has said that turnover and retail will be 70%. Why would you upskill an incumbent worker if you thought that seven out of 10 of them will be gone before you benefited from that training?

If you actually understand the worker's perspectives, you'll find out they're leaving because you're not upskilling them. They don't see an opportunity to make more, they don't see you showing any commitment to their success. And why wouldn't I leave for 75 cents more an hour if I've got no future here, other than wait for you to match that wage? Particularly if I'm getting a $2,000 sign-on bonus for my trouble, or I'm getting to work with someone in my neighborhood, my cousin, someone from my place of worship who said, you should come work where I'm working. It's a good place. So companies just need to get much better control of their own data. 

I think this comes to your point about AI. AI right now is not used in ways that really isolate what I'll call affirmative factors or affirmative filters about how to do the work. It relies on proxies to exclude people, but AI is gonna give us the power to invert that and saying, let me isolate from the data I've got what are the actual attributes that correlate with success, productivity, retention, advancement in this role. And I'm not looking at names, I'm not looking at degrees, I'm not looking at age. I'm just correlating to, these are five things that consistently explain success. Okay. Now tell me who in this pool has those five things. And some experiments in that show, you get a more diverse set of candidates and the outcomes in terms of all those measurements, productivity, likelihood of advancement, retention go up materially.

Mahan Tavakoli: This requires Joe for us to go beyond the statements that are well-meaning, well-intentioned and look at those systems and challenge the questions that we ask, challenge the hoops we have people jumping through to determine whether they are there for a purpose and intended purpose or not. Because the right intentions are not enough whether it is with respect to diversity initiatives that many of the leaders have had the right intentions, but the organizations haven't made as much progress on or in being able to tap into the hidden talent. 

Now, the other thing I would love to get your thoughts and perspectives on is that the leaders that I interact with, Joe, are all looking like me, pulling their hair out, even if they have some hair with this hybrid work. There is a tug of war in that there is value, I do agree with many of the CEOs that I have conversations with, that there is value with people being in person together. At the same time, many of their team members want to spend as little time back in the office as possible. They say, we've been getting our work done. Even getting more work done while being flexible. Why do you want us to drive a couple of hours or whatever else to get into an office space?

What are your thoughts with respect to the future of work in terms of how organizations will end up facilitating whether bringing people together to work in virtual, hybrid, or in-person environments?

Joseph Fuller: That's a $640,000 question, not a $64,000 question, but there'll be several things I would say. First of all, the data is very clear that willingness to consider a full return to work or a significant return to work is directly correlated with commute times. So this is not a nationwide phenomena. If you are looking at a 95-minute train ride into Manhattan or an hour and a half long drive from East Bay to the West Bay in San Francisco, or an hour and 15 minutes in your car on the I-10 in Houston, you're way more reluctant to come back. 

Our data, particularly for younger workers, suggests something that isn't part of the conventional wisdom. They don't care about remote work. They care about flexibility. So they use remote work as a proxy for flexibility. And we were criticizing companies for using proxies like degrees and criminal convictions. Workers are simplified decisions as well. And when you go to the type of young digital native workers that are so sought after now by employers and start talking about time off, flexibility. Flexibility to learn things that are not immediately relevant to your job, but that you are interested in or advance your prospects to advancement inside the company or somewhere else. If you start talking about flexibility and rules that you don't just have to enter and everyone has to be an assistant product manager for three years because that's the way The Johnson and Johnson said to each other, I don't know if they were two Johnsons, but there's at least one. 

So, in any case, I think that companies are gonna find several things. First of all, there are certain types of work, particularly by function that are more or less amenable to this. And they have to start distinguishing by what the work someone does as opposed to their level. 

So if you're an internal audit, do you really ever have to come to the office again as opposed to you are in the product development space? The second is they should be asking why people wanna be remote. Because people don't say, I want to be remote cuz I want to be remote. They say, I want to be remote because my mother is living with us and she has early-stage dementia and I'm much more productive here, I'm much less worried about her here and I'm avoiding trying to make a tough decision about to institutionalize her or try to find a home health, which are expensive and hard to find. Or I've learned that as a management consultant, I really love having breakfast with my kids and I got to do that for 18 months and they're gonna be distraught if I suddenly disappear. And why do I have to fly to my client's site four days a week? Because that's the way we do things around here. And happily, in that instance, the clients are saying, we don't want you anyhow. And frankly, we're like not paying for the paying tickets and the room service. So I think also we are gonna have a different issue in the United States, which is only about a third of work can be done remotely, period.

You can't be a remote surgeon, you can't be a remote maintenance person. You can't be a remote truck driver yet. I think companies should just chill out a little bit and be less anxious about defining exactly how the future's gonna work. We're not gonna get to a new normal this year, next year we're gonna get to a next normal, but use that time to ask yourself fundamental questions about what's driving this, what people actually want, what processes or jobs can be done remotely, effectively, or not. And recognize there are a lot of opportunities in this. In terms of, for example, those 5 million more jobs than we have unemployed people. Maybe boosting workforce participation or filling those jobs would be a function of finding attractive ways to get that work done remotely, which probably will require job redesign. But if your attitude is, we're gonna do the work exactly where you've done it, we're gonna look for people, that's exactly the way we've looked for them in the past.

And I insist everyone comes back. You're missing an opportunity to revisit fundamental practices that could very much advantage your economics and leave to a more motivated and productive workforce. 

Mahan Tavakoli: You put it beautifully that what people are asking for in most instances. And it sounds like your research shows this, is the flexibility that they are associating with remote.

It's not necessarily that they wanna be remote, they want to have that flexibility, but that involves conversations and more flexibility with respect to the organization. And that it can't just necessarily be one set policy that is then cascaded down to everyone in the organization. 

Joseph Fuller: You're really onto a very important point there, Mahan, because the issue is companies for lots of understandable reasons, just wanna have a policy.

The policy could be, you are here four days a week cuz we don't wanna negotiate with 5, 10, 15, 20, 25, 30, 30, 5,000, whoever men, workers a special deal. That's a mistake. If you're going to keep top talent, increasingly you're gonna arc to the individual is the yield of analysis. And one individual Mahan in this case is not gonna be worried about what an under individual Joe, in this case, is getting this special deal cuz Mahan's getting the deal he wanted. And he's happy Joe's getting the deal he wanted. And maybe what Joe wants to do at his age is basically have everybody know from his supervisors to colleagues that from Memorial Day to Labor Day, he's available Tuesday mornings and Thursday mornings remotely for three hours. And otherwise, he's unavailable. He's on the dark side of the moon, don't think he's gonna be there even if your house is on fire. Whereas Mahan is I am working four days a week. And I'm using our no vacation, no set vacation policy between April 01 and June 01. I'm not gonna be in the office Wednesday afternoons in Friday afternoons, cuz that's when my kids' high school sporting events are and she's on the softball team or he's on the track team and I'm gonna go see those and no one's gonna complain about it cuz they're doing their own thing. And a quick example on remote is young professionals, just out of university, just out of graduate schools. They don't even like remote. Why, where do they meet their spouses? Where do they build their social life? They go to their investment bank and then they go out, they, go to their investment bank and they socialize.

Whereas the senior people, the IT department in the same investment bank. They don't want remote because they don't want the two-hour train ride. I'm gonna have one size fits all, just defies the role of work in the lives of your highly diverse workforce. Diverse in terms of age, seniority, life-stage, role, ambitions for the future. Everything you can imagine. 

Mahan Tavakoli: I am smiling as I am listening to you, Joe, because I know some of my CHRO listeners are cringing a little bit right now, . Cause they're saying, oh God. But this is the demand of a changing workforce and their requirements for that flexibility. I think a lot of the mindsets that we still have with respect to how organizations operate, are still based on very industrial age view.

And we have to change that, including in our human resource practices. So what you're recommending is flexibility and people understand and accept that, that different individuals within the team and the organization need different levels of flexibility. 

Joseph Fuller: We absolutely live in a world of Frederick Winslow Taylor the creator of scientific management.

And I work at an institution that was hugely influential in the advancement of his thinking and the propagation of his thinking. I think at the time in an industrial setting where there were improvements in productivity based on industrial investment and industrial capital. Fixed assets is a sensible enough business model, which just got nothing to do with an information economy in the 21st century.

But the DNA of most human resource policies is from Turner. And we need to revisit. I also wanna come back to your cringing CHROs. I feel your pain. My dad was a CHRO one stage in his career, and I have a message for your C E O listeners, which is stop saying to your CHRO that everything that your talent is hugely determined of the strategy. It's the only way we're gonna remain competitive, and I really need to upgrade our skills base, our personnel base. And you've got a self-funded outta your existing budget. Where do you say that to any other executive, when you're talking about a strategic asset?

We can laugh because when I distill it to that, it's innate. But that is essentially the conversation that happens between CFS and CFOs and their CHRO counterparts. And given how much that is administrative and procedural and legal that CHROs are tough to address where it's routine, but if you get it wrong, is a major problem as in litigation as Accenture from government agencies as in significant effects on workforce morale.

It's very hard to just keep making the donuts if you're the C H R O and then you say but we really wanna upgrade our talent, improve our learning, become more attractive to people. But you're the only, C-suite officer who never gets a budget increase. That is the five bridges problem.

We can't solve it. So walk the talk on people are your most important asset or live with the consequences of trying to compete without treating them like that most important asset.

Mahan Tavakoli: If talent is the strategic differentiator, then treated as such. Now, I would love to also get your thoughts Joe, on how leadership has changed. Over the many years, you were CEO and led the growth of your own consulting firm monitor group that you had started with Michael Porter. Then you have been at Harvard Business School now 10-plus years. 

How do you see leadership changing? 

Joseph Fuller: Ordinarily Mahan, we'd invite you and your listener to attend a lengthy and arguably very pricey executive education course here at Harvard Business School to get all the answers to those questions. But let me answer it based on my research with Professor Raffaella Sadun, my colleague here at Harvard Business School.

We looked working with Russell Reynolds at almost 5,000 C-suite job descriptions over a nearly 20-year period. And there were some very distinct patterns which mirror my empirical observations. 

Historically, companies particularly in certain sectors, promoted people that had very rich administrative and technical skills, deep knowledge, let's say, the underlying phenomena in the company. And the distribution of skills tended to skew to specific skills across the jobs in the C-suite. So if you were going to be the CEO of a pharmaceutical company, in the 70s, 80s, 90s. you usually came from one of two functions, R&D or sales. If you're gonna be a CEO of an oil and gas company. You were almost certainly an engineer, and it could be from several functions and probably went from engineering to be in charge of a region that could be your investments in Argentina or in Columbia or somewhere in the Middle East, or it could be in the Permian Basin or rivers.

What has happened consistently, particularly at the level of CEO is the portfolio has gotten much more balance, and across the C-suite, with the exception of CFOs, chief financial officers, the big market share gainer in terms of the skills companies are looking for, in either promoting from within or hiring C-suite executives to the outsize or social skills, the ability to get along with others, to communicate with diverse populations, negotiate, inspire people and what's been going down precipitously are technical skills.

So it's no longer important as we can see by how many CEOs in the pharmaceutical industry now are lawyers, former consulting partners. God bless 'em. I'm a former consulting CEO, so I congratulate them. No longer that grooved yellow brick road out of the research division or out of the sales division. If AI is now doing an analysis of all transactions of a certain type in the history of the company, it doesn't matter if some C-suite officer, is really knowledgeable about what we've done, let's say, in terms of pricing. And therefore their best guess is gonna be really well-informed because they remember anecdotally and have this kind of heuristics to guess what the right thing is. AI will just tell you exactly what happened with a hundred percent fidelity. So what do I need? I need someone who can ask the right questions. Because AI just answers the questions is asked, it doesn't yet ask itself what question would I ask myself if I were to ask myself questions? It needs people that can attract other people who can do that. It needs people who can exercise judgment 'em about who to put in charge of a certain decision or certain process. It needs judgment about talent spotting. 

Imagine the life of a senior executive day at a big, prominent company. Anytime you are with anyone other than your most intimate colleagues or by yourself, you are subject to being taped, Videoed, audioed commented upon by people who weren't listening, commented upon by people who had a very specific agenda before they even started talking to you. And, some of that sunlight is a great antiseptic. So more transparency than these done unalloyed bad thing. But it calls on a completely new array of skills in the C-suite, particularly the CEO, to be able to go from the board meeting to the succession review to the global town hall, to meeting with our employee interest group, let's say the L G B T Q T community to dealing with a regulator to going to be on C N B C and then coming to visit a class at the Harvard Business School.

You have dealt in that lift with eight or nine different constituencies, all of whom you have to say, articulate, appropriate, accurate things to in a way they can understand them. That requires a completely different skill set than being the smartest actuary at Wyatt or at Towers Perrin, wonderful company, distinguished performing company, who's still a great company now merged.

But if you're looking for a C E O in the actuarial space, you don't need the best actuary anymore. You need somebody to manage actuaries. You need someone who can talk to the SEC, talk to Wall Street, talk to CHROs, talk to the communities you're serving and do with a very low error rate.

I think this has deep implications, particularly as you've suggested, as more and more of those thought processes and calls based on historical experiments and judgment can be fast-forwarded. Because of the deployment of AI and in AI, particularly with decision intelligence now, the AI, if not just assembling the data, is making recommendations.

By the way, it may suggest that we're going to see, and at one point in my life, I would've been delighted by this, but in my current stage in life, I'm more hesitant. We may see younger and younger C-suite executives because the 30 years of experience to have the judgment may get fast-forwarded. I don't think it is eliminated because a lot of those types of social skills we're talking about are learned experientially. But is someone gonna need to be the general manager of five different countries or divisions? Because we really need to understand how the economics of Asia work or how the widget division is different from the wat division. When you'll have breathtaking processing power with algorithms formed with people experts in those phenomena and data processed by your subordinates, with people who are highly skilled at the data analysis and the influencing the design of the machine learning to get accurate outputs. I don't think so.

Mahan Tavakoli: I love the way you put it Joe and what an optimistic view of our human future. I've been doing a series of conversations with AI experts and some of my listeners email me about their concerns about potential job losses, and there will be potential job shifts, but what I'm hearing from you is that in leadership the value of that human intelligence and human connection becomes even higher with the capability of AI.

Leaders can double down on those human skills, whether for themselves or for their team members, which differentiates the humanity from the AI, which is a tool that can be used in making decisions. Now, you have been very generous with your time, and as I mentioned to you, I have read all of your papers.

I listened to every single one of your podcast episodes, and I am sure the listeners will also want to see you at Harvard Business School. So where can the audience find out more and connect more with your content, Joel? 

Joseph Fuller: Thank you for those kind words Mahan, and it's always particularly nice to be complimented by someone who uses the same medium so effectively. So thank you. 

If you google Joseph Fuller, Harvard Business School. Managing the Future of Work. We have a website for our project. We have our entire inventory of over 200 podcasts. All the papers that we've discussed are downloadable. The Harvard Business School cases we've written on the subjects are featured there. And if someone has a particular area of interest they wanna follow up on, they can do that through my faculty page at Harvard Business School. There's a click-through where they'll allow you to send a short email but I will get it. 

Always delighted to hear from people on the cutting edge of these issues or have alternative points of view, new companies or approaches that they'd like to bring my attention to.

Mahan Tavakoli: I will link in the show notes your page on the Harvard Business School has a link to all of your papers, which are outstanding. You're graciously sharing those with people who want to read them and learn from them. And the episodes of the Managing Of The Future Of Work podcasts are outstanding.

I really enjoyed a recent one also about the ethics of AI. So there are lots that we can learn from you. And I really appreciate you taking the time to share your thoughts, Joe, most especially taking your focus and energy and putting a spotlight on issues that we can address in order to help elevate people through the joy of work.

So whether it is the hidden talents or the opportunities in contingent work, or the partnership imperative that we have, and these human skills and leadership, all of these are ways we can elevate humanity in leadership. So I really appreciate you doing that, putting all of your effort and joy into it and sharing it both in this conversation, in your papers and your podcast.

Thank you so much, Professor Joseph Fuller. 

Joseph Fuller: My pleasure and my pleasure to be with your audience.