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Developing the skill sets for tomorrow

  • Gerard Seijts and Chris Chan
  • |
  • Mar 19, 2019
Developing the skill sets for tomorrow

In September 2018, we took our global discussion of disruption to Hong Kong, where we held three discussions with several dozen leaders from the local business community. Participants included bankers, retailers, technologists, human resource specialists, and representatives from the real estate, insurance, and civil-service sectors. In each session, we considered three questions: What kinds of disruptions are you seeing? What are you doing about them? What should Ivey do to prepare future leaders for disruption? Our third session looked at the growing compliance sector, artificial intelligence threats, and the skill sets for tomorrow.

Moving toward compliance

An investment banker discussed the increased regulatory presence in his industry, focused particularly on anti-money laundering, bank fraud, and other financial crimes. Concurrently, accounting and consulting firms have dramatically increased their capabilities and head counts in risk management. Why are these kinds of disruptions taking place? Participants noted three reasons:

  1. Crime is on the rise;
  2. Financial institutions no longer want to take the risk of incurring huge financial losses, either through theft or fines, and are taking the necessary steps to stem those kinds of losses; and,
  3. Governments around the world are using financial regulations and interventions as a tool in international disputes.

Whatever the reason, most participants agreed the compliance sector will remain huge, and even grow, but will become increasingly automated. Transaction monitoring will be left to the computers. Financial institutions see this as one of the most promising realms for applied artificial intelligence (AI), in part because the right software programs will both cut costs and improve the detection of financial crimes.

On the other hand, some participants in banking didn’t see much chance of large-scale layoffs and the kinds of disruptions they can create. While there is turnover and shrinkage on the retail side (the tellers in the banks on the corners), they said more banking business today comes from ultra-high-net-worth individuals. Banks have to understand these complicated clients and their families better, to serve them better and to avoid blundering into areas of dubious legality.

Cryptocurrency and artificial intelligence threats

One representative from the real estate industry pointed out the disruptive potential of cryptocurrencies.

“Commercial real estate depends on reliable, stable tenants signing long-term leases, but the cryptocurrency companies are a black hole that we have absolutely no visibility into,” he said. “It’s not necessarily reassuring when those tenants offer to pay a year’s rent in advance. That concerns us. No other business does that. Sure, their valuations are very high right now, but they could all fall apart in six months’ time. Every type of business that deals in crypto will be affected by that collapse.”

He said there is mounting anxiety in the real estate sector about the disruptive threat posed by AI, particularly in terms of replacing brokers’ jobs. The search for suitable space and the structuring of leases could conceivably be largely automated.

“This is a huge fear in our sector because we have no visibility into it,” he said.

Another AI-related concern is the increasing concentration of AI resources in the integrated cloud spaces of tech conglomerates like Amazon and Azure. One participant discussed the impact on developers.

“Even as recently as a year ago, companies had to hire a developer firm to embed new AI functions into their apps. Today, Amazon sends their consultant out to talk to you. As a result, a lot of those developers are having trouble. It’s still a big market, but their revenues are going down. And do we want all that concentration?”

Is your job at risk?

So are we all going to be replaced by robots? The consensus was both yes and no. Middle-aged managers who don’t understand programming are obsolete. And increasingly so are those who know how to program because robots will learn to do it better. On the other hand, participants pointed out that someone will always have to set the strategies.

But that doesn’t mean you shouldn’t prepare for AI?

“If you don’t direct your career toward that, it’s going to be a long struggle,” said one participant.

One entrepreneur stressed the importance of always developing new skills.

“It used to be that you could develop one skill, like being a specialized lawyer, and be really good at that. But maybe the person who’s going to lead in the future is the one who finds the gap in the market and says, ‘Now I need to have these kinds of skills to work with these kinds of people.’”

Developing the skills to succeed

This led naturally to a discussion of the traits people need to build into their organizations and that  business schools should be attempting to instil. Open-mindedness and adaptability are key. One participant put it this way:

“You have to accept the possibility that something will happen that you can’t really comprehend, and which you need to comprehend to excel in today’s environment. You have to be able to adapt in an instant.”

Another participant said people should be pushed on “driving skills,” such as forward- thinking, creativity, and visioning.

“People can get very comfortable when they’re not pushed. They are just reactive. They can do anything that you put in front of them, but they don’t have the drive they need.”

In regard to business school curriculum, one participant suggested a course on “selling a vision.” Schools teach communication and negotiation, but selling a vision is very different from selling products.

“Selling a vision is what people like Elon Musk do, and it’s invaluable,” he said.

Relationships and community are critical

Case-Method Learning was criticized for being “past-oriented.” One participant said classes have to evaluate more hypotheticals and look toward the future, bringing in politics and a number of other factors. Another participant recommended there be more on-site instruction and mentoring in real-life workplaces.

“Not just a few mingling events, but real immersion, in relationships, as a co-worker,” she said.

Several participants called for short, flexible modules that take the student in and out of the workplace, but also build the kinds of networks that are critical to career success. They said four, or even two years, is too long to take yourself out of the workplace to be educated.

“Everyone is afraid that they’ll be made obsolete, if they go full time,” said one participant.

Another participant said business schools need to create strong communities.

“Ivey builds a really strong community, and a culture. And that leads to trust, which in turn means that people will help each other. Whatever you do, don’t lose that!”