Power Sheet - May 13, 2016

Talking with a big-deal CEO recently, we got onto the topic of how technology would revolutionize his company’s operations and how it would change employees’ roles. Finally we reached the issue of how many employees he’d need. He lowered his voice and said, “We’ll have fewer people, and they’ll be doing different things. I don’t talk about that with our labor force. It’s not motivating.”

Every leader will have to think about this issue, and in many cases it won’t be easy, which makes thinking about it all the more important. Three reminders from recent news:

-The University of Minnesota law school is reducing its class size as fewer qualified students apply, reflecting a marked nationwide trend. Several law schools have closed, and others have reduced admissions or cut tuition. Why? “People are turned off on legal education because of a lack of suitable paying jobs,” former vice president Walter Mondale, a Minnesota Law alumnus, tells the New York Times. And why are there fewer high-paying lawyer jobs? “The rise of machine intelligence is probably partly to blame for the current crisis of law schools and will certainly worsen that crisis,” writes Northwestern University law professor John O. McGinnis. Software is increasingly doing work that law firm associates used to do, notably the job of screening documents in the discovery phase of lawsuits, and doing it faster, cheaper, and better than humans. As some major law firms downsize, the concept of the firm is being rethought.

-Defense Secretary Ash Carter visited Silicon Valley this week for the fourth time in his tenure, emphasizing his message that U.S. defense will rely increasingly on infotech in general and artificial intelligence in particular. He has been clear about why: The U.S. military almost certainly won’t match its Russian or Chinese counterparts in headcount, so to maintain its advantage, it must develop technology that can do the work of more people. The initiative is underway in several areas, including autonomous vehicles, increasingly autonomous weapons, systems to sense and respond to the mental state of service members, and much more – plus tech for cyber defense and warfare. Leaders are deeply rethinking the concept of defense.

-Whole Foods will open its first 365 store in a couple of weeks, in Los Angeles, and it’s clear that the new retail format will include technology where you’d expect to find people. If you want a wine recommendation, you’ll consult a wine app (called Banquet) rather than a human. If you’re a tea drinker who despairs of getting decent tea anywhere but your own home, you can step up to the teaBot, which will blend and properly brew a cup of high quality tea. It’s one way Whole Foods hopes to create an upscale experience in stores that will be smaller and lower-priced than Whole Foods supermarkets. So what’s up-market and what’s down-market now?

The revolution in the role of people is accelerating. Leaders are better off participating in it than just trying to respond.

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