Purpose Washing, Hustle Culture, and Automation: Business at a Crossroads
The conversation in Davos showed that CEOs are struggling with conflicting agendas: fairness or growth, humanization or efficiency, government or business power.
Business leaders today must constantly wrestle with opposing forces: They must embrace data and at the same time listen to their gut feelings. They must cater to efficiency pressures and also create a culture of trust and creativity. They must ensure short-term profit while thinking about the long-term impact of their business, acting as “civic CEOs” stewarding “woke brands.” Some may call this ambidexterity, others schizophrenia. At any rate, it’s not surprising that being stuck in the middle of such dichotomy breeds uncomfortable tension and conflicting rhetoric. Double agendas lead to double speak.
This duality was on display last week in Davos at the annual summit of the World Economic Forum. The more than 3,000 leaders who had assembled in a village in the Swiss Alps are facing conflicting agendas regarding the role of business in society, and it would help advance the conversation if they were honest about these issues and made clear choices in response.
Purpose Washing: Social inequality and the question of taxes
The first conflict is between business’ belief that it can help solve the world’s issues through corporate social responsibility, social entrepreneurship, and philanthropy initiatives and those critics who view this as a phony and ultimately futile attempt to fix the damage after the fact. There’s been a notable recent backlash lately against “purpose washing,” led by razor-sharp voices such as Anand Giridharadas and his much discussed book Winners Take All in which he argues that “Today’s titans of tech and finance want to solve the world’s problems, as long as the solutions never, ever threaten their own wealth and power.” For him, Davos is “a family reunion for the people who broke the world.”
Although Giridharadas was not at Davos this year, his apparent kindred spirit Rutger Bregman, a Dutch historian and author of the book Utopia for Realists, was in attendance. Bregman said that Davos felt to him like being at a firefighters’ conference where no one ever mentioned the word “water.” In a session about “The Cost of Inequality,” he provoked an audience that probably prefers to discuss “cross-sector collaboration to enhance business’ social impact” with this Molotov cocktail: “It’s about taxes, taxes, taxes.”
On a different panel, the billionaire founder of Dell Computers, Michael Dell, was asked about U.S. congresswoman Alexandra Ocasio-Cortez’s proposal of a marginal income tax rate as high as 70 percent for top earners in the U.S. (supported by the majority of Americans, as a poll found). He said he preferred to do good through his foundation rather than putting his money into the hands of the government. And he added, “Tell me when higher taxes ever led to more growth!” That earned him a gentle but firm rebuttal by fellow panelist Erik Brynjolfsson from MIT who reminded him that America in the ’50s to ’70s (until Reaganomics changed the course) was indeed the perfect example to prove such correlation.
Tax increases by billionaires are not a new idea. Warren Buffett has been saying for years that the extremely wealthy should pay more taxes, but Ocasio-Cortez has certainly changed the mainstream conversation. The U.S. economy may boast historically low unemployment numbers and record job creation, but as Oxfam International executive director Winnie Byanyima pointed out in Davos, many of these jobs are contingent and we must not look just at numbers but at the quality, that is, the dignity of work.
Indeed, as recent elections and polls show, many workers across the Western world feel betrayed by globalization. According to the OECD and other organizations, upward mobility has been stifled, growth and employment have not led to higher wages but rather to an obscene concentration of wealth among the top 1 percent, and labor market volatility has forced many workers into precarious work with less job security and mounting “hidden” costs, such as growing anxiety, depression, and suicide rates.
Hustle Culture: Become a smart machine or be replaced by one
Companies seek to address these concerns by touting the re-humanization of the corporation and promoting a more human workplace. “Human” has become the hammer for every nail, from the “human network” to the “human brand.” In this case, too, it can be difficult to discern truth from PR. Companies such as Microsoft are taking steps to align their policies with human needs (CEO Satya Nadella even endorsed the new European privacy law, GDPR, in Davos) and foster cultures of empathy and exploration, even if that means to occasionally defy the regime of pure efficiency thinking.
But there is also a growing realization that all the talk about “love what you do” and “bringing your full self to work” may just be another scheme to exploit workers by appealing to their intrinsic motivation. The result can be the kind of “hustle culture” propagated by tech companies, that makes people (even more) miserable, as Dan Lyons observes in his scathing account of Silicon Valley-style workplaces, Lab Rats. In a similar vein, the economist David Graeber claims that the social usefulness of jobs has declined and even calls many of them “bullshit jobs” — essentially jobs that are purely kept to maintain the illusion of valuable work. In Davos, Bregman cited a study that states that 21 percent of sales, marketing, advertising, and public relations professionals think that their job is socially useless, as opposed to 0 percent of librarians.
Nonetheless, companies seek to squeeze more creativity and productivity out of their “human resources” by promising that workers can realize their full potential through their jobs. Increasingly, this means using people analytics tools such as Humu (“driving behavior change by combining people analytics, machine learning, and love,” as its tagline states) to nudge the constant optimization not just of workers’ objective, technical, but also their subjective, emotional, performance (for example their relationships to colleagues, their passion, and their happiness).
It appears as if, in the age of Digital Taylorism, the only choice workers are left with is to either become a smart machine or be replaced by one.
No tomorrow for humans doing routine work
Automation is looming, and as with the social responsibility of companies, there is a lot of double speak going on. Who is more cynical: the CEO who sees no choice but full automation or the CEO who pretends to build a purpose-driven, socially responsible company but is ready to sacrifice all of that in favor of short-term earnings when the going gets tough? “Digital ethics,” “human-centered A.I.,” and other monikers making the rounds often disguise the fact that most CEOs are eager to automate everything that can be automated.
As the New York Times reports, business leaders offered starkly divergent narratives on public panels and in private conversations at Davos. The article cites Richard Liu, the founder of the Chinese e-commerce company JD.com, who dreams of 100 percent automation. Contract manufacturer Foxconn aims to automate up to 80 percent of its workforce in the next five to 10 years. As a 2017 survey by Deloitte found, 53 percent of companies are already using machines to perform tasks previously performed by humans, and this figure is expected to rise to 72 percent by 2020. “There is no tomorrow for workers doing routine tasks,” the Chinese A.I. investor Kai-Fu Lee predicts.
There are only two reasons CEOs might be incentivized to err on the side of humans: One is the need for innovation, which is still an inherently human domain, enabled by hope and imagination (machines are notoriously bad at dreaming up alternative, better worlds); and the other is their concern over a rapidly dissolving social contract that might eventually result in consumer boycotts and social unrest (a Google executive told me recently that he was indeed expecting a mob at their campus gates very soon if things don’t change).
In Davos, Seth A. Klarman, a billionaire investor, sounded an alarm in a 22-page letter to his investors, including the endowments of Harvard and Yale Universities and some of the world’s wealthiest families: “It can’t be business as usual amid constant protests, riots, shutdowns, and escalating social tensions.”
Reinventing Capitalism: a business or government affair?
Shifting course appears to be a daunting task, though, for the majority of CEOs, who, according to a YPO survey presented at Davos, still insist that greater social impacts are achieved through business, not politics, with regulation and taxation being the biggest impediments. This is at odds with the notion of shifting a considerable portion of the responsibility and power for designing more equitable societies to government. Among the priorities for policy makers are the regulation of big tech, higher marginal tax rates, universal health care, stronger protections for workers threatened by automation, and exploring alternative ways for people to integrate into society beyond paid work and traditional careers (universal basic income offers one possible scenario here).
A perfect storm is brewing: the agony of old systems, the void left by less and less trustworthy tech platforms, the disruption of the labor markets by the fourth industrial revolution, and the critical importance of reinventing capitalism and redefining the meaning of meaningful work. In the middle of conflicting agendas, CEOs will have to make tough choices. The most responsible of them know they will have their role to play in tackling all these issues, but are also humble enough to realize that, now more than ever, business can’t do it alone.
This article was first published by Inc.com.