Photo by FlickrCommons

Photo by FlickrCommons

“Number, please” was the oft-repeated request made by the more than 100,000 mostly female switchboard operators in the early 20th century. Anyone who had a telephone grew to know the familiar voices that connected them to the outside world.

But in 1917, when AT&T began the 50-plus-year process of automating local telephone operation by converting to dial phones, it had to grapple with the business and societal impact of dramatically reducing human interface. A century later, artificial intelligence, big data, and advancements in automation now offer companies new challenges and opportunities related to growth and efficiency. In a variety of case studies, students in the MBA elective Managing the Future of Work consider technological trends reshaping today’s workplace and actions business leaders can take. In particular, cases focusing on AT&T and Vodafone help students understand how leaders at these telecommunications giants confronted issues such as pacing innovation, enhancing the customer experience, and managing the workforce.

“By the early 1920s, AT&T was the biggest employer in the United States, on par with Walmart today, so its move to automate away roughly half of its workforce is inherently of interest,” says Assistant Professor Daniel Gross, who examines the historical effects of automation. He coauthored the case “AT&T: Managing Technological Change and the Future of Telephone Operators in the 20th Century” with William Kerr, the Dimitri V. D’Arbeloff—MBA Class of 1955 Professor of Business Administration, who studies how companies and economies explore new opportunities and generate growth. “One of the lessons relevant to both students and practitioners is that this has happened before and will happen again,” Gross says. “The goal is to see what we can learn from past experiences.”

“The AT&T and Vodafone cases are examples of how technology and demographics are changing the workplace, and how leading companies have responded to these challenges,” says Kerr, co-chair of HBS’s Managing the Future of Work Project. He cowrote the case “Vodafone: Managing Advanced Technologies and Artificial Intelligence” with Emer Moloney, senior researcher at HBS’s Europe Research Center. Gross and Kerr note that AT&T underwent a significant technological transformation in moving its workforce composition from predominantly operators to more engineering-type roles requiring different skill sets. In comparison, by 2018, Vodafone had installed chatbots—software applications simulating interactions with people—where one bot may replace three workers, but it hadn’t yet significantly altered its employment structure.

The Vodafone case features a UK-based multinational company with operations in 26 countries and numerous international partnerships. In 2017, the company had more than half a billion mobile, fixed, and TV customers. During case discussions, students explore Vodafone’s strategy for diffusing new technologies in a competitive environment, changes in corporate culture needed to embrace innovation, and management of its 100,000-plus workforce, from retraining or relocating workers, to using AI to find candidates for newly created technology jobs. Balanced against these considerations is the desire to deliver substantive returns to shareholders.

Having the protagonist in the classroom brought these challenges to life when Vodafone’s then CEO Vittorio Colao (MBA 1990) attended the case discussion in February 2018. Colao spoke about the company’s key goals: using big data to personalize customer offers, real-time analytics to improve technology management, and robotics to simplify and automate support activities. He also addressed dilemmas about whether to allow each division to adopt innovation at its own pace or institute it simultaneously company-wide, and the obligation of leaders to workers and the broader society.

“Vittorio was very thoughtful about these questions, and described his concerns about the next 10 to 20 years if we don’t manage the workforce transformation in a productive way,” says Kerr. “I don’t see technology as vastly reducing the availability of jobs in the next 30 years, especially in advanced economies that are facing shrinking workforces due to aging demographics. But we must navigate the transition well.”

Gross agrees: “As I discuss with students, these technologies are more likely to complement their skills as decision-makers and managers than replace them. Inevitably, no matter what the technology is, there will be residual tasks that only humans can do, and human talent may be even more valuable. The real question is, how big will that set of tasks be?”

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