Enterprise hits and misses - HR leaders enforce unpopular return-to-office mandates, generative AI raises sustainabiity questions, and AI boosts earnings morale

Lead story - The data says HR leaders are getting it wrong - what's next?

As corporate leaders put HR execs in charge of enforcing unpopular return-to-office mandates (more on that in the whiffs section), the problems go deeper. Brian parses the data in Chickens coming home to roost - when HR decisions impact morale. So, Brian, what's the problem? Check out Brian's terrific positive/negative HR assessment graphics, and consider this:

According to the executive I spoke with, the return to office mandate is likely the principal trigger for some dramatically lower engagement scores in their recent study.  And, even though the executive I spoke with cautioned the leadership team against the return to office mandate as it would create morale and retention issues, they went forward with it. Now, their scores (on a five point scale) are down approximately two points across several dimensions. 

Why is this coming to a head now? Glad you asked, says Brian:

For many firms, the current wave of employee surveys are the first to occur since the pandemic ended and return to office (RTO) mandates have been issued. The timing is also interesting as the war for talent has gotten worse and people are more willing to change employers than ever before. Tone-deaf leaders won’t just get survey surprises, they’re going to see a flood of people bolting for the doors and no one rushing in to take their places.

Brian goes jugular again:

The willingness of people to leave their employer today is, in a word, epic.

He cites this amazing stat from Monster.com: "A whopping 96% of workers are looking for a new position in 2023." Yes, Monster.com's data set is bound to be biased in favor of job change, but these are all time numbers. Brian concludes:

Waiting a year or more to find out that there’s discontent smoldering away is way too late and damages morale even more. Surprises are great for birthdays but not for engagement scores.

Agreed - modern HR simply cannot afford to wait for annualized data, and neither can the executive teams that HR serves. Most HR software vendors are working on this problem, into more continuous employee feedback loops. No, this is not fundamentally a tech problem, but HR tech should enable better practices, not hinder them.

I will, however, push back on Brian's war-for-talent point. Yes, this certainly applies to the top 20 percent of talent (or so). But overall, I believe the corporate push for generative AI/more sophisticated robotics is also being used to bring employees to heel.

Employees are being made to believe that their contributions can be automated in unprecedented ways (there is some truth to this, but not as much as is evangelized). The end result: a counter-productive "cling" to unsatisfying work environments, and a muzzling of vocalizing employee issues, or, perhaps, your job could be the next automation experiment. I think there is a better way to introduce and implement these AI tools, in a way that affirms the role of human talent, and transparently acknowledges the changes. I truly hope that's where HR goes next; I suspect it will be a very mixed bag.

Diginomica picks - my top stories on diginomica this week

• Busting the myth that existing legislation protects individuals against AI harms - Derek's title says it all; new data from the Ada Lovelace Institute backs that up.
• Tackling generative AI’s sustainability problem - Cath brings attention to an overlooked aspect of LLMs that must be reckoned with. As Cath points out, not all forms of AI are as compute-intensive, but LLMs certainly are: "Organizations need to start getting to grips with the implications, and quickly, if they are to mitigate its worst effects." Sidenote: I believe the future of enterprise LLMs will (mostly) lie in training/refining the models with smaller, specialized data sets. This doesn't change the importance of the sustainability issue, but it may help to mitigate. It's a departure from the mantra of the last few years: "let's expand the parameters of this massive LLM again, to see if we can improve its accuracy further."
• Why digital twins require an incremental process - After skewering gamification and blockchain in recent pieces, George returns to his digital twins wheelhouse. He calls for a focus on integration: "Getting all the tools to talk to each other is incredibly challenging."

Microsoft and ServiceNow earnings reports - common themes: AI is a boost against macro-economic headwinds, and, in Microsoft's case, cloud revenue growth requires some context: companies are taking pains to optimize cloud environments, rather than spend willy-nilly.

• ServiceNow beats Q2 2023 expectations, raises guidance and says AI is a “market-making tailwind” - Derek
• Microsoft cloud revenue growth slows as Google Cloud turns in another profitable quarter, but both look to AI to have positive impact - Stuart

Vendor analysis, diginomica style. Here's my three top choices from our vendor coverage:

• On cloud resilience, scale, and the clean core - Hilti shares results with SAP BTP and RISE - I will never tired of hearing a candid CIO on the factors that led to the successes, and what the reasoning behing the decisions are.
• Salesforce State of IT study - IT leaders reckon that business stakeholders have a grasp of generative AI's organizational role - Stuart on a timely Salesforce study: "We’re at the very early stages in rolling out generative AI and while that potential is clearly there, so too are a lot of barriers to adoption that still need to be addressed, not least around areas such as trust and ethics, both topics that Salesforce has identified as priorities."
• Climate action for business – how supplier contracts, renewable investments and circularity can make a difference - Salesforce weighs in on another important topic. Madeline tells the story: "Businesses holding each other accountable over climate action is a trend that’s starting to gain traction. Salesforce has a sustainability element in its contracts, requiring suppliers to have a Paris-aligned climate target and report their emissions."

A few more vendor picks, without the quotables:

• New owners as Haveli moves in – same Certinia? - Phil
• A succession story less dramatic than Succession - Neil Barua steps up as PTC CEO Jim Heppelmann announces retirement - Stuart
• Skyflow data privacy vault eases enterprise data residency and PII compliance woes - Phil

Jon's grab bag - Automatic for the people - how robotics is transforming life sciences research - Chris documents a company doing automation the right way. Cath examines how companies are still falling short in Women in tech - why enterprises need to tackle systemic issues affecting retention, not just recruitment.

Neil explores the potential of AI in the energy sector in From grid optimization to data management - can AI revolutionize the energy industry? (He also revisits the problem of messy data in Can AI solve the messy data predicament?) Finally, Stuart returns to the scorched earth of past critiques in No turning back from pursuit of the Metaverse White Whale for Mark Zuckerberg, whatever the cost. Juxtaposing Zuckerberg with Herman Melville from Moby Dick is strong stuff. But then again, I do like an epic voyage against all odds... I'll keep my (rarely-used) Quest headset handy just in case.

Best of the enterprise web

My top six

• Software developers' dance with generative AI is still at that awkward stage - Joe McKendrick continues his bold forays into the awkwardness of questioning generative AI's programming invincibility: "Importantly, it will be the jobs of developers and IT professionals to facilitate the democratization of AI, making it safe, useful, and accessible to all users."
• AI and advanced applications are straining current technology infrastructures - An AI two-fer from Joe McKendrick: "A majority of executives in a recent survey, 76%, say their current infrastructures are not ready to meet upcoming demands."
• Comparison of a Successful vs. Failed Digital Transformation - Eric Kimberling of Third Stage juxtaposes two organization that went in very different directions: "The failed implementation suffered from a lack of understanding regarding their current processes and the desired future state. There was minimal documentation regarding the current and future states of their business processes. Consequently, the focus on current and future state business processes was lacking."
• How bold is your business transformation? A new way to measure progress - McKinsey has a useful rundown of the characteristics of transformations that stick: "In the broadest strategic sense, transformative transformations achieve a well-managed balance between improving performance holistically and reinventing the business, excelling in both. Holistic performance is measured along five dimensions that reflect organizational priorities: financial performance, organizational health, talent and capabilities, customer focus, and ESG impact."
• The top 10 technologies defining the future of cybersecurity - Louis "zero trust" Columbus is back with a definitive rundown of the cybersecurity trends to track, and the vendors to watch for each.
• Google engineer warns it could lose out to open-source technology in AI race - The Guardian on how open source AI could change the market, but there's a catch: regulations, which could end up favoring big tech incumbents, could factor in.
• Bonus ESG video content - companies are whiffing on ESG - why? If you want the raw video replay before the podcast and highlight clips, check Companies are whiffing on ESG - why? Research reveal/chat with Brian Sommer. Brian shares a preview of his soon-to-be-release ESG book, with a special guest commentary appearance by Tom Raftery.

Whiff

About those return-to-office futurists I referred to earlier:

But as Brian Sommer points out, Amazon has nothing on this particular McDonald's:

Not the most impressive exhibit of "cleaning up after yourself" I've ever seen:

I'm not sure if this is great news for the "dungeon masters" out there... I'll look into it and get back with you:

If you find an #ensw piece that qualifies for hits and misses - in a good or bad way - let me know in the comments as Clive (almost) always does. Most Enterprise hits and misses articles are selected from my curated @jonerpnewsfeed.