Knowledge work has peaked. Experience workers are the new elite

The end of the 20th century was the moment of peak knowledge worker. In Management Challenges for the 21st Century, published in 1999, management guru Peter Drucker predicted:

The most valuable asset of a 21st-century institution, whether business or non-business, will be its knowledge workers and their productivity.

But Drucker got it wrong. Two trends that were barely visible back then are reshaping the 21st century enterprise. Knowledge is still important, but today it has become a commodity. In the 21st century, value is shifting towards experiences and outcomes. Pay scales and seniority charts have not yet caught up with these changes. But in the coming decade, the most prized talent will be those who excel at creating and delivering high-quality experiences.

The rise of digital connection in the first decade of the century, combined with the acceleration of machine learning and artificial intelligence in the 2010s, are the twin enabling technologies that have wrought these changes.

From transactions to experience

First of all, digital connection moved us from transactions to experience. Throughout the 20th century, automation focused on the efficient processing and completion of transactions. Businesses and their customers were separated by time and distance, and performing well was simply a matter of delivering the best product in the fastest time for the lowest cost. But in the 21st century, the ubiquity and low cost of digital connection has added a new dimension to the relationship.

A continuous digital connection allows businesses to stay engaged with their customers throughout the lifetime of the product or function. They can monitor how customers use those products or services, and take steps to iteratively update or improve their effectiveness throughout the product lifecycle. This creates a virtuous cycle to engage, monitor and improve the customer experience. Because this engagement model is now extending out from its origins in the SaaS industry into every industry, at diginomica we call it the XaaS Effect (pronounced 'X-ass').

More and more businesses are realizing the importance of customer experience, but do not always understand the full picture. Many see experience as simply a matter of increasing satisfaction with the transaction. They reduce customer experience to an acronym (CX) that is solely concerned with branding and marketing, failing to recognize that the customer now expects them to engage with them to help them achieve their desired outcomes. Delight at the point of purchase fades rapidly unless it is followed by enduring customer success.

This is an ethos that requires participation from every part of the organization, from back-office staff to frontline workers. Everyone needs to become an experience worker, conscious of how operational excellence within their own function contributes to the success each customer experiences. Since that will often require them to take the initiative and think outside of the box, their own employee experience must change too, ensuring that they are empowered with the information, skills and resources to deal with exceptions and serve the customer's unique needs. Access to knowledge is still important, but empathy and emotional intelligence become more valuable in crafting and delivering an experience that engages and retains customers.

Automatic access to knowledge

The second technology enabler started to come into effect once this network of connections was in place, providing massive pools of shared data and compute resources that propelled machine learning to a new level, and making its output available on demand. Connected artificial intelligence opens up the locked-in expertise of the knowledge worker, automatically conveying it to where it's needed.

We can see this at its most evolved in customer service roles, where technology is now being used to automatically deliver relevant knowledge to customer service agents and engineers so that they can resolve customer queries and issues on the spot.

In the past, such workers were seen as powerless agents, robotically following a script devised by knowledge workers elsewhere in the organization. Today, chatbots take over the scripted conversations, freeing up service agents to deal with less standardized issues, with the aid of relevant knowledge delivered to them as they need it. This encapsulates the transfer of value from knowledge workers to experience workers — simply knowing stuff has no added value, because what counts is being able to apply knowledge to provide the best customer experience.

Traditionally, the people who actually get stuff done for customers have been paid far less than the knowledge workers whose role was to decide what stuff they should do. But that's because all the value used to be built into a predefined, static transaction. There was no way to connect these firstline workers into enterprise systems or back-office resources while they were on the job. Now such capabilities are coming onstream. Vendors including Microsoft are enabling their products to serve the many workers in industries such as retail, hospitality and manufacturing who spend their working day on their feet rather than sitting at a desk.

Experience work becomes the standard

Connecting these firstline workers into enterprise systems gives them the knowledge they need to support customer success at the point of consumption. Whether they're retail associates enabling a tailored shopping experience or service engineers suggesting product enhancements to R&D teams, they become a far more valuable asset to the organization. Meanwhile, their itinerant, mobile pattern of work is spreading to other roles across the organization. After all, desks only exist because people needed to organize paper or sit in front of a static computing device. Digitally connected information and knowledge, available wherever we are, allow all of us to be productive on our feet.

All of this has huge ramifications for how organizations value talent, and for how individuals manage their careers. Throughout the 20th century, what you knew defined what work you could do. The purpose of education was to acquire a qualification to enter a career, and then rise up through the ranks, as far away as possible from the front line. But as author and future of work strategist Heather McGowan told a keynote audience at the UNLEASH conference in Paris last October, today that no longer holds true:

In the past, you learned once in order to work. In the future, we're going to work in order to learn continuously.

The knowledge you possess will no longer define your worth. Instead, your value will be defined by how well you can absorb and apply knowledge in the moment, and those who are most valued will be most adept at engaging with others and understanding what it takes to help them be successful. It will be all about the experience.

My take

When you think about it, it's only natural that management thinkers at the end of the 20th century assumed that the purpose of computing would be to enhance the impact of the knowledge worker. This is what always happens in the first wave of technology adoption — we harness it to improve what we already do. It's only when we fully appreciate its potential that we start to understand how it enables us to do things completely differently. Two decades into the 21st century, that moment has now arrived, and in this new, digitally connected world, the ability to apply knowledge to enhance experience is far more valuable than knowledge alone.