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The Intersections of EI and AI: The Roads to Rome

Published 19 December 2019

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In an earlier article: ‘A Great Workplace: The Intersection of EI and AI’, we shared a nine-box grid with an invitation to organisations to consider where they might locate themselves as a function of how evolved they considered themselves to be concerning digital transformation and exemplary human capital practices.

In this follow-up article, we discuss some examples of companies that fall into each of the nine boxes.

In a poll conducted by the Human Capital Leadership Institute (HCLI) of client companies in Singapore, the majority of leaders viewed their organisation as fitting into the ‘Getting There’ category, or the central box in the EIAI Grid.

Fig. 1 The EIAI Grid.

To supplement the poll, we decided to carry out a quantitative study of how a few well-known multinational companies might fit into this grid.

In terms of measuring emotional intelligence in the workplace, we decided to infer the level of organisational EI through company ratings on Glassdoor[1]. With over 1 million companies reviewed on Glassdoor’s website, the company ratings offer a standardised measurement of employee sentiment towards a given company. Glassdoor’s rating scale is capped at 5 points, and the average company rating is 3.3 points (as of 20 September 2019). Bearing this in mind, we sorted companies based on their published company rating (as of 20 September 2019) into three categories::

• 3 points and below: LOW in emotional intelligence
• 3 to 4 points: MODERATE in emotional intelligence
• 4 to 5 points: HIGH in emotional intelligence.

Although there is also no standardised way to measure how digitally capable companies (“AI”) are, we relied on our expertise and experience to sort companies into LOW, MEDIUM and HIGH categories. The multinational companies we have used in this study differ in attributes such as industry, size, market segment and complexity. As such, we have factored in the degree of artificial intelligence solutions perceived to have been adopted by the company, relative to the complexity of each company’s industry, business and products/solutions.

• LOW in AI: Just started their digital journey (Novice implementer)
• MODERATE in AI: Digital journey underway (Extensive user)
• HIGH in AI: Well-advanced in their digital journey (Sophisticated user)

A random selection[2] of twenty-six multinational companies were plotted into the EIAI Grid as shown below:

While we acknowledge the results above are not exhaustive and do not represent a sizable sample—and hence may not be conclusive—we gleaned several interesting insights that are worth sharing.

Observation 1 – The ‘Fallen’

The four companies that come under “Falling Behind and Away” are doing so. Among them, Forever 21 is facing bankruptcy while Kraft Heinz, Sears Holdings and Hertz have been plagued by many scandals surrounding their products, company management and employee morale.

Digital transformations are difficult without an equal focus on the human aspect. Our results seem to confirm this. When employees already perceive that their employers do not care for them, they are unlikely to help their company push new technological boundaries or implement artificial intelligence solutions.

Furthermore, employees in low AI implementation environments may fear the loss of their jobs as a result of digital disruption and therefore have no incentive when it comes to AI implementation, and/or may even actively undermine such efforts. If this is a reasonable assumption to make, then it follows that the successful implementation of digital transformation would benefit from more active attention being paid to the human (EI) dimension of the workplace.

Observation 2 – Not all great companies need to go the full mile on AI

Despite being in the “Happy but Losing Out Box”, Boston Consulting Group is arguably not ‘losing’ out much, as their employees seem rather happy in the company, with their Glassdoor rating of 4.1 points.

Similarly, the companies in the “Head in Sand” box comprise several brands which are doing well in their global operations. The only exception appears to be Toys “R” Us, which is suffering financial woes and which saw its US operations undergo bankruptcy in the recent past.

Looking at our results, we can see that where technology serves as an enhancer to these companies’ operations and profitability, its impact is not significant enough to risk complete business model failure. All the above-mentioned companies are in industries where the nature of their products or solutions are not (at least right now) technology-centric nor technology-critical. However, if the companies were in an industry where the dependency on technology is a critical concern for the business, landing in these two boxes would be much more worrying.

Observation 3 – Companies in “Getting There” have two pathways available to them

For companies in the “Getting There” box, two pathways are available to them when it comes to growth strategy considerations.

The first option is to “People Innovate” and chart the company’s next wave of growth through harnessing and extracting greater value from the synergy of different talents within the company. We identified this pathway through the “Missing Opportunities” box, – where companies such as McKinsey & Company, SAP, Salesforce, LinkedIn and Adobe are located. All these companies are known to be people-centric and to practice good human capital policies and practices. They also enjoy good employer branding and often support healthy, innovative cultures within their internal ecosystem. Thus, companies in the “Getting There” box can look to these examples to chart a way forward through their people strategy.

The second option available to “Getting There” companies is to pursue the path of “Product Innovation”. This pathway is exemplified in the “Made to Last?” box, with companies like Amazon and Toyota. These companies are popular for their product innovation and known to prioritise process-centricity over people-centricity. The preferred strategy of choice for these companies tends to be product-driven. The nature of their businesses also features internal value-chains which involve the application of technology to manage tasks: these, in turn, carry a high degree of complexity, lengthy processes and stringent production control. “Getting There” companies wanting to up their game can thus turn to focus on product innovation and moving to the forefront of technological advancement.

Observation 4 – The convergence of paths offers ecosystem learning opportunities

Companies that are classified into the “Missing Opportunities” and “Made to Last?” boxes can merge their different paths to become a “Great Workplace”. The nature and choice of appropriate interventions will be different but complementary to each other as the organisations attempt to dial-up their weaker attribute to reach their full potential.

There will be opportunities for companies from each category to learn from the “next” practices and ideas that have worked well for other organisations. The cross-fertilization of ideas and sharing of leadership experiences and organisational successes will offer these companies peer learning opportunities from different ecosystems.

Observation 5 – The End is not the end

While the EIAI Grid may suggest that the last box, “Great Workplace” is the destination, there is in no fact no final, ideal landing place. The journey forward will – and has to be – be a continuous one. For companies such as Facebook and Google, which rank high on EI and AI, their position on the grid will only be maintained by making continued efforts to push the boundaries on both technological innovation and human capital practices.

Susceptible to macro-environmental trends and often politically-charged circumstances, companies that find themselves in this box (“Great Workplace”) may also experience shocks from technological disruptors, sudden changes in leadership, organisational changes and other factors such as unforeseen crises or black swan events that threaten the status quo and knock the company off its podium—perhaps as the result of a “perfect storm”. Complacency, then, is not advisable.

Conclusions

In conclusion, leaders should be mindful of the transient—in fact, precarious—nature of the standing their organisation might enjoy. Life has its ups and downs—as organisations inside the EIAI Grid will undoubtedly experience.

One way forward for companies to work on both EI and AI is to foster cultures of compassion, open communication, psychological safety and a growth mindset. This creates an environment geared towards innovation and which is open to change. Such an approach must be paired with educating employees on how they can take advantage of the benefits of adopting digital innovations whilst also providing them with opportunities to upgrade their technical digital skills. Thus, when a company embarks on a digital transformation, what we could look forward to is the creation of new job roles rather than the destruction of old ones, because its employees are technically and emotionally ready for such a change. It would also be easier to implement because employees know that the company is not just doing this to become a “smarter” company, but to become a better employer too.

If companies want to remain resilient and be sustainable in the long run, they will need to continuously work on both their human capital and technological capabilities, and work to be the best “beta-version” they can be – at any moment in any given point in time.

This research continues to be a work-in-progress and any feedback is most welcome.

[1] Glassdoor Job Search: Find the job that fits your life. (n.d.). Retrieved September 20, 2019, from https://www.glassdoor.com/.

[2] The companies were randomly selected from the following lists:

Best Places to Work in 2020. (n.d.). Retrieved September 20, 2019, from https://www.glassdoor.com/Award/Best-Places-to-Work-LST_KQ0,19.htm.

Global 2000: The World’s Best Regarded Companies 2019. (2019). Retrieved September 20, 2019, from https://www.forbes.com/lists/best-regarded-companies/#34fbdc43124d.

Global 2000: World’s Best Employers 2019. (2019). Retrieved September 20, 2019, from https://www.forbes.com/lists/worlds-best-employers/#3792d8271e0c.