David Moss0:18
Well, good afternoon. A little while ago, I purchased a new mobile phone. On getting the phone home, taking it out of the box, removing that lovely cellophane wrapping from the front cover, I was pretty disappointed to hear that it was going to take up to 24 hours before I was able to use my new handset on the mobile network. In this modern age of instant gratification, that's quite a disappointing thing to be told. Mobile phone companies belong to what we call service industries.
To wait quite a long time to speak to somebody is quite difficult. In terms of dealing with them, they make mistakes that we sometimes have to point out, and they seem not to be totally listening to what we're saying. They're wrestling with systems that are running a bit slowly. Today we've heard that quite a lot. What I want to talk about today is how within the service industries we're restricting our opportunities for growth because of the way that we're using people and the way that we're using human talent. I want to talk about how we can use human talent in a better way and learn the lessons from other industries to try and improve the way those particular types of service are delivered.
Productivity is a really useful concept. I just want to spend a little while on it. So I could produce so many widgets in one hour, and that would measure my productivity. It's a fundamental cornerstone of our growth, both economically and as a society. If we can increase our productivity, it means we can deliver things faster, it means we can deliver more things in the same period of time. It reduces prices, it increases wages, it increases the standard of living, and it lifts people out of poverty. That's the effect of the impact of increasing productivity, and why governments around the world are trying to harness it.
What's really interesting is if you look at the figures for insurance since 2009, in the same period productivity has fallen by 10%. So in banking, in financial services, in insurance, we're actually going backwards. Things are getting more expensive, they're taking longer to produce and provide, and we're getting a worse service as a result. Let's go back to that mobile phone purchase that I made. You'd think, wouldn't you, that when I bought my mobile phone it would be a very slick, very technologically enabled experience, and the reason it takes 24 hours is because it's very, very complex technologically to do that. Well, you'd be wrong. The reason my phone takes 24 hours to activate on the network is because of the people involved.
Some of them are on the phone speaking to you, the customer. Some of them are giving you advice, listening to what you want, advising you on the right product for you, and taking your order. That's great; they're the kind of humanistic skills that we want. But other people in that process are doing things like activating your SIM card, creating your account, sending you a letter. Basically, they're working these mundane, repetitive tasks, doing the same thing over and over again. First of all, is that something that humans are good at? Not really. Errors start to creep into the process. We do things inconsistently. And thirdly, is it something we can scale very easily? A lot of people probably try to put their new SIM card in on Christmas day, which means it takes a long time to get to the end of that queue.
We need to use humans in a more effective way. We're all familiar with these kinds of images. Even way back in the industrial revolution, we used machinery to replicate previously human manual laborious activities and to scale out massively beyond what people could do. That created a lot of wealth, a lot of productivity, and helped to move organizations and society on. In car manufacturing, I can now order a car from a massive list of extras. I can choose my own colored wheels, my own colored paint. I can put a flag on the roof if I want to. All of that is achieved because we've automated a lot of those repetitive processes on the production line. I get my car faster, it's cheaper than it used to be, and I can have that kind of variety.
Warehousing uses robotics and automation to do things at a scale that people wouldn't be able to achieve. Having 10 times as many people in the warehouse doesn't mean you get your order 10 times quicker; it just means they trip into each other and get in each other's way a bit more. So what lessons can we learn from other industries that are being more productive and reapply to those service industries? Technology is advancing all the time, and advancing very quickly. Just picking something like the autonomous vehicle, we've all heard of driverless cars. What's really interesting is that in 2007, the US military sponsored what was called the DARPA challenge. The course was seven miles. That was in 2007.
Now in 2015, we have trucks driving themselves, we have cars driving themselves. Some of you may even have a car that can park itself. That's the pace and speed at which these kinds of technologies are evolving. We're even using automation in the home. This is an example of a robotic vacuum cleaner, and we also have similar things that cut our grass. Why are we interested in embracing automation in the home? None of us want to do mundane, repetitive, manual activities. We'd rather use our minds and our skills to take ourselves on, to spend time with our families, to learn new skills, to go out and enjoy the world around us.
Let's go back to that process that I looked at and compare it with some of those technologies that we've seen used in different industries, in our homes, in our cars, and see what's going on. This is a typical office. When I put my SIM card in my phone, a few hours later my request ended up on somebody's desk in this office. It looks a little bit like a factory with a lot of people working in it. Some of those people are on the phone, some are talking to customers, using their human skills like empathy, advice, knowledge, understanding, and decision-making to offer customers value and help them with what they're trying to do. But because regulatory requirements and compliance and new products are creating a complex environment,
It's really interesting. Two professors at the London School of Economics, Mary Lacity and Leslie Willcocks, are writing a book about how service industries could benefit from software robots and automation. They use a really interesting phrase: they talk about taking the robot out of the human. So looking at the people in this kind of environment, saying what are the skills and talents that we can use these people for, and what are the skills and talents that we can use automation technology to apply to and get benefits from both. But the question is, why are people in this environment performing these processes? Why aren't we using technology? Why haven't we got systems that do all this work?
We have people for their skills of interaction, judgment, interpretation, all the great things that people are good at. And we think we use technology to add a layer of repetition, rules, consistency, and scale to that people layer. That forms our business process. What actually happens is that as the regulator requires us to do things differently, we have to comply with different laws and legislation and rules, we launch new products, we grow our business and want to serve more people. We end up starting to use people more and more in that technology part. We can't change the technology as quickly as we can change our business or as quickly as we can change our processes.
It's easier to do things manually than to take the risk of amending the system and changing the technology. That's quite a difficult thing to do. What that means, of course, is we're not actually using people for the skills that we employed them for in the first place. We're kind of using them as robots to do these repeatable manual activities. So my question would be: how can we readdress the balance? How can we harness people's talents better and get a better front end of our process? So when we ring up for service from our bank or mobile phone provider, how can we ensure that we get better value from the people we're talking to, that they're not wrestling with the system, that we're not on hold or waiting a long time, and that our productivity can increase like with those other industries?
What does this software robot look like in the office? Well, the first thing to say is, don't imagine something that's got robot arms and legs and is sitting at a swivel chair alongside his colleague working the computer. Think of something a bit more like the player piano. You've got the same instrument, the same piece of music, but you've trained the piano to play that piece of music, and then you can take the player away from the keyboard. The same principle applies with the kinds of processes that these people are doing in the office. It takes the mundane, the repetitive, the robot-like activities away from the person and allows them to focus on the skills that they have: management, decision making, empathy, knowledge.
This creates a virtual workforce. Think about humans working alongside their virtualized, automated counterparts. From a management perspective, you look at a piece of work, you look at a process, and you say: is this a repeatable, robot, rules-based process that I can give to my virtual workforce? Or is it a skilled, humanistic style process that I can give to my human workforce? If I can start dividing work up in that way, it allows me to put more people talking to customers, making decisions, using empathy and skills, and not have to use them in those factory-like back offices doing that repetitive work.
That gives you better products. From the employee's perspective, you're more valued as an employee. You're actually using your skills and your talents, and you're being used for your humanistic abilities, not the fact that you can do the same process 50 times a day at the same time every day. There are lots of benefits from a humanistic perspective, and that also increases your value to the organization. From the perspective of the organization, they get more consistency, they can scale better, they can deliver better products faster to market, and they can increase their size and their productivity in line with those other industries we saw.
If we go back to that original slide that we saw when I talked about the original process when I put the new SIM card in my phone, it was taking a long time. But now, with a software robot and a virtual workforce, this time I might get my phone activated instantly. Instead of waiting on hold to get through to an advisor, I might get through straight away. There will be more people available to help me decide which particular handset to get, which tariff suits my usage pattern, and to make sure I get it more quickly. Behind the scenes, for that repeatable processing element, I'm using my virtual workforce to deliver my products much more quickly. So fewer errors creep into the process, I'm more reliable in what I'm delivering, and my human workforce can use their personal talents and skills to deliver better value to those customers.
I think we're wasting human talent. I think redeploying it in industries like retail, and if we can get automation working in partnership with the humans, we can grow our skills, we can grow our organizations, we can become more productive, and we can harness those talents as opposed to wasting them. We can gain better products, better skills, and better standards of living as a result of that. Thank you very much.