Technology in the so-called Smart Machine Age, which includes AI, virtual reality and robotics, will bring huge changes not just in headcount, but also in how people innovate and collaborate. That will require new approaches to how people think, listen and relate, says Edward D. Hess, a professor of business administration at the University of Virginia. In the “Smart Age” now evolving, ego has no place. Instead, the focus will need to be on the quality of ideas, accuracy, emotional intelligence and mindfulness. Hess writes about these issues in the just-released book he co-authored with Katherine Ludwig, titled Humility is the New Smart: Rethinking Human Excellence in the Smart Machine Age. Hess discussed his ideas on the Knowledge at Wharton show on Wharton Business Radio, SiriusXM channel 111. (Listen to the podcast at the top of this page.)
Below is an edited transcript of the conversation.
Knowledge at Wharton: Please explain the premise behind your book.
Edward Hess: We human beings are going to be in a frantic footrace with smart machines to stay relevant. [What] we’re going to have to do well are those things which are uniquely human, such as our ability to create, innovate and relate at the highest emotional levels with other humans. In order to do that, we have to basically overcome our humanness. That’s the counter-intuitive part of this. We can’t stay relevant by trying to outthink Watson. Watson can process, remember, and recall much more information than us.
What we’ve got to do is to play to our strengths. The problem is that we are not naturally good at high-level thinking, whether it’s critical, innovative or creative [thinking]. And because of our cultural and evolutionary biology, we’re not good at connecting and relating with others. The book is a new story about how humans can thrive in the smart machine age. It begins with [the concept of] New Smart. New Smart, if you will, is the mindset that we ask people to consider because we’re entering into a new game, and a new game needs new rules.
Old Smart won’t work. The question I’m sure you’re asking is, “Okay, what in the heck is New Smart?” Well, if you think of Old Smart, let’s think about how you and I grew up. From elementary school on, we were trained to get high grades — high grades meant you were smart. How did you get high grades? You don’t make mistakes. Smart is basically, “I knew more things than you. I got more right answers. I remembered more things.” Smart was a quantity concept. Well, that’s a losing game.
When knowledge has a short shelf life and smart machines can remember and process more than us, what is smart going to mean? Instead of getting my ego all wrapped up in how much I know, New Smart says, “Define yourself as the quality of your thinking, listening, relating and collaborating. [Those are] the key behaviors that are necessary in order for you and me to think critically, innovatively and to collaborate with others, all of which require other people.”
“When … smart machines can remember and process more than us … define yourself as the quality of your thinking, listening, relating and collaborating.”
We will not flourish along with smart machines by ourselves. It is going to be an otherness game. It is not going to be a competitive game. It’s going to be a collaboration game. New Smart is a new way of thinking, to define yourself not by what [you] know or how much [you] know, but by the quality of [your] thinking, listening, relating and collaborating.
It has four other principles. I am not my ideas; I must de-couple my beliefs, but not my values from my ego. My mental models are not reality; they’re only my generalized stories of how the world works. I must be open-minded and treat my beliefs — not my values — as hypotheses to be constantly tested and subject to modification by better data. My mistakes and failures are opportunities to learn. Those are the five new smart principles, and the new way of thinking that will help us humans complement, augment, and thrive, in the smart machine revolution.
Knowledge at Wharton: That’s where the other piece to the title of the book fits in — in that people’s level of humility needs to be adjusted, correct?
Hess: Correct. We’ve got to get around the concept of extreme individualism, social Darwinism, the Big Me, self-promotion and all-knowing, in order to be more open-minded, listen better, collaborate better and be willing to stress-test our beliefs.
Humility has got a bad rap in our society, let’s be honest. You say “humility” to somebody and they look at you and say, “Are you crazy? I’m not going to be meek; I’m not going to be submissive.” We’re not talking about that. We’re talking about the psychological or philosophical construct of humility, which is not being so self-absorbed, and not being so emotionally defensive. It’s being open minded and self-accurate — being able to be open to the world. It’s tamping down that “me” lens, not thinking in just a confirmation manner and not listening to confirm, but being open to differences in others.
That’s what humility is. It opens you up to the ability to deal more realistically with the world. It’s no longer about who’s right; it’s about what is accurate.
Knowledge at Wharton: You said in the introduction to the book that we’re on the leading edge of a technology tsunami. It already feels a little bit like that — maybe not at the level of a tsunami, but we’re certainly in an unbelievable storm now with all the technology that’s been thrust upon us. In your opinion, we’re just at the tipping point of this.
Hess: Yes, we’re on the leading edge. As artificial intelligence, nanotechnology, virtual reality and smart robotics continue to advance and they are going to be very inter-related, it’s going to be huge. The best research trying to predict what’s coming over the next five to 15 years says that tens of millions of U.S. jobs are going to be automated, including of service jobs and many professional jobs.
The loss of jobs to China and Mexico in the last few decades pales in comparison to what’s coming. We as a society and as individuals are not ready for this. Our book focuses on the individual aspect, but it is just as important from a societal viewpoint. This is going to be as transformative for us as the Industrial Revolution was for our ancestors.
Knowledge at Wharton: You mentioned that part of this is an economic issue that will have to be dealt with. But a lot of it involves scientific disciplines.
Hess: Success in business has generally thought to be the in areas of economics, finance and strategy, and new players coming to the table. It’s going to have probably more chips or as many chips as those three together and that’s called psychology. In order for humans to excel in this environment, we’re going to have to take our cognitive and emotional ways of being to our highest levels.
That means, all right, we’re going to have to do the hard work — the real, hard personal work. My biggest competition is not going to be you [or others]. My biggest competition is going to be me.
I’ve got to overcome my reflexive ways of thinking, I’ve got to overcome my ego, my fears, my fight-or-flight responses. That is all going to bring the psychology, the science of learning, the science of collective intelligence and emotional intelligence into business — into how businesses are organized, into the culture and into processes. It doesn’t matter whether you’re working in a big company or you’re an entrepreneur, or an independent contractor.
So yes, this is a big social issue, and a psychological issue. It’s going to call into question the American Dream — what that means, the purpose of work, and the future of work. Yes, this is big.
Knowledge at Wharton: We are at a point where if you look at the jobs reports that come out and some of the reporting around it, the U.S. unemployment rate is low, and yet the participation rate is still near a record low: It seems that there is a skills mismatch out there.
Hess: Yes.
Knowledge at Wharton: Is this mismatch going to get worse? Or will that mismatch be pared down because the baby boomer generation, where some of this mismatch is happening, is going to be no longer in play?
“Humility … opens you up to the ability to deal more realistically with the world. It’s no longer about who’s right; it’s about what is accurate.”
Hess: Here’s my educated guess. It’s going to get worse. Our school systems, generally speaking, don’t teach the skills that students need for the smart machine age.
Hess: We’re back in the old model. The Industrial Revolution era model of how business is organized and how people are trained — “Don’t make mistakes. Try to be efficient machines.” Think about it, how many kids in school are really being trained in how to think critically? How many kids are being trained in social intelligence, emotional intelligence, how to make things, how to think creatively, how to work in teams, versus how many people are being taught to remember facts in order to take tests so they can score above certain grades?
How are teachers being evaluated? What’s coming will hit us in the next five to 15 years. Every year we’re sending people out in the workforce who, generally speaking, are not prepared for what’s coming. When it hits, it’s going to hit in huge numbers across the various professions and service jobs. So you’ve got the challenge of: “How do we retool? How do these people learn the new skills?”
It will be different this time than it was after the Industrial Revolution. If you look at the history of the Industrial Revolution, it took society in the United Kingdom 60 to 80 years to adapt. If you think about the world today, we don’t have 60 to 80 years. We can’t put up with that much misery and stress — globally or in this country.
What’s also different this time around is you have to ask the question, “Will technology produce new jobs that technology itself cannot do?” We’re finally starting to have that conversation in Silicon Valley. Some bright technology people are saying, “We’re not going to be able to produce as many jobs because technology will continually advance and be able to take over more and more.”
Knowledge at Wharton: I would think that this is part of the reason why they introduce something that a lot of families are getting used to hearing now, called “mindfulness.”
Hess: Yes.
Knowledge at Wharton: To a degree, we are starting that change in how we teach our kids and what we teach them now so that they can be ready.
Hess: Mindfulness is very important. It is a start. But schools should be moving more towards project-based experiences, working in teams where children are challenged and develop what [Stanford University psychology professor] Carol Dweck calls a “growth mindset,” where they learn iterative learning. That is because the No. 1 job skill for the smart machine age is iterative learning. If you’re going to be an entrepreneur, or an innovator, or a scientist, it’s all about iterative learning.
You need an approach to life where you have the courage to go out in the unknown, and you have a methodology to try things. You’ve built up the resilience of how to learn from mistakes and continually evolve. We need to be giving those experiences as early as we can to our children. In some schools, they are starting to do this. But it needs to be done on a mass basis.
Knowledge at Wharton: What about businesses? Also, what about government having a better understanding of this shift?
Hess: [Amazon founder and CEO] Jeff Bezos made a great statement about artificial intelligence and machine learning: “It’s hard to overstate how big of an impact this will have on society over the next 20 years.” Technology will become integral or infused into every business function and every business area. Organizations will be staffed, operated and managed by some combination of smart robots, artificial intelligence systems and humans.
Business excellence is going to require technology excellence and then this human excellence we’ve been talking about. It’s highly likely that we will have two fundamental business models vis-a-vis organic growth — operational excellence and innovation. Operational excellence will be technology-enabling and commoditized, leaving innovation as the key strategic value creation differentiator.
The environment in which people excel at creativity or innovation is very humanistic and people-centric. Technology will dehumanize business by reducing human headcount, but on the opposite side, it’s going to require all organizations to become more humanistic, more people-centric, more psychology-oriented, [and harness] the power of emotions.
“This is … going to call into question the American Dream — what that means, the purpose of work, and the future of work.”
If emotional intelligence, collective intelligence, teamwork and collaboration are mission-critical skills for innovation and critical thinking, who will be able to do those activities very well? Generally speaking, [they are] women.
The smart machine age is going to propel more women into the C Suite. The organization will become teams and networks, hierarchy will be gone and it’s going to take a new type of leader. All of this will impact government. Is government going to be ahead of this or will it be a slow follower? That will make a dramatic difference in governance, in the ability of our society to adapt, the issue of what happens economically and how people are engaged with government. We’re talking about a huge societal transformation.
There are not many places in our society, educational institutions or governmental institutions that are actively having serious conversations about this — what I call Plan B. If we do have significant job displacement, what are we going to do? We need to be having, at the highest levels of our government, discussions about how we as a society will to create the American Dream 2.0, how we are going to adapt to this and stay ahead of this or at least cope with it because we don’t want to be playing catch-up.
Knowledge at Wharton: Is that how do you think that this philosophy will change, like your job as a professor at a university? How do you think it’s going to change how you have to approach talking and dealing and teaching with that next generation?
Hess: One, it depends on your subject matter and your level. But in general, as you go to higher education, it will become more experiential, more learn-by-doing, and teachers will be more guides and mentors and coaches. The aspects of how to think, how to listen, how to make, how to do and how to collaborate will become integral. We will find project-based and more flexible ways of engaging with people that are different from ourselves. Virtual reality and connectivity, and being able to work in different countries — even if you are sitting in the same place — have to come into the education system.
Knowledge at Wharton: You mentioned emotional learning that may have to happen. To a degree, we’ve seen that already with the way marketers are trying to reach and connect with consumers these days. Are they already on the frontlines of this?
Hess: Yes. One of the key behaviors that we focus on in our book is “otherness” – it will be so important going forward in no matter what you are doing. We are going to need others, and we are going to be looking more towards community, collaboration, et cetera. How do you connect? How do you relate? How do you build trust? There’s science behind all of this and that science has to come into the education system.
