“It’s not cost-cutting,” Bill Winters, the chief executive of Standard Chartered, insisted during a recent panel discussion. “It’s replacing lower-value human capital with the financial capital and the investment capital we’re putting in.”
The words created a flurry of protests—“replacing lower value human capital” hitting a nerve for those nervous about an approaching AI “jobs apocalypse”. Winters was obliged to apologize, pointing out that Standard Chartered was investing heavily in retraining teams.
How company leaders respond to the AI wave–and take their colleagues with them—is one of the most important issues for C-Suite leaders as they contemplate the year ahead. At Fortune’s CEO Forum this week on September 16, AI, workforce planning and return on investment will be a centerpiece debate. And that’s before any discussion on the fact that AI might kill us all in any case.
“It’s fundamentally changing the way we work and our timescales and getting products to market quickly,” Kate Dohaney, the CEO of the U.K. mobile network, Giffgaff, part of the Virgin Media Group, tells me. “The question is not necessarily how do we bring down our human capital, but how do we train our people to do more, strategically, across the business? I’m not a CEO sitting back saying cut, cut, cut.
“I’m not saying we don’t become more efficient as a business. But just like with any revolution that has happened in the history of humankind, we have to understand what are the next generation of skill sets? And I’m trying to get ahead of that and bring people on the journey and keep them excited and keep them curious as we navigate.”
Dohaney is in a competitive market, not just with other mobile providers but with new entrants as well. Octopus (energy) and Revolut (banking) are both looking at offering mobile products as mass-to-consumer brands push towards “super-apps” which offer multiple services. Nubank, a U.S. neo-bank, now provides the NuCel mobile network in Brazil.
“The question is not necessarily how do we bring down our human capital, but how do we train our people to do more strategically, across the business?”
Kate Dohaney, CEO of Giffgaff
“There’s a massive opportunity for telcos to get ahead and think about revenue diversification,” Dohaney says. “We have all these competitors getting into telco. We see Revolut, we see Monzo, we see Klarna. That does allow telcos to sit back and say: I can get a lot more creative, I already have this massive, amazing foundation with this great brand.”
Earlier this year, I interviewed Erik Severinson, the Chief Commercial Officer at Volvo Cars, who spoke about brands needing to stand out in a world of noise. In a stadium full of white t-shirts, how does a company make sure it’s the red t-shirt that people notice?
Dohaney has focused the Giffgaff brand on low cost and sustainability. It is a certified B-Corp, supports a number of charities, and three-quarters of the phones it sells are refurbished. “Giffgaff” is a saying in Scotland meaning “mutual giving”.
“So how can we outmaneuver and capitalize?” Dohaney says about the new entrants in the mobile market. “We’re experimenting in fintech. Our strategy is focused on ‘fair play’, giving the next generation fair access and a leg up in life. So how do we enable new and different capital risk assessors for a young person who’s entering the workforce and having trouble finding a job, or wants to start their own business and has no idea where to start?”
Service wars are coming–the mobile phone company that’s a financial trading and advice platform; the neo-bank that does telco; the table booking app that can find you flights to your next holiday destination. Human capital will be the vital component in winning the battle for the future, with a good dollop of AI thrown in.
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