High Road / Low Road

· October 16, 2018

Last week I had an excellent conversation in Brooklyn around the effects of automation on jobs. One idea I found useful to share was the distinction of High Road and Low Road employers used by Thomas Kochan at MIT Sloan. The two roads are between employers who provide a supportive environment for employees, and ones who treat employees as a cost to minimise. The examples used are often Wal-Mart (on the low side), and Costco or Market Basket (on the high).

The meta point is in thinking about an option as framed with intent. Our specific conversation was about a machine learning tool that helps process insurance claims from car collisions . The technology itself is relatively neutral, but the framing of the company adopting it determines whether it works out (socially net) positive or negative. If a company cuts their insurance adjusters due to the time savings delivered by the ML, the impact could be negative. If the company re-tasks some of its adjusters’ time to higher value (and likely more enjoyable) work, then the impact could be positive.

Importantly - its likely that both of these options could deliver good financial returns. Managers have a wide latitude in how to extract value from a new tool. The high road/low road discussion in employment isn’t about trading off results for warm fuzzies: all the companies mentioned deliver excellent returns. The distinction is in how to go about generating those returns, and the implication that as customers or investors we have opportunities to encourage the approaches we prefer.