Business leaders are gaining a deeper understanding of the challenges the 4th Industrial Revolution poses, and they are viewing the actions needed to succeed more realistically.
However, the second global survey on this new world by Deloitte also shows many senior executives remain less prepared than they think they are.
Faced with an ever-increasing array of new technologies, leaders acknowledged they have too many options from which to choose and, in some cases, lack the strategic vision to help guide their efforts, writes Deloitte Global CEO Punit Renjen in response to their survey findings.
The amount of attention that is given to the 4th Industrial Revolution and its challenges is unprecedented, says Shawn Cunningham, partner in the international consultancy Mesopartner and faculty member of the University of Stellenbosch Business School’s Executive Development unit.
Being successful in this constantly changing environment will require companies to adopt a merit-based culture, where the person with the most knowledge is the go-to-person instead of the most senior person.
Companies will have to distribute the “scanning function” in their organisation.
They need more people to scan for opportunities, for changes and weak signals – the small things that are not directly related to their business right now, but could affect their clients, suppliers or even government and policymakers.
Alex Granger, co-founder of Twice Blue, a human capital consultancy in Johannesburg, says they are increasingly noticing a workforce that is “crying to participate and contribute meaningfully” to their organisations.
People need to become “authors” in the change environment.
If they are invested in the success of the change, it is more likely that they will be assertive in the execution of the change.
Adapting to the rapid changes requires an ability to combine and converge new information to do a quick “scenario-setting exercise”.
This will enable business leaders to see whether their strategy is able to deal with, respond to and leverage on these new emerging issues, says Cunningham.
Not only about technology
The 4th Industrial Revolution implies social unrest and many things being out of place.
“A lot of people do not see that, so they feel safe,” says Cunningham.
Businesses are dealing with a lot of disruptive “socio-technological change”.
It is not simply about equipment and technology; the focus should be on disruptive business models.
“What puzzles me is that in other countries, this revolution is leading to far more small enterprises starting up, becoming specialist and knowledge-intensive companies… I am not seeing that in SA,” notes Cunningham.
The lack of investment in research and development (R&D) is also a major obstacle for South African companies to adapt to technological changes.
And Cunningham warns against a too narrow understanding of what the 4th Industrial Revolution is all about.
Everybody is getting carried away by things like artificial intelligence, driverless cars and 3D printing.
It's not only about these innovations.
“You have to figure out how you are going to organise your business around this new technology. You might need to develop new supply networks, develop a new way of costing and managing things – and possibly new clients,” he explains.
The future leaders
Deloitte’s Renjen says among the surveyed executives, only 47% are confident that they are doing enough to create a workforce which is ready for Industry 4.0.The survey highlighted a specific subset of leaders for the new world.
The social supers: Some leaders have figured out how to do well by doing good.
They have found new revenue streams by developing or changing products and services to be more “socially or environmentally conscious”.
The data-driven decisives: They are more likely to invest in disruptive technologies, to be concerned about the ethical use of new technology, and to train their current employees to be ready for the technological revolution.
Disruption drivers: They are more confident that they can lead in the revolution and are more assured that their organisations are prepared to “capitalise” on the opportunities associated with Industry 4.0.
Their approach to decision-making is more holistic.
The talent champions: They believe they have the skills their companies need, and that the composition of their workforce is correct.
They “embrace” their responsibilities to train their employees for the future of work.
Finding an edge
According to Twice Blue’s Granger, leaders need to be relentlessly “curious about innovation”.
They must realise that their training from ten years ago is not going to be sufficient.
“They have to learn the new ways of work, understand disruption and exponential ways of growing their business.”
Cunningham says developing the South African workforce will depend on how capable leaders are to manage a “diverse workforce” that is highly specialised – or more specialised than was required in the past.
“We may have to upskill our management teams, and we may have to change them more often.”
Granger says that some of the key areas that will drive senior leadership are agility, adaptability and collaboration.
They will need the ability to solve complex problems, think critically and creatively.
This will keep them ahead of the change curve.
SA needs organisations that will be able to guide the new entrepreneurs and businesses to survive and thrive in the new world.
Those that are already doing it are not well-positioned or visible, says Cunningham.