We’re experiencing what could be the most significant reinvention of work in our time. Leaders will have an unprecedented opportunity to re-examine, redefine and reimagine the nature of our work, the way they engage their people and how organisations chose to adapt to a new era of globalization.
While many organisations are gradually successfully implementing Industry 4.0 technologies, many senior executives remain less prepared than they think they are. The traditional leadership mindsets, styles and ways of working within most global organisations are simply not suited to coping with the speed, volatility, complexity and ambiguity of this new operating environment. A new approach to leadership learning and leader development is necessary.
While executives conceptually understand the profound business and societal changes Industry 4.0 may bring, like the profound impact of Black Lives Matter campaign, the global pandemic lockdown and the impact on businesses and the rapid technology adoption with the shift to working from home overnight, they were less certain how they could take action to lead in new ways.
The Fourth Industrial Revolution enables an increasingly globalized world, one in which advanced technologies can drive new opportunities, diverse ideas can be heard, and new forms of communication may come to the fore. But how are leaders adjusting?
Many who think they are ready may still not be as prepared as they need to be. But the good news is leaders seem to be gaining a much deeper understanding of Industry 4.0, are increasingly aware of the challenges before them, and are viewing the actions needed for success more realistically.
Working with more than 2,000 C-suite executives across 9 countries in the past two years, I have uncovered how leaders are taking effective action, where they are making the most progress, and what sets the most effective leaders apart.
Executives express a genuine commitment to improving the world. Leaders expressed “societal impact” as the most important factor when evaluating their organizations’ annual performance, ahead of financial performance and customer or employee satisfaction. In the past year, many Executives said their organizations took steps to make or change products or services with societal impact in mind. Many are motivated by the promise of new revenue and growth, but leaders are split on whether such initiatives can and will generate profit.
Executives are struggling to develop effective strategies in today’s rapidly changing markets. 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. Organizational influences also challenge leaders as they seek to navigate Industry 4.0. Many leaders said their organisation does not follow clearly defined decision-making processes, and organizational silos limit their ability to develop and share knowledge to determine effective strategies.
Leaders continue to focus more on using advanced technologies to protect their positions rather than as bold investments to drive disruption. Although many of the organisations that have made investments in technology are seeing payoffs, others are finding it difficult to invest—even as digital technologies are engendering more global connections and creating new opportunities within new markets and localized economies. Leaders acknowledge the ethical implications inherent in new technology, but few companies are talking about how to manage those challenges, let alone actively putting policies in place to do so. This week, PWC announced it will invest $12 billion over five years to create 100,000 new jobs aimed at helping its clients grapple with climate, diversity reporting and artificial intelligence, as part of its new global strategy. They are also increasing training for partners and staff in climate risk, creating an environmental, social and governance (ESG) academy and a new leadership institute to help executives, boards of directors and C-Suites create diverse workforces and manage in uncertain times. Plus $3 billion to invest in its Asia-Pacific region, aiming to double its business which will see growth in the Australian market.
The skills challenge becomes clearer, but so do differences between executives and their millennial workforces. Leaders recognize the growing skills gap but are less confident in their efforts and availability to coach & develop their people. We see many organisations, indicate they will train their existing employees rather than hire new ones, Walmart (VR learning strategy, cross-training, and Amazon Web Services (AWS) going on step further, with re:Invent 2020, by 2025 AWS will help 29 million people globally grow their technical skills with free cloud computing skills training.
Four types of leaders:
The general uncertainty expressed over the past year as a result of the pandemic has not yet subsided, instead, leaders better recognize the many leadership dimensions. These include societal and ethical implications from areas of health & wellbeing to driving diversity, inclusion, and equality, to personal qualities of persistent, grit, and empathy, a new growth mindset & lifelong learning to the importance of clear vision and collaborative organizations, investing in technology and new ways to address the talent gap. Yet among these myriad issues, we see a subset of leaders forging a path forward. They include:
1. Social Supers: Some leaders have figured out how to do well by doing good, generating new revenue streams by developing or changing products and/or services to be more socially or environmentally conscious. Social Supers believe societal initiatives more often than not contribute to profitability, and those initiatives are fundamental to their business models. Uber set aside $800 million to transition its drivers to use electric vehicles by 2025, in their program called Uber Green, which gives customers the option to request an EV or hybrid electric vehicle. Drivers receive an extra $0.50 from a $1 rider surcharge for every Uber Green trip completed.
2. Data-Driven Decisives: Certain executives are far more likely to say they have clear decision-making processes and use data-driven insights. They’re almost twice as likely as other leaders to say they are ready to lead their organizations in capitalizing on the opportunities associated with Industry 4.0. Data-Driven Decisives are also more likely to invest in disruptive technologies, to be concerned about the ethical use of new tech, and to train their current employees to access the skills required for Industry 4.0.
3. Disruption Drivers: These executives invest both in technologies to upend their markets and competitors, and make technology investments that have achieved or exceeded their intended business outcomes, Disruption Drivers. These leaders are more confident they can lead in the Industry 4.0 era and more assured their organizations are prepared to capitalize on the opportunities and they take a more holistic approach to decision-making. The valuation of SpaceX double in July 2020 after 1 June launch, while everyone else was in lockdown, Elon Musk was sending rockets to Mars.
4. Talent Champions: Leaders who are further along in preparing their workforces for the future than the rest of the field are Talent Champions. They believe they know which skill sets their companies need and that they have the correct workforce composition, and they embrace their responsibilities to train their employees for the future of work. Most leading technologies companies Microsoft, SAP and Google hold Leaders accountable for have deep and well-mapped succession plans with detailed leadership development plans to ensure robust business growth.
All in all, Leaders that share a commitment to doing good, with a clear vision of the path forward, take a long-term view of technology investments and are leading with regard to workforce development often report their organizations are growing faster and they’re more confident in their ability to lead their people.
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