Industry 4.0: How It’s Disrupting Leadership

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Industry 4.0 or the ‘fourth industrial revolution’ refers to an ongoing process whereby manufacturing technologies are moving into the realm of the Cyber-Physical, gradually replacing the processes and technologies of the ‘digital’ or ‘third’ industrial revolution. Indicative elements of this new wave include advances in robotics, artificial intelligence, blockchain, and the internet of things.

In his work, ‘The Fourth Industrial Revolution’ Klaus Schwab concludes that this latest revolution will differ greatly from the previous three, which were, to all intents and purposes, simply more efficient uses of technology towards achieving the same end.

According to Schwab, this new revolution will focus on greater connectivity and communication between people, with technological advancement serving as a means rather than an end in itself. This fundamental motivational shift has the potential to change much of what we take as read about modern business, not least the way businesses are led, managed and motivated. This article will explore some of the behavioural shifts leaders can expect to make to keep their businesses relevant in the era of industry 4.0.

Caution is the new risk

In their recent study Success Personified in the Fourth Industrial Revolution, Deloitte interviewed more than 2000 CEOs and identified the following four shortcomings leaders will face in industry 4.0:

• Too much choice in technology (and lack of understanding of functional differences)
• Talent shortages in key areas
• Managing the pace of change and staying up to date
• A paralysis and fear of failure.

It’s clear from these self-confessed failings, that indecision, lack of confidence and lack of knowledge is holding some leaders back. Behaving cautiously is now fraught with danger as businesses continually leverage new technologies to disrupt accepted practices across various industries, those left behind may find their entire way of doing business has been replaced.

Society before shareholders

Much is made of the social inclination exhibited by millennials and younger when selecting their employer or choosing a company to engage with as a consumer. This soundbite is part of a much wider pivot from the maximisation of profit at any cost to a more socially engaged, human-centric industrial model. The recent report by Deloitte found that 34% of leaders value societal impact as their key success metric versus 18% for customer satisfaction, and 17% for financial performance.

These emerging technologies are built around reducing the burden on humans to perform manual tasks, it’s this inherent humanity at the core of the usage of these technologies that is working to change some notions of why businesses operate.

Brokering the deal between tech & talent

In 1900, recorded human knowledge doubled every 100 years, by 1945 this had cut to 25 years and now the figure is approaching just 12 hours. The knock-on effect for data facing employees is that they are in the midst of a battle to synthesise and utilise a continually expanding body of actionable information with emerging technologies as their chief ally.

Leaders must be able to manage and control the ever-changing interactions between technologies and people as the two develop (sometimes independently) to extract the maximum benefit from the two elements.

Standing product-first policy on its head

Manufacturing innovation is typically drawn from a small number of skilled inventive teams developing augmentations and improvements to existing products, with employees further down the supply chain asked to get up to speed or risk losing their Jobs. Previous business generations have had the luxury of surpluses in manufacturing talent, industry 4.0 does not offer this luxury to leaders, demand outstrips supply in almost all areas where industry 4.0 is coming to the fore.

This means that not only do manufacturing leaders need to think about switching to a people first policy of new product development but when they have these people in place they must work extremely hard to instil the correct values so that they can retain and properly energise them.

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