Success personified in the Fourth Industrial Revolution

Success personified in the Fourth Industrial Revolution-Four leadership personas for an era of change and uncertainty is Deloitte’s second annual survey assessing business and government readiness for the Fourth Industrial Revolution. This survey covers more than 2,000 C-suite executives across 19 countries, aiming to uncover how leaders are moving forward, where they are making the most progress, and what sets apart the most effective leaders.
 

Viewpoints / key findings

This year, we asked executives how they are enabling their organizations to succeed in the age of Industry 4.0, and we grouped the leaders who are making better progress within the four major areas of impact (society, strategy, technology, and talent) into personas: Social Supers, Data-Driven Decisives, Disruption Drivers, and Talent Champions. The report examined Industry 4.0 readiness in four areas: positively affecting society, shaping business strategy, utilizing 4.0 technology, and managing talent and workforce needs.

• Societal impact: Executives expressed a genuine commitment to improving the world. Leaders rated 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, nearly three-quarters of respondents said their organizations took steps to make or change products or services with societal impact in mind. While many are motivated by the promise of new revenue and growth, leaders are split on whether such initiatives can and will generate profit.
• Strategy: Executives are struggling to develop effective strategies in today’s rapidly changing markets. Faced with an ever-increasing array of new technologies, leaders said they feel as though they have too many options from which to choose and, in some cases, they lack the strategic vision to help guide their efforts. Organizational influences also challenge leaders as they seek to navigate Industry 4.0. Many leaders reported that their companies don’t follow clearly defined decision-making processes-and that organizational silos limit their ability to develop and share knowledge to implement effective strategies.
• Technology: Leaders continue to focus more on using advanced technologies to protect their positions than on making bold investments to drive disruption. Many of the businesses that have made investments in technology are seeing payoffs; others are finding it difficult to move forward. Challenges include being too focused on short-term results, not fully understanding Industry 4.0 technologies, and a lack of leadership vision. Leaders acknowledged the ethical implications inherent in new technology, but few companies are even discussing how to manage those challenges, let alone actively putting policies in place to do so. Further, business leaders continue to wrestle with how Industry 4.0 technologies should be regulated.
• Talent: The skills challenge becomes clearer, but so do differences between executives and their millennial workforces. The breadth of the skills gap is more evident to leaders compared with last year, as is a sobering awareness that the current education system will be inadequate to meet the challenge. On the bright side, nearly twice as many leaders indicated that their organizations will strive to train existing employees rather than look to hire new ones. And there is more optimism than last year that autonomous tech will augment, rather than replace, humans. But research from Deloitte’s annual Millennial Survey suggests that leaders and employees (particularly younger ones) differ on which skills are most needed and who is responsible for developing them.

The report highlights four personas of leaders who are finding ways to turn societal initiatives into profitable ventures, act decisively in an increasingly complex environment, deploy new technologies in a disruptive manner, and equip their workforces with the right skill sets to navigate the Fourth Industrial Revolution. Some common threads we see across all leader types include:

• A commitment to doing good. All are highly attuned to using Industry 4.0 technologies in an ethical manner. For many, this has resulted in societally driven products that have created new revenue streams.
• Clearer vision of the path forward. They are purposeful and methodical in setting Industry 4.0 strategies. Their companies follow clearly defined processes and use data to make decisions, more so than other companies.
• Longer-term lens on technology investments. In addition to achieving incremental gains for short-term initiatives, these leaders are more likely than others to invest in Industry 4.0 technologies to disrupt their markets.
• Taking the lead on workforce development. They embrace the opportunity to extensively train their existing employees. Further, they are more confident that their organizations already possess the correct workforce composition for the future.

While leaders with these characteristics stand apart, over the past year, leaders’ general ambiguity seems to have subsided into clearer, more tempered perspectives. They better recognize the many dimensions—and ensuing challenges—associated with the Fourth Industrial Revolution. Executives’ mindsets have evolved from a “tension between hope and ambiguity” to “clarity gives rise to progress.” That, in itself, represents progress.