With the world’s leaders congregating in Davos, Switzerland, for the annual World Economic Forum this week, Deloitte has released its annual Readiness Report: Success Personified in the Fourth Industrial Revolution, which looks into how prepared businesses are for digital disruption.
The report is based on a survey of more than 2,000 C-suite executives from a range of industries across 19 countries, who were quizzed on their approach to digital disruption, including the areas where they are making the most progress, the actions they are taking to overcome problem areas, and their own leadership approaches.
While it was found that business leaders are beginning to understand the huge changes that are ahead and the challenges that this will bring, organisations are still shying away from making the bold investments in emerging technologies that are vital to survival in “Industry 4.0”.
“Last year, even though leaders were just beginning to understand how Industry 4.0 would transform business and society, they expressed confidence in their preparedness,” said Punit Renjen, CEO of Deloitte Global. “Yet their actions demonstrated a significant mismatch between their confidence to address these changes and their actual readiness to address them.”
The four leaders of the digital revolution
According to Deloitte, four clear personas were present among the most effective leaders in the digital age, all of which are focused on using technology to their advance and preparing employees for digital disruption. These are:
Social Supers – These individuals recognise the importance of social initiatives within their businesses, generating revenue through socially or environmentally friendly products and services. Social Supers are competent when it comes to workplace challenges and are well prepared for digital disruption – 12% more likely than other types of business leaders.
Talent Champions – These individuals know their organisations in and out and know exactly what they have at their disposal and what they need to achieve the right workplace composition. With artificial intelligence set to displace many workers, Talent Champions do not shy away from the disruption that new technologies are bringing. However, they are more willing than others to reskill their employees to survive in a technological future.
Data-driven Decisives – These individuals use data insights to make better decisions, relying on past results to raise morale, improve productivity and drive growth. Data-driven Decisives tend to have bold, long-term visions of technology and work hard to ensure that their businesses continue to thrive amid the disruption.
Disruption Drivers – These individuals are among the first to invest in new technologies, making bold decisions that give them the upper hand over their competitors and drive growth for their businesses. Disruption Drivers are confident that their businesses can not only survive the fourth industrial revolution, but profit from the new opportunities that it is providing.
What makes these personas so successful?
“Today, leaders are more realistic about what it will take to succeed, and they appear particularly focused on societal impact and workforce development as two critical components of their future success,” Renjen said.
Surprisingly, the survey found that business leaders are increasingly using societal impact as the main metric for tracking success. Some 34% of business leaders said that societal impact is more important than customer satisfaction (18%), financial results (17%) and workforce satisfaction (17%) and regulatory adherence (14%).
Facebook is a good example of this. With its reputation damaged as a result of its part in the Cambridge Analytica scandal, Russian election meddling, the View As data breach and its ongoing fight against fake news, the Facebook share price has tumbled over the past six months, which showing little sign of returning to its July 2018 peak.
But leaders need to focus on more than just keeping society happy. With AI expected to cause disruption to job markets in most industries, it is more important than ever for businesses to pay attention to their employees.
Some 55% of leaders recognise that they will need new skills to survive in Industry 4.0. The shortage of talent for many of these skills is old news. Yet, despite 57% of respondents believing that the education system is failing to prepare new workers, just 25% of organisations are opting to reskill their current workforce over searching for new talent.
Success in the Fourth Industrial Revolution all rests on adapting to new technologies early and effectively. It has previously been found that businesses need to make use of emerging technologies within the first three years of its lifespan in order to reap the greatest rewards.
All four of the leaders identified by Deloitte react quickly to technological changes, which is setting them apart from the rest, who identify too many technology choices (12%), lack of skilled talent (9%), the pace of change (7%) and fear of failure (7%) among their reasons for lagging behind in Industry 4.0.