How Leaders Are Navigating the Fourth Industrial Revolution
Industry 4.0 holds the promise of a new era of globalization. Yet while our latest survey identifies companies successfully implementing Industry 4.0 technologies, many senior executives remain less prepared than they think they are.
A year ago, Deloitte’s inaugural survey assessing private and public sector readiness for the Fourth Industrial Revolution observed a “tension between hope and ambiguity.” We found that while executives conceptually understood the profound business and societal changes Industry 4.0 may bring, they were less certain how they could take action to benefit.
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?
Our new survey suggests 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.
Our latest survey polled more than 2,000 C-suite executives across 19 countries, coupled with select interviews. The goal was to uncover how leaders are taking effective action, where they are making the most progress, and what sets the most effective leaders apart. Among our findings:
Four Types of Leaders
The general ambiguity expressed in last year’s survey has subsided into a clearer, more tempered perspective in which leaders better recognize the many dimensions—and ensuing challenges—the Fourth Industrial Revolution brings. These include societal and ethical implications, the importance of clear vision and collaborative organizations, the tradeoffs of investing in technology for the short term rather than the long term, and 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. Social Supers also exhibit greater rigor around decision-making and believe their workforces are ready for the Fourth Industrial Revolution.
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 surveyed 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: We call executives who reported both investing in technologies to upend their markets and competitors, and making 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 (45% versus 32%) and more assured their organizations are prepared to capitalize on the opportunities associated with Industry 4.0, and they take a more holistic approach to decision-making.
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. About two-thirds have been able to generate new revenue streams through socially driven initiatives, versus half of all others surveyed.
Encouragingly, this research shows that these personas are contagious. While leaders may start on any one of these paths, they often embody a number of characteristics that might offer lessons for those still trying to define their approaches. These leaders share a commitment to doing good, with a clear vision of the path forward. They take a long-term view of technology investments, and are leading with regard to workforce development. Finally, their organizations are growing faster (that is, more than 5% annually) than their counterparts’, and they’re more confident in their ability to lead their companies in the Industry 4.0 world.
While leaders with these characteristics stand apart, leaders generally, over the past year, seem to be better recognizing the many dimensions—and ensuing challenges—of the Fourth Industrial Revolution. Our hope is this clarity will now give rise to progress.
Learn more about the impact of Industry 4.0 here.
How Leaders Are Navigating the Fourth Industrial Revolution
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