Leading in Industry 4.0

TRANSFORMING THE NEXT GENERATION OF LEADERS (2019)

“The fourth industrial revolution or Industry 4.0 (IR 4.0) as it is commonly known, represents the combination of cyber-physical systems, the Internet of Things, and the Internet of Systems. In short, it is the idea of smart factories in which machines are augmented with web connectivity and connected to a system that can visualize the entire production chain and make decisions on its own.

In this fourth revolution, a range of new technologies will evolve that combine the physical, digital and biological worlds. These new technologies will impact all disciplines, economies, and industries, and even challenge our ideas about what it means to be human.”

– Prof Sattar Bawany (2018)
Leading the Digital Transformation of Organisations
Expert Insights, Business Expert Press, New York

Introduction

Digitization which is the cornerstone of the Fourth Industrial Revolution (also known as Industry 4.0) has an impact on all organizations across various sectors or industries. In each case, the impact is a different one which makes it essential for companies to have a good understanding and view of what they face and how digitization will affect their company: which opportunities can be seized and which threats have to be faced? (Bawany, 2018)

The impact of digital disruption has to be managed alongside the more general volatile, unpredictable, complex and ambiguous (VUCA) operating conditions of recent years (Bawany, 2016). An ability to calculate and manage/mitigate risk will, therefore, be another key requirement of leaders seeking to propel their organizations into the digital age. Navigating a course through these difficult conditions may also force leaders to look at their individual leadership style and decide whether it needs to be adjusted.

Professor Klaus Schwab, the Founder and Executive Chairman of the World Economic Forum (WEF), has published a book entitled The Fourth Industrial Revolution in which he describes how this fourth revolution is fundamentally different from the previous three, which were characterized mainly by advances in technology (Schwab, 2017).

Schwab defines the first three industrial revolutions as the transport and mechanical production revolution of the late 18th century; the mass production revolution of the late 19th century, and the computer revolution of the 1960s (See Figure 1).

        Figure 1        The Evolution of the Industrial Revolution         

The Fourth Industrial Revolution or Industry 4.0 as it is commonly known, represents the combination of cyber-physical systems, the Internet of Things, and the Internet of Systems. In short, it is the idea of smart factories in which machines are augmented with web connectivity and connected to a system that can visualize the entire production chain and make decisions on its own. In this fourth revolution, a range of new technologies will evolve that combine the physical, digital and biological worlds. These new technologies will impact all disciplines, economies, and industries, and even challenge our ideas about what it means to be human.

Leading in Fourth Industrial Revolution

Leaders are facing the almost overwhelming task of restoring confidence and respect in leadership and business. They are being called upon to guide organizations through times of turbulence and uncertainty, to show the way forward and to set an example. And all this in the face of an increasingly disruptive era of Industrial 4.0 and in a climate of cynicism and mistrust – tough economic and political circumstances by any standards.

To do this, however, leaders must develop a comprehensive and globally shared view of how technology is affecting the lives of their employees and at a macro level how it is reshaping the economic, social, cultural, and human environments. There has never been a time of greater promise, or one of greater potential peril. Today’s leaders and decision-makers, however, are too often trapped in traditional, linear thinking, or too absorbed by the multiple crises demanding their attention, to think strategically about the forces of disruption and innovation shaping their organization’s future.

From our ongoing longitudinal research, we believe that leadership in the digital world is all about the ability to impact and influence your followers and stakeholders towards achieving the mission and objectives of the organization by demonstrating effectively the suite of next-generation leadership competencies such as cognitive readiness skills, critical thinking and emotional and social intelligence competencies including empathy and relationship management.

NextGen Leadership Competencies

Transforming next generation (nextgen) leaders involves building a sustainable leadership pipeline for the organization so as to ensure its continued success in the highly disruptive, digital and increasingly volatile, uncertain, complex and ambiguous (collectively known as VUCA) business environment.

The nextgen leaders operating in the Fourth Industrial Revolution or Industry 4.0 which represents the combination of Artifical Intelligence, Robotics, Cyber-Physical Systems, the Internet of Things, and the Internet of Systems, has resulted in the need for organizations globally to incorporate the next generation leadership competencies in order to address the development needs of their rising leaders. This expanded group of upcoming leaders need to have a broader skillset, one that equips them to think and act globally in a VUCA business environment.

Today, research has shown the importance of several leadership competencies that have been effective in transforming the next-gen leaders. These include cognitive readiness skills and emotional & social intelligence competencies which are crucial in leading the team and organization in a highly disruptive and increasingly VUCA-driven business environment which underpin the Industry 4.0.

Cognitive readiness can be viewed as part of the advanced thinking skills make leaders ready to confront whatever new and complex problems they might face. As stated earlier, cognitive readiness is the mental preparation that leaders develop so that they, and their teams, are prepared to face the ongoing dynamic, ill-defined, and unpredictable challenges in the digital, highly disruptive and VUCA-driven business environment.

The Executive Development Associates (EDA) has identified the following 7 key cognitive readiness skills collectively known as Paragon⁷ (see Figure 2), which develop, enhance or sustain a leader’s ability to navigate successfully in this ‘new normal.

Figure 2 – Paragon⁷ Elements of Cognitive Readiness Competencies

The descriptors of each of these 7 cognitive readiness competencies are found below:

1)    Mental Cognition: Recognize and regulate your thoughts and emotions

2)    Attentional Control: Manage and focus your attention

3)    Sensemaking: Connect the dots and see the bigger picture

4)    Intuition: Check your gut, but don’t let it rule your mind

5)    Problem Solving: Use analytical and  creative methods to resolve a challenge

6)    Adaptability: Be willing and able to change, with shifting conditions

7)    Communication: Inspire others to action; Create fluid communication pathways

Overall, heightened Cognitive Readiness allows leaders to maintain a better sense of self-control in stressful situations.

2018 Masterclass Series: Leading in Industry 4.0

The highly volatile, uncertain, complex and ambiguous and chaotic changes brought about by the internet over the last twenty years are nothing compared to what is to come over the next few years. No industry, no organization is immune from the threat of digital disruption and with labor markets being transformed by artificial intelligence and automation, no individual is immune. The next generation of transformation leaders at all levels is required to drive digital transformation and to lead in the Fourth Industrial Revolution (also known as Industry 4.0).

So how prepared are organizations and leaders to embrace this revolution?

In March 2018, as part of the ongoing Leadership Readiness Research, we explore a key question: How ready are the leaders of businesses and in the public sector in harnessing the full potential of Industry 4.0 operating within the digitalized, disruptive and  VUCA-driven  business environment with the view to benefit their clients, their people, their organization, their communities, and society more broadly?

This Masterclass is designed to inspire you and to help transform you and your team’s leadership practices to succeed in an innovative, digital context within the era of the Industry 4.0.  During this highly experiential workshop, you will take part in interactive simulations, focused group discussions and receive bite-sized takeaways enriched by the facilitator’s own experience coaching and mentoring leaders who have been involved in digital business transformations. So you can go back and improve your own organizations with a renewed sense of energy, effort and skill set.

For the Course Outline, visit here.

Conclusion

As digital impacts the entire organization it requires effective leadership at all levels to drive the digital strategy going forward. As digital transformation expands across the organization and the ‘war for talent’ continues, organizations need to consider a more structured approach to building a healthy leadership pipeline with the necessary capabilities to lead in the digital era. They can do this by placing potential leaders in positions that stretch them beyond their current competencies and skills, to coach them and support them on building new digital capabilities as rapidly as possible.

Though some traditional leadership capabilities still remain critical to successfully lead in the digital era (e.g. creating and communicating a clear vision, motivating and empowering others, etc.), there are also new requirements for leaders at all levels of the organization. These demand a dynamic combination of a new mindset and behaviors, digital knowledge and skills that are critical to lead teams in the digital era.

As the Fourth Industrial Revolution (IR 4.0) impacts the entire organization it requires effective leadership at all levels to drive the digital strategy going forward. As digital transformation expands across the organization and the ‘war for talent’ continues, organizations need to consider a more structured approach to building a healthy leadership pipeline with the necessary capabilities to lead in the digital era. They can do this by placing potential leaders in positions that stretch them beyond their current competencies and skills, to coach them and support them on building new digital capabilities as rapidly as possible.

References
1. Sattar Bawany (2018). Leading the Digital Transformation of Organizations, Expert Insights, New York, Business Expert Press LLC.
2. Sattar Bawany (2017). The Future of Leadership in the Fourth Industrial Revolution: Importance of Cognitive Readiness and Emotional & Social Intelligence Skills for IR 4.0 in Leadership Excellence Essentials, Issue 12.2017.
3. Sattar Bawany (2016). Leading in a VUCA Business Environment: Leveraging on Cognitive Readiness and RBL for Organizational Success in Leadership Excellence Essentials, Issue 07.2016.
4. Klaus Schwab (2017). The Fourth Industrial Revolution. New York, Crown Publishing Group.
5. World Economic Forum (2018). World Economic Forum (WEF) Annual Meeting at Davos Meeting January 2018.

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