To start or to continue receiving the weekly blogs via email, please sign-up using this link: subscribe to Innovative Leadership Institute weekly blog.
This guest blog is provided by Ashley Wilson as a companion to the Mark Sims interview on Innovating Leadership, Co-creating Our Future. This interview Delivering for the End to End Customer as a Strategic Leader aired on 6/4/2019.
The impending 4th Industrial Revolution promises to bring radical technological transformations to enable faster, more flexible, and more efficient business processes.
Technology is already part and parcel of many industries, but Industry 4.0 takes the meaning of digital transformation to a whole new level by completely changing how suppliers, producers, and customers interact with each other.
What are its impacts on industries and how do leaders play a role in enabling its success?
What Is the 4th Industrial Revolution?
The 4th Industrial Revolution (also known as Industry 4.0) boosts business performance by linking the best of physical and digital worlds.
This is achieved through a mix of innovative technologies such as AI, robotics, cloud computing, blockchain, and the Internet of Things (IoT).
Industry 4.0 is sometimes deemed as the age of the smart factory, where digital systems monitor and make automated decisions for businesses with the help of the technologies mentioned earlier.
Industry 4.0 is paving the way for transformative changes at breakneck speed in every industry, from changing the face of manufacturing to revamping construction works, to enabling fintech services in needy areas all over the world.
How Will the 4th Industrial Revolution Affect Industries?
The question is, what are the industries most impacted by the 4th Industrial Revolution—and what can business leaders do to ease this change?
Many manufacturing companies are behind the tech curve as their operations remain the same as how they were 30, 40 years ago.
Machine operators come into work, attend routine daily meetings with their superiors, then proceed to operate machines manually for the rest of the workday. This is nowhere near efficient for enterprises that want to embrace digital transformation.
With Industry 4.0, many of the repetitive, inefficient processes in manufacturing are automated by smart machines.
This allows employees to focus more on higher-level work which gives organizations leeway in pursuing valuable organizational, operational and digital transformation efforts.
For example, instead of relying on daily meetings to distribute tasks, manufacturers can utilize smart whiteboards to automatically display work metrics in real-time and assign tasks.
Questions like “what are the important tasks to complete today?” and “who should work on them?” are managed automatically without the need for human interference.
Smart monitoring is another avenue manufacturing companies are pursuing to improve work efficiency. In smart monitoring, digital tools assess the conditions of machines in real-time which allows factories to predict potential machine failures with the data at hand.
With this technology, factory owners can identify machine errors before they happen, increasing the long-term quality of their inventory while improving output immensely.
Some smart machines even have the ability to automatically fix itself and optimize processes, further reducing the burden of human workers.
All these advancements will see a shift in the manufacturing field from favoring labor-heavy companies to those who can adapt to Industry 4.0 the fastest—a shift that is already taking effect today.
Logistics and Supply Chains
Modern supply chains do benefit from technology by leveraging big data to coordinate processes within the supply chain.
For example, logistics companies use data analytics to help them make informed business decisions like predicting traffic, improving global collaboration, and manage container risks.
Physical platforms (e.g. logistics) also utilize technology in smoothing the flow of physical products, bringing inventory handling performance to an all-time high while keeping costs low.
Despite these improvements, supply chains still lack the capabilities needed to keep up with the unpredictable expectations placed on companies. Simply put, traditional supply chains are too slow for today’s fast-moving markets.
Industry 4.0 aims to put an end to this obstacle by enabling automation with digitized and robotic supply chain processes.
As a result, more and more logistics processes will be handled by AI and robots, leaving behind the time and cost-intensive human labor of old.
Logistics companies that have the resources to implement these technologies in their supply chains will benefit massively, as wide-scale automation saves a lot of time and effort that can be funneled towards more valuable and strategic work.
Same as the logistics and manufacturing fields, the construction industry is far behind in terms of technology adoption. Many construction companies still use manual labor, outdated machines, and outdated operating and business models.
The 4th Industrial Revolution, however, changes how construction companies are going about in designing, constructing, operating and maintaining assets.
Innovative technologies like 3D printing, robotic machinery, and prefabrication are impacting the construction field positively by reducing excess budgets and inefficient work.
Experts believe that within 10 years, Industry 4.0 could help the industry overcome its growth issues by cutting down on $1.7 trillion of wasted spending, a figure equivalent to 20% in annual cost savings.
The 4th Industrial Revolution will also help companies attract new talent which is vital considering the “boring” nature of the field.
Construction jobs are typically associated with hard work and labor, but that is set to change as future scenarios require a different set of modern skills to navigate.
Technology is crucial to financial institutions as they catalyze the innovation of solutions that help fuel economic growth, mainly through enabling global financial access in less developed areas.
Technology in finance also promotes the greater knowledge of financial tools to the needy, while also increasing transparency—a much-needed solution considering the discrete nature of financial institutions.
The biggest benefit of the 4th Industrial Revolution to the finance industry is its role in simplifying customer-facing technology (e.g. mobile banking), which promotes user engagements, eventually leading to the growth of financial markets.
Most of today’s banking operations will be automated in Industry 4.0. Thus, financial institutions would shift their business model towards offering business insights and higher-level services (e.g. consulting) with the use of data analytics, bringing an end to basic bank teller services.
New financial service models are also expected to appear for operational, business, and specialized finance, with tasks being done by a combination of humans, robots, and AI.
This forces banks and other financial institutions to rethink their business strategy to pull through the 4th Industrial revolution.
Why These Industries Need Strong Leaders to Navigate Through the 4th Industrial Revolution
The ever-changing environment of the 4th Industrial Revolution creates a level of uncertainty and expectation that requires businesses to be agile and flexible—a task that falls on the shoulders of business leaders.
The same study was repeated six months later and surprisingly, only 47% said they were prepared for Industry 4.0—less than half the previous figure in just under a year.
While this figure may seem worrying at first sight, it represents a welcome change in the attitude of leaders towards the 4th Industrial Revolution.
Instead, this mindset shift suggests that key executives are now more aware of the effort it takes to overcome Industry 4.0’s biggest challenges.
The Skills Every Top Leader Needs to Embrace Industry 4.0
Leaders play an important role as they’re the ones responsible for easing digital transformation in the workspace.
That role begins by putting people first and empowering them with the tools and skills needed to adapt to change.
Agile and Flexible
The rapid speed of change in the 4th Industrial Revolution means that leaders need to be agile and flexible in embracing change.
More importantly, strong leaders see change as an opening for organizations to innovate, not as a liability.
This skill, along with the flexibility to cater to the changing demands of employees, working environments, and business tools, is crucial as strategies that work today may not work in the future.
Hence, leaders need to be on their toes in keeping up with change and making the best out of it.
Emotional Intelligence (EQ)
Emotional intelligence is an important skill to have in the future as leaders are expected to manage employee sentiment well as well as their own emotions.
As machines and smart systems enter the workforce, leaders will need to be even more empathetic to maintain their team members’ wellbeing.
A good leader in the 4th Industrial Revolution is someone who is willing to have honest, open conversations with their team not only about work but also on personal topics outside of work.
Leaders can only earn the respect of their team if they’re responsible and accountable.
Industry 4.0 preaches a transparent workplace, leaving no room for irresponsible employees including leaders themselves.
It’s crucial for leaders to take responsibility for the outcomes of business decisions while ensuring that team members are protected from criticism should any unwanted events occur.
Industry 4.0 is driven mainly by advanced technology.
As a result of this change, future leaders must be tech-savvy to understand rapidly changing tech landscapes.
This allows them to identify the right technology for their organization rather than blindly following what’s in trend.
Teamwork and Collaboration
In contrast to today’s offices, future leaders won’t have their own exclusive workspace—they’ll be working with the team instead.
Leaders will still have executive powers but collaboration will be the number one factor that separates strong leaders from mediocre ones.
The importance of collaboration is further amplified by the diversity of future workspaces.
With employees coming from different backgrounds and parts of the world, they need strong leaders to appreciate and leverage the differences of every individual to benefit the team and the organization.
Industry 4.0 Needs Equally Transformative Leaders
As the 4th Industrial Revolution changes how we work in the future, business leaders must prepare their teams by leading by example.
No matter how much AI and smart machines impact the workforce, excellent leadership will—and always will be—the driver of organizational success.
Check out the companion interview and past episodes of Innovating Leadership, Co-creating Our Future, via iTunes, TuneIn, Stitcher, Spotify, Amazon Music, Audible, iHeartRADIO, and NPR One. Stay up-to-date on new shows airing by following the Innovative Leadership Institute LinkedIn.
About the Author
Ashley Wilson is writing about business and tech, and the intersection of the two. Personally, she has been known to reference movies in casual conversation and she enjoys baking homemade treats for her husband and their two felines, Lady and Gaga. If you need a new writer, get in touch with Ashley via Twitter.