The 4th Industrial Revolution will be dominated by companies with the flexibility to adapt to forthcoming technological innovation that is well beyond our current comprehension. Because of this, business leaders must build certainty in their companies while confronting a future that promises nothing but uncertainty.
Many of today’s most successful companies are at the intersection of time and technology. In other words, they are operating during a time that joins the right technical capabilities and the right market demands. This dynamic can easily shift, however. The potential exists for a damaging divergence as market demands react to unforeseen technological innovation.
Business leaders today have a responsibility to build a corporate culture and business model that can endure these inevitable and possibly seismic changes. In a survey conducted by PwC, 43% of companies reported having a dedicated team for digital innovation. But simply leveraging new technologies to improve existing products and services is no longer enough. The risk in doing so may be catastrophic to each company or to the careers of their employees.
Why? Because in the 4th Industrial Revolution, it’s possible to be too focused on products and become blind to the inevitability of change in the marketplace and across entire sectors. Companies must now balance product innovation with a more radical approach: business model innovation.
Consider the forecasting capabilities of Artificial Intelligence. Or the possibilities of new cures and advances in medicine through synthetic biology. The continued innovations created by computing in the Cloud. Self-driving vehicles and drones. Virtual and augmented reality. Robots. Blockchain. 3D printing. And the Internet of Things. All in the 4th Industrial Revolution. And, of course, none of these things will happen on their own — the advances will be exponential, especially once applied to each other.
Yet, none of us have a crystal ball. We all see breathtaking advancements on a daily basis, but none of us know for sure what type of innovation is only years or just days away from changing everything. What questions should be asked now to position a company to reap the rewards of the 4th Industrial Revolution rather than bearing the brunt of its disruption?
There are a few key things to consider.
1. Will the 4th Industrial Revolution result in more cross-sector activity and make sectors less regimented?
Deep understanding of a business’s sector is a hallmark of maintaining competitive advantage. But the digital transformation may increase cross-sector activity. Having the agility to strategize and implement across market sectors will require global coordination and define winners in the 4th Industrial Revolution.
2. What type of impact on the workforce and their educational/professional experience can be expected?
As many businesses are finding with the current digital transformation, it’s ineffective to think that a business can recruit or hire their way out the problem of an employee skills deficit. The labor pool is too tight and expensive for that. Proactively preparing a company’s people for greater demands is essential for the future. Better learning and development techniques are required to increase their digital fitness. PwC’s Digital IQ Survey found that 60% of companies surveyed felt their employees lacked the tech skills that are necessary to carry their organization into the future. Those companies that both retain and maintain highly-skilled and educated workforces will be best positioned for the 4th Industrial Revolution.
3. What will the organizations of the future look like?
By focusing on business model innovation vs. product innovation, the focus shifts from organizations now and toward organizations of the future. This radical shift will create completely new companies, and a completely new set of competitors for existing leaders. Competitive dynamics will also change among sectors. This is currently being observed as today’s competitive landscape is much different than previously anticipated.
Organizations savvy enough to understand the potential of the 4th Industrial Revolution are already building these future-oriented strategies. And instead of hard and fast roadmaps, their plans are fluid, reflecting a more flexible approach which is better able to accommodate rapid advancements.
These companies are partnering within industries, with workers, with governments and with educational institutions to increase the potential for 4th Industrial Revolution success and minimize societal turbulence as a result of change. Being adept at understanding the technologies is crucial, and so is a broader understanding of the 4th Industrial Revolution’s potential impact on regulation, competition, and the workforce. Risk mitigation and positioning for potential mergers and acquisitions are highly-relevant as well.
We know the 4th Industrial Revolution is upon us with tremendous growth potential. We have a sense of the unknowns surrounding it as well. But our assumptions can mask the truth or an altogether new reality. The next iteration of business will be ready for whatever comes. With all of its technological advancements both anticipated and yet realized, the 4th Industrial Revolution may be a revolution of industry but also a radical evolution of how business itself is conducted.