A digital revolution is currently underway. Technology has disrupted every aspect of our life and society: info-communication, education, health care, transportation and logistics, farming, and manufacturing. Blockchain and cryptocurrencies are disrupting banking systems. Metaverse, Web 3.0 (focused on the use of technologies like machine learning and AI to provide relevant content for each user instead of just the content other end users have provided), hyperconnectivity, through communication systems, sensors, wearables, and smart devices, have blurred the boundary between the physical and digital worlds.
Leaders need to understand the implications of megatrends of disruption, innovative disruptive technologies, big data, and, more importantly, how to leverage them to help their companies connect to customers and stakeholders with efficiency and precision, creating new opportunities and staying ahead of the competition. Digital platforms offer fundamental improvements to traditional business models, can transform entire industries, and are critical drivers of growth. Web-based enterprises that leverage digital infrastructure can enter markets quickly and move with agility in the current era of the Fourth Industrial Revolution (Bawany 2020).
Digitization has an impact on companies in various sectors. 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 businesses: which opportunities can be seized, and which threats must be faced.
Digitization 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 must be faced.
The impact of digital disruption must be managed alongside the more general VUCA operating conditions of recent years. An ability to calculate and manage/mitigate risk will, therefore, be another essential requirement of leaders seeking to propel their organizations into the digital age. Navigating a course through these challenging conditions may also force leaders to look at their 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 defines the first three industrial revolutions as the steam-enabled transport and mechanical production revolution of the late 18th century; the electricity-enabled mass production revolution of the late 19th century; and the computer-enabled technology revolution of the 1960s.
The Fourth Industrial Revolution (or Industry 4.0 as it is more commonly known) represents the combination of AI, robotics, cyber-physical systems, the IoT, and the Internet of Systems (IoS). 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 (see Figure 1). These new technologies will impact all disciplines, economies, and industries, and even challenge our ideas about what it means to be human.
Figure 1: The Fourth Industrial Revolution (IR 4.0) Framework
Technological innovation is on the brink of fueling momentous change throughout the global economy, generating great benefits and challenges in equal measure. To thrive in this environment, Schwab argues, public-private research collaborations should increase and should be structured toward building knowledge and human capital to the benefit of all.
There will be enormous managerial leadership challenges as the impact of technology and the disruption will result in an exogenous force over which leaders would have little or no control at times. However, it is the role of leaders to guide their teams and to be mindful of these forces when making business decisions that would impact the sustainability of their organizations. They should thus grasp the opportunity and power to shape the Fourth Industrial Revolution and direct it toward a future that reflects the organization’s values and success.
Conclusion
To do this, however, leaders must develop a comprehensive and collective 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 more exceptional 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.
In the end, it all comes down to people and values. Leaders need to shape a future that works for all stakeholders by putting people first and empowering them. In its most pessimistic, dehumanized form, the Fourth Industrial Revolution may indeed have the potential to “robotize” humanity and thus deprive us of our hearts and souls. But as a complement to the best parts of human nature, creativity, empathy, and stewardship, it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny. It is incumbent upon all of us to make sure the latter prevails.
Leading in Industry 4.0 would require the next-generation leaders to be “disruptive leaders” who can adapt to these new technologies, and to be able to do so effectively means that the relevant leadership skills and competencies would need to be developed and demonstrated proficiently.
