Discussion of the Fourth Industrial Revolution has been a major theme of the World Economic Forum’s (WEC) annual meeting which wrapped up in Davos, Switzerland last weekend.
A range of forward-thinking insights have been put forth by business experts who attended the meeting, exploring how we’ll need to approach the realities of work and running businesses in the coming few years in order to keep up with global changes.
As well as looking to these new behaviours and ways of thinking, we want to point out five lessons history has taught us, which give great pointers for navigating the Fourth Industrial Revolution.
What exactly is the Fourth Industrial Revolution?
If you haven’t heard of the Fourth Industrial Revolution, the concept and the term were coined by Klaus Schwab, the founder of the WEC, in his 2016 book of the same name. Schwab describes an industrial revolution as the appearance of ‘new technologies and novel ways of perceiving the world [that] trigger a profound change in economic and social structures.’ Put more simply, it refers to the intersection between new and developing technologies, and the way we humans live.
As the term indicates, we’ve already had three other industrial revolutions in modern history.
The first, spanning 80 years between 1760 and 1840, refers to the invention of the steam-powered engine and the construction of railways. In the late 19th century, an age of scientific development and mass production brought about the Second Industrial Revolution. The Third Industrial Revolution, also referred to as the Digital Revolution, happened in the 1960s.
What characterises this revolution is both its speed of development, digitisation and automation, and the blurring of boundaries between digital, physical and biological advances. Unlike in previous industrial revolutions, where advances could be seen and anticipated sometimes decades ahead of time, we’re now experiencing a revolution framed by the fact that technologies which haven’t even been invented will be impacting our businesses in less than five years. However, while the technologies are new, some of the ways we’ve approached change in the past still hold true.
1. Great people will always be great assets
Given this age of automation, and the inevitable fact that, in some workforces, people are going to be totally replaced in the next five to ten years, talking about people as assets might seem outdated.
There’s no getting around the fact our workforces are changing, and people are being replaced at an unprecedented rate as AI, automation and streamlined processes become the focus for many businesses. It’s not all bad news, though, for those who are able to anticipate the decline of their current roles and are willing to take measures to ensure they remain relevant to employers.
As with previous revolutions, the people we do need are likely to become even greater assets than they are now. Those who are agile, ready to learn and change roles at a moment’s notice, or to upskill with a new technology, will remain valuable contributors as new technologies come on board and are adopted as mainstream.
2. Know where your business is on the adoption scale (and change if it’s not working for you)
There are several categories when it comes to how fast businesses and even whole industries adopt new advances: innovators or inventors, early adopters, early majority, late majority and laggards. We can’t all be innovators, and nor should we, but it’s important to understand where your business sits on this scale so you fully grasp the pros and cons of each category.
Early adopters, for instance, but must embrace the fact that there are likely to be kinks in whatever technology or process they’re implementing. Being an early adopter and potentially having an influence over how those kinks are smoothed could be a huge benefit if you’re looking to influence how something is developed, though, and gives an edge over the slower-adopting competition.
At the far end of the spectrum as a laggard, you’ll find whatever systems you implement will be thoroughly road tested. Unfortunately, with the current pace of technological advancement it’s highly likely you’ll be outpaced by something more effective before you’ve even made the change to whatever you’re looking at.
If you can identify where your business falls on the adoption scale and you aren’t comfortable with it, it’s time to take steps to change.
3. Price, not invention, is where the impact lies
The birth of a new technology indicates great potential, but it’s not where the pivotal benefits arrive at the majority. For that, we have to look at developments in price.
When the cost of bringing a technology to a wider audience comes down by way of reductions in product or materials cost, or when production volume goes up, that’s when we know something is here to stay and that it’s going to be accessible enough to effect change.
The Human Genome Project is a great example of the impact of price over invention. Set up in 1990 to sequence and map the full range of human genes – the genome – the project took 13 years to complete at a cost of more than 2.7 billion dollars. At the commencement of that project, the potential was enormous for medical advancement but genome sequencing wasn’t able to benefit a layperson in any significant way. Today, a genome can be sequenced in a few hours and costs less than a thousand dollars, making it accessible and useful to countless people around the world for a wide range of genetic, medical and health applications.
4. Play the long game
We focus a lot on the speed of change and our ability to move quickly when it comes to adopting new technology. This short-termism has become normal in many parts of society and although it’s important to be ready to act on something with little or no notice, there’s evidence that thinking more long term provides greater business gains.
Long term thinking can seem counterintuitive, but just like the tortoise and the hare, slow and steady wins the race. Short term ‘chopping and changing’ in an effort to yield quick gains distracts a business from looking at the bigger picture and working towards broader goals. We need to balance agility and the implementation of great technology with a vision for the future, assessing whether the changes we make today are carrying us towards that vision.
5. Choose the right type of leader at the right time
At different stages of a business’ life, different types of leadership will be required.
Many businesses are founded by a progressive, risk-taking entrepreneur but it’s rare for that founder to also possess outstanding management and leadership qualities. The ones who stay the course and go on to long term success are astute at surrounding themselves with other leaders who have complementary skills where they fall short.
Take tech giant Salesforce’s appointment of a co-CEO as an example of this approach. Larger than life CEO and founder, Mark Benioff, recently made an unusual decision to appoint his vice chairman and president, Keith Block, to equal standing in the company. Speaking to Fortune, he said,
“Cementing Keith and I together as the leadership is really the key to accelerating future growth.”
Benioff, whose influence lies in developing the products, technology and culture of the company, is now able to leave operations and distribution roles to Block, maximising the strengths each of them brings to the business.
Allowing the leadership and management styles of different people to drive a business forward at different times increases its potential exponentially. Confident and daring entrepreneurial leadership works in phases of growth and innovation, while a solid, capable and steady manager who’ll maintain the status quo can help a business maintain what’s working and keep things going in order to ride out a recession or an industry crisis. If a business is going through enormous change or morale is low, someone who’s dynamic with an ability to lead people, as well as spreadsheets, is going to be a better fit than a bottom-line-at-all-costs manager.
Agility is essential but so is tradition
As we move through this Fourth Industrial Revolution and look to continue developing thriving businesses with a firm eye on the future, we should feel comfort and a sense of familiarity that all the old advice is not obsolete. If we can find ways to integrate some traditional thinking with modern agility, and the adoption of technology beyond anything we’ve ever imagined, our businesses will be better positioned to succeed and keep up with the speed of change no matter where we are on the journey.