The HR & Leader’s Guide in Coping with the Industry 4.0 Tsunami

The impact of IR4.0 is, therefore, no stranger to all organisations including the likes of small and medium enterprises (SMEs), spanning across the myriad of sectors or industries. The impact, however, differs from one organisation to another which makes it critical for companies to have a good knowledge and view of what they face and how digitisation will affect their organisation at large; posing the question — which opportunities can be done away with and what threats exist to be faced (or countered)?

Stemming from the volatile, unpredictable, complex and ambiguous (VUCA) operating conditions that have been plaguing workspaces of recent years, the impact of digital disruption has to be tackled alongside these key indicators.

It comes as no surprise why today’s leaders are faced with the brunt of having to re-establish respect and confidence in leadership and business in its entirety. They are being urged to guide organisations through times of turbulence and uncertainty, to pave the way forward in setting an example. And not forgetting, all this amid a progressively disruptive global economic climate and in a nestled in cynicism and mistrust – hard-hitting economic and political circumstances by any canons.

We have confidence that leadership in the digital world is all about influencing your followers and stakeholders towards achieving organisational goals by effectively representing the league of next-generation leadership competencies such as emotional and social intelligence proficiencies including relationship and empathy management, cognitive readiness skills and critical thinking.

The Fourth Industrial Revolution (Industry 4.0)

The founder and executive chairman of the World Economic Forum (WEF), Professor Klaus Schwab, published a book entitled The Fourth Industrial Revolution explains how this fourth revolution is intrinsically different from its three predecessors, which were defined predominantly by technological advances.

The Fourth Industrial Revolution or Industry 4.0 as it is fondly known, embodies the combination of the Internet of Things (IoT), cyber-physical systems and the Internet of Systems. It denotes the idea of smart factories in which machines are augmented with web connectivity and connected to a system that can visualise the entire production chain and make informed decisions on its own.

As the name of this revolution suggests, a revolution is set to take place with an array of new technologies that combine the physical, digital and biological dimensions. These new technologies will impact all disciplines, economies, and industries, and even challenge our ideas about what it means to be human.

Technological innovation is on the brink of fuelling momentous change throughout the global economy, catapulting great benefits and catastrophes, in equal measure. To thrive in this environment, Schwab argues, public-private research collaborations should intensify, and should be structured towards building knowledge and human capital for the benefit of all.

Leading in the face of the disruption

There will be colossal managerial leadership challenges as the impact of technology and the disruption that comes will result in an exogenous force over which leaders would have close to little or no control at times.

However, it is more imminent now that the role of leaders to be able to guide their teams and be mindful of these forces when it comes to making business decisions that would inadvertently impact the sustainability of their business. They should thus grasp the opportunity and power so as to shape the Fourth Industrial Revolution and direct it toward a future that reflects the organisation values and success.

To do this, however, leaders must develop an all-encompassing and globally shared view of how technology is affecting the lives of their employees and at a macro level how it is transforming the economic, social, cultural, and human landscapes.

There has neither ever been a dawn of a more burning promise, nor one so perilous per se. Today’s leaders and decision-makers, however, are too often consumed in archaic silo thinking, or too absorbed by the multiple crises demanding their attention, to think strategically about the forces of disruption and innovation influencing their organisation’s future.

Why cognitive readiness?

Through our consultative and executive coaching engagements over recent years, we have discovered that those leaders who thrive are able to develop and demonstrate effectively the pool of cognitive readiness competencies.

Cognitive readiness can be viewed as part of the advanced thinking skill sets that make leaders ready to confront whatever new and complex problems they encounter. As stated earlier, cognitive readiness is the mental preparation that leaders develop so that they, and their teams, are well-prepared to face the continuing dynamic, ambiguous, and unpredictable challenges inherent to the digital, highly disruptive and VUCA-driven business space which are the cornerstones of the Fourth Industrial Revolution.

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

The summarised overview of each of these 7 cognitive readiness competencies are:

1. Mental cognition: Recognition and regulation of your thoughts and emotions
2. Attentional control: Managing and focusing your attention
3. Sensemaking: Piecing the puzzle and seeing the bigger picture
4. Intuition: gut check, but don’t let it take on your mind
5. Problem-solving: Analytical and creative methodology used in resolving a challenge
6. Adaptability: Be receptive and agile to change, with ever-changing conditions
7. Communication: Inspiring others to take action; forming fluid communication pathways

In a nutshell, heightened cognitive readiness encourages leaders to maintain a greater sense of self-control in the face of stressful situations.

Leadership Efficacy at all levels

As digital is the cornerstone of organisation-wide, it demands effective leadership across all levels to forge the digital strategy forward.

As digital transformation swells across the organisation and the ‘talent wars’ continue, businesses need to consider a more scrupulous approach to growing a healthy leadership pipeline with the necessary capabilities to lead in the digital era.

This can be done by placing potential leaders in positions that stretch them so as to beyond their current competencies and skills, to coach them as well as support them on building new digital capabilities as rapidly as possible.

Though some traditional leadership capabilities still remain fundamental to successfully leading 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 organisation. These demand a dynamically vibrant combination of a new mindset and behaviours, digital knowledge and skills that are critical to lead teams in the digital era.