C-suite executives are on board with the mindset of Industry 4.0 but they are still figuring out the action plan to turn goals into reality.
Industry 4.0 is the idea of connecting physical assets and advanced digital technologies—the internet of things (IoT), artificial intelligence (AI), robots, drones, autonomous vehicles, 3D printing, cloud computing, and nanotechnology. The goal is to collect, analyze, and act on data to make data-driven decisions.
Deloitte’s new report, “The Fourth Industrial Revolution: At the intersection of readiness and responsibility,”shows how quickly opinions have changed about climate change and social impact over the last few years.
Two years ago only 35% of executives listed positive impact on society in the top 5 corporate goals; now the number is almost 60%.
Corporate leaders have shifted their thinking on climate change also, with 48% stating that climate change is a top responsibility for the current generation of leaders, and 54% said they are taking some actions to address it.
Two years ago, only 10% of executives believed their companies could influence environmental sustainability.
The disconnect between stated priorities and actual business practices show up quickly, however. Survey respondents listed “generate revenue” as the top reason to focus on societal issues (42%), followed by pressure from external stakeholders (39%) and pressure from employees (22%).
Leaders haven’t made the connection between positive social impact and Industry 4.0 tech, either. The report states that “only one in five leaders said they are prioritizing investing in advanced technologies that have a positive societal impact.”
If IoT technology can reduce electricity use and water consumption, that could also boost a company’s positive impact.
SEE: Special report: Harnessing IoT in the enterprise (free PDF)
Deloitte surveyed more than 2,000 C-suite executives across 19 countries to understand how much progress Industry 4.0 technologies and strategies have made.
Here are two areas that show the difficulty leaders are having in translating priorities into business practices, including embracing disruption and updating training.
Disconnect between goals and tactics
The report lists 12 Industry 4.0 goals that range from training to disruption to tech investments:
- Attracting and retaining the right talent
- Connected, integrated approach to implement Industry 4.0 techniques
- Developing innovative products and services
- Disrupting competition
- Making effective Industry 4.0 tech investments
- Finding growth opportunities for existing products and services
- Investing in Industry 4.0 tech with positive societal impact
- Making a profit while positively contributing to society
- Protecting our organization from disruption
- Training and developing the workforce
- Understanding what skills will be needed
- Utilizing new labor models
These are the top four areas where companies say they have made progress:
- Making effective Industry 4.0 tech investments 77%
- Training and developing the workforce 75%
- Protecting our organization from disruption 73%
- Understanding what skills will be needed 72%
Playing defense is not the same thing as winning at Industry 4.0. Another example of this disconnect is around the idea of updating business models. Only 9% of survey respondents have done this, and no one chose it as a top priority for Industry 4.0 investment.
The risk of transformation seems to be paying off for the leaders who have revamped the business model: almost 30% of leaders in companies growing at more than 20% said they’ve done this.
What is the training need?
CEOs have shifted their thinking about training as well but also are having trouble implementing new programs. Two years ago, only 12% of respondents said their organizations could impact education and training. Now, 75% of leaders said training and employee development are the Industry 4.0 priorities in which they will be investing most. At the same time, only 21% said they are making a great deal of progress in training and developing workforces for the future.
Part of the challenge is the uncertainty around what skills the future workforce will need. When the future is uncertain, preparing is a challenge.
Instead of training for certain skills, leaders are focusing on the hiring process and looking for people with a life-long learning mindset. The report recommends this approach for longer-term talent success because “people with open and flexible mindsets can be trained on an ongoing basis to adapt to the organization’s changing needs.”
Pierre Naudé, CEO of nCino, a software company that provides cloud solutions to financial institutions, said the best approach is to hire people who are flexible, self-reliant and empowered.
“And they should feel that they can use their own brain power and experience to actually mold their jobs as we go forward, to adapt at the pace of change,” he said.