Societal impact and talent development are atop the list of priorities for executives worldwide.
Deloitte’s second annual Readiness Report, Success Personified in the Fourth Industrial Revolution, found that executives say they genuinely want to improve the world and have a clearer grasp of the skills challenge ahead. However, organizational roadblocks are limiting the development of effective strategies and those executives continue to shy away from bold technology investments that will drive innovation and disruption.
The report surveyed more than 2,000 C-suite executives in 19 countries.
“Last year, even though leaders were just beginning to understand how Industry 4.0 would transform business and society, they expressed confidence in their preparedness,” said Punit Renjen, Deloitte Global CEO. “Yet their actions demonstrated a significant mismatch between their confidence to address these changes and their actual readiness to address them. Today, leaders are more realistic about what it will take to succeed, and they appear particularly focused on societal impact and workforce development as two critical components of their future success.”
The survey showed that societal impact (34%) is the most important factor business leaders use to gauge success — totaling that of financial performance (17%) and employee satisfaction (17%) combined. Additionally, more than half of global executives surveyed (53%) noted their societal impact efforts resulted in new revenue streams.
Deloitte’s report identified four leadership personas that will succeed in the future:
“Social Supers” are leaders who consider societal initiatives fundamental to their businesses. They have demonstrated success in “doing well by doing good” by generating new revenue streams through socially or environmentally conscious products or services; and think that these initiatives, more often than not, contribute to profitability. Social Supers are more confident in their ability to handle the workforce challenges of Industry 4.0 — they are 12% more likely to cite that their workforce composition is prepared for digital transformation and show far greater willingness to train workers (54% vs. 37%).
33% of global leaders cited lack of leadership vision as the top challenge their organizations face in adapting business strategies to meet the needs of tomorrow. Strategy also falters when it comes to implementing new technologies, as leaders reported concerns over too many technology choices and difficulty keeping pace with the rate of change. 29% of executives surveyed said their organizations have clearly defined decision-making processes.
The “Data-Driven Decisives” are overcoming challenges through a methodical, data-focused approach and are bolder in their decisions. These leaders are confident in comparison to other leaders, with 62% strongly agreeing that they are prepared to lead their organizations in capitalizing on the opportunities associated with Industry 4.0 — almost twice as many as other leaders (32%) surveyed.
Twice as many leaders said they’re more likely to invest in Industry 4.0 technologies to protect themselves from disruption than are looking to disrupt other industries or the marketplace (67% versus 33%).
Leaders known as the “Disruption Drivers” understand that investment in new innovations is required for growth. They invest in technologies with a concerted focus on upending their markets. These bold decisions have paid off — their technology investments have achieved or exceeded their intended business outcomes. "Disruption Drivers" are more likely to say they feel ready to lead in the Industry 4.0 era (45% versus 32%) and are more assured that their organizations are prepared to capitalize on the opportunities associated with Industry 4.0.
Global leaders appear to understand the new skills required by Industry 4.0 jobs. However, the fear of technology and automation isn't necessarily causing executives to increase efforts to train their workforces. While 55% of leaders highlighted a significant mismatch between current skill sets and those needed in the future, 25% still prefer hiring new employees over retraining their current workforces. Furthermore, 57% believe the education system is failing to adequately preparing incoming workers — up from 35% in 2017.
The “Talent Champions” know what skill sets their companies need — and they believe they currently have the correct workforce composition. These executives are aggressively preparing their companies for digital transformation and embrace their responsibilities to train their employees for the future of work (51% versus 41% for all other respondents). Talent Champions also are more likely to invest in technologies to disrupt competitors (42% versus 32%).