So it is that wonderful time of year. Business Leaders mix with other Global Leaders, Influencers and those that want to move and shake present opinion, at the World Economic Forum in Davos, Switzerland from 22nd to 25th January 2019. Now I love this event. The deluge of fresh reports on all things concerning our leaders thinking come flooding out, all hoping to be read and understood in their seriousness.
You have to apply “selective reading” but this year the main theme is Globalization 4.0. It strikes me the challenges within the Fourth Industrial Revolution (4IR) have shifted to this new emerging theme of Globalization 4.0. So after I and many, many others have got used to one revolution we seem to have merged this into another. The argument is simple, the condition of the planet, a changing multipolar international order, and rising inequality are shifting the goal posts. If we do not gather around the need for changing the deteriating human condition and reducing the rapidily depleted natual resources that we have at our disposal, by taking action at corporate, national and international level we are, can I say it, “simply fried”? Globalization4.0 is somehow trying to scope out the issues, for heading this off. Well, maybe!
We are, according to Dr.Klaus Schwab, the Executive Chairman of WEF, vastly underprepared for this movement to the need of Globalization 4.0 that 4IR is simply not enough, we are all in need of a new global architecture. Yet this pesky 4IR is still lagging and not delivering all the “quantum leaps” it was supposed to deliver. So I wanted to just step back, into this 4IR world before it gets caught up, fused, merged and placed in the next “great” initiative under the new all-embracing “Globalization 4.0” banner. We always love to move on, without actually finishing what we need to have in place, I can never understand that.
The biggest reason is dealing with the fear of the unknown – a lesson in 4IR change management.
This fear of the unknown, that constant blocker of “not been tested in our environment” has greatly inhibited adoption. Equally the nature of much of production has been designed “on the fly” and the equally tough job of connecting the whole process up in a new integrated, fully connected system meets huge resistance. Legacy systems plague the ability to break out of our present traps of silo’s and we are still struggling to solve these issues, machine by machine, a process by process, incompatible software and hardware, piece by piece.
Presently most businesses are in “pilot purgatory”. They keep testing, testing, testing, never wanting to make the deep, highly committing set of decisions around the technology investments they really need to achieve 4IR. They are delaying the inevitable, caught in uncertainty, in a lack of sustaining leadership- They lack that the confidence to make the investment they need to connect themselves up and move towards “the promised land”, that is told to them constantly by every consulting firm, every forum they go too, and with nearly all the business guru’s they meet on what they need to do- make the commitment and implement 4IR.
So why you might ask?
Just IN- you should read this. Published on the 15 January for the WEF meeting, written by Simon Torrance and Felix Staeritz of Factor 10, entitled “Is your business model fit for the Fourth Industrial Revolution?
So my thoughts to follow that view expressed on Business Models.
Uncertainty and the constant pace of those inventing new technology, so they can sell it, might, perhaps, be part of the problem. I wonder if anyone would be brave enough to call “stop”, let’s fix what we have got as our only need for the next few years. We will still achieve economic growth but in a radically different way and actually leverage scarce resources in more thoughtful ways if we applied our “collective” minds.
Arguably Industry is trapped by complexity. The system complexity, understanding and investment delays are often huge and difficult to unwind. Many organizations are constantly meeting resistance to change, building some very mixed views of transformation and its lasting benefits. Thirdly the redesign to save space, and to determine more up-stream flexibility needs embracing digital solutions and reliance on partners and levels of collaboration not truly established to date. Any revolution is difficult, costly and requires time to work through a change in “order” to adapt to the new. We talk the game of “*legacy” but would rather talk of the “promise” of the future, through technology than really spend the time and a lot of money fixing the past to get it ready for this future.
The Underpinning drive to connect-up is getting closer to that “crossing over” point
What drives us to keep going and yet ignoring much that is within our own “backyards” that we can fix? Increasingly, there is this recognition that the competitors seem to be moving faster towards becoming more digital, so it then becomes a race to catch up, as this “digital advantage” is increasingly eroding competitive advantage for the digital laggard, even if he is today the market leader. There also continues today that industry disruption is increasing, by those spotting both opportunity and weakness in present market players. Those that are digital laggards can’t achieve the same flexibility, the speed of manufacturing change, productivity and response as the new investor, building more on “greenfield” principles. The established player has processes that are fixed far more on past trading conditions, where longer production runs produced (past) economies of scale that became over time, more rigid and not adaptive.
Supply chains have often remained reliant still on manual instructions with limited visibility to the whole supply change to manage, adjust and respond. Today, production is changing its philosophy where flexibility is “baked in”, for adapting further upstream and downstream so as to cater to a greater individual client and customer need. High levels of automation are generating the “digital factory” that comes as an offspring of this 4th industrial revolution.
The internal change is slow. There is a strategic resistance, there is a lack of organizational agility and still not the level of commitment this is required, driven from the top. Hence why we are stuck in so many “pilot purgatories”
Yet the threat of not changing is building pressures. this reluctance to embrace a new digitally connected world is feeding the “seeds of destruction”. Customers expect rapid response, reduced delays, tailored designs, and greater engagement. What is going to shift the needle on this dramatically to recognize we are in a real revolutionary period and caution is not your friend but your enemy?
There are increasing use cases being built and shown. The WEF wants to create a neutral, learning platform, which provides the best technical and organizational insights with respect to 4IR technologies in manufacturing to accelerate the delivery of the benefits, to give a sort of safe harbor. Such a learning platform will also facilitate collaborative action and the new partnership between companies and governments. Confidence grows through these learning exchanges This will partly help yet this will not be the real catalyst, that lies in addressing the old legacy problems, in bold, imaginative ways.
I look for innovation but (hold it) one that extends the life of the existing, not chasing something always new. Do I hide with this thought?
Innovation is one powerful catalyst ripe for leveraging in this 4th Industrial Revolution.
Reality dawns, when the penny finally drops and the change is at the customer level, not the business level
There is a real value in recognizing
The ability to have a more “rapid response, flexible manufacturing” can align more to market shifts earlier. We can begin to design products that are more “digitally connected” that can be updated in the consumer’s premise or hand. We can enhance “their” innovation by shortening the time-to-execution and extending the product life cycle, we can build new potential through greater innovation design, based on increasing insight and collaboration.
So I return to my pile of documents outlining all the reason why we should relentlessly keep moving on, allowing the Fourth Industry Revolution to simply slip under the new all-embracing “Globalization 4.0” banner.
My only wish was simple. Fix your problems in legacy before you keep moving on. You will eventually break down. Oh hang on, that is what it presently feels like in our global world. I better keep reading for the answers. Have a happy Davos, reading, watching or participating.