Leadership in the Fourth Industrial Revolution: Time to Update


12/1/20166 min read

Everyone is talking about the Fourth Industrial Revolution. There is no doubt that we live in a time of process automation and interconnection between devices, a time of smart cars, homes and other gadgets. Not a day goes by without us learning about the emergence of advanced technologies, such as: IoT, robotics, artificial intelligence, internet storage (cloud), 3d printing, smart data, augmented reality. All these technologies are revolutionary solutions not only for one industry - all industries are evolving at breakneck speed. We all know this because we read “The Fourth Industrial Revolution” by the founder and president of the World Economic Forum in Davos. Thus, we pretend to make a revolution, but we do not do it correctly.

The mother of all qualification needs

Our teams at Exponential University Berlin receive some pretty depressing testimonials from CEOs, board members and managers around the world. They quite frankly and freely state: "My fellow top managers really understand the transition to digital technologies only in exceptional cases." And the people who hear it rarely disagree with them. Most likely, we will hear from a manager in his forties and older:

"We will be in charge for 20-30 years. With technology advancing at such a breakneck speed, we need to evolve at least five quantum leaps since the invention and use of the iPhone. We understand that. We just don't know how to start, which way to approach it, or how to learn it.”

The need for qualifications in management positions is huge, but it is deliberately hidden from society. Obviously, with the onset of the Fourth Industrial Revolution, industrial processes and human relationships will change and be revolutionized. Anyone in a leadership position with a high level of responsibility is under enormous pressure to improve their skills. The Fourth Industrial Revolution requires an upgrade to Management 4.0. Why? What is missing?

The question for millions of managers: what is the transition to digital technologies?

We are reminded of the 1970s, when strategy and marketing were perceived as innovations in the field of management, mostly from Harvard students. Managers were concerned with these new topics, practically every company took care of conducting training on this topic, and managers of medium and small businesses attended training courses on management and business management at the best universities.

The same situation for new topics and key questions is happening now: What is UX? How does design thinking work? What other Lean-Startup practices can be applied to our organization and how do we implement them even as the organization grows in scale? We have a digital development strategy, but how do we determine the path to follow? What organizational development methods do we use? Do we need social media forensics?

Now there are no intelligent managers who do not know the 4P Theory or Porter's strategy. They all know what Cost Center Accounting is and can apply the Balanced Scorecard to common management tools because they have embraced innovation. Likewise, 30 years after this wave of innovation in management, all digital means of improving work processes must be mastered by everyone.

Hearing does not mean owning

Should we believe in some of these illusions? It must be clearly stated that knowing information about the latest technological achievements of the fourth industrial revolution, presented at the most famous conferences by high-ranking professors, mainly from Silicon Valley, cannot be evaluated as obtaining an education. Such conferences are important, necessary and informative. However, even in your wildest dreams, knowledge will not turn into skills. There is nothing new here.

This approach was true for old management skills like the Balanced Scorecard - I've heard and read so much about it - you'll only know how it works by adapting the scorecard to your own needs and the needs of the company. What applies to the Balanced Scorecard applies exponentially to digital transformation. The proof that you're eating the pudding is in the eating of it.

Even if you have a lot of experience, you will still be forced to participate in the digital transition. A driving test of the future, so to speak. This is the difference between digital technologies and increasingly ineffective methods of educational formats; learning in one direction no longer works. Whose managers have already 3d printed smartphone covers or airplane parts? Who installed sensors in warehouses to make the logistics process more transparent? Or got an e-commerce store up and running within three hours? Or analyze or criticize zig apps, business ideas and prototypes from the user's point of view? Only after these things are done can you claim to have contributed.

Digital leadership

It's no secret that CEOs are familiar with these keywords, but unfortunately, they often don't know how to put them into practice. The top manager of an international corporation told us during his visit to Berlin:

"Our leadership culture is hopelessly outdated. When someone is appointed to a leadership position, he stands up to his colleagues and says, 'You all have 90 days to convince me that you have a good level of performance!' : 'Boss, you don't quite understand the situation. You have 30 days to convince us of your level of productivity, otherwise we will look for another leader.'

This anecdote clearly demonstrates how intensively the fourth industrial revolution is reconstructing leadership paradigms. The same applies to organizational culture. Where this level of perfectionism is resorted to, the process slows down, and success is achieved with unprecedented speed. For example, with the help of Google Design Sprints, innovations can be achieved in just 5 days, instead of implementing a large 5-month IT project, or an MVP developed in 5 weeks instead of the 5 months used for a classic prototype.

It makes sense that when leadership and culture change, communication also undergoes a revolution. For example, following the principle of social media: collegiality, cooperation and integrativeness, instead of the principle of command and control, standing in front of the whole team once a month to communicate the agenda.

Who is studying? Manager

The management education needs briefly explained in this article are ignored by many organizations without delving into the question of what is necessary for exponential growth. The most successful and skillful are those who have identified 4 main target groups. They implement digital technologies, starting with managers. You can achieve success in this within 6-10 days divided into intervals. Namely thanks to the classic face-to-face teaching method. Nevertheless, do it not superficially, but by direct application, with the help of so-called field experiments. In between training intervals, managers must once again apply the knowledge in practice, adapt it to themselves and transfer and implement the knowledge gained during the digital training.

Who is studying? Pioneers of digital technologies

Those groups of people who have long been involved in the development of new digital products, services and business units are trained to work together to create something new. They learned the methods of Google Design Sprint and MVP Tracks. They feel comfortable and trust outsiders with information about their corporate culture in order to bring outside ideas and creativity into the company.

Who is studying? Talents in the development of digital technologies

A third target group for strategic and structured digital learning is talented developers from universities and other educational institutions who study coding instead of computer science, digital business instead of business administration, or social media instead of marketing. A company interested in its own future should have its own selected lists of these institutions and provide degrees with the option of further internship in its company.

Who is studying? "Digital Trainers"

This is by far the most important target group for implementing such education. This group, so to speak, is a necessary prerequisite for "digital transformation": without it, nothing will work. Transformation? Not without our coaches. They act as catalysts and ensure changes within the organization. This group of people in your company (maybe just one person, as a result of which in large corporations information will easily spread among 100 people) will drive digital change quickly, provide technical and, much more importantly, social change in management. They form the hinge between the executive and the operational level of the digital strategy. How many digital trainers has your company trained? Less than five? Don't panic, but you're in for a digital fail.

Who are "digital trainers"?

They are the experts who are like an ambulance service, who will always show you when things get hot or your digital integration project gets stuck at some stage. Digital coaches are change drivers who take on digital technology in the face of employee skepticism and stand their ground better than budget managers could or would.

Why are digital trainers able to do this? Why are they able to walk on water? Because not only do they have a deep-rooted knowledge of digital age technologies and management methods – they have been trained to do so – but also because they are also equipped with high-performance communication and social competence unlike some obvious digital nerds. This is how they manage to inspire and motivate people to digital transformation and dispel any resistance with pleasure. They put out fires and ignite action at the same time. Without them, digital transformation will move very slowly, if at all.

When all four focus groups join forces, we will make the Fourth Industrial Revolution a reality: train people to succeed in the digital age.

Christopher Jahns,

Founder, XU Exponential University of Applied Sciences i.Gr GmbH