In the final lecture of the 2019 Bristol Distinguished Address Series at the University of the West of England (UWE), Bruce Carnegie-Brown, President of the CMI and Chairman of Lloyd’s of London, delivered an impactful presentation entitled “21st Century Management”. In his lecture, he discussed the impact of the fourth industrial revolution on the business world, and how the role of the leader has had to evolve in an ever-changing landscape.
Carnegie-Brown opened in his lecture with the statement: “Never has technological development had such a profound impact on society in such a short space of time.”
This would set the tone of the lecture, which looked into the impact we are currently experiencing in this technologically-rich age, where every facet of the business world is experiencing the impact of the fourth industrial revolution.
The convergence of computing, data, artificial intelligence (AI) and universal connectivity has had an impact of every part of our lives – with business, and those running them, feeling the pressure to adapt to the modern world.
Carnegie-Brown believes that this industrial revolution has changed, and will continue to change, the role of a business leader and how they to navigate to navigate through the constant wave of disruption and change.
That adaptation is not just important to thrive in this revolution, but also to just survive it.
Carnegie-Brown said: “Fail to adapt, and companies will slide into irrelevance.”
The true impact of the Industrial Revolution 4.0 on management
He continued: “Managers and business leaders are at the forefront of this change. They have a responsibility to build organisations that can thrive in the fourth industrial revolution. To do this – they need to understand what those implications are for their company, their teams, and the future. They need to know that they have the right skills to manage change effectively.”
But before that can be done, it is important to understand the current conditions in which we all live and work – and how the latest innovations and technologies have changed this.
If you look at business over the last few decades, the value used to be purely intangible assets like property, staff, and products – whereas nowadays there is a heavy focus on the intangibles such as brand values, data and digital platforms. In the last 30 years alone, the largest companies on the globe’s stock markets have changed from a majority of tangible to intangible value. In the UK alone, 80% of the GDP is made up of services, rather than goods.
Carnegie-Brown continued: “Where it used to take generations to build global enterprises, it now only takes a few years. For the entrepreneur of today, all it takes is an idea and a laptop to start a business.”
This level of entrepreneurial innovation was almost impossible before the internet. The same level of access to markets, customers and the wider world just wasn’t possible.
However, on the flip side of that – is that almost anyone can now start a business or disrupt an industry – “the level of competition is ferocious”.
The ever-changing mix of innovation and disruption is changing the rule book for working practices and changing the business world beyond recognition.
Uber is the world’s largest taxi company, but owns no cars.
Airbnb is the world’s largest accommodation provider, but owns no hotels.
Facebook is the world’s largest publisher, but owns no newspapers, magazines or television stations.
Online marketplaces sell all the products we need, but don’t necessarily have a bricks and mortar store.
Carnegie-Brown comments: “New technology is giving consumers more choice and better service.”
Tech and changes in the workplace
It is clear that the models of business have changed the business world – and so naturally the workplace itself has changed.
Companies can be set up in an instant, and can be managed remotely. People have more career choices, and in more locations than ever before. More flexible work patterns, flexible hours and modern working practices are now commonplace across the world. Tech has driven all of this change.
And even if someone is working remotely from the team, they can always be connected through readily available tech tools.
However, it isn’t just tech that is part of this working revolution. Mass social changes have meant there are more women in the workplace, more diverse cultures work together, and what was once an enclosed team of workers, can now be spread across the far reaches of the world, but work as a single team to help drive growth for their company.
What are the challenges?
The fourth industrial revolution has clearly provided many opportunities for new working practices and the chance at exponential global growth – however, it also provides many challenges.
New business models have to look at the pros and cons of automation and artificial intelligence (AI), for example.
These technologies are already replacing human workers, with up to 800 million manufacturing jobs across the world, currently under threat across the world, due to automation.
For comparison, Google’s new Quantum computer completed a task in an hour, that a computer of the 1970s would have taken more than 10,000 years to complete – showing the increase in technological power now available to companies.
This also puts into perspective the processing power that is currently available, and the potential it could have in the future – putting further jobs at risk.
Carnegie-Brown said: “It is why we have to assume, that AI will not just be doing administrative tasks in the future. The pressure on the job market will be relentless and the need to have the relevant skills will only intensify.”
These changes can have the potential to have negative setbacks.
A disrupted and dispersed workforce could affect labour rights, for example. Uber has been in a legal battle over workers’ rights, over what a ‘self-employed worker’ really is in 2019 – and what they and the rest of the gig economy companies need to start offering in comparison to established traditional business models.
Carnegie-Brown stated that he, like many others, are unsure what the legal parameters of modern work will look like in the years to come. He said: “No one, including the law, knows just how the modern world should work.”
So, what does the future hold for the ‘manager’?
It is clear that the impact of the fourth industrial revolution has had both positive and negative influences on the working world, and with the constant increase in the amount of data and levels of innovation/disruption happening, it can be hard to run a business and manage the teams within it successfully.
Overseeing this constant transition can be difficult and by the looks of it, there will be many causalities along the way – but those that innovate and lead correctly, can far surpass the competition.
This next generation of leaders and managers will need to understand the market they are in, the innovations in tech and working practices, as well as their willingness to embrace change and new ideas.
That willingness will help build a loyal and inspired workforce that are given open and transparent information on the future direction of the business and their specific roles within in.
Gone are the days of the dictatorial leader, and a more empathetic and democratic leader has risen to prominence.
Many questions remained unanswered on whether all leaders need to be tech-savvy innovators themselves, or whether they offer the human balance through managing a tech-influenced workforce, is yet to be seen. Carnegie-Brown believes it will be a mix of both, as it is part of that willingness to adapt and embrace constant change – a major factor of the fourth industrial revolution.
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