• Leadership

Leadership for Industry 4.0

The 4th Industrial Revolution will require a major shift in management outlook and performance⁠—a step up from ‘Level 1’ to ‘Level 5’, says Prof Vlatka Hlupic

Monday 13 January 2020


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According to a recent report from IBM’s Institute for Business Value, only 41% of employers have the people skills and resources necessary to effectively execute their business strategies today. If this is the case, organizations do not appear to be in great shape to adapt to the rapidly evolving 4th Industrial Revolution.  

The IBM report states rather alarmingly that, “More than 120 million workers in the world’s 12 largest economies may need to be retrained/reskilled in the next 3 years as a result of intelligent/AI-enabled automation,” as demand for new⁠—particularly soft⁠—skills grows, and repetitive, rules-based activities are progressively taken on by machines.

In the coming era of machine learning, robotics, and AI, not only will reskilling the workforce be essential, but there will need to be a major shift in management practice and culture. For organizations to seize the opportunities presented by Industry 4.0 the old model of leadership, based on carrot and stick, command and control and fear, must be replaced by a new model of humane leadership⁠—which I will term Leadership 4.0⁠—which can enable trust and respect to permeate organizations and a culture of creativity and innovation to prevail.

Globalization, digitization and increasing connectivity have led to massive market disruption and volatility. The 4th Industrial Revolution will bring an accelerating pace of change and the management dogmas of the past will become increasingly obsolete.

The Right Time for Leaders to Adapt

For leaders it is time to adopt new modes of thinking, that are conducive to adaptability to change and innovation. Leaders must strive to create the right conditions for engagement, creativity and purposeful work for those they lead⁠—making organizations more human and fit for purpose. Embracing this new model will require a major shift of outlook and performance from leaders and would-be leaders; a shift starting with the individual, which will ripple out to the organization.

The Five Levels of Emergent Leadership: A New Model

I have produced an Emergent Leadership Model which describes five levels that individuals go through during their development to becoming exceptional leaders⁠: and the type of leaders equipped to embrace the challenges of Industry 4.0.

The Emergent Leadership Model is based on current academic research in the areas of; psychology, organizational behaviour, complexity science, neuroscience, leadership theories, and economics. My research investigates what occurs at both individual and collective levels in terms of mindset, behaviour, beliefs and actions, leadership style, and organizational outcomes.

The model illustrates the management shift required to meet the challenges of Industry 4.0 successfully, and where Leadership 4.0 emerges.

  • Level 1 – Lifeless/Apathetic: “I am demoralized/There is nothing I can do to change this situation.”
  • Level 2 – Reluctant/Stagnating: “I am frustrated/There is no point trying too hard.”
  • Level 3 – Controlled/Orderly: “I need to be in control/I’m reluctant to share information.”
  • Level 4 – Enthusiastic/Collaborative: “We can achieve great things as a team/I respect myself and others.”
  • Level 5 – Unlimited/Unbounded: “I inspire others to achieve their unlimited potential/I am living a fulfilled life.”

Any moderately effective manager (or organization) will be operating above Levels 1 and 2. A significant change occurs moving from Level 3 to Level 4. This is the key moment of the management shift: the point at which high-performance begins. Level 4 is the level where Leadership 4.0 emerges. This is the level of leadership organizations need for surviving and thriving through the 4th Industrial Revolution.

Shifting the organizational culture starts by shifting the mindset of individuals and teams. Every individual can take an action that will create some positive ripples. A group of such thoughtful individuals can eventually make a big impact, as illustrated in this quote from Margaret Mead: “Never doubt that a small group of thoughtful, concerned citizens can change the world; indeed it is the only thing that ever has.”

Hult Ashridge Executive Education helps organizations around the world improve their leadership talent, strategic thinking and organizational culture.

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