Australian business leaders are more likely than their global counterparts to invest in new technologies to disrupt their market, rather than protect existing market share, according to Deloitte’s annual global Readiness Report, Leadership in the Fourth Industrial Revolution: Faces of progress.
Some 49% of Australian business leaders say they invest in new technologies to disrupt their market, compared with 33% globally. And Australian businesses are well-placed to innovate, with 61% of executives believing they have permission from leadership to fail and learn in the context of innovation.
The research is based on a survey of 2,042 global executives (134 in Australia) conducted June-August 2018. Survey respondents came from all major industry sectors and included CEOs, COOs, CFOs, CIOs and CTOs, all from organisations with revenue of US$1 billion or more.
“In 2018, when asked about their organisation’s readiness for technological and societal change, just 2% of Australian leaders said they felt highly confident, compared with 14% of executives globally,” said Deloitte Chief Strategy & Innovation Officer, Robert Hillard. “This year, when questioned on their readiness to lead their organisations to capitalise on Industry 4.0, 37% completely said they feel ready. Leaders’ confidence in Australia also now exceeds the global average of 34%. This increased confidence is perhaps partly due to greater awareness of what Industry 4.0 is and community discussions around its impact on the future of work and skills education.”
In the wake of the Financial Services Royal Commission, business is responding to community trust concerns: 24% of Australian corporate leaders now rank having a positive societal impact as the most important success measure in evaluating their annual performance. Having a positive societal impact ranks second only to employee satisfaction and retention (30%), and notably higher than financial performance (16%).
Proving that profit and social purpose can co-exist, 52% of Australian business leaders invest in initiatives they hope will have a positive social impact to generate new revenue streams. Only 9% say they do so to meet shareholder expectations. Furthermore, 57% of Australian business leaders say they have generated new revenue by developing or changing products or services to be more socially or environmentally conscious.
More than half (57%) of Australian business leaders say they know which skills their future workforces will need to thrive in the Industry 4.0 future and, significantly, 60% say they plan to extensively train their current employees to help them close any skills gaps (compared to 43% globally).
Australian businesses are also more enthusiastic than their global counterparts that the current education system will sufficiently prepare individuals for Industry 4.0 (Australia 53%, global 43%).
“Business leaders are listening to their employees,” said Hillard. “There are community fears about robots taking people’s jobs, but history shows that more jobs are created than lost by technological change. It’s easy to be fearful about the future, but machines are taking away repetitive and highly physical tasks and creating opportunities for problem-solving and creativity. Our report shows that the majority of businesses are helping their people to re-skill for the jobs of the future, which is encouraging.
“Every business needs to be more systematic about innovation. Many of the jobs of the future haven’t been invented yet. People need the chance to play with and explore new technology, and work out new ways to use it. Problem-solving is a very human skill.”
The research also identified four types of leaders who are thriving in a technology-disrupted world:
- Social Supers: leaders who consider societal initiatives fundamental to their businesses. They have figured out how to ‘do well by doing good.’ They generate new revenue streams by developing or changing products or services to be more socially conscious, and believe societal initiatives contribute to their profitability.
- Data-Driven Decisives: confidently leading their organisations in Industry 4.0, taking a methodical approach to strategy development and using clearly defined decision-making processes that incorporate data-driven insights.
- Disruption Drivers: invest in new technologies to disrupt the market. These are more likely to feel ready to lead in Industry 4.0, and take an assertive, hands-on approach to leadership. Disruption Drivers have holistic decision-making processes, a ‘rolled-up-sleeves’ approach to talent and a comfort with the unknown.
- Talent Champions: leaders who understand their organisation’s skills needs, and believe they currently have the correct workforce composition. They embrace the responsibility to train their employees with a proactive approach, while emphasising society and ethics.
The research shows that these personas are contagious, and often share a number of characteristics that might offer lessons for those still trying to define their approaches, including:
- A commitment to doing good;
- Clearer vision on the path forward;
- Longer-term lens on technology investments; and
- Taking the lead on workforce development.