Akshay:
Loving the content, looking forward to more!
4th industrial revolution digital era - the basis of global economies is Physical activity - manufacturing, labour, Mining, agriculture, etc. So while I agree that digital/ tech will be a larger, and more visible, component of economies I wonder if it will displace traditional industries. So is the term digital age/ 4th revolution marketing hype?
Charles: There is a whole lot to this question, so let me try to unpack it a bit.
First, the transition from the Industrial Age to the Digital Era (what I prefer to call it) is less about displacing physical with digital, and more about the transformation of how we create value. Much of what we interact with, purchase, consume, and use on a daily basis is still physical and will continue to be so long into the future. After all, we need to live somewhere, populate our home and workplace with physical things that enrich our lives, we need to eat, etc. The difference is that how those physical products are differentiated in the marketplace will be increasingly driven by the experience rather than the physical attributes of those products or how or where they’re sold. And that experience will exist in perpetuity throughout our journey with a company or product and will increasingly be digitally-enabled.
Because of all of this, I do think that the term the “4th Industrial Revolution” is incorrect and misleading. It makes it sound like this is version 4.0 of what started 150-200 years ago. I, however, believe that this shift represents another wholesale revolution that will ultimately transform everything about how we produce, purchase, and consume products and services. So, in that sense, I don’t think it’s hype at all. If anything, it’s being under-hyped in that most people are failing to grasp the enormity and fullness of the transformation that has already begun.
Akshay: Organizational focus - very enterprise focused (competition, creative engagement with customers, etc) - where is social element? We see small scale (relative) job losses from AI, chatbots, etc. What moral/ ethics come into play when assessing and mitigating the impact? Should they come into play? Is it a government duty or corporate duty to manage the wider impact? People out of work will not have money to pay for goods and services from the very companies that let them go and can lead to other problems for wider social constructs, mental health, etc.
Charles: There are really two parts to this question. The first assumes widespread job displacement from technology. The second asks what we should do about it. I want to start by challenging the first assumption. As a human race we have already gone through several of these massive societal transformations that altered the nature of work. In each of these cases, technology (in the broadest sense, e.g. the adoption of the wheel, etc.) resulted in the creation of more jobs than it destroyed. While there is obviously not deep data going way back on this point, the data we do have from more modern times backs this up. Technology has been the great job creator. The challenge, however, is that we cannot always see around the corner to anticipate what those jobs might be. We can see this even in our own lifetime. Many of the most prominent jobs today did not exist in any way (or were even an idea) just 30 years ago as I was entering the workforce.
The difference this time is that things appear to be moving much faster than at any other time in the past. That creates a higher degree of uncertainty. Nevertheless, I don’t think we should go into this assuming that we’re going to see massive net job disruption, per se. But what we can assume is that there is going to be a major shift in the nature of jobs and what we, as a society, value — and that this transition may occur at a pace that outstrips our ability to counteract it, at least using the traditional approaches of retraining, etc..
All of this leads to the second part of your question. Assuming that there is some sort of widespread disruption caused by automation, where does the responsibility lie in responding to those challenges, even if it’s a temporary situation. That’s a very challenging question that some very smart people are beginning to grapple with. A number of folks are advocating for the Universal Basic Income (UBI) to close this gap (most notably, U.S. Presidential Candidate Andrew Yang). This is an idea that’s been around for a long time, but is largely untested. It may be a necessary stop-gap, but it’s unclear if it will have the desired impact. I think that there is no question that this is something that must be dealt with at a governmental level — I think it’s too big for even the largest companies to address in a meaningful way — but I also am concerned that there will be no avoiding a very traumatic short-term period of adjustment. The big question will be just how short it turns out to be and how lasting the impact will be on society in its wake.
Akshay: Is there a contextual difference between the transformation in b2b environments Vs b2c?
Charles: Increasingly, I’d say that the answer is ‘no.’ In the end, we are all consumers and our expectations are set by our daily consumer-driven experiences. It only takes so many times of enjoying the ability to go on Amazon’s site, to quickly find what you need, read reviews, and have it show up the next day to have that experience shape your expectations when you are making a B2B purchase at the office. Likewise, businesses are increasingly moving toward ‘as-a-service’ business models in which the business-to-business relationship is on-going and less-transactional. We’re seeing this adopted in retail and consumer-driven approaches as well (Amazon’s Prime is a good example) to create a stickier consumer relationship. I expect that we will see this trend continue and the lines separating how B2B or B2C interactions occur continually blurring and becoming almost indistinguishable.
Akshay: Feels like new ways of working are getting traction at lower levels of an org. What happens when these people become management and enterprise leaders? Will the weight of the market/ shareholders crush the movement? Or will we see economic & social disruption are markets reindex?
Charles: I think that we are seeing greater acceptance of self-organizing work models simply because there is little choice if we are to move fast enough to respond to market demands. But this is neither a recent development or something that is limited to on-the-ground efforts. Broad holocratic management models have been used to great effect by some companies for decades. Likewise, there are numerous examples of organization who are using variations of Agile or even DevOps outside of IT. There are also other organizations that are using similar principles as part of their organizing management model.
That said, there are two great barriers to the broader adoption of these types of self-organizing approaches. The first is the fear of the middle-management layer (and sometimes of the executive suite). The hierarchical models of the industrial age not only created a highly-structured management model, it also became a proxy for professional achievement. Rising to ranks of a senior executive within an organization was a signal to the world both inside the organization and outside of it that you had achieved greatness in some way. This sense of pride of accomplishment tied to hierarchical rank extends far into the middle management ranks of organizations – where its hold is much more tenuous. As a result, managers are reticent to give up this hard-won ‘achievement’ by moving to self-organizing, flat management models. Thus, you see these approaches adopted most widely in situations where it does not represent a threat to the hierarchical model. It will only be when the outside pressure on the organizations forces these model to break that we will see broader change — but I believe we’re already seeing the first cracks in the hierarchical protective shell.
The second issue you alluded to is the focus for organizations (mostly public companies) to deliver quarterly results, which causes a focus on short-term results and makes organizations averse to the risk of adopting new management models. I think this is a real problem and will continue to be so for a time, but increasingly we will see that those organizations that are unwilling to take the chance will suffer in the market and the pain will eventually outweigh the risk.
