Andrew Kingery
The 3rd Industrial Revolution gave us the rise of big data, digital automation, and faster moving markets. At the dawn of this 4th Industrial Revolution (4) what lessons can we learn from the past, so we lead our organizations to create a more valuable future?
Data Requires People to Look at the Past
Data came and it’s here to stay. The world is currently creating data in the form of bits and bytes at enormous rates. Depending on which estimates you use it’s expected to be over 450 exabytes a month by 2025 (1). If you put a single month of this new data into 8GB USB memory sticks, you would fill up over 3,100 shipping containers with the sticks.
Time spent analyzing data is now a much bigger part of our organizations than it was before the middle of the last century. How many people do you employ whose job it is to wait to see what data were recorded by your systems and then review it for insights? Teams of analysts build their schedules around availability times of datasets. When the data drops it’s their job to react to the datasets and deliver insights to help run the business more effectively. We’ve gone from wishing we had the data to having so much data we can’t find it when we need it, or we even forget what we have.
The first lesson from the last industrial revolution is this, we’re spending more time looking backward, or data gazing. This is important because data generally reflect the past and the future is always changing. Old maps will get you lost. I’m not saying data gazing is unimportant, I’m saying be mindful of the consequence.
Compliance Creates Resistance
Digital process improvements or workflows were a big gain in the 3rd Industrial Revolution. The rise of IT investments in organizations has made an important impact on productivity (2). Executives now have more information about work in progress than ever before. But this has come with a cost, too – the cost of compliance.
A process is meaningless without compliance. If you’re in a public company, you know how many steps and schedules you need to comply with to get a purchase order paid. Or if you’re in a sales role you know how important it is to keep the CRM tool updated, your Sales team probably relates to spending most of workdays working within the tool. If you’re a healthcare leader, you probably don’t even want to hear other industries complain about process compliance.
As the need for compliance rises, so does our need for compliance-oriented people. In a study of psychometric data for over 5,200 professionals, 74% self-reported over-using their reliability to the point they were hesitant to change (3). Being hesitant to change was the most reported over-used trait. And this makes sense, compliance with process means we must resist changes that make us non-compliant.
Our second lesson is that we’re filling our organizations with people and training that foster compliance-oriented mindsets rather than value-oriented mindsets. This is stifling growth at many organizations. In my experience this is a big reason why many innovation efforts fail.
Build a Value-Oriented Organization
The pace of change will only accelerate as we head into the 4th Industrial Revolution (4). So what can you do as a leader to learn from these lessons?
Invest in value-oriented mindsets. My research over a decade shows less than 1 out of 10 people can explain how value is created (5), and this dataset includes salespeople. As we spend more time data gazing and complying with process, it’s important to also teach value creation. Build a common and consistent language in your organization around what it means to create value.
Embed customer empathy. Each year ask your top sales personnel to present the most important strategies, goals and problems of your top customers. Ensure your entire Sales and Marketing team attend, but also include leaders from all supporting departments. Encourage all your people to interview a customer or spend 3 hours with customer service and report findings.
Attack Critical Trends. Align with your leadership team on the 1 to 3 most important trends to which the organization must respond in the next few years. Make intentional investments (people, time and money) that respond to these trends in a way that creates more value for your customer. Begin with an expectation of iterating. Your first response is never your best.
Sources
- How much data is generated each day? Jeff Desjardins , Founder and editor, Visual Capitalist
- How IT Enables Productivity Growth, The US experience across three sectors in the 1990s, McKinsey Global Institute, San Francisco, November 2002
- The White Stone Consulting Group analysis of anonymized data from Lumina Spark® portraits in 2018, Lumina Spark® is owned and designed by Lumina Learning
- Schwab, Professor Dr. Klaus, The Fourth Industrial Revolution, The Crown Publishing Group, Kindle Edition.
- “Q: How is value created?” respondents were corporate practitioners from 2009 to 2019, n = 150+
