Since the founding of ubiquitous tech companies such as Google and Facebook, the worldwide economy has changed drastically. We are in the midst of a fourth industrial revolution.
In case you need a refresher, here’s a quick recap:
- The first industrial revolution occurred in the 18th and 19th centuries with the advent of manufacturing techniques, factories, and steam power. Communities moved from agrarian to urban and industrialized.
- The second industrial revolution happened in the decades before World War I, as electricity led to mass production.
- The third industrial revolution began in the 1980s and is now petering out. Also called the digital revolution, this era produced massive change with the introduction of computers and the internet.
The fourth industrial revolution is marked by a continuing shift away from energy and other physical resources, toward a new future where human capabilities are fully integrated with the functionality of emerging technology like artificial intelligence, augmented and virtual reality, robotics and nanotechnology, and the new connectivity of the Internet of Things. This revolution is different than any we’ve seen before because of its fusion of digital and biological functionality, and its unprecedented speed.
As a result, the global business environment is changing and evolving at an exponential pace. Business models are transitioning from the sale of goods to the sharing economy. For example, today’s biggest enterprises rarely own physical assets. Instead, they facilitate transactions by building networks with which to share goods. Some of the world’s largest service providers, like Alibaba and Airbnb, have no inventory.
The rate of change has pushed businesses out of the marketplace at an unprecedented rate. Almost 9 out of 10 companies on the Fortune 500 list in 1955 are no longer on the list—and as the American Enterprise Institute notes, “It’s reasonable to assume that when the Fortune 500 list is released 60 years from now in 2076, almost all of today’s Fortune 500 companies will no longer exist as currently configured.” Based on analysis of the S&P 500 list, turnover is higher than ever before.
This revolution is different than any we’ve seen before because of its fusion of digital and biological functionality, and its unprecedented speed.
How companies keep up in a rapidly changing marketplace
This churning, competitive global marketplace represents the combined power of human creativity and emerging technology. But some worry technological changes might outpace our ability to keep up as enterprises and workers.
The Worldwide Economic Forum predicts that by 2020, the global economy will experience a net loss of more than 5 million jobs. While it is true that technology has the potential to eliminate many jobs, it also creates them. Rapid job creation requires workers with new skills. Many of today’s jobs didn’t exist 10 years ago. Without options for reskilling and retraining employees, enterprises won’t be able to meet labor needs.
CEOs and their teams must do more than just retrain employees, however. Data from Gallup shows only one-third of U.S. employees (and 15 percent worldwide) are actively engaged in their jobs. The number of millennial employees who feel strongly connected to their company’s mission is similarly low—40 percent. These two statistics rise and fall together. When employees connect strongly with their company’s mission and with senior leaders and direct managers, they are more likely to be engaged. And companies with engaged employees outperform those without by up to 202 percent—even in a volatile marketplace.
We are changing the way we consume, work, and learn. To keep up, business leaders must transform every aspect of how they work—from the way they hire and train employees to the way they structure their business models and the way they use technology.
Companies with engaged employees outperform those without by up to 202 percent—even in a volatile marketplace.
The future of work
The fourth industrial revolution ushers in a merger of human and digital functionality. To avoid being left behind, enterprise leaders must incorporate emerging technology into every facet of their business.
Today, the business innovators who succeed orchestrate highly communicative networks, both inside the company with employees and managers, and outside the company with their customer base. Success requires a radically different business model.
We see four integral ways in which enterprises must transform to meet the challenges of the twenty-first century and the fourth industrial revolution.
1. Transformation through training.
Education is essential to building a workforce ready to meet the challenges of the fourth industrial revolution. Business leaders must develop training and education platforms that offer true employee engagement. That means hands-on, relevant training platforms, such as Walmart’s Training Academy. Employees have the opportunity to learn real-life skills such as math and reading while completing courses that help them advance in their careers—without additional college education.
2. Transformation through leadership.
Business leaders must become champions of the employee experience. Employees who feel like their voices are heard are happier, more committed to their jobs and company, and more productive at work. This translates into lower turnover and boosts institutional knowledge, as employee-centric organizations hire and retain the best talent.Data collection offers a way for HR and managers to incorporate employee feedback into their organization.
3. Transformation through process.
Leaders must rethink their business models to counter disruption—or to become the disruptor. Poor organizational design and sluggish innovation leave a door open to competitors able to meet market demands. The lack of smart processes also leads to poor communication and faulty decision making within companies. One example of organizational transformation is agile recruiting. Applying an agile approach to the recruiting processes cut months from the recruitment period for IBM, allowing them to find top talent in as little as two weeks—compared to three or four months, previously. Agile methodology can create efficiencies in areas like hiring, training, and communication.
4. Transformation through technology.
Emerging technology is essential to the future of work. Forward-thinking leaders will leverage big data and artificial intelligence to eliminate busywork and automate tasks. One example is x.ai—an online personal assistant that uses artificial intelligence to scour email data and set up appointments. Emerging tech like AI can be harnessed to scour vast amounts of data, and innovators will use that data to make informed, nimble business decisions that keep them on the cutting edge. Technology like augmented reality and the Internet of Things can also provide connectivity that enables workers to access data where they need it, when they need it.
Our mission at RevUnit is to empower millions of people to be happier and more productive at work — to #WorkBetter. The nature of work is changing, and businesses must transform sooner, not later. We believe in the power of transformation—and we believe that with the right tools, businesses can radically transform to shape the future of work.