Indian executives stand out in their preparedness for Industry 4.0 : Deloitte Report
With the Fourth Industrial Revolution (Industry 4.0) re-shaping how the world lives and works, global leaders are facing the pressures of preparing their businesses and their workforces for this new era.According to Deloitte’s second annual Readiness Report titled, Leadership in the Fourth Industrial Revolution: Faces of progress, certain geographies and especiallybusinesses in India have demonstrated the right aptitude for success in Industry 4.0 due to their focused approach to upskilling their employees, linking customer satisfaction to societal impact and profits and above all, the ethical use of Industry 4.0 technologies.
This year’s survey of more than 2,000 C-suite executives across 19 countries also included 130 respondents from India.The Deloitte ‘Readiness Report’ was released at the World Economic Forum’sAnnual Meeting in Davos, Switzerland on January 21st. Many respondents in this year’s survey acknowledged that they are still in the early stages of navigating Industry 4.0.However, businesses in India are making better progress than others in dealing with the challenges within the four major areas of impact they were measured - society, strategy, technology, and talent.
Globally, organizational roadblocks appear to be limiting the development of effective Industry 4.0 strategies and many leaderscontinue to shy away from bold technology investments that drive innovation and disruption. However, in two critical areas – societal impact and talent development – CXO attitudes have changed dramatically from 2017, indicating leaders are becoming more realistic about what it takes to succeed in Industry 4.0.
“Poor decision making processes are holding back many companies globally, but this seems less significant in India. The recognition that customer satisfaction many times leadsto social impact initiativesis higher in India than in the rest of the world is an interesting data point brought out by the survey”, said Kumar Kandaswami, Partner, Deloitte India. “Here is a cue for businesses to change the narrative, thanks to the possibilities Industry 4.0 offers, so that profit and purpose can and must co-exist.Further, organizations with leaders who embody the characteristics personas—commitment to do good; defined, data-driven decision-making; bold, longer-term vision of technology; and aggressive about workforce development—are better poised for higher growth and more confident of leading their organizations in the world of Industry 4.0.”
Social impact– Organisations are developing new products or services that have a positive social impact and contributing to profits
Whereas customer satisfaction remains a top priority for Indian executives with 29% of the respondents saying that they rely more on customer satisfaction,globally, 34% of the respondents indicated that the societal impact is the most important factor business leaders use to gauge success—totaling that of financial performance (17 percent) and employee satisfaction (17 percent) combined.
However, that’s not to say Indian executives aren’talso taking necessary action to ensure a much wider societal impact.Eighty-five percent say that their organizations have developed a product or service to make a more positive impact on society – the second highest of any country – compared to 73 percent globally. As a result, Indian organizations are more likely to have generated new revenue streams from these changes (India 67 percent, global 53 percent) and they believe social initiatives are more often contributing to profitability (India 56 percent, global 48 percent),proving purpose and profit can coexist in Industry 4.0.
Better decision-making processes an advantage for Indian Executives
While many global execs struggle with their decision-making processes, likely making it difficult for them to successfully implement Industry 4.0 strategies, this is not as much of a challenge for Indian executives. Fifty-eight percent of Indian leaders – the most of any country – say their organization has a clearly defined decision-making process. The decision-making processes are more inclusive of a diverse set of stakeholders (India 32 percent, global 20 percent), are more likely to be based on data-driven insights (India 32 percent, global 17 percent), and more often go beyond financial returns to include societal impact (India 15 percent, global 4 percent).
Sixty-five percent of Indian executives believe they have permission from their leadership to fail and learn in the context of innovation, similar to global executives (India 65 percent, global 69 percent).Strategy also falters when it comes to implementing new technologies, as leaders reported concerns over too many technology choices and difficulty keeping pace with the rate of change. Strategic obstacles, such as organizational silos, can complicate decision-making processes and hamper innovation. However, increased use of data and insights in addressing these challenges are helping organizations cope with the pressure.
Ethical use of technology overrides economic and societal considerations for Indian Executives
Despite the unquestionable economic and societal potential of Industry 4.0, many organizations opt to maintain the status quo with respect to their technology investments, leaving themselves at risk. Twice as many global leaders said they’re more likely to invest in Industry 4.0 technologies to protect themselves from disruption as they are looking to disrupt other industries or the marketplace (67 percent versus 33 percent). Issues such as being too focused on short-term results, having too many technology choices, and a lack of understanding of the technologies rose to the top as barriers to investment.
Further, Indian executivesare more concerned about the ethical usage of Industry 4.0 technologies (India 55 percent, global 30 percent) and are taking action. Forty percent said that their leadership has frequent discussions about the ethical use of these technologies, compared to 29 percent globally, and 22 percent say they are exploring or have put in place policies related to their ethical use (compared to only 12 percent globally). More than four in ten (41 percent) of Indian executives also indicated their organizations are investing in new technologies to disrupt the market, compared to 33 percent globally.
Building the skills for Industry 4.0. -Indian executives will train and re-train their employees
While Indian executives are less confident about knowing which skillsets their workforce will need in the future (India 53 percent, global 63 percent), they’re working to be more prepared. Nearly three-quarters (72 percent) say they will extensively train their current employees, compared to only 43 percent globally, and 55 percent say they are doing everything they can to create a workforce for Industry 4.0 versus 47 percent of global execs. When it comes to preparing the workforce for Industry 4.0, Indian leaders are just as challenged as their global counterparts by the mismatch between current skillsets and those needed for the future (India 55 percent, global 55 percent). They foresee attracting talent as far less of a challenge (India 39 percent, global 48 percent) than retaining talent with the necessary skills (India 52 percent, global 46 percent).
“Despite the obvious challenges and confusion that Industry 4.0 may initially cause, there are immense growth opportunities that will spring up once the businesses are ready with the necessary skillsets”, addedKumar Kandaswami, Partner, Deloitte India.
This research is based on a survey of 2,042 global executives conducted by Forbes Insights in June-August 2018. Survey respondents represented 19 countries from the Americas, Asia and Europe, and came from all major industry sectors. All survey respondents were C-level executives, including CEOs/presidents, COOs, CFOs, CMOs, CIOs and CTOs. All executives represented organizations with revenue of $1 billion or more, with half (50.1 percent) coming from organizations with more than $5 billion in revenue. Additionally, Forbes Insights and Deloitte Global conducted one-on-one interviews with global industry leaders and academics.