The Fourth Industrial Revolution and the impact of AI on leadership

In 2018, a Deloitte survey polled more than 1,600 C-level executives across 19 countries—including 100 respondents from South Africa on their readiness to harness the changes associated with Industry 4.0.

South African executives expressed greater doubt about their organizations’ readiness to fully harness the changes associated with Industry 4.0 than the survey population at large. The report indicated that only 4% of executives in South Africa feel highly confident, compared with 14 percent of executives globally. Further, only 2 percent of South African executives are highly confident that they can act as stewards for their organizations during this time of change, compared with 33 percent of global executives

It is clear that not even leadership itself will be spared from the impact of AI, as a part of Industry 4.0. In fact, it is predicted that AI will supplant many aspects of the “hard” elements of leadership, the parts responsible for the raw cognitive processing of facts and information.

In an HBR article – January 2018, (As AI Makes More Decisions, the Nature of Leadership Will Change) Chamorro-Premuzic, Wade and Jordan predicted that AI will lead to greater emphasis and need for the “soft” elements of leadership — the personality traits, attitudes and behaviors required for individuals to help others achieve a common goal.

It is easy for leaders to feel threatened by AI, robotics and machine learning. However, AI cannot emulate the soft elements of leadership. This is where the responsibility of leadership lies. AI is not only changing the way we do business. It’s changing the way we lead.

In another HBR article, (The Rise of AI Makes Emotional Intelligence More Important) authors Megan Beck and Barry Libert make the point that we’ve already accepted that automated systems can do tasks such as data gathering and analysis efficiently. “A human being, however, is still best suited to jobs like spurring the leadership team to action, avoiding political hot buttons, and identifying savvy individuals to lead change.”

Consulting firm McKinsey & Company has been studying the areas in which machines are best suited to replace humans. What kind of work is most adaptable to automation? Their findings suggest technical and tactical as opposed to strategic thinking. This is because work that requires a high degree of imagination, creative analysis, and strategic thinking is more difficult to program. According to McKinsey: “The hardest activities to automate with currently available technologies are those that involve managing and developing people (9% automation potential) or that apply expertise to decision making, planning or creative work (18%).”

Computers are great at optimizing, but not so great at goal-setting or using common sense. This means leaders must leverage their human capabilities to differentiate themselves in the future. Indeed, according to Chamorro-Premuzic, Wade, and Jordan, 50 years of research suggests that personality traits, such as curiosity and emotional stability (EQ), are twice as important as IQ – the benchmark for reasoning capability – when it comes to leadership effectiveness.

As AI gains momentum, we need to re-think the essence of effective leadership. Domain experience and authority are becoming less important. Engagement, humility, creativity, initiative, adaptability, and vision will play key roles in morale-boosting and industry-building leadership.

How are you and your company preparing future leaders for Industry 4.0? How are you preparing yourself and your industry for this change in leadership style?

In my new book – “The Transformational Leader: how to build a competitive advantage by inspiring, motivating and engaging teams in times of increasing uncertainty”, I discuss the Future of Leadership in a technology dominated world. As leaders, we need to stop sitting on the “technology fence”. We need to get connected, involved and invested. If not, technology will become an existential threat at a scale we do not even understand today.

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