Columns Paul Donkers

The fourth industrial revolution

What is the impact on your organization and what are you going to do?

Last winter the annual World Economic Forum in Davos addressed the fourth industrial revolution. And they did it with a very good reason.

What was it again?

1. The first industrial revolution was characterized by the transition from manual to machine-made goods. It started around 1750 in England.
2. The second Industrial Revolution, also known as the technological revolution, was a period of overall Industrial Revolution, which ran from the second half of the 19th century until World War I.
3. The third industrial revolution was characterized by digitizing, communications and computers, by which we were able to communicate much easier with each other around the world. This enabled businesses to globalize and ranges from the 1950's until recently.

We are now facing the beginning of the fourth industrial revolution. The impact of new technologies such as 3D printing, nano-technology, memory capacity of computers and new physical materials has transformational impact on whole industries. Where in the past we were used to getting comfortable with new technologies over decades; today, we see transformations happening within just a couple of years!

A whole range of industry sectors have been completely turned upside down by new disruptive revenue models in the last few years. The influence that AirBNB has, for instance, on the leisure sector can hardly be underestimated. Or the way in which young companies like Uber and Tesla, each in their own way, influence the way we go from point A to point B. Or think for a minute about the entire logistics sector which is now actively testing with the use of drones to take over their delivery.

The question is, what impact will the fourth industrial revolution have on your business? Will your revenue model be challenged? How do you assess the opportunities and risks? Have you developed scenarios to anticipate these changes? Is the influence of this new revolution not yet visible in your industry? Will you deliberately 'manage the decline', or do you start cannibalizing your own revenue before someone else does? You have to act strategically.

Obviously, you cannot jump on every new trend, but it is your responsibility, as the leadership of the company, to think about this new revolution. You must do the analysis and decide whether and how to deal with it. Hope is not a good strategy.

View the video trailer of the World Economic Forum on the fourth industrial revolution here..

Hope this helps

Paul Donkers

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ps. Strategy is essential for the future success of a company. At the same time we know from research that the major part of a business' success is achieved through the execution of the strategy. Our advice is for most organizations to spend about four days per year to work on the strategy with the leadership team. The rest of the year can be spent on strategy execution and the people who are making up the organization.