Cognitive Readiness & The Fourth Industrial Revolution

By: Sattar Bawany, Managing Director, EDA Asia Pacific & C-Suite Master Executive Coach

Digitization has significantly impacted organizations across all sectors and industries. In each case, the impact is a different one which makes it essential for companies to have a good understanding and view of what they face and how digitization will affect their company: which opportunities can be seized and which threats must be faced?

The impact of digital disruption has to be managed alongside the more general volatile, unpredictable, complex and ambiguous (what is collectively known as ‘VUCA’) operating conditions of recent years (Bawany, 2018).

Leaders are facing the almost overwhelming task of restoring confidence and respect in leadership and business. They are being called upon to guide organizations through times of turbulence and uncertainty, to show the way forward and to set an example. And all this in the face of an increasingly disruptive global economy and in a climate of cynicism and mistrust – tough economic and political circumstances by any standards.

We believe that leadership in the digital world is all about the ability to impact and influence your followers and stakeholders towards achieving the mission and objectives of the organization by effectively demonstrating  the next-generation leadership competencies such as cognitive readiness skills, critical thinking and emotional and social intelligence including empathy and relationship management.

Leading in the Fourth Industrial Revolution (Industry 4.0)

Professor Klaus Schwab, the Founder and Executive Chairman of the World Economic Forum (WEF), has published a book entitled The Fourth Industrial Revolution in which he describes how this fourth revolution is fundamentally different from the previous three, which were characterized mainly by advances in technology (Schwab, 2017).

Schwab defines the first three industrial revolutions as the transport and mechanical production revolution of the late 18th century; the mass production revolution of the late 19th century, and the computer revolution of the 1960s (See Figure 1).

The fourth industrial revolution or Industry 4.0 as it is commonly known, represents the combination of cyber-physical systems, the Internet of Things, and the Internet of Systems. In short, it is the idea of smart factories in which machines are augmented with web connectivity and connected to a system that can visualize the entire production chain and make decisions on its own. In this fourth revolution, a range of new technologies will evolve that combine the physical, digital and biological worlds. These new technologies will impact all disciplines, economies, and industries, and even challenge our ideas about what it means to be human.

Technological innovation is on the brink of fuelling momentous change throughout the global economy, generating great benefits and challenges, in equal measure. To thrive in this environment, Schwab argues, public-private research collaborations should increase, and should be structured towards building knowledge and human capital to the benefit of all.

There will be tremendous managerial leadership challenges, as the impact of technology and the disruption that comes will result in an overarching force, in which leaders would have little or no control at times. However, it is the role of leaders to guide their teams and to be mindful of these forces when making business decisions that would impact on the sustainability of their organizations. They should thus grasp the opportunity and power, in order to shape the Fourth Industrial Revolution and direct it toward a future that reflects the organization values and success.

Figure 1: The Evolution of the Industrial Revolution

To do this, however, leaders must develop a comprehensive and globally shared view of how technology is affecting the lives of their employees and at a macro level how it is reshaping the economic, social, cultural, and human environments. There has never been a time of greater promise, or one of greater potential peril. Today’s leaders and decision-makers, however, are too often trapped in traditional, linear thinking, or too absorbed by the multiple crises demanding their attention, to think strategically about the forces of disruption and innovation shaping their organization’s future.

Importance of Cognitive Readiness Competencies in IR 4.0

In our executive coaching engagements over recent years supporting senior leaders managing complex problems and decision making within their organization operating in a digital and highly disruptive business environment, we have found that those leaders who thrive are able to develop and demonstrate effectively the suite of cognitive readiness competencies.

Cognitive readiness can be viewed as part of the advanced thinking skills enabling leaders to confront whatever new and complex problems they might face. As stated earlier, cognitive readiness is the mental preparation that leaders develop so that they, and their teams, are prepared to face the ongoing dynamic, ill-defined, and unpredictable challenges in the digital, highly disruptive and VUCA-driven business environment.

Executive Development Associates (EDA) has identified the following 7 key cognitive readiness skills collectively known as Paragon7 (see Figure 2), which develop, enhance or sustain a leader’s ability to navigate successfully in this ‘new normal. Overall, heightened Cognitive Readiness allows leaders to maintain a better sense of self-control in stressful situations.

Figure 2: Paragon7 Elements of Cognitive Readiness Competencies

7 Cognitive Readiness Competencies:

1)    Mental Cognition: Recognize and regulate your thoughts and emotions

2)    Attentional Control: Manage and focus your attention

3)    Sensemaking: Connect the dots and see the bigger picture

4)    Intuition: Check your gut, but don’t let it rule your mind

5)    Problem Solving: Use analytical and creative methods to resolve a challenge

6)    Adaptability: Be willing and able to change, with shifting conditions

7)    Communication: Inspire others to action; Create fluid communication pathways

As digitization impacts the entire organization it also requires effective leadership at all levels to drive the digital strategy going forward. As digital transformation expands across the organization and the ‘war for talent’ continues, organizations need to consider a more structured approach to building a healthy leadership pipeline with the necessary capabilities to lead in the digital era. They can do this by placing potential leaders in positions that stretch them beyond their current competencies and skills, to coach them and support them on building new digital capabilities as rapidly as possible.

Though some traditional leadership capabilities remain critical to successfully lead in the digital era (e.g. creating and communicating a clear vision, motivating and empowering others, etc.), there are also new requirements for leaders at all levels of the organization. These demand a dynamic combination of a new mindset and behavior, digital knowledge, and skills that are critical to lead teams in the digital era.

About the Author:

Professor Sattar Bawany is the Managing Director & C-Suite Master Executive Coach with Executive Development Associates (EDA) in Asia Pacific. He is also the Chief Executive Officer of the Centre for Executive Education (CEE). EDA is the Strategic Partner of Centre for Executive Education (CEE) in offering a suite of Executive Development solutions in the Asia Pacific region.