Corporate survival in the Fourth Industrial Revolution will be determined by CEOs

There is no longer a debate – we are living in disruptive times. Individuals, companies and nations are all grappling with what it will take to reinvent themselves and thrive in this new dawn. The Fourth Industrial Revolution (4IR) demands that companies have new strategies to compete – business as usual won’t cut it. What then will determine who wins and loses? What is the X factor that will guarantee businesses’ success or failure?

To answer this question, let’s take a walk down memory lane.

Blockbuster was once a flourishing video rental chain with over 9,000 stores in the US alone, over 84,000 employees worldwide, and more than 65 million registered customers. Today it no longer exists.

The video rental company held on tightly to a business model that no longer served its customers’ needs. Unknown to its executives, that left it vulnerable to competitors who would give customers greater value. John Antioco, then CEO of Blockbuster, arrogantly believed that continuing to charge “late return fees” was a sustainable business model. When the Netflix founders approached Blockbuster to buy them for only $50-million, the Blockbuster executive team laughed them off (as recounted by Netflix co-founder Marc Randolph in his book That Will Never Work).

Blockbuster fell because of one thing – leadership.

Blockbuster had a leadership team that felt it was too big to fail. They were arrogant, self-assured, comfortable and believed nothing could topple their empire. They didn’t keep their eye on new trends, scanning for competitors, and, most importantly, searching for new and improved ways of doing business. They were wrong.

The Blockbuster story does not stand alone. It is a similar tale to that of many Fortune 500 companies whose leaders were bent on not disrupting themselves, like Kodak, Nokia, Xerox, Yahoo and BlackBerry. Blockbuster is the story of yet another executive team not willing to reinvent its business and leverage technology to ensure longevity.

In the words of David Bowie, “The future belongs to those that can see it coming.”

The fate of companies does not lie in the hands of fierce competition, unpredictable markets, or even technology. Leadership will be the determinant of the future success of a company. The question is, will the CEO lead the organisation to navigate these disruptive times, or dig in their heels and choose not to embrace innovation and disrupt the business?

While the focus in many conferences and seminars discussing the Fourth Industrial Revolution is on technology, technology is the simple part. History has shown us time and time again that organisations’ responsiveness to the threats and opportunities brought by any new trends lies in the leadership’s ability to bring clarity and decisiveness as they lead into the future.

Deloitte’s latest Industry 4.0 Readiness Survey found that “leadership lack of vision” was the number one barrier to a successful 4IR strategy. Boards, shareholders and competition are forcing executives to articulate a digital strategy. Yet, it would seem few leadership teams have a conceptual understanding of how to begin a digital transformation journey, leveraging new technology, changing business models and ensuring the reskilling of their entire workforce. It would seem the average CEO is travelling the safer path of maintaining the status quo and waiting for their contract to end so they can cash in their share options.

For now, it’s business as usual.

Without intentional, bold leadership, companies will not be able to navigate the 4IR storm. Like Blockbuster, we will be telling the story of “what could have been”.

The fate of companies lies in the hands of its leaders. May audacious and courageous CEOs rise and lead in these disruptive times. May they not be afraid to innovate, create new business models and proactively reskill their workforce as they march into an unknown future. DM