Mohamed Kande is Vice Chairman and Advisory Leader, PwC U.S. His expertise spans the areas of operational strategy, technology development, mergers and acquisitions, and operations management. Consulting caught up with Kande to discuss how the Fourth Industrial Revolution was going to redefine the future of business and what PwC's role will be as it guides clients through this brave, new world. Traditional will not be effective in the future, so organizations need to realign their roles and strategies to meet the goals of the business, he says. The Fourth Industrial Revolution is going to force companies to re-imagine how they do nearly everything if they want to be successful in the future.
Consulting: So, lots of people have been talking about the Fourth Industrial Revolution. How do you and PwC define it?
Kande: For me when I think the Fourth Industrial Revolution I think about how the wall of physical assets is colliding with the digital wall—the Internet, wireless communications, etc. The revolution is the result of two different sides of business coming together and creating a massive amount of value. In this new environment, everything changes—you can not run a manufacturing plant, you can not build new products today without understanding the applications of these new technologies and how they will impact your business; how they will impact your customer. You can't think about new products today without thinking about how you will sell products to new customers. It's this bringing together of the physical and the digital worlds—that's what we mean when we say the Fourth Industrial Revolution. There are also connections that are created from it; the number of connections you are going to get in the transition from the physical to the digital world is going to increase exponentially. There are massive amounts of data moving around and that is creating brand new business models related to how that data will be used.
Consulting: We've heard a lot about digital disruption and technological transformations in consulting. Is it time to think bigger—should we be thinking more about the Fourth Industrial Revolution?
Kande: Yes; there are two areas where the Forth Industrial Revolution is impacting business. The first one is around new business models. With the Fourth Industrial Revolution, we are finding out that companies have to dramatically update their business models. Not only the basics of how to run the business, but how to make money, how they are going to get the product and services to their customers—all of this is going to be changing. Companies now have to think about the collision of the physical part of the business and the digital part—how do they think about the next generation of products and services; how do they build them in a very different way? That value chain has to be updated to take advantage of all the new tools that are coming out of the Fourth Industrial Revolution. And companies will have to rethink their supply chains; take 3-D printing, for instance: Maybe you no longer have spare parts built at a plant somewhere and then shipped, but rather, maybe you have them 'printed' where you need them. There are lots of implications; lots of things to think through. How do you sell a product—how do you sell a car, for instance—using only digital channels, not physical channels. The companies that are thinking about how to run their companies differently and how to sell to their customers differently are going to be the winners.
Consulting: And the second area where the Fourth Industrial Revolution is impacting business?
Kande: At the strategic level, companies will have to think about who will be the next generation of challengers they're going to face. That's where you start to get into business model innovation. Business model innovation creates the next category of challengers. Blockbuster, for example, got taken out by a company that it never saw coming. Netflix began mailing videos, and they completely changed the model and now look at where they are. The Fourth Industrial Revolution has completely accelerated the rise of new entrants that are leveraging the manifestations of the Fourth Industrial Revolution to create new business models and new ways of creating value for customers, new services, new products and even new industries.
Consulting: What about the human side—leadership—the executives running these companies?
Kande: Most business leaders of companies are either trained to lead in digital world or the physical world; very seldom do you see an executive who can do both. So, what will the next generation of leaders need to have from a capability standpoint? We spend a lot of time with companies' leadership trying to get them to think about these issues in a new way. What is the best way to run a company today? What will be the workforce of the future? How will they come up with the next generation of workers and leaders? So we have the transformation of the business, the transformation of the industry and the transformation of the workforce all being impacted. A lot of executives are struggling, and we spend a lot of time working with them to help them navigate the Fourth Industrial Revolution.
Consulting: Should they be focused more on the people side or the technology side?
Kande: They have to do both. If they focus only on the technology side they're missing a huge piece. That's why a lot of big technology transformations have failed. People not only give you the execution; they also give you the adoption. You need both. If you go with next-generation technology, you also need to make sure that the people who are interacting with that technology have the right skills or else it will not work.
Consulting: How would you characterize clients' mindset right now regarding this revolution?
Kande: I would say they are optimistic about the future. This change is good for most of them; it gives them the opportunity to re-invent themselves and come up with new models, but not all of them have the answer. They are willing but many of them don't know where to start—that's where PwC can help, of course.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.