A few months ago, my son received a new cell phone. I watched as he excitedly worked through the new features and programs, customising his phone to his personal preferences. A few hours later, I asked him how he liked his phone and he was eager to show me all the new apps he had downloaded onto his phone. I then asked him if he had read through the terms and conditions of each of the apps and he replied, “No, all my friends have got those apps and they are cool.”
This raised the question in my mind: Does the excitement about new technology diminish our fear of risk, or does our lack of understanding mean we don’t ask questions out of fear of seeming stupid?
So over the last few months I have made a conscious effort to ask my clients and students (from junior management to executives) the same question. I was utterly surprised to find that out of a room full of people maybe one or two had read some of the terms and conditions. I found this quite astonishing considering the amount of information that we entrust to our smart phones today, including emails, Word documents, WhatsApp messages and the like. Even the brightest and most experienced business people were ignorant of any risk or chose to ignore it. Either way, this was a disturbing finding.
At the launch of the King IV report, one of the international panel discussions highlighted the fall from grace of a well-known international bank. Yet if you look at the quality of its board, it was impeccable in terms of credentials and business experience. So what went wrong? Is business experience enough to navigate this new world of business?
With the advances of artificial intelligence, big data and machine learning, do we have a clear understanding of the complexity of the Fourth Industrial Revolution that has led to Industry 4.0, or are we relying on the CIO and CRO to understand and highlight the potential risks?
This changing world of business is highlighted in the World Economic Forum Risk Report 2016, which states that crimes in cyberspace cost the global economy an estimated US$445 billion and that these numbers are rapidly growing. Furthermore, Gartner predicts that by 2020, there will be 20 billion devices connected to the internet as we begin the roll-out of 5G in some developing countries at anticipated speeds of 10 gigabytes per second plus. With all the changes in technology and ways we do business, we have never had more opportunities to thrive, grow and disrupt ‘business as usual’. The achievement of Salim Ismail’s “abundance based reality” has never been more achievable. But are we chasing innovation and growth at the expense of leaving the back door open to hackers to access our databases with all our customer and business-sensitive information, perhaps through our smart phones?
Sarah O’Connor raised some insights into this soft underbelly of technology in her article “Robots for recruitment raise some tricky issues”. She discussed Colin Lee’s PhD thesis, where he built a model where he could predict with 70% to 80% accuracy which candidates would be invited for an interview, avoiding human error and unconscious bias. But Lee acknowledges that human biases in the original recruitment decisions create potential biases in the algorithm such as gender, age and ethnicity that should be stripped out. On the surface it appears that this algorithm solves a business need of effective recruitment, but does it conflict with our constitutional rights and the Protection of Personal Information (POPI) Act? In a highly competitive environment with time pressures to perform, how easy would it have been to adopt this robot recruitment solution without understanding the unintended consequences of such a decision?
Have we learnt the lessons from Lehman Brothers, where even the top executives battled to explain the complexity of the instruments they sold to the market? With the growing threat of WikiLeaks and recent email hacking scandals at major global companies and the US Elections, are we feeling confident and competent to lead our companies into the Fourth Industrial Revolution? We are fighting our way through ever-increasing complexity and shortened time lines to make critical business decisions. But are we asking the right questions?
It has become an imperative for leaders to understand the lingo and dynamics of Industry 4.0 in order to lead their organisations in a responsible way to the “abundance based reality” that this 21st century offers.
Perhaps a starting point is to read the terms and conditions of the apps on your smart phone.
Keith de Swardt is a part-time faculty member at USB-ED specialising in strategy and leadership on the SMDP and MDP programmes. He is owner of a consulting and coaching company, member of the Institute of Directors in Southern Africa, and associate member of the Institute of Risk Management. Within his fields of expertise, strategy and leadership, he guides companies to leverage the strategic opportunities of the Fourth Industrial Revolution.