Change management models need to be rethought. Change management is usually applied at the organisational level with a focus on controlling disruption and transitioning people towards a new modus operandi. There is need to broaden this context by tracing the implications of the fourth Industrial Revolution (4IR) from the global level to the individual. The 4IR will drastically alter the global environment, national competitiveness, organisations and consequently how people work. As such, change management must be considered across multiple dimensions and not just in the context of digitising an organisation. The change models of the future will not replace current models entirely but should integrate and augment them through systems thinking.
Global transformation and the fourth Industrial Revolution
The first Industrial Revolution (1IR) saw the mechanisation of manual work and the invention of the factory. The second Industrial Revolution (2IR), propelled by petroleum and electricity, further transformed manufacturing and globalisation. These transformations were not just technological but also economic and cultural with effects still being felt today.
The world is still adjusting to the 2IR in the midst of the ongoing Digital Revolution (3IR) and advent of a 4IR, which according to Professor Schwab, founder of the World Economic Forum (WEF), ‘is characterised by a range of new technologies that are fusing the physical, digital and biological worlds, impacting all disciplines, economies and industries, and even challenging ideas about what it means to be human’. Consequently, these ‘revolutions’ are intersecting into an exponential blur. Notwithstanding this awareness, the change management narrative has not focused on the global and national levels, but rather the narrow focus has been on disruption in the organisation.
Given the advances in data analytics, medical science, automation and agrotechnology, one must consider whether the 4IR will alleviate global issues of poverty, pollution and inequality, as well as how global effects cascade to nations, industries and individuals. The WEF puts forward two perspectives: (1) competitiveness is not a zero-sum game between countries — it is achievable for all countries and (2) there are deep divides between countries when it comes to current competitiveness — and the risk of further divergence. While the United Nations has begun to address some of these risks with its seventeen Sustainable Development Goals, this alone will not alleviate the predicted social tensions, ethical issues and job market segregation of the 4IR. Global leaders must collaboratively strategise to deal with the potential disruption and transition.
As the effects of the 4IR manifest globally, countries must be attentive to the new challenges. Trinidad and Tobago is neither a big influencer nor a major innovator at the global level. In so doing, we generally react to global policy and technological disruption as opposed to causing it. This lack of competitiveness is reflected in the 2018 revised WEF Global Competitiveness Index (GCI). Some innovation-related indices include Research and Development (R&D) Expenditures, Venture Capital Availability, Quality of Research Institutions and Growth of Innovative Companies in which we ranked 111, 112, 112 and 125 respectively out of 140 countries. These bottom 25th percentile rankings are alarming for a country that ranks in the top 50th percentile for GDP per capita and has a skilled workforce (49th) that is well subscribed to mobile devices (15th) and broadband (43rd).
The resulting dependency is interlinked with social issues such as crime, corruption, poor work ethic and reliance on subsidies. Apart from the major fuel subsidy, energy windfalls have cushioned other aspects of the economy including tertiary education, often in saturated areas of study, perhaps explaining why Trinidad and Tobago ranks 49th for ease of finding skilled employees. In the past, having a workforce with tertiary education sufficed, but innovation and critical thinking will supersede the knowledge economy in the 4IR, noting that our country’s GCI ranking for Critical Thinking in Teaching is 93/140.
Slow adoption of technology, failure to innovate, crime and corruption are interdependent, as such, addressing in isolation is not a sustainable solution. The antidote is culture transformation which is a systemic and viable approach to change and is the collective responsibility of government, corporations, educational institutions and individuals.
Local companies, small but not agile
According to J. Khadan in an Inter- American Development Bank 2017 publication, Are Oil and Gas Smothering the Private Sector in Trinidad and Tobago? the non-petroleum sector declined over 2001-2014 from 72 per cent of GDP to 62 per cent. In 2014, 69 per cent of firms were ‘only Importers’. Other sources indicate that energy accounted for 77 per cent of merchandise exports in 2017 but only employed 3 per cent of the workforce. This suggests that the majority of firms and by extension their employees are not contributing proportionately to the local economy and are not competing at the global level. Moreover, most of Trinidad and Tobago’s organisations are small to medium enterprises, rendering adoption of large scale technology difficult and almost infeasible. The alternative is to innovate to local scale and culture, however, Khadan suggests lack of funding and an unwillingness of firms to collaborate can impede this. Due to this inertia, change management dialogue has not been prolific locally. However, within recent times, large state and private sector companies have been reviewing their business models and digitising their processes. Consequently, more change management roles are being created to utilise the existing change management toolkit. Contemporary change management models propose a framework for managing employees’ reactions to a change initiative or activity. Typically, any of ADKAR, Kotter or Kubler-Ross models is used for framing the behavioural and psychological reactions of employees but does not address the issues at a systemic level. These models assume that the organisation is choosing the change initiative. This may no longer be realistic in the wake of the 4IR as global effects cascade to the organisation level and disrupt on many dimensions, and as such, a systems thinking approach is required. Systems thinking is generally underutilised in the business domain.
Systems thinking is a holistic approach which examines relationships amongst the components of a system, how interdependencies evolve over time, the patterns that emerge from interdependencies, and how they behave within the context of larger systems. Systems thinking differs from analytical thinking which deals with decomposing a domain into its parts and understanding each part separately. Examination of how the effects of the 4IR interrelate and cascade from the global to the national and the individual levels is an example of systems thinking at work. McKinsey’s 7s’ model and Peter Senge’s Fifth Discipline offer useful systems thinking perspectives advocating culture as a leverage point.
The systems thinking experts emphasise that organisational transformation is predicated on individual/personal transformation. Having a strong personal vision, aligning that vision to that of the organisation and directing one’s efforts cohesively towards that vision is the starting point. This requires self-awareness. Awareness of their inner mental model or thought process of how things work is critical, i.e., the individual’s deeply ingrained assumptions, generalisations and heuristics about the systems in which he/she exists. This model implicitly attracts the same old outcomes. As such, it is the individual’s responsibility to continuously calibrate his/her thinking in response to the changing environment and also recognise where his/her mental model also effects changes in the system in which he/she exists.
The individual must also look outward, for example, the WEF’s Future of Jobs report guides on how technological advancements are shaping the jobs and required skills of the 4IR. Jobs proposed to become less relevant include accountants, bank tellers and other jobs that are transactional in nature. Emerging demand is noted for data scientists, people and culture specialists, and organisational development specialists, i.e., transformational roles. In terms of skills, these roles require more critical thinking, active learning, learning strategies, creativity, originality and innovation. Additionally, the traditional, less prestigious fields such as farming and trade work will be revolutionised by the 4IR technology.
The dynamics of the 4IR should guide career and succession planning. Many jobs will require a combination of science, math, technology and humanities training, cognitive flexibility, learning agility and non-cognitive soft skills.
Collective responsibility and the ethics of change management
As the 4IR reveals itself, industry leaders must jointly consider the impact on the workforce in the near future and plan how to cushion the effects. Questions that need to be raised include: How will trends in renewable energy impact the local energy sector? What will be the knock-on effects in the financial and services sectors? Given the aging population in Trinidad and Tobago, how many people will be able to adopt the new skills required vs those who will be left jobless? Moreover, Trinidad and Tobago needs to resolve the mismatch of tertiary funding to the actual job market to ameliorate the shortage of certified tradesmen and agriculturalists. Not only do change management models need to consider systemic disruption, they also need to be deployed proactively and ethically as well.
Leaders of government, business and education have an obligation to collaborate on these issues and proactively develop strategies to transition the workforce. If the macro environment is not ready, then it’s a zero-sum game for all industries.