Page 59 - The Fourth Industrial Revolution

mentioned “customer-centricity” is one of these, with proponents such as

Nespresso focusing their efforts on front-line processes and empowering
staff to put the client first. Frugal business models use the opportunities
afforded by the interaction of digital, physical and human realms to open up
new forms of optimization such as efforts by Michelin to provide high-

quality services at low cost.

Data-powered business models create new revenue sources from their

access to valuable information on customers in a broader context and
increasingly rely on analytics and software intelligence to unlock insights.
“Open and liquid” companies position themselves as part of a fluid

ecosystem of value creation, while “Skynet” firms focus on automation,
becoming more prevalent in hazardous industries and locations. And there
are many examples of businesses pivoting towards business models that
focus on employing new technologies to make more efficient use of energy
and material flows, thereby preserving resources, lowering costs, and

having a positive impact on the environment (see Box B: Environmental
Renewal and Preservation).

These transformations mean that businesses will need to invest heavily in
cyber- and data-security systems to avoid direct disruption by criminals,
activists or unintentional failures in digital infrastructure. Estimates of the

total annual cost to business of cyber-attacks are of the order of magnitude
of $500 billion. The experiences of companies such as Sony Pictures,
TalkTalk, Target and Barclays indicate that losing control of sensitive
corporate and customer data has a material negative effect on share prices.
This accounts for why Bank of America Merrill Lynch estimates that the

cyber-security market will more than double from around $75 billion in
2015 to $170 billion by 2020, implying an annual growth rate of more than
15% for the industry in the coming five years. 38

Emerging operating models also mean that talent and culture have to be
rethought in light of new skill requirements and the need to attract and retain

the right sort of human capital. As data become central to both decision-
making and operating models across industries, workforces require new
skills, while processes need to be upgraded (for example, to take advantage
of the availability of real-time information) and cultures need to evolve.

As I mentioned, companies need to adapt to the concept of “talentism”. This

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