Navigating Disruption A Leadership

Perspective- Breakout

Workforce Strategies Summit by Wegner CPAs

January 10th, 2019

What We Will Talk About Today(Continued)

1

• A set of transformational technologies are driving unprecedented change,

and you as leaders need to be ready.

• Readiness starts with a basic understanding of what these technologies

are and how they create this wave of change.

• Companies are at varying stages of preparation for the Great

Transformation. We will share a few thoughts on how to take the first or

the next steps

• We will go into a lot more detail on the last point now!

A Navigational Tool to Face Disruption

2

Preparation

Posture Opportunity

Basic

education on

technologies

and impacts

There is no Perfect Sequence

3

Organization A:

Largely unaware, in

exploration mode

Use cases to

illustrate the

potential Articulate

if/why/how to

play the game

Systematic

evaluation of

various

optionsClarified

posture

Stakeholder

analysis

Identification

of top

opportunities

Preparation

Posture Opportunity

Detailed plans

to ready the

organization

Integrated Game Plan

Organization B:

Aware and eager to get

started

Organization C:

Clear vision of how

to play

It Starts with

Understanding the

Opportunity

Opportunity needs integrated discussion

5

Preparation

Posture Opportunity

Value

Creation

Tech Reality

EnvironmentOther

Aspects

• Where in the value chain?

• Which Tech and why?

• Tech lifecycles?

• Platforms?

• Capacity for change?

• Pace of customer expectations?

• Competitive movement?

• Regulatory realities?

Mapping Digital Industry Dynamics

6

In which spaces do we

anticipate opportunity

and/or detect activity of

other players

Mapping Digital Industry Dynamics

7

In which spaces do we

anticipate opportunity and/or

detect activity of other

players

Physical space,

manufacturing

• Advanced Robotics

• Sensor technology and

connected machines

Industrial (R)evolutions 1.0 – 4.0

8

Industry 1.0

Mechanization through

Power Generation

(Strength)

Side effects

• Urbanization

• Entrepreneurial wealth

• Era of European

dominance

• Pollution

• etc.

Industrial (R)evolutions 1.0 – 4.0

9

Industry 2.0

Mass production along

assembly lines, powered

by electricity

(Coordination)

Side effects

• Management

techniques

• A new dimension of war

and post war prosperity

• U.S. prominence

• Environmental impact

• etc.

Industrial (R)evolutions 1.0 – 4.0

10

Industry 3.0

Automation and motion

control through IT

(Precision)

Side effects

• Digitization of work,

digitization of personal

life

• Disruption of power

structures and

industries

• The rise of Asia

• etc.

Industrial (R)evolutions 1.0 – 4.0

11

Industry 4.0

Connected intelligence,

transition into the

cognitive realm

Side effects

• ???

Manufacturing/Industrial Use Cases

12

• Sensors embedded in machines and equipment measure repetitions, temperature,

friction, sounds, or take images of critical components

• The information is analyzed and compared to patterns in various stages of operating

performance to indicate if/when maintenance/parts replacements are needed

Predictive

Maintenance

• GPS or radio frequency devices are embedded in expensive equipment (from airplanes

to containers) to create a (near) real time overview of where each peace of equipment

is, resulting in better utilization, lower losses, higher chance of asset recovery

• Blockchain tracking of raw materials, produce, etc.; sensors can track location but also

temperature or other conditions

Asset

Tracking

• With machines and materials having a digital representation and information about them

flowing in real time, production processes can be designed, planned, managed at a

much more granular level

• Analysis and optimization may leverage AI/Machine Learning to understand and address

complex multivariate constellations

Production

Optimization

Mapping Digital Industry Dynamics

13

In which spaces do we

anticipate opportunity and/or

detect activity of other

players

Physical space,

manufacturing

Operational

effectiveness

• Advanced Robotics

• Sensor technology and

connected machines

• Smart spaces

• Robotic process

automation (Admin)

Familiar Terms – Robotic Process Automation

14

RPA does Apply in Manufacturing

15

$700M Automotive Manufacturer used RPA to

automate a cumbersome paper based Accounts

Payable process:

• 18 AP personnel, 60,000 annual invoices

• 70% drop in cycle time

• 43% reduction in processing labor

Mapping Digital Industry Dynamics

16

Physical space,

manufacturingAnalytics,

cognitive

Emotional,

experiential

Operational

effectiveness

• Advanced Robotics

• Sensor technology and

connected machines

• Predictive, self-learning

models

• Decision support tools

• Customer engagement in

the digital/virtual space

• Mood based actions

• Smart spaces

• Robotic process

automation (Admin)

In which spaces do we

anticipate opportunity and/or

detect activity of other

players

Embrace or Fear?

17Source - http://www.vanityfair.com/news/2017/03/elon-musk-billion-dollar-crusade-to-stop-ai-space-x

Evolving Human Intelligence - Examples

18

Basic

Elements

Creativity

Emotional Intelligence

Consciousness

Identity/Sense of Self

Mapping Digital Industry Dynamics

19

In which spaces do we

anticipate opportunity and/or

detect activity of other

players

Physical space,

manufacturing

Logistics,

distribution

Analytics,

cognitive

Emotional,

experientialRisk, security,

fraud prevention

Operational

effectiveness

• Advanced Robotics

• Sensor technology and

connected machines

• Trusted supply chain

• Autonomous vehicles,

drones, etc.• Predictive, self-learning

models

• Decision support tools

• Customer engagement in

the digital/virtual space

• Mood based actions

• Biometric identification

• Secure transactions on

blockchain

• Smart spaces

• Robotic process

automation (Admin)

Declaring a Posture is a

Challenge for Many

Posture should a critical guidepost

21

Preparation

Posture Opportunity

Objectives

Collaboration

Risk

Appetite

Other

Aspects

• Survival?

• Differentiation?

• Efficiency?

• Customer experience?

• Go it alone?

• Consortia?

• Vendor tools?

• Go all in?

• Selective bets?

• Wait and see?

• Etc.

Exploring the Why

22

• Not missing the boat on technological change

• Responding to increasingly more challenging operating realities and

unsustainable cost structures

• Creating a competitive advantage and valuation differential (including

subsequent M&A optionality)

• Fostering a culture of innovation and change, injecting excitement and

ability to attract talent

• Enhancing the customer experience and deepening customer engagement

• Optimizing risk management capabilities

• Etc.

Enterprise Opportunities in Manufacturing

23

Strategic Chessboard - Examples

24

Go it alone

Build/seek

partnerships

Leverage

third party

capabilities

Utilize

standardized

solutions

Act ahead of

peers

Match peer

pace

Willingness

to lag

Mavericks

Leveraging Vendor

solutions

for Do-it-yourself

Disruption

Down-streaming

of Solutions

Industry

Consortia

Third party custom

Leader Consortia

Partner with

disruptors

Late Buy-in

A few Thoughts on

Preparation

The Why of Advancing AI Wisconsin (AAIW)

26

Without preparation, nothing else matters

27

Preparation

Posture Opportunity

Customers

Workforce

Partners

Other

Aspects

• Demanding vs. rejecting?

• Communication and

teaching?

• New forms of engaging?

• Transparent customers?

• Job descriptions,

competencies, skills?

• Sources of talent and

skills?

• Reskilling?

• Entirely new roles?

• Impact on the supply chain?

• New alliances, new enemies?

• Current and future technology

providers?

Audiences for Digital Transformation Education

28

Reskilling Strategic

Members of the workforce

seeking to update/upgrade

their skills and knowledge

(same career track)

Members of the workforce

being pushed into new

career tracks

Corporate and Business

leaders, Community

Influencers, Entrepreneurs,

etc.

• Reskilling will require new

formats and collaborations

between colleges and

employers

• Awareness building, dialogue

about disruption, jointly

shaping education approaches

Higher Education Key Challenges for Each Audience (2/2)

29

Members of the workforce

seeking to update/upgrade their

skills and knowledge (same

career track)

Members of the workforce being

pushed into new career tracks

Corporate and Business leaders,

Community Influencers,

Entrepreneurs, etc.

• How do we become the target destination (in an increasingly

diverse field of educational options) for these audiences?

• What formats of education do we need to offer?

• How can we anticipate the rebalancing across jobs in the workforce?

• How can we build transition pathways that may not exist today?

• How do we activate the dialogue around these topics (extending

the horizon of workforce needs/focus)?

• What role to we aspire to play?

Skills of the Future

30

The World Economic forum states that

65% of children entering primary school

today will ultimately end up working in jobs

that don’t yet exist. So, how do we prepare

students?

Ultimately, the most important skills will be

those which are uniquely human.

In the Future of Jobs report, the World

Economic Forum put forward the following

as top skills that will be required in the

future:

How well and how explicitly are

we creating these skills in our

Higher Education programs?

Robot-Proof – Higher Education in the Age of AI

31

Joseph E. Aoun, President Northeastern University

A “robot-proof” education, Aoun argues, is not concerned

solely with topping up students’ minds with high-octane

facts.

Rather, it calibrates them with a creative mindset and the

mental elasticity to invent, discover, or create something

valuable to society—a scientific proof, a hip-hop

recording, a web comic, a cure for cancer.

Aoun lays out the framework for a new discipline,

humanics, which builds on our innate strengths and

prepares students to compete in a labor market in which

smart machines work alongside human professionals.

The only certainty about the future is change.

Focus on experiential learning and life-long learning.

Data

Literacy

Technology

Literacy

Human

Literacy

… to manage the flow of big

data

… to know how “machines”

work

… to function as a human

being (the Humanities,

Communication and

Design)

Examples of Learning Platforms

32

Singularity

UniversityUdacity

Building a learning

community around

innovation, focus on

leaders, executives

Individual courses and

“nanodegrees” in cutting edge

technology topics; also enterprise

programs to reskill the workforce

eDX Coursera

Education marketplace

combining online courses

from world class

institutions

Leading institution consortium for

broad spectrum of online courses

and certificates

New Forces in Workforce Development/Education

33

New Technologies as Your Friend – Will You Accept Them?

34