Folie3The abbreviation „4.0“ currently seems to be just as trendy as the keyword „digitization“. In fact, it was shaped by the German Federal Government, which – a few years ago – submitted a working paper on „Industry 4.0“. What is at stake is a „fourth industrial revolution“.

Why 4.0?

We speak of industrial revolutions when an innovation (such as the steam engine) brings about revolutionary change in the industrial and professional world. On the one hand, it is about the way, how is managed or produced. On the other hand, it’s about how people work in this world. For this reason, KAOS Coaching & Development uses the term „Work 4.0„.

1.0 to 4.0

It is worth taking a look at the revolutionary industrial developments of the past and the accompanying changes in working environments. So we can understand where we are today. And only in this way can we build on it in a sensible way.

1. Industrialization: steam engine and introduction of wage labor

There were occasional employment relationships in the Middle Ages in which employees performed work for a living wage. However, the real reason for wage labor (as we know it today) coincides with the industrial revolution of the late 18th century, which was marked by a multitude of technical achievements, notably the invention of the steam engine. In the UK, the then important textile industry was revolutionized by innovations such as the spinning machine. Steam locomotives and the introduction of the railway changed the transport of goods significantly, the mining industry boomed. The society changed from an agrarian to an industrial society. Today’s industrialized countries experienced a population explosion. Manual labor was mechanized, factories emerged. With the liberation of peasants came a free choice of residence which led to rural exodus or urbanization of society. The factory system of industrialization massively changed the conditions of employment and brought social questions: large parts of the population, mainly peasants and artisans, became impoverished under the changed economic conditions. Working conditions in the factories were sometimes catastrophic until the introduction of social legislation at the end of the 19th century, and the gap between capital owners and wage earners was enormous.

The concept of wage labor and our social security system date back to this period – as well as the separation of place of residence and place of work. The concept „Home Office“ is much older than most suspect!

2. mass production and assembly line work

At the beginning of the 20th century, Henry Ford (1863-1947) established industrial mass production. It is based on the so-called „Taylorism„, named after the American Frederick Winslow Taylor (1856 – 1915). This suggested analyzing work processes in detail and then assigning each worker a detailed and standardized process step (horizontal specialization). For each process step, the staff was selected individually and optimally according to the (physical and mental) requirements. In addition, financial incentives were introduced. Hand and brain work should be strictly separated, so the workers‘ performing activities are distinguished from the managerial monitoring activity (vertical specialization). Henry Ford linked these principles to the assembly line, thereby laying the foundation for modern mass production. Production gains and efficiency gains were enormous. Ford was able to decouple the machine running times from the individual working hours through shift work. The working conditions changed considerably. However, monotonous work processes and great physical and psychological stress led to a high rate of sick leave.

The issues „stress“, „depression“ and „burn out“ are by no means products of the 21st century, but well-known phenomena of different working environments. From this era we get our 8-hour days, or 9-to-5 jobs, as well as the concept of management. Its is a question to be discussed if performance should still be measured by time spent at a workplace or actually by the achievement of results.

3. Automation and emergence of the service society

A major disadvantage of Ford’s production system was the lack of flexibility. Ford put it in a nutshell: „Any customer can have a car painted any color that he wants so long as it is black.“ That changed with the third industrial revolution of the 1970s: automation. Monotonous and rigid production processes were increasingly taken over by machines, manufacturing systems made more flexible. Automation has become indispensable in modern manufacturing companies. An important result for automated production is the achievement and adherence to quality standards; the increasing development in the field of IT has in some cases led machines to outstrip manpower by far. For the worker, automation means the elimination of monotonous routine activities.

With the introduction of PCs, not only manual but also increasingly office work has been automated. Another trend brought about by the third industrial revolution is the development of countries into „knowledge societies“. This means that jobs shift from the manufacturing sector to the service sector. This can also be seen as the end of the „industrial society“.

4. Digitization and the new knowledge workers

The emergence of the knowledge society is accompanied by a social change of values. The new knowledge workers are self-confident and demanding – and due to the shortage of skilled workers they are in great demand today. Companies have to come up with something to win the competition for the best minds. This is exacerbated by the demographic change: In Germany, the total population is steadily shrinking, and with it the working-age population.

Surveys show that a safe workplace remains the top priority. At the same time, people do not want work to set the pace. Flexibility is needed. This applies both to daily working hours and flexible employment models. The question of reconciling family and work is urgent. In times of skill shortages, it is hard to believe that highly skilled women still have a hard time getting a foot in the door when they return to work after a baby break. The increase in the elderly population also brings into play the important aspect of caring for relatives. The answers from politics and businesses to these questions have been frighteningly thin.

The integration of migrants – be they refugees or others with a different residence permit – poses completely new challenges not only for companies but for society as a whole. Many companies hope to be able to compensate for the shortage of skilled workers through immigration. This does not happen automatically – we need concepts that prepare, sensitize and strengthen both sides – meaning old and new employees.

The world moves faster, more dynamic and more complex, competition becomes global. Anyone who wants to survive on the market must face up to these challenges. The buzzword is „innovation“. Innovations are nothing new. That’s how Henry Ford is credited with quoting „If I asked people what they wanted, they would have said faster horses.“ But in the modern age,  one innovation seems to be  chasing the next. The combination of digitization and globalization gives innovations a whole new dynamic. Impressive examples of „disruptive innovations“ were provided by Steve Jobs with Apple. He proved that a company’s innovation can push established large corporations and long-standing market leaders aside. The iPod conquered the music market – so far taken by the Sony Walkman ; the iPhone almost drove global mobile leader Nokia bankrupt. Today, the smartphone is an integral part of our everyday lives.

Apple and Google are probably the most prominent examples of the paradigm shift in our economic order: it is no longer determined by size alone but by innovation. Defending current status is no longer sufficient if a company wants to remain in the market in the future. Of course, innovative inventions have displaced products and possibly entire companies from the market in the past. The steamship has replaced the sailing ships and cars the horse-drawn carriage. However, digital innovation often requires relatively little start-up capital and investment. That makes it fast.

Work 4.0 holds opportunities and risks – just like any revolution. Businesses need to innovate while building on existing resources. It’s about making change meaningful and holistic – it only works by motivating and engaging employees.

Rigid hierarchical processes have no place in the new world of work – and will not survive. That means paradigm shift on many levels:

  • flexible organizational processes and structures that take into account the enormous dynamics and complexity of the current environment
  • visionary and self-aware leadership that motivates employees, sets a clear direction and reacts flexibly to changes
  • competent employees who can contribute and develop individual strengths and potential
  • Room for creativity and innovation to enable the innovative power of the organization and its employees