Bringing humanity to work: Digital transformation and Industry 4.0

ImageRecently I wrote an idealised view of restoring humanity to work. Still at a high level, let's talk about it in the context of a couple of big trends right now.

Two areas of fascination for executives at the moment are “Digital Transformation” and “Industry 4.0”. These ideas look at the impact of technology on product and manufacturing respectively. What is often lost in these discussions are the work changes that they cause, and the wider social advances that are happening anyway which they align with. As digital transformation gives customers direct access to our systems, and as industry 4.0 increases automation, these have direct impacts on the people using the products and the people creating them. It calls for greater humanity.

Digital transformation means customers have much higher expectations of the experience using the product. This expectation is set by their experience using massive multi-billion-dollar companies like Google, Facebook, Webo, Alibaba, and Amazon (whose design/build resources we can’t hope to match), and by “smaller” agile companies like Twitter, Netflix, Uber, and Spotify (whose agility we had better learn to match pretty quickly).

Industry 4.0 and the internet of things mean higher levels of automation, which frees up our workforce. We can go in two directions: we can either reduce our staff numbers and create unemployment, or we can redirect those people to higher value work creating new opportunities for our organisations to grow in the future.

Digital Transformation and Industry 4.0 are two very different disruptions with different causes and different consequences, but they have one thing in common: to gain the maximum benefit from them, to succeed in them, and perhaps even to survive them, we must grow our organisation’s humanity.

The more that customers interact with machine systems instead of with humans, the more they want those systems to feel human, and the more that they want human value-add around them. This means that in order for our products to be successful, we must create a customer experience that deeply understands what it is to be human, and that provides empathetic humans to support it.

Industry 4.0 displaces manual workers who have less potential to add value in other ways. As automation becomes increasingly sophisticated, it also displaces knowledge workers, who are educated and can be used creatively. The immediate demand for humanity in Industry 4.0 is to embrace those knowledge workers: create a supportive and welcoming environment for them, and encourage and empower them to find new directions and products for the organisation. The longer term demand for humanity is to deal with the social disruption created by unemployment. If we do not protect and provide for those people and places impacted by social transformation, it will destabilise our society just as it has done a number of times in the past. We must share the wealth generated by automation to protect the benefits (and prosperity) we gained from it. [1]


What do we mean by rediscovering or restoring humanity? The Industrial Revolution drove thinking that regards people as resources, as another device in the system of machines. This thinking reached its peak with Scientific Management at the beginning of the 20th Century (“Taylorism”). Scientific Management creates great efficiency when mass-producing in stable environments, where people can be made to do the same transaction over and over at increasing levels of speed and quality. Fundamentally, the system is based on violence, on force of authority and power, which does not work in the modern world where so much work is knowledge-based and where our environment is constantly changing . (That constant change creates a complex environment, which requires whole new ways of thinking, which is a separate discussion. Along with restoration of humanity, it is the other massive driver to change how we work - it needs agility). If people are doing knowledge work, then they work collaboratively with others and they work inside their heads. You can't see it and you can't measure it. All you can see is the overall output of the group. This means you can no longer use force of authority to improve performance because you have less idea who the under-performing individuals are, and you can only create incentives for the group. As well, the way they work has to constantly adjust to changing conditions and demands, to be agile, so any observation is lagging anyway.

So, in order to get optimal performance and productivity out of knowledge workers, we must return to treating them as fellow humans instead of resources: with love, respect and collaboration. Maximum return from knowledge workers comes when we inspire, motivate, and invite them to do work with us that they want to do, and trust them to do it.

As well as automation, the second aspect of rediscovering humanity is the change in customer experience driven by digital transformation. We can no longer sell products to people in a transaction that ends when they pay. Every organisation now sells a service not a product, with an ongoing and direct engagement with the customer through technology. We no longer make to stock, selling through a long supply chain to faceless buyers who take whatever is on the shelves. Increasingly, they buy direct and they want a say. This means that the experience for the customer must be pleasant - they have to like you. The path to success is through customer loyalty. Probably the best example of this in the world is Apple. iPhones are not the best phones in the world and they are certainly not the best value for money, but that is not the consideration of their customer base. (Personally I think HTC make the best phones, and - because camera, weight, and price mean most to me - I think the Google Pixel 3a is the best phone in the world. For me. But most iPhone users never consider another brand).


This all comes together by saying that if you want your staff to work well and your customers to buy well, you must behave as if they are fellow human beings and not objects in a system. Both Digital Transformation and Industry 4.0 are driving us to a new work culture which is centred on humanity.

The world is already talking about Industry 5.0, and it revolves around humanity; higher value workers, creativity, human/machine interfaces… And customer experience (CX) is a dominant idea in product design for Digital Transformation.

But we want to go broader than this, to understand a more profound shift in culture which people have been talking about for 50 years (these things move slowly), and which is becoming more and more obvious around the world. There isn't a good word for it yet that we have found. The aspiration, the far off goal, is a higher social consciousness. There’s not a good word for that yet either, so we use "Teal", a light colour between green and blue, which was made popular by Frederic Laloux [2]. Teal is code for the highest form of social culture (so far), which makes three realisations or “breakthroughs”:

Self-organising. People work best in small autonomous teams with no one “in charge”. Work flows to the teams and people flow to the work. Staff have skills rather than roles. The organisational system works on peer relationships not hierarchies.

Wholeness. being true to ourselves, bringing our whole self to work (Maslow’s “self-actualisation”). We restore the unity between truth, goodness, and beauty.

Emergent[3] purpose. The organisation is organic, it grows. We are driven by a purpose and direction that emerges from the organisation.

That’s all very nice, but not very practical. How does it affect work right now? There is a lot of thinking and experimentation happening around that too, but once again there isn’t a good word for it yet. Lots of people try to use “Agile” but it much too heavy a load for a poor little word, so we say Human Systems Agility[4]. There are three key themes to the new ways of working:

Human: people, humanity, wholeness, culture, sharing, empathy, diversity, inclusiveness, egality, trust, integrity, authenticity, open, transparency, curiosity, learning, mastery, pride, empowerment, freedom, authorisation, servant manager, safety, wellbeing, health. [states]

Systems: customer, value, flow, feedback, quality, lean, streams, iteration, networks, complexity, chaos, emergence, antifragile, shift left, teams, organisation, collaboration, ritual, sharing, resilience, human error, holistic, data, science. [artefacts]

Agility: ambiguous, uncertain, iterate, increment, experiment, explore, observe, adjust, fluid, organic, improve, curious, embrace failure, fail fast, small, granular, simplify, flexible, pragmatic. [actions/adjectives]

These ideas aren’t new. Some are a century old. Most are decades old. What is new is the synergy, the coalescence, the synthesis of them all. Especially, what is new is their increasing adoption and impact, the wave that is building, the renaissance.

This is what comes after Digital Transformation and Industry 4.0 at work: Human Systems Agility. In fact, it doesn’t come after them, it enables them. Digital Transformation and Industry 4.0 don’t lead to Human Systems Agility later. You need Human Systems Agility for them to succeed. As you try to achieve Digital Transformation and/or Industry 4.0, you will uncover this need for greater humanity.


[2] Reinventing Organizations, Frederic Laloux (2014)

[3] Laloux uses the word “Evolutionary”, but evolution is a complicated concept that often leads us astray when thinking about organisations.

[4] New Ways of Thinking, Teal Unicorn

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