What can aspiring Industry 4.0 organizations learn from born-digital businesses?

All the technological innovation in the world will struggle to deliver the impact an organization aspires to without the people surrounding it to put the right processes in place, make the right decisions and exercise the best judgment from the wealth of data available and, ultimately, push performance in the right direction.

Even with the finest digitally driven minds around the table, the success or failure of any major transformation program relies on much more than technical skills alone. A positive culture, values-based leadership, and company-wide collaboration - supported by an authentically-articulated purpose - will provide the impetus and sustainability for your human capital to excel.

With a program of significant digital transformation on the horizon for organizations moving towards Industry 4.0, it’s useful to look at born-digital companies for many of their success factors in getting the most from their existing talent, attracting the very best new hires, and building an organizational culture supported by people processes that delivers the most engaging, motivating environment for transformation efforts to be realized and sustained.

Here are four key takeaways to consider:

1. Purpose and values must be a priority

Leaders must capture the energy and imagination of their employees through their communications and visible actions, the alignment of their behaviors and decisions with their values, and their ability to put the purpose and mission of the organization into their own words. In a digital-focused environment, where the war for talent intensifies by the day, your people should be in no doubt about the direction you’re going in, the all-important why, and how you’re going to get there. Through leadership and culture development, the values and behaviors of an organization can be aligned with its purpose and mission, allowing the senior team to model and reinforce that to the rest of the organization.

2. The digital organization of the future is very flat

Very few organizational layers allow businesses to place a heavy emphasis on free-flowing communication and, especially, on omni-directional feedback. This doesn’t only mean feedback between layers or between manager and employee. It includes feedback from clients and customers, too – for example in product development and beta testing. A flatter structure facilitates communication up, down and sideways, including feedback, and importantly performance feedback to aid employee development.

3. Career pathing is critical

All professionals crave the feedback mentioned above plus career development, which is especially true among the younger employees that digitally focused organizations need to attract and retain. Even though compensation will always be an important factor, this demographic craves feedback on which to base the development of both themselves and their careers. Most younger professionals today - especially those drawn to jobs in born-digital companies - are active learners inherently impatient with their careers, and so they need - even demand - to see clear paths ahead for them if they remain with the organization. They understand well the rapidity of change, and they know intuitively that their own skill development must keep pace. Therefore, best practice dictates that every professional have a development and career plan and receive frequent and actionable performance feedback. 

4. Organizational structure needs to tie to strategy

There is a desired velocity behind Industry 4.0 activity, organizational alignment, and return on technological investment. For example, private equity will be seeking a minimum of single digit multiples in value creation in just three to four years. This makes getting the structure that’s going to facilitate the growth strategy for the organization absolutely critical and is why deploying, for example, organizational health diagnostics from the outset can identify how a business can move at pace from good to great and create the roadmap to get there. An important role, which can fit into any evolved organizational structure is that of the CPO (Chief People Officer) or CHRO (Chief Human Resources Officer). In fact, our 2021 Private Equity Leadership Survey revealed that one of the fastest-growing jobs at PE firms is human capital partner - a role often filled by former CHROs and organizational development and talent management experts. The differentiator roles of this kind can bring is the elevation of people strategy into the conversation. When a business is talking about transforming and expanding, a people strategy has to connect directly to that, and a deeply-qualified CPO or CHRO should be able to work with management and the board to develop - and sustain - a highly functional and pertinent organizational structure as the company grows.

View previous articles from the series here: