Empty factories and increasingly autonomous machines: Those who only envisage the
modern working world in this nightmarish scenario are overlooking the diverse possibilities and opportunities that digitalization offers companies and their employees. The chemical industry is getting to grips with this subject right now.
Text: Thomas Luther
Digitalization is making work more flexible and creative,” says Professor Christoph Meinel, director and CEO of the Hasso Plattner Institute. “There is huge upheaval in the working world,” writes the former IG Metall boss Detlef Wetzel in his book Arbeit 4.0 (“Work 4.0”). “Digitalization is challenging, but it also presents us with great opportunities,” says a convinced Matthias Zachert, CEO of Lanxess. This year he will invest more money than ever before in new technologies and processes in order to turn the
Cologne-based specialty chemicals company into a digital trailblazer. Three assessments from three experts from very different backgrounds, but their outlook is similar. And all three come to virtually the same conclusion: The digital transformation process will permanently change the industrial working world, indeed revolutionize it.
The disruption already evident in some sectors, such as retail, will continue. Markets and industries will change dynamically – also driven by demographic change and further globalization. This general finding is nothing new. However, it is becoming increasingly clear how much the growing use of digital technology is revolutionizing existing processes and changing present structures. The focus thus far has been on the reorganization of work and the change in individuals’ activities. Which new and old qualifications will people have to possess in the digital future in order to do their jobs? What new kinds of interaction will there be between individual workers, teams, and departments? According to a study conducted by the University of St. Gallen, the future working world will predominantly be characterized by networks. Rigid organizational structures will be increasingly replaced by flexible, interdisciplinary teams.
In simple terms, there will be a tendency for companies to cut back their vertical manufacturing operation and increasingly diversify their processes in order to share them with both internal and external cooperation partners. “Work in itself will fundamentally change as a result of digitalization,” asserts Ravin Jusuthasan, managing director at Towers Willis Watson. “Traditional management and organizational structures within companies will dissolve; work will become disaggregated into dispersed tasks that will be processed both internally and externally.”
The end of hierarchies
According to the employment market researchers and digitalization experts from St. Gallen, digital skills will become a key qualification in such an environment. Employees’ individual jobs and activities will be freed from existing fixed structures. Instead, those employees will be flexibly organized and used according to their qualifications. Hierarchies will break down as a result. The focus will then shift to a close, interdisciplinary, and interdepartmental form of cooperation. Structures and processes will no longer be set by managers, but by IT systems with artificial intelligence. According to the scientists, agile management will thus become a success factor even more than was previously the case.
For individual employees, this means that permanent appointments will become less important. In line with their qualifications, employees will in the future join project- based teams – possibly on a freelance or small business basis – which in turn will feed on various resources. Structured knowledge management will become a success factor within those teams – when working on projects, but also in order to accelerate the learning curve effects of other teams.
“The key aspect here will be that companies will significantly improve their interdepartmental thought processes and internal cooperation,” says Marco Wagner, consulting expert at T.A. Cook. Changes in the working world present staff-related challenges to traditional industry sectors, such as the chemical industry, in particular. The foremost challenge is the skills shortage. According to a study published last summer by the Basel-based research institute Prognos, this skills shortage is set to get much worse by 2040. In the chemical industry alone, 7,500 skilled workers on average are set to retire each year by 2025, increasing the risk of a brain drain here and elsewhere, with the associated loss of knowledge and expertise.
Big data becomes smart data
Digitalization requires this staff-related transition process to be managed, using means such as flexible transition arrangements and employment relationships. That’s firstly because demographic change will make it ever more difficult to attract career starters who in turn will take years to train. Secondly, attracting new employees who possess digital qualifications and the right mindset for the future approach to work will be a success factor in terms of organizing processes actively and efficiently. Soon, it will increasingly be a case of not only analyzing an ever-growing amount of data and information, but also drawing the right conclusions and action guidelines from it and then communicating that within the company.
Big data is becoming smart data. As a result, the requirements and qualification profile for each employee will change on a case-by-case basis. There will be a move away from focused expertise in individual technical disciplines towards a broader set of skills that give employees expertise in a number of different areas. One way of plugging the staff gap is to mobilize more female workers than has previously been the case – particularly in industry sectors and countries where this has been overlooked until now for traditional reasons. “Women often possess very good communication skills, making them suitable for many jobs and tasks in the digital world of work,” says T.A. Cook expert Wagner.
From a global perspective too, a strained employment market means companies will also have to offer their employees greater opportunities to shape an individual work-life balance, for example, with sabbaticals and flexible part-time models. Only by doing so will they also remain attractive to international skilled professionals. Against this backdrop, the implementation of knowledge management is already fundamentally important. It will be essential for companies to systematically secure the immaterial asset otherwise known as employees’ digital media expertise – such as blogs, wikis, tutorials, or podcasts – and manage the transition process. Companies should also learn lessons from the impending demographic change and keep their organizational structures and production processes flexible to make them less dependent in future on individual employees’ knowledge. Above all else, they should prevent employees in key posts from being able to accumulate knowledge to such an extent that they ultimately have the monopoly on it.
New knowledge, new values
The aforementioned flat organizational structures will also help in this regard. In a modern leadership and management culture that functions with few tiers, employees have a greater incentive to devise and contribute their own ideas. Companies wishing to press ahead with their digitalization strategy and remain agile therefore need to come up with answers as to how responsibility can be delegated and how employees can be involved in management decisions, even in large units.
Such changes will undoubtedly present great challenges to traditionally minded managers in all industries. By contrast, the required acquisition of digital and technical expertise is comparatively straightforward to achieve. Acquiring new knowledge requires time and patience. Embracing new values, however, requires a considerable amount of conviction. Or to put it another way: Almost anyone can master digital technology. On the other hand, digital management is much more difficult.