The Fourth Industrial Revolution Has Begun, and It’s Not Managed from the Corner Office

The fourth revolution of work has begun – how to manage people when work is changing?

Reetta Räty, 13.02.2018

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Interdependencies between work and time, work and place, and work and employment relationships are losing their grip. Change demands new type of management. “Managers need to demonstrate increased sensitivity and dialogue in order to see what works in different corporate cultures”, declares Hertta Vuorenmaa, researcher at Aalto University.

Startup entrepreneurs and public sector employees alike find themselves nodding in agreement."

When researcher Hertta Vuorenmaa talks about ways in which the fourth industrial revolution is changing the character of information-intensive work, business, managing people, and the work of leaders, the audience reacts in exactly the same way whether in Finland, Korea or Britain. Startup entrepreneurs and public sector employees alike find themselves nodding in agreement: Exactly! Rings true! Just like at our workplace!

The fourth industrial revolution is a combination of changes brought on by digitalization and globalization."

Changes taking place in the realm of work are at different stages depending on the industry, but certain basic trends can be seen in almost any white-collar job. The effect of work on time, place and employment relationships is under transition. Tell-tale signs can be largely seen on a practical level: abandoning clock cards and hourly billing, being able to catch up with a colleague in an Asian internet café via Skype, and a manager’s subordinates not necessarily being employed by the same company. People eagerly discuss the meaningfulness of work, and many rules are being rethought, as not everyone is in regular employment at the office on weekdays from nine to five.

Practical examples are however only small fragments of a much larger mindset and paradigm shift. The fourth industrial revolution is a combination of changes brought on by digitalization and globalization. Former revolutions were kicked into motion by factories, electricity and computers. Now large-scale, overlapping powers are at play, which don’t solely apply to work.

“It’s not about leading technical skills, but related emotions.”

Change is gradual, and even people at the same workplace are affected by various stages of change.

According to Hertta Vuorenmaa, the new situation requires special sensitivity from managers. General instructions cannot be given, as ways of working diversify.  Also employees of different generations need to be managed in different ways. For managers this means that instead of merely leading processes or perhaps the adoption of certain digital software or devices, they need to also manage emotions sparked by change.

The new situation requires special sensitivity from managers."

“It’s a question of managing people instead of organizations”, highlights Vuorenmaa.

As routines change, the importance of analysis becomes emphasized in a manager’s work:

“Managers needn’t lift a finger, if they don’t understand the operating context. They need to understand the character of the corporate culture and analyze what will work in the situation and what type of management is necessary.”

An understanding of the corporate culture also helps in choosing the changes that should be introduced first, and in explaining their connection with the strategy to everyone. For instance, uncertainty over new technology can result in fear and rejection.

“Some might refuse to use an iPad, if they don’t understand how and why it is used. Sensitive management takes this into consideration.”

“Corporate culture cannot be copied; it doesn’t transfer across”

Understanding the significance of corporate culture doesn’t help leadership alone, as one aspect of corporate culture is that its original source is difficult to pinpoint.

“Organizational culture has been searched in studies as if it was the Holy Grail”, says Hertta Vuorenmaa. “Can the culture be traced, can it be changed, does the culture own the company or vice versa…?”.

The significance of corporate culture can be illustrated through a few examples.

The corporate culture of Nike was admired for years, and more recently Netflix has risen as an exceptional example. Then why isn’t the world full of Nikes and Netflixes?

Corporate culture cannot be copied; it doesn’t transfer across.”

“Because corporate culture cannot be copied; it doesn’t transfer across.”

American, multinational manufacturer Lincoln Electric provides another type of example, whose business model and corporate culture have come under scrutiny in business schools around the world. Eight case studies on Lincoln Electric have been conducted at Harvard Business School alone.

“It has an almost barbaric management system: fast working pace, but a chance to earn well on the other hand. The culture is clearly communicated to employees, who are well aware of the rules of the game. It’s a type of corporate culture that doesn’t suit everybody, and 20 per cent of new employees quit”, explains Hertta Vuorenmaa.

South West Airlines is often mentioned as an example of a company where personnel take part in recruitment. The corporate culture is community-driven: employees become members of a large family.

“Naturally, in this context management is totally different than at Lincoln.”

Employee’s wish to a manager: see my input

Although corporate culture and the pace of work vary depending on the industry, among personnel of different ages and in different teams, management in the new era has some common denominators.

First of all, there’s no point in leading this new type of work from the corner office through top-down commands based on hierarchies and status. “Value managers thrive in the new era. Managers need to create the right mood and culture, demonstrate they understand the operating context, and adapt their management style accordingly.”

The work of managers becoming increasingly complex and difficult is another leadership-related feature. Hertta Vuorenmaa explains that work has only just begun to change, but the end result seems to be an increasingly heterogeneous reality, which requires paying attention to more and more areas. The feeling of an accelerating pace of work and changes creates pressure. In this new era, researchers and managers alike have more questions on their minds than answers.

Management should aim to provide employees with a feeling that they are seen."

The third feature has to do with the unchanging nature of human beings. Work and technology change, but humans stay pretty much the same. Vuorenmaa mentions a major study on occupational welfare in five different sectors. The conclusion was that regardless of the industry, management should aim to provide employees with a feeling that they are seen – that their input is appreciated.

“All of the researched sectors and people shared the same wish: ‘that I and my work are seen, that my supervisor sees me’. A sense of belonging continues to be extremely important, and has a direct impact on performance. A motivated employee who enjoys work has a completely different approach to what they do than someone who feels they are not seen and what they do makes no difference.”

Hertta Vuorenmaa concludes by saying that as work and the operating environment become increasingly complex, what people need to be offered becomes more simple: value management and a feeling that managers understand their employee’s work and its context.

Hertta Vuorenmaa is one of the instructors in Executive HR and AaltoJOKO® programs. In AaltoJOKO® program she is leading a Live Case about corporate culture.

Currently reading: Aalto Leaders' Insight: The Fourth Industrial Revolution Has Begun, and It’s Not Managed from the Corner Office

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