To lead individual employees and teams through such a process requires understanding of the personalities of followers at the cognitive, conative, and emotional intelligence levels. Leadership deals with leaders, followers, and situations. An organisation’s situation is pervasively influenced by the economy in which it functions (such as the current Industry 4.0), and the associated disruptive key enabling technologies (KETs) and organisational forms.
The KETs have a profound influence on operating technologies utilised in processes, and information technologies utilised in the infrastructure of the processes. This underlines the importance of organisations having on board sound strategic analysis, strategic development and strategy implementation policies and practices in their quest to advance dynamic capability.
Organisational transformation in the Industry 4.0 economy cuts across four strategic dimensions, i.e. behavioural, structural, operational, and digital. These deliver attitude and behaviour changes through vision, mission and value systems, organisational structural change in response to customer expectations in the marketplace, and relationship requirements such as open innovation virtual networks of partners. Moreover, operations and business system changes aim to create improved organisational processes. Digital transformation leverages technology for strategically planned changes in organisations with the aim of staying relevant in a competitive marketplace.
‘Digitisation’ is best described as the transitioning of physical records to analogue, which are then stored by employees and customers, transposed into usable data points by computers, and made accessible in real time to users anytime, anywhere. ‘Digitalisation’ is the interaction between business and clients using technology as the means of communication and interaction. Digitalisation cannot be achieved without digitisation. ‘Digital transformation’ is defined as organisational strategies that reshape the way people, processes and systems are used to enhance employee and business performance while serving customer needs.
Accordingly, digital transformation is about the use of KETs to interact and communicate with associates to develop and enhance the organisation’s products, services and processes, and to ensure product delivery in line with the strategic intent of the organisation. It enhances the interaction between centres of expertise through digital channels to deliver on organisation-wide initiatives and to help guide the development of the right strategy for the organisation’s needs and purpose in Industry 4.0.
Interestingly, PhD research at Cranefield College (Tanya Keller, 2022) reported that the financial services industry remains one of the top sectors in technology adoption, leading to it being one of the most innovative and technologically advanced areas of business. Benefits of digital transformation include an improved customer experience, higher productivity, faster time to market products, brand recognition, higher profitability, and highly responsive and agile teams. Digital transformation technologies assist with real-time tracking of transactions and performance monitoring.
For decades, organisations have been dealing with technology questions as to how to anticipate the future and how to recognise and understand global and industrial trends and react timeously. Major changes and developments were recognised regarding digitisation and its impact on reshaping industry, organisation downsizing, work decentralisation, and increasing self-employment. A further significant consequence of digitisation is the enhancement of possibilities of face-to-face interactive communication and participation globally, and working collaboratively.
By appropriately leveraging technology, practitioners have regarded digital transformation not simply as the implementation of ad hoc projects or engaging modern technologies such as artificial intelligence (AI), but rather as an organisation-wide transformation effort to change the business into an agile, data-driven, responsive partner for customers. Unfortunately, inflexible departmental silos and a belief that transformation is someone else’s problem are key inhibitors to achieving a digitally mature organisation.
Digital maturity is achieved when the organisation’s operations are shaped around the correct digital tools. The push toward digital maturity can no longer wait for organisations that wish to remain sustainable in future. Digital maturity is about converting the organisation to compete effectively in the increasing digital ecosystem. Maturity requires more than simply implementing new technology, and must align strategy, workforce, culture, technology and structure, with the expectations of the customer, employees and virtual partners. Digital maturity should be seen as an ongoing process of adapting to a changing landscape. Hence, organisations require an effective digital transformation strategy to remain relevant.
Moreover, traditional bureaucratic organisations need to rapidly transform into virtual dynamic learning entities to remain competitive. It also means that leadership, management and governance need to progress to Industry 4.0 mindsets, behaviours and methods. In an article published in the PM World Journal, Steyn and Semolic (2018, May) assert that technological innovations continuously create new challenges and opportunities in product, service, process and organisational value chain design and development, and contend that these are extremely important strategic issues in the Industry 4.0 economy. The authors stress that opportunities need to be captured to create value through effective digital transformation and change.
The modern technologies at the centre of digital transformation have a significant influence on how the Industry 4.0 organisation is shaped, led, managed and governed. Consequently, organisations are compelled to abandon bureaucracy in favour of knowledge-based learning paradigms and structures. Human talent and the associated collective innovative skills are seen as the most important intangible assets of the organisation, and must continuously be better educated and skilled to cope with the dynamic situation.
Processes are structured cross-functionally and are programme-managed. Cross-functional processes incorporate collaborative virtual networks of partners to improve organisational effectiveness and efficiency, leading to much improved competitiveness and performance. Moreover, partnering boosts the creation of small and medium-sized enterprises and concomitant job creation. The resulting transformation and change hold profound benefits for organisations and society.
Professor Pieter G Steyn