How and under what conditions we work is something that has been changing throughout the history of humanity. New tools, new materials, new possibilities, and new social norms have all contributed to change.
Change has at times gone more slowly, at times faster, and at times it has come very abruptly – just think of the invention of the steam engine, the Industrial Revolution which it triggered about 150 years ago, and the fundamental change in the world of work which took place in those times. At present, we are once again at the start – or rather, already in the midst – of such a phase of massive change.
In a lecture on digitalization and new working environments in October 2016, Professor Wilhelm Bauer of the Fraunhofer Institute for Industrial Engineering IAO in Stuttgart, Germany, identified a whole series of factors which will have a significant impact on the world of work: He cited demographic change, digitalization, internationalization and new competitors as external challenges facing companies; and management and culture, the “flexibilization” of work, skills and diversity as internal challenges.
And just one of these factors alone – digitalization – would be enough to make work look very different in the future than it does today. The changes commonly referred to under the overarching term “Industry 4.0” offer companies many new opportunities:
- New products, services and business models are possible.
- Processes can be made faster and more efficient, and ultimately lead to products of higher quality.
- Work can be structured more flexibly, with less hard physical labor required.
At the same time, digitalization creates entirely new challenges:
- Business models which functioned well over a long period of time are being replaced; an example with which everyone is familiar is the music industry. Today, current hits are usually streamed, and as a rule are no longer purchased on physical recording media. This is also giving rise to new competitors. And companies have become vulnerable in a new way – namely to cybercrime. As the saying goes, there are two types of companies: Those that have been already been the target of cyberattacks, and those that just don’t know they’ve been hit.
- More flexible processes are often also more complex. Managing them calls for new skills on the employees’ part, and for new tools as well.
- Employees can only continue to fulfill rapidly and drastically changing job profiles and requirements by consistently developing their skills and participating in advanced training. Finding suitable applicants for job openings is becoming increasingly challenging.
“Business models which functioned well over a long period of time are being replaced through the digitalization; an example with which everyone is familiar is the music industry.”
At Merck we are responding to these changes by focusing on three areas:
- We are working intensively on our leadership culture and on how we organize our work. For example, in Germany we have introduced the highly successful work model “mywork@Merck”, which allows many of our employees to decide on a largely independent basis where they will work, and when. And at our Innovation Center, for example, we are testing out entirely new forms of collaboration. The opportunities concerning working hours have been already mentioned in a comment to my previous post. I’m going to elaborate on our experience with “mywork@Merck” soon.
- We are enhancing our technical infrastructure and the advanced training we provide to our employees. We have already made considerable progress on the road to the “digital workplace”. We are adjusting to the fact with the digitalization of work, many more employees than before will require IT and communication skills – and in a global company, they will often need them in English. And finally, we are making major investments in staff training and are adapting our advanced training programs. Our Merck University, for example, will now be offering a module on “Digitalization and Innovation” in cooperation with Stanford Business School. This topic will be the main subject in a future article at this place.
- We are preparing for the fact that with the digitalization of production processes, the amount of hard physical labor associated with manufacturing will steadily decline. As Merck continues to grow at an above-average rate, we will need more and more highly qualified employees – individuals who have either completed solid training such as that provided by the German dual vocational training system, or who hold university degrees.
Today, no one knows exactly how the world of work will develop in the coming years. The impact of the various factors which Professor Bauer identified in his lecture is simply too strong and too dynamic. But one thing is certain: We must address these trends together, shape them, take advantage of the opportunities and counteract the risks. I find that the “White Paper on Work 4.0”, which the German Federal Ministry of Labor and Social Affairs recently presented after an intensive process of dialogue and debate, makes an important contribution to this discussion.
By the way: The icons on top of the articles (i.e. “be empowering”) are examples of Merck’s leadership competencies. The changes in our working environment require a substantial adaptation of how we approach leadership and thus require new concepts on how leadership competencies are developed, get implemented and how a successful implementation is tracked. We adapted our competency model to these needs 18 months ago. More on this topic later.