11

Growing the 01
digital economy
alongside
disruptions
Objectives
✓✓ Interpret the digital economy and different industrial revolutions in the
context of the organization and its people
✓✓ Understand disruption and outline key disruptions across industries and
the function of human resources
✓✓ Explore the impact on the future of work and the workforce with new
work models
✓✓ Understand why people are at the centre of the digital world

Overview of the digital economy

and the new industrial age
Going digital is no longer an option today, it is a must. Yes, it’s true that the
digital economy is shaping the aspects of society, including the way people
interact, the economic landscape, the future of work and business transfor-
mation, empowering them with fast-changing technologies.
The digital economy is the worldwide network of economic activities,
enterprise transactions and professional interactions that are enabled by in-
formation and communications technologies (Rouse and Pratt, 2017). The
term digital economy was first coined by Don Tapscott in his 1994 best-
selling book The Digital Economy: Promise and peril in the age of ­networked
intelligence (Tapscott, 1994).
12 Revolution

There are many thoughts on the digital economy around the world.
According to Nicholas Negroponte, founder of the Massachusetts Institute
of Technology’s Media Lab and author of the book Being Digital (Negroponte,
1995), the digital economy uses ‘bits instead of atoms’. According to Neelie
Kroes, Vice-President of the European Commission, ‘There is no sepa-
rate digital economy. We have an economy that is digital’ (European
Commission, 2014).
While for most of us as individuals and organizations we use technolo-
gies to simplify accomplishing existing tasks, mainly by becoming comput-
erized or in other words digitalized, the digital economy is more than that.
It is not simply using a computer to perform tasks that are traditionally
done manually.

Knowing the digital economy

The digital economy focuses on the opportunities and the need for organiza-
tions and workforces to use technologies to execute tasks better, faster and
often differently than before, with the aim of improving productivity and
efficiency. The digital economy uses these technologies to rework traditional
exchanges and enable new ones by adding value.
The digital economy also displays the shift from the third industrial revo-
lution to the fourth industrial revolution. The third industrial revolution,
also called the internet revolution, describes the developments that occurred
in the late 20th century with the shift from analogue electronics and me-
chanical devices to internet technologies. The fourth industrial revolution,
on the other hand, continues the trends in the digital revolution to further
connect the physical and cyber worlds through technology.
Klaus Schwab, founder and executive chairman of the World Economic
Forum, coined the phrase fourth industrial revolution as ‘a fusion of technolo-
gies that is softening the lines between the physical, digital, and biological
spheres’; a progress defined by ‘speed, scope, and systems impact’ unlike any-
thing ever seen before (Schwab, 2016). The fourth industrial revolution will
likely have radical implications on almost every aspect of daily life, affecting
how workforces interact with technology and transforming how work is done.
The fourth industrial revolution is sometimes described as an extensive
pattern of change that is visible in front of us but arriving at a pace that
hardly gives us time to get prepared. While some organizations and people
are ready to face the challenge and take advantage of its impacts and op-
portunities, others do not even know what’s going on.
 Growing the Digital Economy alongside Disruptions 13

Industry 4.0 is an alternative term for fourth industrial revolution and it

is important to understand because it doesn’t just affect manufacturers, al-
though many understand it in that way; it can impact all of us. The main
aim of the fourth industrial revolution is to enable business leaders to visual-
ize the new ways that could affect their worlds, with higher productivity,
lower risks and an increase in business growth.
There has been a lot of discussion about whether it is a fourth industrial
revolution or an extension of the third one, but most people agree by now
that we have arrived at the start of a new phase; that it is the digital revolu-
tion and connecting the human with the cyber world. When we see all the
changes that are taking place, we realize we are in a new era of industrial
revolution.
The marriage of these two different worlds has start affecting the experi-
ences and interactions in an organization through their customers, consum-
ers, employees and other business partners, so it challenges and empowers
both workforce and customers.

Journey of the industrial revolutions

If we look at Figure 1.1, we see there are mainly three major industrial revo-
lutions that have taken place throughout history thus far. The first industrial
revolution was the mechanical revolution, centred on the production of
equipment powered and driven by water and steam, and a new type of en-
ergy that thrust forward all processes, the development of railroads and the
acceleration of economic, human and material exchanges. The first mechan-
ical looms were introduced in 1784, a revolution that replaced agriculture
with industry as the foundation of the economic structure of society.

Figure 1.1 Four industrial revolutions

1.0 2.0 3.0 4.0

Mechanical Electrical Internet Digital

Mechanization,
Mass production Computer and Cyber-physical
steam and water
and electricity automation systems
power

1784 1870 1969 Today

14 Revolution

The second industrial revolution, which was related to electricity, happened

around 1870. The use of electrical energy and the division of labour enabled
mass production, and the development of the combustion engine, the growth
of the steel industry, chemical synthesis, the invention of the telegraph and
the telephone, also all happened during this phase. These were all made pos-
sible through research and capital structured around an economic and in-
dustrial model based on new large factories.
The third industrial revolution occurred in 1969. It witnessed the rise of
electronics, microprocessors and IT automated manufacturing, and then the
internet was launched. The internet revolution and its scalability added
more computers, information technology systems and, when handled cor-
rectly, achieved economies of scale. This new technology also led to develop-
ments such as space research and biotechnology.
The fourth industrial revolution is distinguishable from the third because
it is where humans meet the cyber world; where technology and people are
not distinct, not separate. Before we had a life of working with personal
computers, but today our devices and sensors are becoming an extension of
us, for example social media, our smart phones and even our wearables like
smartwatches. This fourth revolution is creating a new world in which we
humans are equally required to work with machines to ensure the future
of work.
Everything is integrated, customized and smart-automated, as this indus-
trial revolution automates complex tasks; it’s the age of the internet of
things, cloud computing and the rise of artificial intelligence. These increase
our capacity to introduce more innovations using what already exists in
artificial intelligence, powerful algorithms, cloud computing and many such
revolutions.
The vast majority of new innovations experienced over the last few years
has been driven by the consumer and is now changing organizations from
the inside. The impact of the new industrial revolution is greater than that
of previous ones, as they were empowering organizations; the current revo-
lution is empowering people and society along with industry.
The fourth industrial revolution will likely change how we make things,
but it could also affect how those things are moved, how customers interact
and the experiences they expect to have as they interact with organizations
and other people. The impact of this industrial revolution could also drive
transformations within the workforce. The fourth industrial revolution will
change not only what we do but also who we are. It will affect our identity,
role, responsibility, the way of leadership and our mindset.
 Growing the Digital Economy alongside Disruptions 15

The digital economy has initiated waves of disruption and, as a result,

many new organizations and new ways of work are emerging. Yet, many of
the organizations and industries have not been able to maximize their re-
turns from technological change; their operations have faced declining sales,
market share and even entire collapse (Deloitte Insights, 2018).
Humans must be proactive in shaping this disruption. This requires
global collaboration and a common view of how technology is reshaping
our economic, social, cultural and individual lives. Organizations should
start investing in disrupting their business models, ways of work and value
chains. If businesses cannot move to be smart, connected organizations, they
will soon fall behind and become extinct as time moves on.

Disruptions across industries and functions

One of the top buzzwords heard in today’s business world is the term dis­
ruption; and it is important to know what is behind this buzzword. This
concept was first used by Clayton Christensen of Harvard Business School
(Christensen, 2018), meaning a time when organizations that produce suc-
cessful but expensive products and services would be overtaken by newer
organizations who could bring much more economic, simpler and competi-
tive alternatives to the marketplace.
The attributes of disruptive businesses are mostly associated with lower
gross margins, smaller target markets and simpler products and services,
usually not emerging as attractive as existing solutions when compared with
conventional performance metrics. Typically, they displace other organiza-
tions moving upwards in the market, hence creating opportunities at the
bottom of the market for new disruptive innovations and players to emerge.
Table 1.1 shows some examples from the past and present of disruptive
innovations; the last three are typical examples of digital disruptions led by
some key players in the market. These innovations have disrupted old indus-
tries while at the same time giving rise to completely new ones. It is upside
down to the way brands are usually built, and we will see some examples
later in this section.
Disruptions have transformed the economics of society. It has connected
a distinctive paradox to the new generation of workforces and organiza-
tions. It has also emerged as the main challenge in most boardrooms across
industries around the world.
16 Revolution

Table 1.1 Some examples of disruptive innovations from the past and present

Disruptor Disruptee

Personal computers Mainframe and mini computers

Mini mills Integrated steel mills

Cellular phones Fixed line telephony

Digital music stores Physical discs

Online shops Retailers

Video streaming Cassettes and discs

In disruptive innovation, most of the new products and services evolve at

the bottom of a market, and, in most cases, although they provide a desira-
ble value proposition, they remain a low ended brand or have a poor reputa-
tion. However, due to lower costs, higher accessibility, or other benefits,
these products and services eventually become more appealing than their
peers within the industry.
This is in stark contrast to sustaining innovation, where the new creation
and moderations triggered by businesses existing in the upper market re-
main relevant to their customers. These innovations are valuable as well, but
in most cases, products and services developed along these lines are too
complicated, isolated or expensive to have any real lasting capability. In
general, consumers look to less expensive, simpler and other radical alterna-
tives that meet their needs.
The demand for radical alternatives tends to attract more attention to
startups that are already gaining attention, while the disruptors are slowly
climbing the ladder, unnoticed by the industry leaders that they are going to
affect and replace. More on the different types of innovation can be found
in later chapters.

Examples of disruptions
These disruptions and related technology-driven changes are taking over the
way we do business, how we are working with each other and how organi-
zations endure. These changes are happening across all sectors, accelerating
rapidly and putting strain on businesses to keep up. Disruptions caused by
 Growing the Digital Economy alongside Disruptions 17

technological innovations have become progressively more noticeable as we

explore deeper into technology as a tool that enables problem solving.
Below are some examples (Daisyme, 2018) of major disruptions
across ­industries that have changed the industrial value chain and have
also had an impact on the workforce and organizations as a result of huge
transformations.

●● Disruption of the automobile industry: In the automobile industry, a

perfect place to begin is mobility, with the arrival of Uber. Uber revo­
lutionized and significantly disrupted the car industry with its efficient
pricing algorithms and business model. Uberization is a term derived
from the way Uber redefined the car industry. It utilizes a homogeneous,
optimized business model. There are other disruptive trends happening in
the car industry as well, focusing on autonomous driving, electrification
and remodelling the usage of digital features.
●● Disruption of customer service: The digitalization of services and products
creates disruption across whole industries. The way in which businesses
communicate with their customers has been impacted by social media
sites such as Facebook. Many organizations have been drawn to these
social media platforms to improve their customer service, enabling them
to quickly resolve issues or to receive feedback. The communication from
business to consumer will evolve more over the next few years transforming
the customer service move to digital.
●● Disruption in the financial industry: The biggest disruption in the financial
industry has been caused by Bitcoin; it has only been around for less than
a decade. Following the 2008 financial crisis, an online community
created their own currency that was outside of government control. The
use of blockchain, which is a decentralized shared public ledger on which
the Bitcoin network relies, will go on to become an essential part of
financial institution technology and operational infrastructure across
the world.
●● Disruption in the entertainment industry: Many of us have already shifted
from old cable networks and video libraries to Netflix or similar other
on-demand video streaming providers without much cost and with
significantly more convenience. This substantial change occurred very
rapidly, with Netflix overtaking traditional major cable providers in
subscriber numbers. In the future, it is expected that these cable companies
will become outdated in the same way that video rental stores such as
Blockbuster have become.
18 Revolution

●● Disruption of retail: In the retail industry, Amazon is an example of an

online retailer that is capitalizing on the shifts in consumer behaviour
towards convenience, ease of access and lower prices. Lower prices, larger
selections of products and effective automated algorithm recommendations
have all played a significant role in creating the pressure on retailers to
rethink their strategies. It is anticipated that these changes will accelerate
as new technology further improves the online customer shopping
experience.

Interpreting disruption isn’t just about creating better ideas; it is also about
being protective and looking out for new competition that might disrupt the
industry in the future. But the most interesting part and the biggest threat to
any business is when they don’t realize that something is coming. The true
disruptor will turn these threats into opportunities and move themselves
onto the frontline.
There are many examples of disruptions across industries and functions,
for example Google disrupted online search and advertising; Salesforce dis-
rupted customer relationships; Amazon disrupted distribution; Uber dis-
rupted transportation; Airbnb disrupted hotel industries; Facebook
disrupted social experiences; and so forth. Now let us explore the disruption
that occurs in the HR function.

Disruptions in the HR world

You must be wondering by now what this disruption means for human re-
sources. To avoid the disruption starting in industry, organizations and busi-
nesses have the belief that it is best to self-disrupt, and when organizations
follow this, HR professionals and leaders find themselves playing an impor-
tant role.
According to Dave Ulrich (Ulrich, 2012), a university professor, HR
thought leader and management coach, HR disruption is about delivery of
HR services but also about the sense behind that delivery. HR disruption is
less about a shift from one idea to another, like moving from operational to
strategic, and more about forming a hub of ideas relying on each other, like
being both operational and strategic. The disruptive hubs in HR have been
going on for decades and will necessarily continue.
Figure 1.2 shows the major disruptions that are happening to HR or-
ganizations, with major impacts on business leaders.
 Growing the Digital Economy alongside Disruptions 19

Figure 1.2 Disruptions in HR

HR as profit centre

• Creating value to business, customers and investors

Consumerization of HR

• Driving a great employee lifecycle experience

Trusted advisory

• Advisory in reinventing organization and leadership

Data-driven HR

• Enabling technologies and data for innovations

Human capital is the driving profitability strength behind any business and
the truth is, that it’s all about the people. Significantly, a well-developed and
motivated employee is profitable for the business, as they demonstrate the
productivity and generate revenue with their activities. By monetizing vari-
ous aspects of the HR function within the organization and projecting how
those functions impact and add to the financial outcome of an organization,
HR can easily turn from being a cost centre into a profit centre.
Today the new manifest for organizations is to build one employer brand
that provides a memorable employee experience associated with remarkable
customer experiences. The focus of any such transition must be supported
by an empathetic and empowering environment that delivers true consum-
erization for HR, like that enforced within other business functions. The
business case for organizations to consumerize HR is quite captivating, as
HR would be able to focus more on strategic rather than tactical tasks.
The next disruption for HR is to become a trusted adviser for the busi-
ness and workforce. Organizations must move forward from hierarchy or
bureaucracy to building capabilities, with clear roles, rules, routines and
responsibilities, and HR plays an important part here for such organiza-
tional transformation. Moreover, HR should not just be about helping peo-
ple to become better leaders but building collective leadership depth
throughout the organization.
20 Revolution

Lastly, HR is now uniquely positioned to use data to drive performance –

both people and the organization. Data-driven HR enables business to lev-
erage the value of the huge amount of data available from their people,
together with business data. Business and HR leaders need to turn this data
into tangible insights to take decision that enrich the performance of the
organization and allow it to be more innovative.
So, HR is not about what it implies today or in the past, rather the em-
phasis is on the values that HR can create for the business. The discussion
always focuses on activities such as staffing, training, compliance and other
administrative matters, as HR plays a transactional role for businesses
today. For businesses, it is important to understand how much value these
activities can generate, but this is currently blocked by old mindsets due to
the current nature of the HR function.
For organizations, it matters most when HR activities and capabilities
add value to the investor, customer, community and the workforce. A lot of
attention is now focused on how HR can innovate new ways to shape the
future and become a highly contributing business function rather than just
a supporting one. So, these disruptions are not only preferable for the HR
function but also for the business and the entire organization.
For many years, as a result of good HR work, there has been a lot of
focus on the outcome of talent development and people, particularly the
employees. In addition, technology is enabling people to connect with one
another across time and space to create positive social experiences, and this
in itself is a good valuable contribution to business leaders. All this has led
to an important question about the future work models needed in the busi-
ness community. While businesses are preparing for the future role of work,
they are also admitting that their future workforce may not be sufficiently
prepared yet.

Impact on future work models

and the workforce
We are living and working in a world today that is changing so fast that it
has become impossible to predict or even to effectively plan for. Most or-
ganizations want to shape the future of their work and workforce but are
using an outdated method of working that revolves around planning and
predictability.
 Growing the Digital Economy alongside Disruptions 21

This old way of working continues to function well in a few limited con-
texts where the tasks are predominately routine and require minimal col-
laboration. But the rate of change is not going to slow down. The challenges
we face are growing and becoming incredibly complex. They require strong
collaboration between teams with diverse skill sets and outlooks. And there
is no single, one-size-fits-all solution that can address the needs of every or-
ganization.
Each organization, and every team within those organizations, has its
own culture, set of common values and unique business challenges and re-
alities. We will explore the human-centred design approach to managing
these changes in more detail in the following chapters. Any successful change
must be designed for the people who want to change and this means a lot
for organizations.
The digital revolution is also having a very significant impact on work-
forces and HR organization, with the major changes including ongoing de-
mographic, technological, sociological and cultural transformations. In this
digital era where technology is also changing at its fastest rate ever, HR and
business leaders should start streamlining their organizations in terms of
collaborating and considering the right work models for their workforces as
a result.

The work 4.0 model

In November 2016, the German Federal Ministry of Labor and Social
Affairs published a white paper and first coined the term work 4.0 (Federal
Ministry of Germany, 2015). It is seen more as a supplement to the already
flourishing industry 4.0. The rise of this new work model has come out of
the challenges in the world of labour and policies, which also impact aca-
demia, trade unions, employers and the workforce.
Work 4.0 is notable because of concerns raised by policy makers about
forthcoming changes in working environments and the related social secu-
rity systems. As a result of the impact of digitization and automation that
has already become visible to blue-collar workers in manufacturing in the
2010s, a lot of white-collar professionals are realizing only now that their
current jobs might change radically in the coming years as well.
In addition, for a new generation of mostly very young people, the way
of working seems to be very different, especially if we consider the growth
of the gig economy where flexible working, owning of work, project-based
employment, remote work and many others are increasingly blurring the
22 Revolution

lines between work and life. Although we are going to explore all of these in
the coming chapters, let us first visualize what this new working model can
mean to the workforce:

●● Security vs. flexibility: A proper balance between job and social security
and requirements for flexibility in the job is not uncommon among the
workforce. On the one hand, workforces are looking for better social
security from their employers, and on the other, new workforces are also
demanding greater flexibility in their working environments, which can
also lead to higher collaboration.
●● Life-long learning: The leading changes in occupations and jobs will lead
to massive transformations in jobs and the workforce. This naturally
means a need for new skills’ development with life-long learning, which
is more important than ever before. This implies the growth of on-the-job
training and continuous learning environments for the workforce, and
indeed the entire organization.
●● Employment insurance: Today we need a preventative social policy that
should gradually expand the existing unemployment insurance into an
employment insurance, with a provision to personalize vocational
guidance and continuing education. This means the agencies managing
unemployment should transform themselves into proactive qualification
agencies.
●● Working time and flexibility: The rise in demand for better working hours
and flexibility from today’s workforce is forcing organizations to think
about their working hours. A suitable policy that can provide more
options for the workforce in relation to working times and location is
much needed by workforces today.
●● Personal employment accounts: There are also recommendations to
include the establishment of long-term personal accounts that each
individual employee sets up at the start of their working life, which is
then furnished with a basic capital and earns credits through employment
or individual contributions.

Health and safety regulations are another important aspect here, and rein-
forcing a framework for negotiations between the social partners in the
digital age is also needed. A lot of effort can be seen going on in many or-
ganizations in all these areas while they consider their new work models.
Digitalization isn’t just about technological changes. The future of work
is something we must actively shape with the right digitalization approaches,
 Growing the Digital Economy alongside Disruptions 23

Figure 1.3 Work 4.0 drivers

Cultural
shift

Globalized
knowledge
society

WORK
4.0
Changes in
the standard
Digitalization
employment New
and automation
relationship products and
production
processes

and the new working models play a vital role. Figure 1.3 shows how the
above-mentioned characteristics of work 4.0 are driven by cultural shifts,
the globalized knowledge society, new product and production processes,
new standards in employment relationships, digitalization and automation.

The value to the workforce

The biggest challenge that is occurring now due to the growing digital econ-
omy is about how to build a digitally ready workforce in an evolving busi-
ness environment. To do that, any organization must start by filling the talent
gap in technological skills, which is also vital to digital strategy. Successfully
acquiring, developing and deploying talent starts with a strategy that directs
what work will be done, how it will get done and by whom.
24 Revolution

Next, organizations need to create a compelling value proposition for

talent that includes training in new skills, development opportunities and
rewards. The way people interact within organizations has also changed a
lot today. People expect to use social communication skills in the workplace
as well. Therefore, communication platforms should take advantage of
using social sharing practice that allows people to collaborate using familiar
methods that they are already using with friends and family.
For leaders, retaining the human part in a growing digital world is vital
for future success. It is clear that the digital age requires different qualities
from business leaders. The leaders who understand well enough how tech-
nology and people complement each other and create added value, are on
the front line.
Today, leaders should be able to connect with a well-defined purpose,
inspire their workforce to this common purpose and give them the inde-
pendence to create more value. When workforces have a purpose to deliver
and are motivated and inspired by leaders, they respond with high levels of
engagement, increased commitment, bringing creativity to work, shaping
themselves and their organizations to flourish in a digital age.
By creating a company culture that acknowledges and invests in the
above considerations, an organization can make their workplace more at-
tractive to a much wider talent pool and can be far ahead in the talent war.
All of these automatically add value to their workforces and to the digital
economy. Table 1.2 shows the approaches to determining the value case for
the digital economy in respect of organizations and their workforces.

Table 1.2 Approaches to determining the value case for the digital economy

Inspire Empathize Design

Understand digital Identify business critical Design a lean,

economy for the mission impacted by digital autonomous and
organization and people economy and disruptions multidisciplinary team

Derive touch points for See the big picture: value Turn threats into
fourth industry revolution creation and value capture competitive advantage

Explore HR value chain Measure the change in Focus on excellence,

and disruptions mindsets and readiness innovation and long-
term sustainability

Define future of work Ensure leaders understand Rethink the strategy

and workforce in context how to adopt the practice process for agility
of organization
 Growing the Digital Economy alongside Disruptions 25

So before designing such value cases, we need to understand what digital

economy means for the organization and its people, identify business criti-
cality, see the big picture, get ready with the right mindset and ensure that
leaders recognize the transition. For design, it is necessary to have a lean,
autonomous and diverse team that can turn threats into opportunities.
Through a simple set of practices, we can help accelerate business-critical
missions, begin a global movement of people from across the organization,
and create measurable behavioural changes that result in substantial eco-
nomic impact. The management and leadership team within an organization
should encourage every team and employee in the organization to take re-
sponsibility by providing the necessary framework, tools and incentives.

People are at the centre of the digital world

To add these values to digital success, organizations need to bring people to
the forefront and hire new digital professionals who have different but spe-
cific skills, expertise and working styles that may have not been considered
in the past. Today, organizations may need to measure the potential to build
up internal talent by establishing multidisciplinary diverse teams, develop-
ing cross-collaborative networks, creating new evaluation frameworks and
redefining leadership roles.
By positioning people at the centre of development and economic evalu-
ation, this drives a revolutionary change in the way labour and social
­inequity are considered. This helps strengthen the growth in sustainable
­development goals that organizations should be prepared for by making
equally radical decisions about changing contexts and the new challenges
that the world is encountering. We will cover more on sustainable develop-
ment in later chapters.
So, to put people at the centre of business, digital success and economic
growth, we need to consider human development as a key aspect, because
human development focuses on improving people’s lives rather than just
economic growth. To bring people to the centre, organizations need to see
what is meaningful to their workforce today.

Human development
The term human development is defined as an evolution of human capabili-
ties, a broadening of choices, boosting freedom and a fulfilment of human
26 Revolution

rights. This also means developing intellectually and socially by growing

and experiencing changes in our lives and learning new things.
The United Nations was the first organization to start enforcing their
report on human development, and the vision was to see development as a
process of enlarging people’s choices. All the development outcomes were to
be measured in terms of people’s experiences: a long and healthy life, educa-
tion and a decent standard of living. These force governments and policy
makers to consider the quality of human life not just economic growth.
According to the United Nations, developing countries’ transformation
into major economies with growing political influence has impacted the pro-
gress of human development, which has highlighted the need for appropri-
ate policies and investment in capacity building with a focus on education,
nutrition, health and employment skills.
A lot of areas are under the microscope in terms of the suggested sustain-
able development goals. Enhancing equity with inclusion on the gender di-
mension, enabling greater voice and participation of youth, confronting
environmental pressures and managing demographic change are the major
areas of focus on the human development side.
Based on these human development needs and the changing world of
work, the way people work today also needs to change. This means organi-
zations need to support a better understanding of their workforce and for-
mulate new work structures based on the workforce’s intelligence. These
approaches are key to finding and retaining top talent; fostering productiv-
ity, performance and wellbeing; and driving agile, flexible attitudes towards
people collaboration.
There are different practices within organizations that emphasize on
human development directly or indirectly. Organizational development is
one of the ways that are used within organizations as well as applying be-
havioural science to help organizations to improve their people and systems.
This also enhances organizational effectiveness while focusing on the or-
ganization’s culture and values. Aligning human behaviour with the organi-
zation’s strategy, structures, processes and business objectives is another
point to take into consideration.
Human resource development is another framework used in many or-
ganizations to help the workforce develop their personal and organizational
skills, knowledge and capabilities. It is one of the most significant opportu-
nities that workers seek when they consider an organization, as the ability
and inspiration help them to continue to develop their skills. This particular
area from HR organization is quite important when leading an organiza-
tional transformation.
 Growing the Digital Economy alongside Disruptions 27

Transformation in the digital age requires new structures, new working

environments, better training and empathizing with people’s need to dis-
cover their full potential in the digital age. The principals in the required
transitions are the people themselves, and these people need to know the
new ways that exist to develop themselves so that they can play their new
roles in the organization and digital success (Becerra, 2017).

The people first approach

During any transformation, the journey is more important than the destina-
tion, but many organizations focus just on the bottom line. Many digital
transformation initiatives fail today because organizations do not review
their various capabilities along the way. Many also ignore the creators and
enablers, which can also mean their most talented staff, if they do not adopt
a people-centric approach.
When we consider change, we should mostly be interested in getting peo-
ple to buy in to that change and to see the value they will gain from it. In this
sense, adopting the changes isn’t about the essence of technological details
or usage numbers; instead, adoption is more about people and their re-
sponses to the changes.
So, it is very important for organizations to understand what their work-
force wants. Asking their people what matters most to them and listening
carefully to their responses is what organizations need to do to really pro-
gress any changes. There are a lot of initiatives such as anonymous surveys
and continuous feedback loops to drive employee listening.
On the other hand, knowing precisely how the team works and respect-
ing people’s engagement with their work can help to gain the trust that or-
ganization leaders need to initiate the changes during their journey of
transformation. This is necessary in order to ensure they don’t get lost in the
process and that every step organizations take towards the adoption of
change is adapted to their needs.
As waves of change are transforming global businesses, HR organiza-
tions can embrace disruption in the way organizations work, and they can
help to rethink how to prepare leaders and their workforce to succeed.
Many business and HR leaders state that they are aware of these changes
and the importance of preparing the workforce for the future. They empha-
size their goals in terms of engagement, productivity, agile ways of working
and people-centric transformation. We will learn more about transforma-
tion in the next chapter.
28 Revolution

As the world is becoming more interconnected, value creation is shifting

from the individual to the collective. No matter what the initiative is about,
the goal should be to guide leaders with strategies and actions, to unleash
the potential of their people to work in empowered, self-managed teams
with a sense of entrepreneurship, and enable organizations to emerge and be
sustainable.
Many leaders are desperately trying to transform their organizations,
pursuing improved performance and efficiency by changing behaviour and
capabilities throughout the organization. But in most cases, these leaders
lack the right mindset needed to deal with the situations that arise, espe-
cially in this fast-changing uncertain world.
And then, if we ask why organizations keep on failing in their digital ini-
tiatives, one of the biggest reasons is, of course, the people. You can have the
best vision and strategy in the world, but if you don’t have the delivery ca-
pability, it will just end up as another failure. Picking the right talent and
building the right team is what organizations need to consider.
Hiring the wrong people to do the job, or putting the wrong team to-
gether will inevitably lead to failure from day one. Recruitment can be very
vital here to get the right people in place to deliver these initiatives.
Management and leadership teams are not taking this seriously in many
cases, and hence their chances of becoming successful are shrinking. HR can
always be a key adviser during these transformations.
Organizations that establish a people-first culture are better places to
work. Businesses that embrace this approach are rewarded with better re-
sults and happier employees. Creating a successful people-first culture takes
time, effort and different mindset. A small thing can make a big difference in
demonstrating that organizations are placing their efforts on achieving a
people-first approach during their journey of transformation.

Summary
Interpret the digital economy and different industrial revolutions in the con-
text of the organization and its people:

●● Digital economy is the worldwide network of economic activities, com-

mercial transactions and professional interactions that are enabled by
information and communications technologies (Rouse and Pratt, 2017).
 Growing the Digital Economy alongside Disruptions 29

●● Organizations need to move from the third industrial revolution to the

fourth industrial revolution, where humans integrate with the cyber
world.
●● The ongoing digital economy assists organizations and workforces to
leverage the use of technologies to achieve higher performance and
increase efficiencies in their tasks and activities.
●● Industry 4.0 isn’t just for manufacturers; it can impact all of us, as in this
era, technology and people are not distinct or separate.

Understand disruption and outline key disruptions across industries and the
function of human resources:

●● The attributes of disruptive businesses are associated with lower gross

margins, smaller target markets and simpler products and services, and
usually do not emerge as attractive solutions.
●● Disruptive innovations have turned the way brands are built upside down
and disrupted old industries as well as giving rise to completely new ones.
●● Disruption has transformed the economics of society and has brought
about a distinctive paradox to the new generation of workforces and
organizations.
●● HR is not about what it means today or meant in the past; rather the
emphasis is on the values that HR can create for the future for the
investor, customer, community and the workforce.

Explore the impact on the future of work and the workforce with new work
models:

●● We are living and working in a world today that is changing so rapidly

that it has become impossible to predict, or even to effectively plan for.
●● The digital revolution is also having a very significant impact on the work-
force and HR organization. The major changes include ongoing demo­
graphics, and technological, sociological and cultural transformations.
●● Work 4.0 was considered because of the changes it brings to the world of
work and how it will have an unavoidable impact on the welfare state
and social security systems.
●● The biggest challenge is to build a digital ready workforce in an evolving
business environment. To do that, any organization must start by filling
the talent gap in technological skills and continuous learning agility.
30 Revolution

Understand why people are at the centre of the digital world:

●● To put people at the centre of business and digital success, and economic
growth, we need to consider human development as a key aspect and
focus on improving people’s lives.
●● Organizations need to support a better understanding of their workforce
and formulate new work structures based on the workforce’s level of
intelligence.
●● The journey is more important than the destination in any transformation,
but many organizations focus just on the bottom line and ignore the
many creators and enablers along their way, which is not a people-centric
approach.
●● Organizations that have a people-first culture are one of the greatest
places to work and are rewarded with better results and happier employees.

Time to act
• Why going digital is no longer an option, it is the
Why the need for change? default. Why do people need to be at the centre of this?

• Are we ready for this digital economy, industry 4.0

What makes sense? and disruption? How does it impact us?

• Which business areas and functions are critical to

Where to start?
consider? Where is the big picture?

• Who will get the benefit of all this? Are leaders

Who can help?
aware and do they understand the challenge?

• How can we turn threats into opportunities? Do we

How to change?
have a business case for this change?

References
Becerra, J (2017) The Digital Revolution is Not About Technology: It’s about
people, World Economic Forum, Geneva
Christensen, C [accessed November 2018] Disruptive Innovation [Online] http://
claytonchristensen.com/key-concepts/ (archived at https://perma.cc/9QJ9-WEKX)