Leadership and work 4.0

The 4th Industrial Revolution describes the significant changes to the way we live, work, and relate to one another due to the adoption of technological platforms. Further, leadership styles of today must follow the societal mega-trends of diversity, globalization, and digitization with the requirements of workers for more responsibility, freedom of decision, psychological security, flexibility and integration in the company. In the 4th Industrial Revolution leadership is characterized by the capability to create strategic alignment and engage networked teams with a clear purpose.

“The changes are so profound that, from the perspective of human history, there has never been a time of greater promise or potential peril. My concern, however, is that decision-makers are too often caught in traditional, linear (and non-disruptive) thinking or too absorbed by immediate concerns to think strategically about the forces of disruption and innovation shaping our future.” – Professor Klaus Schwab, founder and executive chairman of the World Economic Forum.

The nature of work is evolving

Leaders in mature corporations are struggling to develop compelling strategies in rapidly changing markets, execute it, and lack the vision to lead. They face an ever-increasing array of innovative technologies while leaders have problems understanding all the latest technology-driven opportunities. Besides, leaders don’t follow intelligibly defined decision-making processes and organizational silos restrict their capabilities to find, nurture, and share knowledge to make better decisions, communicate, and execute strategies.

In order to make the market or adapt and succeed in this VUCA (Volatile, Uncertain, Complex, Ambiguous) business environment, it is valuable for leaders to change their mindset from machine organizations to view the organization as a “living organism.” Established corporate models hinder organizational productivity and employee productivity output ratio with the outdated leadership styles, which are characterized by positions of power, a chain of command, and bureaucratic hierarchies.

With no power comes no responsibility

Often leaders over-centralize operational activities and the execution of particular tasks to be absolutely their duty. Moreover, employees are being informed on a need-to-know basis on matters that relate only directly to their jobs. They are not expected or even allowed to expand their knowledge beyond their job description. For example, employees may not be told beforehand about upcoming plans or projects. Consequently, top management does not seem to foresee the need to communicate changes to employees. Through centralized management, employees’ and line manager’s talent are underutilized in decision making. Even though they have a better understanding of their team’s capabilities and business situation, they often don’t have adequate decision-making power.

When wrong people make decisions about critical affairs incorrectly and provide an uninformed diagnosis of problems, centralization prohibits growth and talent, which means that good talent goes to waste. Through the decentralized organizational culture, employees can influence the organization through the direction that makes it ideal for their relationship with their employer so that the employee’s well-being and livelihood are optimal with their jobs.

The traditional leadership culture has been slow to recognize the needs of workers and address the challenges of the new information-centric world. Established managers, in particular, have difficulties rethinking their leadership style. Organizations need to advance flexibility in order to be able to adopt digital platforms and strategies. At the same time, work-life balance preferences are changing. Newer generations are interested in having more diversity and also flexibility in their work commitments. As for more mature workers, especially highly skilled, they prefer to stay in the workforce for longer with flexible arrangements.

Transcending the traditional leadership roles

If a company prioritizes its processes over smart and impactful contributions, it is falling behind the competition. Innovators and change-makers set bold ambitions and work on the edge of opportunity. Employees working closest to customers often find the most efficient solutions, and it is usually best to follow their lead. Though some traditional leadership capabilities remain significant to successfully leading in the digital era like motivating and empowering others, there are also new requirements for leaders at all levels of the organization. This model recall Robert Greenleaf’s idea about “The Servant as Leader” from the essay in 1970.

Even more, 50 years later, in the middle of the 4th Industrial Revolution, Servant leaders are indeed change-makers. They take the traditional power leadership model and turn it completely upside down. The Servant Leadership puts employees at the very top and the leader at the bottom, charged with serving the employees above them. The great leaders are open to creative employee solutions and that kind of innovation rather than trying to put limits on innovation. The servant-leader moves beyond the transactional aspects of management, and instead actively seeks to development and alignment.

New demands for success

As digital impacts the entire organization, it requires effective leadership at all levels to drive the digital strategy going forward. As digital transformation expands across the organization, organizations need to consider an approach to building a healthy leadership transformation with the necessary capabilities to lead in the digital era.

In agile organizations, employees want better access to information, make decisions more independently, regular feedback from their superior and more flexibility in arranging their work and working hours. Additionally, jobs are being broken down into projects that may either be outsourced to independent experts or be reconfigured into projects that assemble physical or virtual teams, across borders and time-zones. As organizational boundaries are becoming more blurred, organizations are going to have to become agile in the way they think about managing people’s work.

As the 4th Industrial Revolution changes the way we work, businesses must prepare workers for this new era, and this means life-long learning, new types of jobs, decentralized decision making, and a commitment to diversity. Today’s subordinates must be able to collaborate, communicate, and solve problems. These skills are developed mainly through social and emotional learning. Combined with traditional skills, this social and emotional proficiency will equip employees to succeed in the evolving digital economy.

The absolute centralized governance we had for the preparation and spreading of messages that are circulated within organizations is coming to an end. We are going towards a redistribution of internal communication power, where everybody has the power to raise an issue, send messages, and give opinions in open and company-wide discussions. Open communication can be a threat. However, it is also an opportunity. From being able to produce, spread, and circulate contents, internal communicators should learn to manage communications generated without their intervention.

Similar to communications, organizations need to take a more holistic and decentralized approach to decision making, which includes more transparent processes that are data-driven and get input from a broad set of stakeholders. Whether deciding which applicant to hire, which service to use, or which business case to execute, the capacity to make the best decision is critical for success.

Everyone is a decision maker

Even if you do not hold a management position, you are making decisions at least in professional settings. Having the ability to problem solve thoughtfully and logically while incorporating diverse perspectives is key, and you will need the input of others to come to a decision. Being able to communicate your goals clearly and welcome feedback is central to a collaborative environment.

Human decision-making already becomes more complex in today’s workplace. While information processing and artificial intelligence provide insights that are impossible for humans to gather, ultimately, a human needs to make the decision. This requires recognizing the implications the decision might have on personnel and the effect on other human sensibilities such as morale. As technology takes away more supporting tasks, it will leave humans to do more higher-level, values-based decision-making.

It is crucial not to let your emotions take over when coming to an informed decision. Mainly when you are working with others to come to a decision central to the decision-making process, you will need to control your emotions to communicate your opinions effectively. To come to an informed decision, you will need to look at all the facts presented to you.

Skill set of an employee in the next decade

Subordinate skills of the future defined by World Economic Forum

Disruptive changes are transforming industries and business models, changing the skills that employers need and shortening the shelf-life of employees’ existing skill sets in the process. Earlier it has taken decades to build the education systems and labor market required to develop major new skill sets on a large scale. Now business model change translates to skill set disruption almost simultaneously and with only a minimal time lag.

The expectation is shifting towards being able to form one’s own views, understanding more complex entities and relationships, and working effectively with other individuals. In the upcoming era, self-direction and empathy are trending along with problem solving and decision making. Companies now need to adjust to the needs of the employees alongside the needs of their customers. The employee is no longer a robot which performs simple tasks when money is thrown at them, rather a self-thinking individual with a sense of self worth and a drive for meaning in their work.

This is the third installation in our blog series for Work 4.0. Read the previous instances here:
Decentralization and alignment
Paradigm shift of internal communication

Author: Jaakko Pellosniemi – My driving vision is to invent something which everyone needs every day. The pursuit of this goal has led me on an interesting journey beginning in the corporate world and including adventures pioneering eBusiness, innovating digital TV software and inventing a medical diagnostic product.

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