With artificial intelligence (AI) infiltrating nearly every aspect of modern life, the once-revolutionary Industry 4.0 concept centered on AI, automation, robotics, and other technological advances has given way to Industry 5.0 and its focus on resilience, sustainability, and societal versus economic value – including the human-centric nature of putting people at the center of the organization.
Instead of shareholder value, Industry 5.0 emphasizes internal and external stakeholder partnerships within an organization. Internally, this reflects workforce diversity and workflows wherein AI, automation, and other digital tools support rather than replace employees. Externally, it emphasizes the organization’s positive impact on society, its ability to serve rather than merely sell, and its capacity to enhance resilience while delivering sustainable outcomes.
Bridging the Industry 5.0 gap
The first step in bridging the gap between Industry 4.0 and 5.0 is undertaking an assessment to ensure the fundamental pillars of Industry 5.0 are in place– treating your employees the same way you treat your customers. This can be determined by answering one simple question: What is our current state and what can we do to take us to Industry 5.0?
The response to this question should lead toward a set of targeted people-centric initiatives that drive the shift toward an employee-centric culture. From there, leadership should focus on the organization’s people-facing initiatives to enable greater innovation for all stakeholders.
This shift will typically identify any weaknesses in the leadership structure. This is critical, as leaders should be the stewards driving Industry 5.0. They are the sherpas for the business team, guiding every step of the transformation up to and including investment decisions around the workflow technologies required in a more people-centric culture.
Even more importantly, organizations must determine their resiliency to survive and thrive in this new world. Pre-COVID-19, organizational resiliency was taken for granted. There was no urgency about or concerns with the health of the business, nor could an organization authentically test its resilience – something the pandemic did very succinctly.
Organizational leadership took for granted that necessary resources and assets would always be available – no supply chain disruptions, no workforce shortages. They would always be around because they had always been around. There was no need for any company to test its mettle for confronting risk or examine ways to automate workflows.
Resiliency is a vital part of Industry 5.0. Organizations must make a deliberate attempt to incorporate this value into their business strategy, forecast, and game plans so that shareholders and stakeholders can succeed. With such a plan in place, it’s more likely that employees will remain loyal during the nuances of sustaining profitability.
Part of the success we have had in our transformation to Industry 5.0 has come from incorporating the following three concepts into our culture and strategic initiatives.
Recruiting for Industry 5.0
Behind every Industry 5.0 organization is a diverse workforce. A diversity-centered recruitment strategy helps unite multiple perspectives drawn from diverse life experiences. It ensures that various departments can collaborate with our customers to foster innovation, while also guaranteeing the participation of creative individuals to drive the innovation engine.
This shift is also evident in our transition from a one-dimensional focus (solely on customers) to adopting a more balanced approach that also prioritizes our employees and their well-being. We do this because we recognize that our investments in developing internal technology, products, and services would lack value if we didn’t place our employees at the core of these efforts.
Industry 5.0 recognizes that a single individual does not build organizations. Organizations require multiple people working together towards mutual goals. This includes navigating collective challenges and celebrating collective success.
Focusing on employees
In an Industry 5.0 organization, the focus should be on supporting employee capabilities — asking, “What are our organization’s capabilities for supporting employees today?” Instead, many organizations focus solely on their employee’s capability to serve customers and gain revenue.
While profitability is crucial, it should be redefined to identify the necessary capabilities required for empowering employees to contribute to revenue generation and the provision of services to all stakeholders who contribute positively to society. One recommendation is to add a chief people officer who is equipped with all the tools, analytics, and data to treat employee engagement as a critical organizational asset.
Another recommendation is to identify strategies and capabilities to support a human-centric workflow, then connect these workflows to your innovation roadmap and build out from there. Include diverse teams and empower them with digital collaboration tools and technologies. For example, we use Paylocity for Human Resources and social engagement. Microsoft Teams is another excellent tool because it has so many features beyond just messaging. We also have an internal Facebook-like communication tool that allows people to share and celebrate their personal and professional moments with colleagues to help build a safe and fulfilling culture where everyone feels that they are part of something bigger.
People before technology
AI is now inescapable, and companies that are not shifting their focus to prioritizing how technology and other advanced technologies can improve the lives of their employees and other stakeholders will quickly fall behind. Transitioning to an Industry 5.0 organization ensures that everything from technology to workflows benefits employees so they can be stronger, more productive, and happier in every aspect of life.
To that end, the technology we employ has been specifically designed to support the personal and professional needs of employees and the organization. We believe that technology should support people-driven initiatives, not the other way around. This approach creates a balanced, collaborative, and harmonious environment for all.
Becoming Industry 5.0
We’ve tracked the value of our Industry 5.0 approach in our employee retention, with a turnover rate of about 1% in the last 12 to 18 months. Companies that join in this transition will soon realize that content and supported employees enhance organizational success more effectively than advanced technology products.
Ritesh Ramesh is CEO of MDaudit, a leading health IT company that harnesses its proven track record and the power of analytics to allow our nation’s premier healthcare organizations to mitigate compliance risk and retain revenue.