Digital Leadership – An Imperative for Manufacturing 4.0

Improving people-centric leadership, psychological safety and intergenerational dynamics drive digital transformation forward

Digital transformation has been around as long as I have been in the workforce. The depth, capabilities and reach of technology has vastly grown, but the reality is we have been working on digital transformation for decades, in all industries and all capabilities. Yet, with all this experience, the percentage of digital transformations that fail continues to hover at around 70%, a dismal number[1].

Today, we are bringing some of our latest technologies in IoT, big data and analytics, and artificial intelligence into the industrial space with vast opportunities in efficiencies, quality improvement and increased safety. It is an exciting time for manufacturers and the stakes are high. However, as Manufacturing 4.0 technologies offer enhanced efficiency, manufacturing leaders are faced with both new and old challenges while implementing these new systems and processes. How can we improve on that 70% failure rate? Is digital transformation different on the shopfloor? How do I get everyone on board?

A digital leadership approach is key to achieving Manufacturing 4.0. It extends beyond the processes and technology. It requires taking a people-centered approach throughout the organization, creating a culture and atmosphere that drives resilience, agility and innovation, and encouraging participation and open communication at all levels of the organization.

The events of the last few years have shown that people are critical to manufacturing operations, even in our digital future. Manufacturers who successfully achieve their adoption of Manufacturing 4.0 technologies will have done so by engaging their leaders and employees and enabling organizational participation from top to bottom. They will have employed digital leadership.

What is Digital Leadership?

At its core, digital leadership involves leading through disruption and transformation, harnessing digital technologies to achieve organizational objectives. It calls for an understanding of emerging digital technologies and the ability to guide their integration into existing processes. But underpinning this is your employee base who must adapt to the fast-paced changes driven by technology. An even more critical key to any transformation’s success, these employees must understand the inner workings of the organization. A digital leader must foster an environment that encourages participation, drives agility and resilience, and rewards innovation at all levels of the organization. It is critical this leadership approach extend beyond the executive suite and managerial roles all the way to the front-line supervisors. Digital leadership focusing on the people first is key to achieving a successful transformation.

What Skills Do Your Leaders Need?

Effective leaders in the digital age are not just those in the C-suite. They are individuals across the organization who champion innovation, collaborate across levels and functions, and prioritize continual learning. that looked at leadership styles and their success during the COVID disruption, leaders using a coaching style had teams that were more resilient, engaged and productive[2].

We will call this digital leadership, and there are a few key skill sets that make digital leaders so effective in driving transformation through a manufacturing environment.

  • Communication – Many change management programs focus on outward communication, informing about and justifying change. However, a strong digital leader focuses on active listening and curiosity. Through this type of communication, issues, concerns and blockages will be found earlier and resolved sooner.
  • Conflict Resolution – There will be many conflicts that arise in any digital transformation. A successful leader ensures that respect for all parties is the basis upon which any conflict is addressed and resolved. By insisting on and modeling respect first, a leader shows each person they are valued and encourages issues to be brought forward.
  • Accountability – Leading by example and doing what you say builds trust. Trust is one of the hardest things to build when introducing new processes and technologies. A digital leader is aware of their words and actions and acts in a way that builds trust.
  • Self-Reflection/Vulnerability – Digital leaders have learned to embrace the uncomfortable. They acknowledge their own feelings and are open to where there may be gaps in the transformation program or their own knowledge. It is very important that digital leaders do not feel like they have to be the ultimate experts. A strong digital leader conducts a consistent self-reflection on the program and progress and is open to bringing in outside experts when needed.
  • Empathy – A strong leader spends time noticing the people in the organization. They look for who is speaking up and who is quiet. They engage and seek to understand both types of people. In times of disruption, your biggest distractors will not actively speak to you as the leader. It is important to engage every member of the team to bring everyone along and find issues at the place and time they arise. This need for empathy at the individual level is why digital leadership must span the organization, from executive to front-line leader. Leaders must actively involve and include team members, understanding their motivations and aligning individual strengths with organizational goals.

Why Take a People-Centered Approach?

Manufacturers do not run without people. The people in your factories and central offices deeply understand the business and will be on the front lines of adopting the digital changes. In some cases, they will be contributing to the technology itself by supplying the knowledge and input needed for AI and ML models. In all cases, the people running the manufacturing lines will have a front-row seat into the impact and success of any technology implemented. It is critical that these employees and leaders feel comfortable voicing their concerns, sharing ideas and taking calculated risks. By taking a people-centric approach to digital transformation, organizations can tap into an enormous well of knowledge, support and energy to help drive the program’s success. On the contrary, if a command-and-control approach is taken, people will distrust the transformation, issues will not be reported, and innovative ideas will be silenced.

Psychological Safety – the Key to Success

Psychological safety refers to an environment where employees feel comfortable, secure and confident in expressing their opinions, concerns, ideas, and identifying mistakes without the fear of negative consequences. Creating a culture of psychological safety is critical in a manufacturing environment where safety, quality and efficiency are paramount. Considering the added complexity of a Manufacturing 4.0 transformation, building a culture of psychological safety can be the difference between success and failure.

Creating and maintaining psychological safety in manufacturing requires proactive efforts from leadership, clear communication channels, training programs and a commitment to address issues without blame or retaliation. When psychological safety is prioritized, employees are more likely to engage in the ongoing process of identifying and mitigating risks, ultimately contributing to a safer, more efficient, and higher-quality manufacturing operation and a successful digital transformation.

Some of the key components of a psychologically safe manufacturing environment that should be employed throughout the organization:

  1. Open communication is modeled and fostered
  2. Failures and learnings from mistakes are openly discussed with no blame
  3. Raising concerns or issues is celebrated and retaliation is not tolerated
  4. New ideas are considered and encouraged
  5. Employees feel comfortable expressing well-being concerns with leadership or HR

Fostering a culture where individuals are encouraged to voice their opinions or concerns and learn from their mistakes is essential. It will not only improve operations during the transformation but for the long haul as well.

Navigating Intergenerational Challenges

Today’s businesses encompass a diverse range of generations, from Generation Z to boomers and much has been made about intergenerational dynamics, particularly when it comes to digital participation. You could probably fill a library with the amount of material written on how to engage each generation, what they care about and how they work. With all of this noise, there is a strong risk that we make assumptions based upon generational classification. As leaders, we must understand how to manage intergenerational dynamics effectively, but at the same time challenge stereotypes and focus on each person individually with empathy and respect.

Baby boomers or Generation X have likely grown up in more of a command-and-control leadership environment which tends to minimize psychological safety. Yet, these more experienced employees also tend to possess invaluable experience and institutional knowledge that you do not want to lose, so building trust through empathy, respect and active listening will be critical to helping this persona be an active participant in the transformation. Building an inclusive environment invites this generation to contribute their experience, transferring know-how to the digital framework and to newer employees.

Younger generations, such as millennials and Generation Z have grown up in more of an open, collaborative environment where information is democratized and individuals have more power. Open communication, active listening and authenticity will be critical for this generation.

Although different generations might have varying approaches and motivations, it is critical that leaders avoid making stereotypical assumptions. Creating an inclusive environment where everyone’s voice matters and everyone is valued will create thriving intergenerational teams

Front Line Leaders are the Key to Success

Front-line leaders (or shopfloor leaders) are normally the newest leaders, have the largest span of control, and touch the largest section of the organization. Yet, these leaders are often not considered critical to a Manufacturing 4.0 transformation. Successful digital leadership expands to all levels of the organization. Since our front-line leaders touch such a large section of the organization, their impact must be considered and encouraged. Here are some ideas:

  • Educate these leaders on the transformation’s goals and be open about timelines and changes.
  • Actively listen to this leadership level on a regular basis taking their input and ideas into the program. Coach them to do the same with their teams and share that feedback up the chain.
  • Supply adequate leadership training and ensure their leaders are modeling those skill sets critical to driving agility, resilience and innovation.

Having all levels of the organization acknowledge front-line leaders as key to a transformation’s success will support a positive outcome.

Digital Transformation is a Team Sport

The art of digital leadership lies in striking a balance between technological innovation and people-centric leadership. But this responsibility does not sit with one person or even a few. Each layer of the organization will be critical for success in both aspects. As organizations undergo digital transformation, it will be critical to supply leaders from the executive suite to the shopfloor guidance and resources needed for success. By fostering a culture of psychological safety, valuing intergenerational perspectives, and embracing employee input and dissent, leaders will build cohesive teams that trust one another and feel a sense of belonging. This will lead to better problem-solving, greater innovation and overall productivity – all critical for thriving through disruption.


Digital disruption and transformation have reached the shopfloor. The combination of IoT, big data and analytics, and artificial intelligence will drive significant improvements in quality, efficiency, safety and energy use. How quickly and extensively a manufacturer can get there will affect everything from that organization’s competitiveness to regulatory compliance. This era of rapid technological advancement requires manufacturing leadership to evolve. It’s not just about knowing how to leverage the latest tools; it’s about knowing how to empower, inspire and guide teams toward a future where technology and human potential intersect seamlessly. Employing this people-centric, digital leadership approach to transformation will provide a lift and accelerant to any Manufacturing 4.0 program.

As industries continue to change, it’s these digital leaders who will navigate the complexities of digital transformation, engage their employees in embracing the change, and propel their organizations to new heights.


About the Author:

Diane Guganig, an experienced Strategic Advisor and Sales Executive at Hitachi Digital Services, began her tech obsession at age five after touring a room-sized computer. Starting as a systems engineer, she spearheaded software development initiatives, led teams, and played pivotal roles in resolving significant business challenges. Transitioning to sales allowed her to partner with and solve a wider number of challenges, including intricate cross-industry issues. Her passion for technology has evolved into a mission to enhance the human experience, leading her to partner with purpose-driven enterprises dedicated to solving real-world problems for a better future.

[1] McKinsey:

[2] International Journal of Evidence Based Coaching and Mentoring 2022, Vol. 20(2), pp.3-19. DOI: 10.24384/ektn-xx15

View More