Industry 4.0

The rise of new technologies is changing traditional industries. As new trends gain momentum – VR, IoT, automation, robotics – traditional businesses are applying new technology to traditionally un-sexy products.

Industry 4.0

Industry 4.0 is quickly changing traditional industries and products. The evolution of industry has been defined in four evolutionary segments:

  • Industry 1.0: mechanization, water and steam power

  • Industry 2.0: mass production, assembly lines, and electricity

  • Industry 3.0: computer and automation

  • Industry 4.0: integration of cyber and physical systems; typically referred as the internet of things (IoT)

From medium-sized manufacturing firms in Germany to family-owned private manufacturers in the Midwest, small to medium sized companies are out-innovating larger incumbents. Industry 4.0 is gaining steam and being adopted by the least-likely industries, far away from Silicon Valley. Industries from tractors, hand-tools, and front-end loaders are adopting new technologies to meet the needs of changing customers.


Komatsu, a 95-year old tractor manufacturer in Japan, is outfitting diggers with sensors to provide ongoing real-time data from field work to improve efficiency and reliability. Sandvik, a 154-year old Swedish manufacturer of heavy equipment, outfits oil rigs and rock crushers with sensors to monitor equipment remotely. Similarly, Valliant, a 142-year old German manufacturer of central heaters monitors equipment remotely with GPS technology. As farmers have used combines outfitted with GPS and technology that would rival a jet fighter for decades, Case IH moved to the next level by unveiling an autonomous combine that will change the nature of modern farming.


So, why don’t more organizations innovate quicker and operate on the edge of trends? Linking factories and products to technology is not a new phenomenon. However, industrial manufacturers have been taking the lead as industries rely on technology to improve efficiencies as mechanization replaces labor. In addition, these typically private firms maintain a culture of creativity and risk taking against much larger competitors that have lost the edge as size and subsequent bureaucracy changes the culture. Leaders who value creativity, innovation, and continuous improvement are driving these firms to market leadership.


Without strong leadership focused on creativity and innovation, and a culture that embraces experimentation, failure, and continuous learning, it is very difficult to maintain forward momentum and accept ambiguity and change. Incremental improvements overtake risk as leaders of these large firms focus on short-term activities and employees are not encouraged to continuously improve the organization. So what if you work for one of these firms that avoids disruption and stifles creativity?

For an organization to change, it takes strong leadership working to alter the overall firm culture. If strong leadership is not in place, individuals can still change their “small world”. Using deliberate and systematic creative and problem solving tools, individuals can make big changes in small ways. In addition, finding like-minded change agents at the lower levels of the organization can result in wins which may eventually gain new followers. As team members see improvements, the processes, tools, and techniques will be valued and adopted. If you can’t solve world hunger, then make sure your neighbors are well fed. Learn the benefits of systematic creativity and problem solving to improve your world.