This summer in Venice, a city of museums and art galleries, we have hosted openings at our Digital Capability Center for Operations. It’s a gallery, of sorts, showcasing the future of transformational business technology.
Some 1000+ guests have toured the newly expanded center, including the media, local and global business leaders, and tech experts, for both in-person and virtual tours that demonstrate how technology will be changing the way businesses run.
Part tech expo, part science lab, part immersive theater, the center replicates the end-to-end operations of a fictitious company that manufactures compressors for household appliances.
Under tremendous pressure to improve sales and reduce costs, the model company’s three divisions have implemented 100+ advanced digital technologies, which seamlessly weave through every function, from front-end sales through its far-flung supply chain.
The Digital Capability Center is one way we are helping industries prepare for the next normal. Companies experienced as much as five years of digital growth in two months during the pandemic. They launched new online channels, digitized entire business segments, and equipped their employee populations for remote work. As they look to further advance their digitization and transform their operations, the center can help them literally see what the future might look like and apply it in their own business.
Teams can observe how augmented reality can reinvent product design and see AI bots run CRM systems, robots assemble products, digital twins guide component repair, and analytics drive the dashboards that inform management decisions.
“Any operations transformation is as much about people as it is about technology, requiring changes to the human side at all levels of the organization,” says Dinu de Kroon, the partner leading McKinsey’s Digital Capability Centers in Europe. “That’s why McKinsey has expanded this center, so that we can inspire people with a view to the future and help them develop the right skills, mindsets, and behaviors needed to embrace a successful transformation.”
This new expansion was built with the Confindustria Alto Adriatico, an organization representing 150,000 manufacturing and service companies in Italy. It is enhanced with an ecosystem of some 100+ technology partners and startups.
“We are technology agnostic,” explains Sergio Farioli, a McKinsey partner, “so we can bring a wide range of capabilities into our learning scenarios.”
In addition to digital transformations and design-to-value labs, the center runs innovation workshops in which businesses can collaborate with a variety of partners to create new products and services, and it will launch a program focused on sustainability in operations.
“Our immersive experience is what really makes a difference: trained actors and coaches play the roles of operators and senior executives,” explains Cinzia Lacopeta, leader of the European Digital Capability Centers. “We spend a lot of time up front working with the consultant who is bringing in the group so we can develop before-and-after scenarios, simulations and debriefs that reflect their own real working situations.”
Participants will interact with our trained actors who recreate the challenges and mistakes they may be experiencing in their own companies, whether it’s using an outdated manual process or attitudes that are resistant to change, a common occurrence in transformation work. They see demos of how the technology can be applied to not just solve a problem but generate a quantum leap in terms of impact, and build the skills needed to encourage and enact change.
While participants come away with enhanced digital skills, leaders say the most important takeaways are new mindsets: curiosity and creative thinking about alternative approaches; flexible attitudes about roles; new ways of defining success.
“We say mindsets and behaviors are important in our workshops, but I can't emphasize this enough,” observes one leader who is managing the digital transformation of a major CPG company. “As we launched the first wave of skills building, our people were helpful, attentive, and we developed six new use cases. But throughout the second wave, the reaction was much more proactive: thinking about how to apply tech and operational excellence in their own areas. The challenge is how to create enthusiasm and inspire this inquisitive, open thinking - if we can do this, we should bottle it.”
The team that built the new center did some capability building of their own during the construction, which trebled the size of the original footprint. They broke ground during the pandemic in May of 2020 .
“We had 30 people, from India to Iceland. We knew we needed to work safely while keeping to our original schedule, so we pulled in our Capital Excellence experts who helped the architects, engineers, and construction team implement an overall building information modeling process (BIM) so we could bring in digital tools,” explains Sebastian Overlack, a McKinsey partner who led the project.
These included a digital control tower to enhance collaboration and create a common source of truth. The team used drones and fixed and hand-held scanners to capture 3-D images of the site to ensure accuracy and feed into the reporting dashboards, and used sensor-based technology to enhance worker safety. “We were very much ‘eating our own cooking,’” says Sebastian, with a laugh.
In addition to European-based enterprises, the center actively serves the smaller and medium-size businesses of the region and has built a strong presence Venice. "We have a social mission to develop the digital skills of 1,000 students every year, from high school up to post-graduate level,” explains Cinzia. “This ranges from learning how to use analytics to develop very simple algorithms to managerial skills and programming a collaborative robot. We are committed to developing our next generation of digital experts.”
Starting in September, the Center will host programs for organizations who want to qualify for the Global Lighthouse Network, helping participants understand the criteria and create a roadmap to become one of the most advanced digital factories in the world.