How to define manufacturing innovation: digital transformation practices.

To help companies take the path that best suits their individual needs, McKinsey has identified 8 areas in which it is possible to correct inefficiencies and create value, as well as 26 concrete levers that emerge from Industry 4.0.

It is the so-called: “digital compass”.

However, this tool risks not appearing sufficient to make the necessary changes.

In fact the current problem, especially in Italy, concerns the strong pressure that companies suffer to digitize models and products.

There are several examples of historic companies that have achieved 80% of revenue from new digital revenue, but it is a specific, highly structured and operational elite worldwide. Realities such as SMEs or even large companies (but which do not have an international dimension) more than acquiring awareness and organization, often find themselves fearing digital change, assuming possible losses and lower profits compared to previous years.

What is missing is the adoption of a long-term project based on established transformation practices, the combination of which ensures profit expectations.


To better understand the type of necessary practices, McKinsey conducted a survey whose results were analyzed in two ways. Using multiple machine learning classification techniques, he identified the “clusters” of digital transformation practices that are closely associated with performance that exceeds expectations.

He also used regression analyzes to illustrate practices that had an unusually large effect on improving the results of a digital transformation (always in relation to expectations).

Then he isolated the transformation characteristics that are statistically significant both in the explanation and in the prediction of the probability of an exceptional success.


Five thematic groups of practices emerged from this analysis, which in particular move the performance needle.

Applying practices across all five groups maximizes the chance that a company’s digital transformation exceeds performance expectations.


These practices are:

Define clear priorities. The possibility that a digital transformation is exceptionally effective is even greater when executives determine which elements of the transformation involve “difficult to reverse” choices that are fundamental to the direction of the company and agree on how to deal with these elements.

Investing in talent, especially at the top. Transformation into a digital company requires the addition of specialized leaders. The Chief Digital Officer (CDO) is an essential member of the leadership ensemble: all successful companies have a CDO. Chief Analytics Analytics (CAO) has become an even more important leadership role for effective digital transformations.

Commit time and money. Performance above expectations is 1.5 times more likely when respondents said digital transformation was a top priority for senior company leaders. Companies also need to reserve sufficient funds for their digital transformations.

Embrace agility. The speed with which competitors and customers move in the digital economy means that companies need to revisit and reorganize their priorities more often. Agility often occurs throughout the company. Employees are more likely to be rewarded for generating new ideas, taking appropriate risks and respecting test and learning practices while pursuing opportunities.

Make people responsible. Digital transformations are more likely to be exceptionally effective when companies give people clear roles and responsibilities and entrust an “owner” to each transformation initiative. The possibility of superior results also increases when companies hold people responsible for achieving the individual objectives that have been assigned to them.


A management team may have little control over the strength of the digital competition it faces or the extent to which its industry has already digitized or started to change within its borders.

But it has a significant influence on the degree to which the organization’s digital transformation approach embraces these practices, which can reduce uncertainty and lead to extraordinary results at your fingertips.