EVP and CTO at KONE

The physical and digital worlds are merging. Traditional manufacturing companies will need to adapt to rapidly changing customer expectations and be able to innovate at speed and scale. When I lived in the San Francisco Bay Area, I connected with the city by driving everywhere. In Helsinki, where I moved when I joined KONE, I experienced the city quite differently. I walked, used public transportation, and made these experiences seamless by interacting with the physical infrastructure via digital and physical means. My experience of the built environment has become much more personal and connected.

At KONE, over the past two to three years, we have been building a physical and digital organization to be in tune with our customers and deliver superior experiences to city dwellers around the world. Like me in Helsinki, our customers increasingly expect seamless, truly integrated experiences as they move around their buildings and neighborhoods. Therefore, we concluded that if we wanted the physical and digital services and solutions we co-develop with our customers and partners to be seamless and integrated, we had to become a fully seamless and integrated physical and digital organization ourselves. We had to reinvent ourselves first to become ready to create amazing experiences for and with our customers. From steel boxes to people flow experiences

Founded in 1910, KONE has a long history of manufacturing elevators, escalators, and automatic building doors. However, at our core, we are a people and material flow company. We move one billion people every day. To provide amazing experiences and to ensure that our products keep working, we connected and integrated our elevators and escalators into our cloud-edge architecture. However, while technology has been a foundational force behind KONE’s digital transformation, the most powerful drivers have focused on people. Here are the key takeaways from KONE’s digital transformation journey:

1) Acknowledge rapidly changing customer and end-user needs

2) Adopt agile ways of working across software and hardware development

3) Co-create with customers and partners as default.

Customer experience drives innovation. The digital transition has heightened customers’ need for personalized experiences around physical products. The basic technology building blocks are here, whether we talk about the Internet of Things, sensors, edge/cloud infrastructure and services, analytics, artificial intelligence (AI), blockchain, or the likes. We pull these technology building blocks into a cohesive, scalable Application Programming Interface (API) based architecture. This allows us to concept, prototype, and evolve seamless experiences that delight our customers and city dwellers.

" To provide amazing experiences and to ensure that our products keep working, we connected and integrated our elevators and escalators into our cloud-edge architecture "

Just imagine a city where people interact with their physical surroundings effortlessly with the help of technology. At best, your experience is highly personalized and tuned into your needs. Your office building system recognizes you by your phone, booking a suitable quiet space for you according to your calendar and calling an elevator to your destination floor. Later, you will be served lunch with the help of a service robot that roams independently around the building using APIs on the connected elevators. In the future, we could enjoy lunch via drone delivery or enjoy novel services provided by AI, which predicts our needs as we navigate around cities.

Building a unified and agile organization

Traditionally, many industrial companies approached digital as a separate activity. Companies used to hire Chief Digital Officers who were often responsible for digital-only activities separate from the mainstream physical core development, thus creating separate parallel teams, skillsets, and development environments – physical and digital.

At KONE, we knew that such a model would not enable us to provide superior physical plus digital experiences. Thus, instead, we chose a fully integrated approach and created a unified technology and innovation organization that encompassed all aspects of R&D, IT, Innovation, Codes and Standards, and Strategic Partnerships. But we also knew that just combining all aspects of technology under one organizational umbrella was not enough. We had to break siloes, enable dynamic resource allocation, and attract and retain talent – we had to create an expert organization where every person could grow and innovate.

We started with building a foundation by adopting agile ways of working and competency-based structures across software and hardware development. The transition was by no means easy. Transforming the ways of hardware development with a history of over 100 years took a meticulous focus on customer value and the courage to pilot new ways of working, harmonize product platforms, and modern leadership.

Most people either changed their roles completely or changed the scope of their roles substantially. Managers became experts. Everybody wrote code or developed products. Hardware experts learned APIs. Software hackers learned sensors. We unified tools and practices. Quarterly planning ruled.

Powering the shift with partnerships and co-creation When the pandemic started, one of the key requests from our customers was to help them deliver solutions for people to move from a metro station or a parking lot to their apartment or their office in a seamless, safe, and timely manner. To deliver these types of capabilities, we needed a modern cloud-edge architecture that was API-first. We needed to co-create such solutions with up to nine different sets of partners.

We recently migrated our first-generation digital and data platforms to a second-generation one that was open, API-based, and scalable globally, with AWS cloud, edge, and IoT services at its core. The migrations took place in more than ten releases across 50+ countries and 6 IoT device types. Partnerships enable companies to scale the digital transition globally. At best, strategic partnerships provide fruitful ground for co-creating new services for superior customer experiences.

We all have a role to play. Global companies need to rethink the way they operate and build their business on customer needs and co-creation. This requires fundamental shifts in mindset and ways of working inside the organization. Technology is an enabler, but it is the people that make the change happen. We all need to become physical and digital experts.