Click 'Read Original' or scan the QR code in the image to register As digitalization becomes a recognized key part of future business, digital transformation is something almost every company is doing. In this process, a widely accepted view has emerged: digital transformation is a 'top leader' project. However, if this is simply interpreted as having the boss initiate and drive the transformation, that's a misunderstanding. Recently, a service provider CEO told New Distribution in an interview that among the many FMCG companies they serve, they observed a phenomenon: **In the process of digital transformation, the ease of implementation shows a clear polarization: transformations initiated by the sales or marketing head are implemented significantly faster and yield better results; In contrast, companies where the boss initiates the transformation often face numerous difficulties in implementation, resulting in wasted money, time, and a series of hired talents, yet they still fail to do digitalization well. Why? -01- Success Depends on Your Level of Pain In fact, this is a problem many companies encounter. It's often said that digital transformation is a 'top leader' project, but many interpret this as having the boss as the primary driver, which is a misunderstanding. Think about it: in what kind of companies does a new technology tend to lead? Take cloud services, for example. Which companies are leading now? Alibaba and Huawei. Why do old internet companies like Baidu, as well as many hardware-strong companies, lag behind Alibaba in cloud computing? Because they are not in enough pain! Zhao Bo, founder of New Distribution, once told me, 'Anyone does something driven by only two forces: love or pain.' Love is hard to come by, and in a corporate setting, it's almost impossible to achieve because you can't make everyone love the same thing, especially when it's a new technology or concept that is boring and almost completely unknown at first. Transformation itself is an extremely painful process, with too many new things to learn and too many things to change. Therefore, corporate transformation is pain-driven; the speed and determination of transformation depend on whether the company is in enough pain, enough to outweigh the pain brought by the transformation itself. In comparison, Taobao at that time, as a business model with an extremely short chain, needed to process massive data in real time. Online shoppers cannot wait even a moment: they want to place an order now, pay now, complain now; even a half-minute delay degrades the experience by several levels. There was no choice; Alibaba could only rely on cloud computing to achieve real-time processing of ultra-large-scale data. It had to be done, so Alibaba stood at the forefront. In contrast, the old internet giant Baidu had such easy money that it didn't need to invest much effort in accelerating the development of cloud computing, storage, and other technologies. So you should understand why 'boss-driven' digital transformation often doesn't work well. -02- Boss-Driven or Business-Driven? Boss-Driven: Most digital transformations initiated by bosses stem from anxiety: I don't know exactly what changes digitalization can bring; I only know that this is the digital era, other companies are doing it, and if I don't, I'll fall behind in the future. Because the boss decides to undergo digital transformation for this reason, the pain is not enough, or even if the boss clearly understands the pain of not doing it, it's hard to make the entire enterprise understand and feel that pain. The result is that the boss is willing to spend money to find talent, software, and systems, but the team cannot fall in love with the system, nor can they accept the shock and inconvenience that the new system brings to the originally mature business system. The boss might suddenly realize one day that customer resources should be corporate-owned, because when salespeople move, company resources are lost. So we need to implement software to manage people, manage customer resources, and solidify processes—this is the boss's management-driven approach. Then it's handed over to the CIO and IT department, and ultimately implementation is difficult. A corporate CIO told me that their company's leadership recognized the importance of digitalization early on, laid out plans early, and spent a lot of money buying various software. But the result was that these software had poor interoperability, and departments had no motivation to interconnect, leading to one data silo after another, merely storing a pile of data without playing a role in supporting business. Business-Driven: Business-driven is completely different; the starting point and mindset are entirely different. This kind of drive is usually proposed by the head of sales or marketing, and their reasons for wanting digitalization are simply two: First, when business development hits a bottleneck, digitalization is needed to achieve sustained rapid growth. Midea is a typical example. Before 2012, Midea was a highly decentralized organization, with each business unit operating independently, resulting in highly fragmented information systems lacking consistency. All information was siloed, unable to be integrated, let alone automatically shared, which led Midea, already large in scale, to encounter a bottleneck: it couldn't integrate across business units to achieve integrated, synergistic rapid development. Second, when the company's business itself has serious problems and profitability has become a challenge, digitalization is the best solution. For example, many FMCG companies are like this: as the era of cheap labor gradually becomes a thing of the past, the efficiency of the traditional distribution system is also becoming stretched. Only through digitalization can they improve production and management efficiency, and even reduce marketing expenses and costs to achieve profitability again. Under business-driven, the motivation for companies to use software systems undergoes a fundamental change. This business-originated digital transformation makes the system match the business, rather than making the business adapt to the system. From a human nature perspective, this is also easier for the entire team to accept. Of course, this doesn't mean that business-driven will definitely succeed; it's just that the motivation is more scientific and aligns with the original intention of corporate development. Additionally, it's important to emphasize that even under business-driven digital transformation, the role of the 'boss' is still crucial. The statement 'digital transformation is a top leader project' is correct; there must be someone in the company to make decisions and push forward, especially when the transformation faces difficulties. There must be someone who can withstand pressure and hold on through the tough times. Moreover, without the boss's support, where would you get resources? In Conclusion: With the arrival of the digital era, companies urgently need to clarify where the driving force for digital transformation comes from and find the right direction, so as not to deviate during the transformation process, wasting a lot of manpower and resources, and ultimately still lagging behind competitors. However, digitalization is a brand-new field, and no company dares to claim that its digital transformation direction is definitely correct. But we can still learn from the cases of companies that are recognized as relatively advanced in the digital field, absorbing experience and applying it. Only by seeing more, communicating and learning more, can we think more, and ultimately have a clearer and more holistic understanding of the company's own digital operations, and explore a more feasible path for digital transformation. To address the needs of many companies in the digital transformation process, New Distribution, together with Mr. Liu Chunxiong, the initiator of new marketing and dean of the Marketing Digitalization Research Institute, has planned and organized the Digital Practice Driving Business Growth Course. The first lesson will officially start on June 30 to July 2. Those interested can scan the QR code in the long image at the end of the article to consult or click 'Read Original' to register for details.