Several projects I worked on this year involved the implementation of digital transformation for brand owners. I interviewed dozens of people, from marketing teams bottom-up and IT teams top-down, and gained many insights that I'd like to share.

To avoid misunderstandings, I should first clarify that I don't define myself as a designer of IT system tools or a planner of corporate digital strategy. Rather, I am a connector and enabler between channel digitization and marketing teams in corporate digital transformation. The following views are based on this.

01 Digital Transformation: Optimize Organization or Processes First?

Ten years ago, brand owners managed by holding personnel and finance tightly; if done well, the business would thrive. Today, this model is less adaptable. With technological advances and market changes, brand owners now need to focus on processes and IT. IT serves processes, and processes determine success, highlighting the importance of processes.

So the question arises: since organization serves processes, and processes can optimize organization, and digital transformation requires new organizational support, should we build the organization first or the processes first?

Given the existing organization, let's look at the commonly recognized process architecture, which can be divided into levels L0-L6.

  1. L0 - Company processes: the collection of all processes that create value for customers from resource input.
  2. L1 - End-to-end processes/business domains/process categories: collections of processes that achieve a business function. The L1 structure determines the company's business model.
  3. L2 - Logical process groups: logical stages or support functions of a business function. Stage/function division is a natural need for manageable business control and reflects the business model. The L2 structure determines the company's business model.
  4. L3/L4 - Processes/Sub-processes: define how a specific business stage is executed. For scenarios that don't require differentiation, they can be composed directly of activities. For scenarios requiring further differentiation, L4 sub-processes should be set per scenario (e.g., under ITIL, managing IT - managing IT services - managing IT service strategy requires further dividing IT service strategy into service levels, availability, continuity, etc., each being a sub-process of IT service strategy). The L3 structure determines key success factors and control points. For management convenience, L3/L4 can be unified as the process layer; if no scenario sub-processes are needed, L3 and L4 processes share the same name until the L5 activity layer, where they are further divided by execution role.
  5. L5 - Activities: elements that make up a process and are key to delivering process value. An activity typically has a single responsible role (i.e., can be assigned to a specific position). The structural relationships of activities determine process efficiency.
  6. L6 - Tasks: items that complete an activity. Completed by a single responsible role, formed after further decomposition and standardization of activities.

L0 | Value Chain & Strategic Goals L1 | Strategy Classification, Business Model L2 | Process Grouping L3 | Process Items L4 | Sub-processes L5 | Execution & Activities L6 | Tools & Methods & Tasks

We can clearly see that the top-down process also corresponds to the continuous implementation of organizational levels. New processes driven by digital transformation should match new organizations. Returning to the initial question: organization first or process first?

My view: Digital transformation is not an organizational upheaval but a functional transformation or optimization. Within the existing organizational framework, combined with digital transformation leaders, you can build the key process framework. Process and organization should proceed simultaneously: first the organizational framework to the process framework, then process details to organizational details, and finally coordinate, match, correct, and improve both.

It's also important to note: process mapping must be led by internal personnel who make final decisions at key points; external forces can only provide reference suggestions.

The reason is simple: first, if a company hasn't clarified its strategic goals, digital transformation is just "following the trend"; second, no external institution knows the company's strategic goals, internal operational pain points, and actual situation better than the company itself.

02 How to Effectively Bridge IT Language and Operational Language?

Many companies feel that digital transformation models developed at high cost ultimately cannot be implemented, like an "empty shell," resulting in a bunch of flashy PPTs.

This involves the process of forming digital transformation models. Many consulting firms focus on senior executives and department heads when building these models, designing questions, interviewing them, collecting results, and combining with past experience and methodologies to form transformation directions.

Is this wrong? Definitely not, but it doesn't clearly distinguish between "individual problems" and "common problems." Remember, the ultimate focus of digital transformation is not the executive level but the backbone of the company: middle managers and the execution layer.

The inability to effectively bridge IT language and operational language is the main source of "empty shells." Here's a simple example of differences.

Typical profile of IT language people: highly educated, young and driven, strong ability to accept new things, good understanding of new things and future prospects, and income is more for a better life. In 16 characters: Because they believe, they see; because they see, they aspire.

Typical profile of operational language people: lower education, mainly born in the 70s and 80s, habits hard to change, change can even be painful, weaker comprehension, weaker acceptance of new things, and income is mainly for making a living. In 16 characters: Because they see, they believe; because they believe, they follow.

So the question is: how to effectively connect these two levels is key to digital implementation; otherwise, it becomes an "empty shell." This requires transformation designers to go to the front lines, understand market conditions, interview middle and grassroots workers, visit channel partners at all levels, collect data, and synthesize diagnoses.

Here I'd like to mention Mr. Fan Xianguo, Chairman of Jinmailang. A core element of the "Four-in-One" success is the daily wage system. The "daily" vs. "monthly" payment is Mr. Fan's extremely subtle "insight" into the human nature of frontline workers. You can ponder that.

03 Should Digital Transformation Designers Be Comprehensive or Iterative?

My view on this is to be iterative. First, in FMCG, no company can claim its digital transformation is fully successful; it's just a matter of speed. Second, there's no fixed template for corporate digitization; it's a highly "personalized" operational model. So being comprehensive is impossible. Don't spend too much time on transformation design; fully integrate with actual work, continuously summarize and explore.

Regarding design combined with practice, my view is: With marketing digitization as the core, starting from market status + channel status + operational methods and strategies, do specific work like improving marketing strategies, optimizing both processes and organization, and iterating transformation methods, to provide solutions for final digital implementation. This is the process of best matching theory and practice, requiring iteration and continuous PDCA cycles.

Let's take an example: Traditional enterprises often face three major pain points: unclear status, unclear causes, and unpredictability.

  1. Unclear status: never knowing the current sales situation until weekly or monthly summaries.
  2. Unclear causes: why a well-designed product isn't accepted by consumers? Why do management think it's a hit, but no one buys it in the market?
  3. Unpredictability: why new product launch plans often face delays due to various human or external factors, making them completely unpredictable.

How does digital transformation solve this? The hardest point in transformation always comes from mindset. As a consultant for multiple companies, I've found that the core issue is never how great the plan is or how well it fits; all core points come from the frequent changes in senior management's mindset. This is unavoidable; everyone is exploring, so iteration is inevitable.

04 Top Management Must Dare to Criticize and Self-Criticize, Challenge and Self-Challenge

I strongly agree with a teacher's saying: "There are no absolute authoritative experts in FMCG digital transformation; we are all still on the way."

Indeed, digital transformation is a top-led project. Top management must absolutely understand and comply. For the entire company, any executive or IT leader, maintaining sensitivity to data is basic, and the ability to capture, analyze, and use data is the most fundamental skill. This basic skill is built on understanding and compliance.

  1. Executives facing the unfamiliar and fear of the digital age: With the rapid rise of digital technology, traditional success models seem unable to meet future operational needs. Executives have realized they need to embrace change but lack confidence, even with some fear.

At this point, executives must dare to challenge (all previous success models that hinder digital transformation) and self-challenge (break the empiricism under traditional models). They need to learn more, listen more, see more, value young people, leverage their new thinking, let them pilot new methods, and expand after results.

  1. The core executive team's determination for change must be unwavering: Currently, digitalization is hot, and many companies blindly follow trends without carrying transformation through, resulting in half-hearted efforts.

At this point, executives must dare to criticize (everything that contradicts digital transformation) and self-criticize (face all shortcomings and errors during transformation). Digital transformation requires real investment and executive energy. Success depends on the entrepreneur's or top leader's determination and courage. If the entrepreneur hasn't thought it through or lacks persistence, digital transformation will be ineffective.

Summary:

The essence of digital transformation is organizational transformation. First, recognize the common pain points in the industry; second, clarify future trends and opportunities; third, based on these trends, think clearly about how the company will grow in the future and what role digital technology plays.

Implementing digital transformation requires a mindset shift from executives to the execution layer. Only with the joint execution of all employees can transformation be better promoted and achieved, especially with the determination and courage to adjust core personnel.