Traditional Enterprises Are Undergoing Disruptive Restructuring: Will You Be Destroyed or Reborn in the Future?

Traditional enterprises are undergoing disruptive restructuring. The scary part is that many companies caught in this wave are unaware of the threat of destruction or the opportunity for rebirth. Such companies lack a future. Let's run toward the future now.

The Direction Toward the Future: Change Your Posture

In the first half of 2014, to help Hengan International Group, the leader in China's tissue and maternal and child hygiene products industry, implement and advance sales management reform projects in areas such as small-region deep cultivation, balanced development of weak categories, and distributor and team management, I spent a lot of time in Guangdong.

During my time in Guangdong, I was surrounded by sanitary napkins and diapers every day, fighting side by side with Hengan's sales colleagues. Here are a few points relevant to this book to share with you.

First, we might use WeChat for daily sales management, but we may never have thought about optimizing business and sales management processes based on mobile internet.

Like many enterprises, within Hengan's sales system, numerous WeChat groups were created based on hierarchy, region, category, and channel type. People reported on promotional sessions, new store development, new product placements, order progress, and shared photos of improved displays, or exchanged information on inventory and distributor purchases.

But the problems are obvious: everyone posts photos of well-done terminal displays to solicit praise, lacking before-and-after comparisons or comparisons with strong competitors, and failing to expose poorly performing issues. Faced with data that remains unchanged or even zero day after day, upper management typically just reads reports in WeChat groups without direct follow-up or accountability. Even when phones and WeChat become daily management tools, we might never think of making even small improvements or optimizations to order processing.

For example, instead of having salespeople return from a day of field visits and then compile orders the next morning to pass to distributors or sales logistics, they could take a photo of each order and send it back to distributors or sales logistics in real time. Even such a small change can greatly improve the timeliness of terminal delivery and order fulfillment rates.

Second, promotional expenses and materials have never been effectively deployed, but we may never have thought of using mobile phones to solve this problem.

Hengan conducts monthly channel promotions with fixed rate quotas and distributes materials matching new products and terminal promotions. However, due to distributors' interception and misuse of funds, as well as issues like untimely activity execution and poor communication, some promotional expenses never truly reach second-tier wholesalers and terminal store expansion and shelf placement, and some materials rot in warehouses.

Why can't we extract the mobile numbers of the responsible persons for A, B, C, D class stores from the database (provided such a database is established) and push relevant channel promotions and material placement information to corresponding terminal merchants via WeChat or even SMS, which is increasingly less used? Is this difficult? It's something a clerk in a branch office can handle!

Instead of the old way: printing DM flyers with "purchase with gift" activities, relying on sales supervisors to notify each distributor one by one, or having salespeople inform each terminal one by one as they visit. Past facts and experience have already told us this is unreliable.

A small clue reveals the big picture. At this point, I remind everyone of a basic fact: in the increasingly deepening mobile internet era, the barriers created by layers of organizational or channel hierarchies between us and the mid- and low-level marketing managers scattered across markets nationwide, even the frontline salespeople, between us and distributors and their sales teams, and between us and the myriad terminal stores, are no longer insurmountable as before, no longer as distant as "a thousand miles away," but can now be faced "face-to-face" through mobile internet platforms, technologies, and tools.

The era of "the emperor is far away" is over. When we can bring the most remote partners and the lowest-level salespeople almost right in front of us, when we can directly listen to and observe the real situation from the front line, what we need to do is change our posture, and change it again, in the direction of the future, using future-oriented methods to reform and respond to reality.

Only in this way can we live more comfortably in the future.

Go Deeper, Feel Better

Around 2011-2012, when we were serving China's leading health product companies By-Health and Qianlin Health (formerly Baorui Pharmaceutical), we had in-depth discussions with Qianlin's general manager Yao Zhuangmin and other senior executives on how to convert the members held by chain terminal systems into enterprise members.

At that time, what we could think of was: first, by sponsoring or helping chain terminal companies conduct health lectures and corresponding services, through repeated direct contact with terminal members, we could attract consumers; second, build a matrix to absorb members as "fans," converting consumers and terminal members into followers of corporate Weibo and blogs, and obtain purchaser data by entering e-commerce platforms like Tmall...

With limited technical means, we simply couldn't think of effective methods to quickly and massively directly grasp consumer data, directly manage and serve consumers, and directly operate on consumers.

But today, with mobile internet technology maturing, if we launch 1 million bottles of liquor (or any other product) with QR code labels, we might obtain 500,000 real consumer scans and their data. Of course, the premise is that we give the QR code attractive and sticky content.

Once we have the mobile numbers and WeChat IDs of these 500,000 consumers, we can push targeted precise communications; we can direct them to our WeChat official account, PC or mobile official mall, and on the micro-community developed from the WeChat official account or in specially established WeChat groups, we can communicate directly with consumers face-to-face, listening to their suggestions or requirements on product development, packaging, promotions, and other aspects.

Once we obtain consumers' preferences for product categories, price points, purchase quantities, purchase locations, purchase times, and other consumption behavior preferences, we can segment and manage them into smaller niches, and thus tailor specific products and promotional plans for groups of consumers with similar preferences, or even for individual consumers.

When we know that 5,000 of our consumers live in a large community in a certain city, we can even target that community and its surrounding retail terminals with specific product categories, carrying out targeted promotional activities.

When we can face a large number of consumers directly, we can also bypass distributors, wholesalers, and terminal retail stores to transact directly with them.

These were unimaginable in the past; this is the great change that will occur in the next decade. Through the above, we should know that in the mobile internet era, the corresponding platforms, technologies, and tools have broken traditional barriers, allowing us to directly control the lowest-level frontline salespeople, the most terminal stores, and consumers.

And when we truly achieve these, the impact on our product R&D and production, promotions and marketing, distribution channels and terminal stores, corporate organization and business management processes, is equally unimaginable, even disruptive restructuring.

Now, I want to remind you: stand higher, look farther, and embrace the future pragmatically and deeply. These are what I strive to present in my book "From Trends to Action: The New Business Ecosystem of the Next Decade + The Road to Enterprise Transformation and Reform."

The Group Exercise Team Is Growing: Is There Still a Place for You?

In the early years of the e-commerce wave, there was a widely influential phrase of twelve characters: "Invisible, Despised, Incomprehensible, Left Behind."

"Invisible" means not seeing where the opponent is. Just as Wanda, in commercial real estate, never imagined its competitor was not other real estate peers but Taobao and its ilk, and Suning, in home appliance retail, never imagined its biggest rival was not Gome but JD.com and its ilk, after consumers shifted or transferred from traditional offline consumption to online, the competitive force field also twisted, causing many enterprises to encounter opponents they never thought of or never considered as rivals.

"Despised" means even if we perceive that a new business species might be our opponent, we still rely on our identity as mainstream competitors over the past decades, and on consumers' past consumption channels and the habitual notion that "changing consumption habits is the hardest," we look down on opponents that have just shown their potential.

"Incomprehensible" means not understanding why opponents can become so strong and successful. Outside the new business gameplay reconstructed by e-commerce and the internet, we can't even figure out their business logic and models.

"Left Behind" means when you can see, respect, understand, and want to compete on the same track, you find you can't keep up with the leading opponents. Even if you want to catch up or might be able to, you'll find the threshold today is much higher than before, and even if you invest several times more than your previous opponents, you may not achieve their current success.

At the same time, we will find that when more and more existing or potential opponents rush into the track to the future, the track becomes a square, and the transformation and reform of enterprises crowded on the track is like a group exercise.

But we should remind ourselves: when everyone rushes in because they see, respect, or understand, the dividend period of enterprise transformation disappears, and the group exercise queue becomes so crowded that you can't squeeze in or find your place.

This is like the earlier e-commerce. When laggards in clothing, department stores, audio-visual books, and other industries joined the e-commerce ranks, they could no longer enjoy the high-speed traffic growth dividends of online shoppers, nor the low-cost traffic conversion dividends experienced by pioneers, and faced higher entry barriers, higher intensity, and higher-cost competition.

That is to say, in this wave of major transformation and reform that China's entire business society is ushering in, transformation itself is a competition. And this competition, as we have already felt and are confused and anxious about, is more led by the internetization of consumer behavior and the internetization of traditional businesses and enterprises.

In some respects, in the big square and group exercise queue of transformation and reform, when and how we enter is crucial. I believe that whether I have seen, participated in, or promoted, or what you have seen, around us there are already some traditional enterprises that have begun transformation and reform in the mobile internet era. Even among the distributor groups that many people consider to have relatively poor quality.

Speaking of this, I can't help but recall the distributor Boss Liang I met in Guangyuan, Sichuan. Boss Liang is the local distributor for Liby Group in the daily chemical industry and Hengan International Group in the tissue industry. Perhaps influenced by Hengan equipping its sales team with mobile phones installed with SFA (Sales Force Automation, a sales management software) to manage sales personnel and business processes, at the end of 2013, he spent over 100,000 yuan to introduce a "mobile order management system" with similar functions but simplified modules. By fixing the daily terminal visit routes of salespeople, making terminal visits and sales processes transparent, making the number of visited terminals and order quantities transparent in real time, and making warehouse preparation timely after orders are returned to the backend, the daily terminal visit data of his company's dozen or so salespeople more than doubled. As for sales, how much do you think they increased?

You will see more details of Boss Liang's transformation case in the book "From Trends to Action." I won't elaborate here. However, I want to remind everyone: when the distributor group, which we consider poorly organized "local guerrillas," and some small terminal store owners are keeping pace with the mobile internet era and starting to transform and reform, we are still lost in direction, confused about transformation, puzzled by reform, or even lying in the comfortable warm water we are used to, being slow to perceive or even unaware.

If we are not "dead pigs unafraid of boiling water," we can only become "stupid pigs" boiled to death by the increasingly boiling water of the mobile internet era, and we cannot become the "pigs" that can fly, lifted by the wind of trends.

Now, run, brothers. Even if we are a bit slow, even if we can gain a little time and space for a running start, it's good, because we can fly better in the next decade!

This article is from the public account Business Trends (ID: lizhengquan02), originally the preface of Mr. Li Zhengquan's new book "From Trends to Action: The New Business Ecosystem of the Next Decade + The Road to Enterprise Transformation and Reform." During publication, the editor made changes.

At the request of many distributor friends, the fourth B-end e-commerce inspection class of this public platform will go to Nanjing and Hangzhou from August 15-18 to inspect Qianmi Network and Alibaba Retail Link. Distributor friends interested in transformation can join us for on-site inspection:

Activity process: Time: August 15-18

15th: Check in at designated hotel in Nanjing; 16th: Inspect Qianmi Network, take high-speed rail to Hangzhou in the afternoon; 17th: Participate in the "FMCG Distributor B2B Transformation Exchange Summit"; 18th: Inspect Alibaba Retail Link in Hangzhou;

Distributor friends interested in transformation are welcome to join us to learn and inspect on-site:

Organization Form

1. Company visit 2. Actual market case visit 3. On-site explanation 4. One-on-one communication

Participating distributor friends only need to pay a registration fee of 200 yuan Other expenses are self-paid Note: This inspection is limited to distributors

Interested distributor friends can register by long-pressing the QR code below.

When adding, please note: "Fourth Phase Registration".

Non-participants, please do not disturb

Group Photos of Previous Inspections:

Group photo of the 3rd B-end e-commerce inspection, from top to bottom: Yunbao Shangmeng, Weijie Chengpei, Wanshang Yizhan.

Group photo of the 2nd B-end e-commerce inspection, from top to bottom: Jinhuobao, Caiba, Yishang.

Group photo of the 1st B-end e-commerce inspection, from top to bottom: Piduoduo, Beiquan, Yishang.

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