Some say that while China's history has seen many successful dynastic changes, very few reforms have succeeded, with Deng Xiaoping's being an exception. This shows that reform is harder than revolution.

Chinese enterprises are now entering a new round of transformation, from traditional to internet-based, from industrial restructuring, and from corporatization to platformization. In short, the difficulty of this transformation is akin to the transition from agricultural civilization to industrial civilization, and now from industrial to information civilization.

Transformation is never just a matter of viewpoint or attitude; it is also a technical job requiring strategy, tactics, and a deep understanding of human nature.

Who would willingly go under the knife without illness?

The path of transformation is never short of failures, and failures may even be in the majority.

Feeling unwell but not admitting illness, thinking that enduring a few days will suffice—this is the mindset of many patients.

When a serious illness is life-threatening, going under the knife is not a problem. So, the more severe the problem, the faster the transformation, as one must be pushed to the brink to survive.

The issue is with those minor patients, those who have just fallen ill. If you tell them that if they don't get treatment soon, they'll be in danger, they may not believe it. At a transformation conference, the host asked me: "Some bosses are still doing well now, why should they transform?" I countered: "Do we have to wait until we're dying to transform?"

Even for seriously ill patients, when the doctor asks whether to operate or use conservative treatment, the patient hesitates. With surgery, they might not even survive the operation. To be safe, hospitals now require family consent for surgery. Conservative treatment, though it may not cure, usually doesn't pose immediate life-threatening danger.

I live near a hospital, and my wife works there. Despite some doctors lacking ethics, it's common for doctors' good intentions to be misunderstood by patients. Looking at patients from a doctor's perspective is really similar to how we view transformation.

A good doctor not only treats the disease but also persuades the patient to cooperate, which is no less difficult than the treatment itself.

So in transformation, we don't need to force everyone to move in lockstep or have equally advanced thinking. There will always be those who are ahead of the curve and those who refuse to wake up. The spread of ideas follows the same principle as fashion trends; only a few are trendsetters.

The biggest obstacle to transformation is internal

The biggest obstacle to transformation is not from competitors but from internal colleagues, because the object of transformation—the past model—may be a glorious history of the company, a source of pride for many. When transformation means negating the past, people's first reaction is not whether to transform but whether they can emotionally accept the negation of their glorious past. Perhaps before transformation, people complain about tradition and even criticize its drawbacks. However, once transformation begins, people find themselves already an inseparable part of tradition.

Transformation also involves company politics at the management level, which is a more complex issue than transformation techniques. From this perspective, the derivative problems of transformation may be more complex than transformation itself.

Persuade or "Conquer"?

Reasoning and convincing through logic is persuasion. Persuasion works for a few.

For the masses, persuasion is difficult, especially in transformation. The masses are usually "conquered." Here, "conquer" does not mean military conquest but conquering with facts.

For example, a distributor trying to transform to the internet held a training session, but it didn't work; they couldn't persuade. Then, the distributor took a few clients with more forward-thinking to inspect other places, and the clients were "conquered" by facts. Then, using these clients as models, they "conquered" other clients.

Chinese people have always been good at making models and demonstrations because they tend to believe in "facts" and seeing is believing.

Transformation: Who assimilates whom?

A company wanted to transform but never succeeded because there were many "old-timers." Perhaps they had conflicts usually, but they jointly resisted transformation.

Later, the boss proposed hiring new people. But when new people came, they were quickly pushed out by the "old-timers," as the old-timers had numerical, psychological, and influential advantages. In the end, the new hires were either assimilated by the old-timers or left.

Later, I helped this company hire a large batch of new people, and they operated independently, adopting "new people, new markets, new methods, new policies," quickly achieving results. Then, they used these new people to assimilate the old-timers, mixing the old-timers one by one into the new team, thus achieving the new people assimilating the old-timers.

Start from existing stock or incremental growth?

Why is it difficult for companies with existing stock to transform? Because they fear affecting the existing stock and harming vested interests. So, the usual scale advantage becomes a "scale burden" during transformation. The larger the stock, the more hesitant the transformation.

If transformation starts from a blank or the worst market, or from new products, then the existing stock is not affected, and it is not an obstacle. For example, two companies in the same industry recently transformed to e-commerce simultaneously. One started with their best customers, and sales increased but profits declined. The other set up an independent company, starting with new customers, not affecting old ones, and the new sales were not comparable. Perhaps the results were the same, but the feelings were definitely different.

Pushed to the brink, reborn from death

The better the market, the harder the transformation. A once very successful food company in the south repeatedly proposed transformation plans but always faced strong opposition. Because they were immersed in past success and unwilling to transform, the company declined, to the point where the leadership team's annual plan of "10% sales decline" became routine. Despite this, transformation still faced many obstacles. Later, when the northeast market completely collapsed, they treated it as a last resort, allowing the northeast regional head to decide on transformation independently, while other regions remained unchanged. Two years later, the northeast market transformed successfully, and the market fully recovered, becoming the company's best market.

Don't think the above case is ridiculous; such situations have occurred in many companies. Therefore, when transformation resistance is too great, some markets can be allowed to "die first and then live," that is, let the bad markets completely rot until no one dares to touch them, and those opposing transformation stay far away, then there is an opportunity for transformation and rebirth.

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