Digital transformation and inclusive innovation
In Xing Xiaoqiang’s view, the driving force of digital transformation in the company’s future strategic layout is reflected in many aspects. First, digital transformation optimizes strategic decisions through big data aggregation and intelligent analysis, making the company's strategic layout more systematic and collaborative. Secondly, digitization not only promotes the digital upgrade of traditional businesses, but also provides opportunities for the exploration of emerging digital businesses, making the strategic layout of enterprises more structural and forward-looking. Finally, digital transformation also promotes changes in corporate organizational structure and culture, making strategic layout more inclusive and supportive. Successful digital transformation has at least three key factors. The first is a clear digital strategy, which provides the direction and space for digital transformation; the second is an innovative digital business model, which demonstrates the value logic and transaction structure in the transformation process; the third is a highly efficient digital operation system, which reflects the specific implementation measures and results in the transformation.Xing Xiaoqiang also emphasized that digital transformation is not just a separate project, but a deep integration of strategy, business model and operating system, ultimately forming a comprehensive digital organization covering R&D, production, sales, service and other aspects.
Xing Xiaoqiang also discussed the strategic significance of "inclusive innovation" in low-income markets. This concept stems from inclusive growth, which emphasizes that through innovation, the benefits of economic growth can benefit all levels of society, especially those low-income groups that have long been ignored, the "bottom of the pyramid market." In traditional business models, low-income markets are often ignored due to lack of resources, low consumption power, and high transaction costs. However, from the perspective of inclusive innovation, with the development of digital technology and business model innovation, low-income markets are not a burden, but an opportunity for enterprises to obtain new competitive advantages and a driving force for sustainable economic development, in which enterprises can create and obtain value. China’s Kuaishou is a good example. Through innovative digital business models, Kuaishou has solved a long-standing problem - the problem of expression and attention of the bottom of the pyramid groups to the world. In the traditional age of graphic and textual information, groups at the bottom of the pyramid usually lack the necessary writing skills and find it difficult to find suitable channels to publish content. But in the era of digital economy, short videos have become a new carrier of information and content. Through digital technology innovation, Kuaishou has significantly lowered the threshold for short video production, allowing more bottom-of-the-pyramid groups to participate in content creation. At the same time, Kuaishou's business model innovation not only enables these contents to be spread within the bottom of the pyramid, but also across social circles to reach a wider audience.Kuaishou Company’s innovation has activated two previously neglected resource capabilities: one is the creativity at the bottom of the pyramid, and the other is the attention at the bottom of the pyramid, which brings new growth opportunities and business value to the enterprise.
Technology and business models complement each other
“In the digital era, companies must abandon traditional business thinking and adopt new business models in order to effectively respond to the challenges of this market.” Xing Xiaoqiang said. He also cited Pinduoduo as a typical example. In the fiercely competitive e-commerce field, Pinduoduo did not follow the traditional "80/20 rule" to target high-income groups, but chose the large-scale low-income market. By building a digital business ecosystem and leveraging digital technologies, Pinduoduo has successfully overcome various obstacles in low-income markets and thereby created new value. For example, consumers in low-income markets have strong social attributes. Pinduoduo reduces customer acquisition costs by leveraging social connections between consumers, and achieves viral spread. In this process, technical means such as the construction of digital platforms and data aggregation and transformation have played a huge role. Through inclusive innovation, Pinduoduo not only brings a new growth curve to the enterprise, but also provides low-income groups with more affordable and acceptable products and services, thus achieving a win-win situation.
In the process of commercializing new technologies, technology selection and business model innovation often need to complement each other. When asked what suggestions he had for enterprises undergoing digital transformation, Xing Xiaoqiang first quoted Harvard Business w88 casino professor Chesa Bluff’s view: Technology itself cannot directly realize economic value, and business models play an intermediary role between technological input and economic output. The same technology will produce different value propositions through different business models, thereby bringing about completely different economic performance. Most business models are thought to be designed within a set of constraints, and when new technologies or other changes relax or impose new constraints, opportunities for business model innovation emerge. For example, Kuaishou wanted to do video social networking when it first started. However, due to the immature infrastructure, technology and market environment, it could only launch a mobile application for making and sharing GIF images. Later, thanks to the popularization of China's 4G network and smartphones and the promotion of unlimited traffic packages, Kuaishou itself solved technical problems such as video compression and intelligent algorithm recommendation, and then realized the innovation of the short video social platform business model.
Therefore, in the process of digital transformation, enterprises should not only focus on the novelty or advancement of technology, but also on the suitability and integration of technology.In practice, the digital technology chosen by enterprises must focus on business model enhancement on the one hand, that is, to support and enhance the creation, delivery and acquisition of value through digital technology. For example, by replacing traditional manual customer service with online intelligent customer service - which improves service efficiency but does not change the dominant logic. On the other hand, we must focus on business model innovation, use digital technology to propose new value propositions on the basis of original business, expand the space for value creation, and generate new value logic. For example, many manufacturing companies collect real-time data through the combination of digital technology and hardware products, and then provide refined services based on big data.
“However, the most challenging transformation is to completely subvert the original business model and rebuild a new value network and transaction structure through digital technology. This kind of ‘capability-destructive’ business model innovation needs to be handled carefully and should be accompanied by corresponding methodologies to guide the enterprise’s transformation process.” He added.
Requirements of digital transformation on organizations
Successful digital transformation places higher requirements on organizations in terms of resource coordination, flexible adaptation, and cultural construction. Xing Xiaoqiang focuses on these three aspects and provides "good prescriptions" for organizations in the midst of digital transformation.
First of all, in the process of digital transformation, if an enterprise wants to effectively integrate resources, it first needs the direct responsibility and promotion of senior leaders. He emphasized that digital transformation involves multiple levels such as strategy, business model and operations. Without the coordination and management of senior leaders, the cost of resource integration between departments will greatly increase. Secondly, the selection and integration of resources must be consistent with the organization's digital transformation strategy and must be systematic and collaborative. He also pointed out that resource integration needs to consider the interests and demands of different stakeholders as well as internal and external departments, so governance thinking should be adopted. Finally, resource integration also requires clear planning and roadmaps, as well as mechanisms for fault tolerance and timely adjustment to ensure the efficiency and success rate of resource integration.
Secondly, when talking about the adaptability of organizations during enterprise digital transformation, Xing Xiaoqiang pointed out that in the face of the rapidly changing digital economy, organizational structures and processes should not remain static, but need to be constantly adjusted to promote the in-depth implementation of digital transformation. In particular, digital transformation requires the organic integration of digital technology and traditional business, which is usually reflected in the relationship between technology departments and business departments. For example, when some large manufacturing companies (such as Lenovo Group) are promoting digital transformation, they will set up a digital transformation (DT) department to be responsible for their own transformation work, while the information technology (IT) department not only provides technical services for the company itself, but can also provide technical solutions to external customers. Xing Xiaoqiang therefore proposed the concept of "digital and real organization duality", emphasizing that in the process of organizational design and evolution, through integration and decomposition in different links of the value chain, it can simultaneously support the digital upgrade of physical products and the digital derivation of new service businesses, promote continuous collaboration and integration between digital and real, so as to maintain stability, improve efficiency, and achieve innovation during the digital transformation process.
In addition, how should companies promote cultural changes to support digital innovation?
Xing Xiaoqiang pointed out that it is crucial to build a training system for digital transformation. Enterprises need to conduct systematic training for employees at different levels and departments to change traditional cognition and influence the way employees think. More importantly, digital transformation is not only the responsibility of a certain leader or department, but a collective action of the entire organization, so all employees should participate in it and truly learn in practice. He suggested that companies can break down transformation tasks into multiple projects and set phased and spatial goals so that each employee can assume the corresponding tasks. At the same time, a digital transformation innovation competition can be held to inspire employees to propose improvement plans and promote innovative practices. In addition, a narrative strategy must be designed in corporate publicity, with a unified voice, to convey clear transformation signals and confidence both externally and internally, ensuring that all employees share the strategic vision of digital transformation and work towards the same goal. Finally, he also suggested incorporating the performance of digital transformation into the assessment system and evaluating the process and results by setting specific indicators to ensure that the transformation work is implemented.
Xing Xiaoqiang predicts that in the next 5 to 10 years, digital transformation will have a profound impact on multiple industries. Especially with the popularization of artificial intelligence, digital technology will bring unprecedented changes to the industry, especially in knowledge-intensive fields such as education, medical care, and film and television. For example, in the medical industry, although doctors' knowledge is essentially tacit knowledge, through deep learning and model training of artificial intelligence, the diagnosis and treatment of many basic diseases will become more efficient and accurate.NumberDigital transformation will promote innovation in all walks of life and improve productivity and service efficiency through the application of emerging technologies, ultimately forming a more intelligent, efficient and inclusive society.For business managers, seizing this trend and successfully implementing digital transformation will be the key to future competition.
With the continuous development of digital technology represented by artificial intelligence and the continuous innovation of business models, enterprises will face more unprecedented opportunities and challenges in the future. Xing Xiaoqiang’s insights provide valuable guidance for enterprises on how to gain a foothold in the wave of digitalization, not only at the technical level, but also at the strategic level, providing profound thinking and practical direction. In the process of this transformation, an enterprise's adaptability, innovation and cultural construction will determine whether it can stand out in the rapidly changing market and become an industry leader.
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