As the mainstay of China’s economy, state-owned enterprises have been exploring and advancing in the wave of digitalization, and have accumulated a lot of rich experience. They are also one of the main forces, driving the development of the country’s digital economy.
At the “2021 State-owned Enterprise Digital Transformation Case Conference”, Wang Jibin, Co-Executive Director and Secretary-General of the Innovation Professional Committee of the Chinese Society of Management Science, and Wang Jibin, Director of the Internet Research Center of a large enterprise, shared the digital innovation experience of state-owned enterprises.
Embrace the digital wave
Digital innovation is essentially innovation management based on a new generation of information technology.
Digital innovation can be carried out in many places in the industry chain. As long as there are pain points and inefficient areas, the entry point of digital innovation can be found.
For example, in terms of customer service, many companies usually adopt the method of “flooding irrigation”, and do not use digital technology to adopt “precise drip irrigation”.
There is a grass-roots state-owned enterprise that uses the Kano model in the field of customer service to scientifically locate retail customer service needs and intelligently produce visit plans; it uses artificial intelligence optimization technology (k-modes clustering algorithm) and Sanofi’s “Jiugongge customer classification model”. , intelligently distribute service items; use the multi-point path optimization model to intelligently plan travel routes.
At the same time, according to the two dimensions of operating ability and contribution, customers are divided into nine categories, including fluctuating customers, stable customers, growth customers, and key customers, and adopting a combination of online and offline services to manage hierarchical and classified management . Digital innovation using two service types, standardized services and intelligent response services.
This AI-based customer service method has significantly improved the satisfaction of visiting service, especially core customer satisfaction, by 13.38% and 19.45% respectively, and the effect is obvious.
It can be seen that digitalization is the ultimate goal of improving productivity and innovation through the three major elements of technological progress, efficiency improvement and organizational change.
At present, from the many cases of digitalization of state-owned enterprises we have seen, state-owned enterprises are not resting on their laurels, but are more actively embracing the wave of digitalization, and will achieve better innovation results in the future.
Challenges and advantages of digitalization of state-owned enterprises
Unlike native Internet companies, the digital transformation of state-owned enterprises faces many challenges. For example, due to the huge volume, the pace and action are slow; the decision-making speed is slow, and there is a certain gap in fault tolerance; the silo effect is obvious, causing many barriers between functions; there is a lack of digital talents and there are not many growth channels.
However, the digitization of state-owned enterprises also has many advantages. For example, we are good at using mature technologies and will not be aggressive; we should pay attention to practical results, and we must have output if we have input; They are all spiraling upwards, not the exponential rise of native Internet companies.
What we can see is that China Railway 12306, which has been digitized for more than ten years, faced with such a high concurrency and such a large customer group, through years of technological progress, the success of the day and the contribution to our travel. Bring great convenience.
Of course, we can also see that there are many obstacles facing the digital transformation of state-owned enterprises, which are often not technical problems, but cultural or institutional problems.
For example, we can see that for some state-owned enterprises, the biggest obstacle to digital transformation is not the application of technology, but the panic of traditional departments with great power over digital technology; it is not that these bigwigs have no motivation and passion for transformation. In fact, they also have the spirit of innovation, but they do not understand digital technology, which leads to natural risk aversion and dependence on reality.
Of course, we can also see that many state-owned enterprises have summarized a digital innovation system that conforms to their own industrial characteristics and their own enterprise characteristics, including the methodology of continuous innovation. For example, obtaining high-level support, starting from a small number of projects and gradually accumulating experience, finding sparks of innovation in marginal areas, and exploring the correct direction of digitalization under the condition of limited resources; digitalization relies on the physical business department as the backing to generate efficiency value.
In addition, in the process of digitalization of state-owned enterprises, it is necessary to maintain the original intention, confidence, determination, patience, perseverance and relief to cope with the difficulties in the process of digital transformation.
Principles of Digital Innovation
Management guru Hamer once said: “Many managers have realized that the Internet has changed business models and formats, but few people have realized that the Internet has changed management models.”
Digital innovation is not only the innovation of productivity, but also the innovation of production relations. The common challenge facing the digital transformation of state-owned enterprises is how to build a future-oriented innovation environment and new types of organizations that represent new production relations in a fully digital business world.
Since digital transformation is an innovation management work based on a new generation of information technology, the way of innovation determines the content of innovation.
Digital innovation must encompass elements of leadership, strategy, processes, resources, measurement and incentives.
In China, the most advanced innovation management is Huawei’s IPD. Its theoretical basis, principles and methods have in-depth reference significance for the digital transformation of state-owned enterprises. For example, adhere to the high-level personal participation and take a path that is in line with the actual situation of the enterprise, such as changing the concept first, such as eliminating obstacles to transformation in real time.
For example, opposing cumbersomeism, blind transformation, no change in part to the whole, siloed cadres, perfectionism, lack of leadership in business practices, lack of sufficient argumentation, and long-term optimization and non-solidification.
From the tracking and research of many cases, the specific promotion of digital innovation needs to pay attention to the following seven points: First, support for digital innovation at the cultural, conceptual, strategic and business model levels, and play a strong role in digital combination and decision-making leadership. The second is to integrate into the entire business idea, and to integrate with the daily business model. The third is to match the depth of corporate strategy. One thousand readers have one thousand Hamlets, and one thousand enterprises have one thousand digital transformation paths. The fourth is to obtain a natural balance among technology, creativity, efficiency and value. The fifth is to think about how to eliminate the organization’s antibodies all the time; the sixth is whether digital innovation is disruptive innovation or continuous innovation, each enterprise has different characteristics, but it is definitely an open innovation, which requires the integration of internal and external resources; seven It is about establishing reasonable metrics and incentives for digital transformation.
Organizational Construction of Digital Innovation
Digitization has changed the logic of business, but also the logic of organizations. The decision-making of the organization has evolved from the hierarchical structure of the pyramid to the decentralized, collaborative, and cross-departmental autonomous decision-making. Organizational tasks evolve from top-down decomposition to bottom-up proactive strategic alignment of open and transparent visions and goals. Organizational behavior has evolved from institutional and process-oriented to a cultural orientation of “internalization in the heart and externalization in action”.
Cultural construction of digital innovation
For many traditional companies, cultural change is the biggest challenge facing digital transformation. Agility, openness, autonomy and adaptability are the core values of digital innovation.
Agility, i.e. act quickly and iterate, rather than waiting for all the answers; openness, i.e. broadly draw information and insights from the ecosystem, and openly share suggestions and information; autonomy, i.e. give a high degree of freedom, give up The organizational structure of hierarchy and control provides more empowerment and assistance; adaptability, that is, to have an insight into one’s core competitiveness at all times, and to continuously improve one’s core capabilities with the help of innovation.
Collaborative system for digital innovation
Whether it is through the combination of the Kanban visualization method and the Internet platform, to build a Kanban to realize the online, collaborative and visualization of the work process, or to use Feishu, DingTalk, etc., there are information coordination problems.
Given the high level of uncertainty in the Internet age, it is especially important for organizations to embrace agility in a timely manner and have the ability to quickly adjust strategies based on new information. The continuous sharing of information can cultivate team members’ overall view and make them more clear about the common challenges they face and the common goals that need to be achieved.
We must realize that everything is being reconstructed, cognitive reconstruction, value reconstruction, and thinking reconstruction. These reconstructions undoubtedly require a broader perspective, more interactive associations, and a more open pattern, which is more similar to the logic of an “ecosystem”, complex and diverse, self-organized, evolutionary and symbiotic. Enterprise business models, organizational models, and inter-enterprise collaboration models have all begun to show the trend of meshed collaborative operation.
The approach to digital innovation
Digital innovation Agility is the first principle, and there are many techniques to follow to achieve agile innovation. Such as demand pull, problem orientation, technology substitution, knowledge management and the Medici effect.
A project team is usually composed of business departments, technical departments, training departments and other mixed operations, and innovation can only be generated under the mixed action of multiple disciplines.
A brand-new productivity comes to this society with brand-new challenges and impacts, changing the world. Although the road ahead is like a fog, full of fear, confusion and high uncertainty, it is worth exploring. With loyalty to our beliefs, enthusiasm for entrepreneurship, ingenuity for business, and love for life, we will use innovative management to control the real economy. Integration with the digital economy makes SOEs more efficient and flexible.
At the end of the speech, Wang Jibin said: “Whether it is in the silent fields, in the roaring manufacturing workshop, or in the noisy streets and alleys, we all hope to have a figure of digital intelligence. The level of digital intelligence of state-owned enterprises is no weaker than that of Alibaba and Tencent. Compete with 12306 and align with Huawei.”