Lean Digital Transformation in China - the next frontier
This year, China's internet adoption has reached 54.3% of the population. By comparison with other markets, this may seem low (USA: 88%, Japan: 91%), but when you remember China's population size, you will know that 50% represents almost the whole population of Europe - ~750MM people, and more than double of the USA.
Needless to say, that brings huge opportunities for organizations to grow their Digital business, whilst still presenting considerable challenges to local and global enterprises.
Let's explore some of them.
eCommerce - On one hand, you have one of the most eCommerce driven markets in the world (if not the most aggressive one), where banking has been "delegated" to apps such as AliPay and WeChat Pay.
Remaining 50% - There is still about 700MM yet to have access to the internet in China.
WeChat - As reportedly being used by more than 80% of the Chinese internet users, WeChat provides instant messaging, groups messaging, browsing, news, banking, SSO (Single Sign On) and geo location based "Mini Apps" (aka: Targeted campaign opps), among others.
Open Mindset - Chinese are often open minded, and will embark on a new journey if the potential benefits are shared.
Some of the Challenges:
Impact of a strong Startup Ecosystem: a mature, well funded and extremely agile and wealth startup scene is in place across different large cities in the country. They are disrupting existing business with new ideas to tap into that vast market.
Top Down culture: as opposed to a more collaborative approach.
Crowded market: With such a huge pool, no doubt, everyone wants to jump in. Then there is a vast ocean of business experts, IT and solution providers, some of them of questionable legitimacy, making it hard to make investment and partnership decisions
Time Machine effect: Believe it or not, despite all exciting digitalization powered by the China ecosystem, some Chinese enterprises still rely on traditional waterfall implementations. What've I seem if that for most part, there is a delay in adopting western proven, for different reasons.
How can organizations tap into those opportunities, whilst overcoming those challenges? One thing is certain: not on the "traditional" way.
Chinese and global organizations must reinvent themselves to cope with this scenario. One proven approach I believe organizations can leverage is the The Lean Digital Transformation.
Lean Digital Transformation is a set of principles and techniques that aim, ultimately, to change the culture of an organization, allowing them to effectively become more agile when delivering digital projects.
The key to this game changer strategy is to first focus on what is being done and how is being done, and then start doing it on a different way, from the get-go, and eventually, culture, or behaviour, will be changed.
That goes from how silos organize themselves, how they communicate and interact with other groups, all the way to how digital projects are handled, from the birth of the idea to the value activation once the project is delivered.
What is very exciting about this approach (besides the usage of Lean techniques) is that anyone is welcome (and recommended) to join - from the CEO to the software engineer, all the way to the business units, as the whole chain involved on a customer journey must be part for it to work. There is no need to know "Digital" or technology, per say, more than just being a consumer of technology, as most of us are anyway.
Moreover, it's focus on continuous delivery, data driven and customer centric allow leaders to always keep sight of the real goals.
I find this approach particular suitable to overcome the challenges I mentioned above. Let's check one by one:
Impact of a strong Startup Ecosystem: Lean Digital Transformation help companies achieve the agility and speed that is fundamental to take the challenges by scheduling rapid delivery cycles and continuous learning, using metrics and management to build high-performance teams.
Top Down culture: It can help by consolidating a new leadership role - one that stimulates, steers and supports teams so they can work autonomously, yet, within the common goal. The Leadership Development aspect aims to create a collaborative team spirit, build a common vision and purpose, while fostering learning, sharing and ownership.
Crowded market: Lean Digital Transformation gives you the speed to be competitive and win the game by stimulating innovative thinking and the ability to consistently test and learn → read "Innovation".
Time Machine effect: Here is where agility and Lean Leadership comes into place, to implement, experiment and learn proven approaches faster, mitigating any fear of the unknown.
For local and global Enterprises, there are tremendous opportunities to get into the Chinese digital space, coupled with similar size challenges though. Conventional approaches to explore such venues may fall short, thus a more holistic yet comprehensive way should be applied. There is no silver bullet, but our experience shows that Lean Digital Transformation is one way to go.