Three considerations for transformation

Thoughts December 31, 2019

Transformation cannot be limited to business jumps in different modules

When it comes to transformation, most people and companies It is to adjust the strategy from three dimensions:

The first is to make parallel transformation from the direction of industry field: for example, he is engaged in third-party financial management, but feels that the market has not been easy to do in the past two years, and then he Jump to the education and training industry and engage in knowledge payment for inclusive finance; or, switch to left overseas asset allocation, add one-stop services for overseas immigration, transform and choose a new track and field, the field is different, and the audience resources faced Also different.

The second type is to make a parallel transformation from the direction of industry: for example, he is engaged in third-party financial management, and the transformation is still focused on the field of financial management, but the direction of the industry has changed. The original direction was to do insurance, Focusing on funds and equity, it is now transitioning to quantitative hedging products and private equity products. The business has changed and the strategy must be readjusted.

The third type is vertical transformation from the category direction: for example, it used to be a third-party financial management institution. It originally had various major categories of financial products, but now it only produces customized insurance products. Mainly connecting insurance companies and cross-border institutions, this is achieved by narrowing the business area and achieving refined operations.

The transformation in these three directions is not bad, but there is a more powerful transformation, which is to subvert a certain business.

Take Kodak’s transformation as an example. It changed from film business to digital business. The transformation logic here is to use one technology to transform products from “good” to “excellent” to “better”. "This is also a strategic transformation. Its essence is to find the core competitiveness of the enterprise from innovation that subverts itself.

The idea here is that we do not necessarily have to give up the original resources and channels and choose another new field to start the transformation from scratch. Instead, we should consider more whether we can optimize the existing resources and channels. The business will then create a new track through the process of iteration and self-subversion.