Accelerating the construction of World-class enterprises: a guide to the transformation of China's chemical industry

1. Demand-guided innovative research and development capability

World-class value creation is inseparable from R&D innovation. Building a demand-led innovation and research and development capability is not only the need for the development of Chinese enterprises, but also the requirement of macroeconomic structural changes.

Historically, the research and development of Chinese chemical enterprises has mostly focused on the two aspects of "reverse development" (overcoming the production process route) and "technology catch-up" (improving the production process). These two types of research and development in the future can capture the value of the space is very limited. The special materials and specialty chemicals driven by the downstream high-end demand, because of their differentiated application performance, customized production process, service-oriented sales process and other characteristics, while having a higher value, they can pass the cost to the consumer side more smoothly, so as to have the advantage of obtaining higher and more stable profits.

With the continuous progress and upgrading of China's manufacturing industry, the demand for materials and chemicals in downstream industries has shown an increasingly high-end and customized trend, providing sufficient soil and space for Chinese enterprises to establish demand-guided innovation capabilities

At present, the construction of the innovation system of Chinese enterprises is rapidly increasing in terms of R&D input and output (such as the number of patents, etc.), and more and more Chinese enterprises have changed from "reverse development" to "cooperative development" and "independent innovation". However, many Chinese chemical enterprises still face the following pain points in the process of innovation and research and development:

(1) What to do: unclear innovation goals and strategies, and lack of correlation with business strategies; R&d project portfolio decision is not scientific enough, lack of clear decision basis; There is a lack of linkage between the planning and development of advanced technologies, products, applications and processes.

(2) How to do: many enterprises have landed the gating process, but only the brought process as the "standard answer", the lack of customization and tailoring according to business characteristics and innovation scenarios, resulting in heavy process, rigid application, affecting the speed and quality of research and development.

(3) Who should do it: lack of cross-departmental collaboration, emphasis on functions and light projects in organization and assessment, and regard R & D and innovation as only the matter of technical departments, can not form effective cooperation; The lack of team building planning, the lack of corresponding mechanism for the "selection, breeding and retention" of R & D talents, and insufficient blood supply; Lack of digital application planning in the field of innovative research and development, and insufficient digital leverage.

In response to the above pain points, enterprises can take three measures to gradually build a strong innovation research and development engine, and make it become a new driving force leading the high-quality development of enterprises:

(1) Establish strategic objectives for innovation

According to their own business development needs and industry characteristics, clearly define the value opportunity points of innovation for the enterprise, so as to formulate the innovation strategy of the enterprise, and strictly follow the strategic plan to ensure the smooth landing of research and development projects.

(2) Clarify the organizational structure of R&D

Guided by the business scenario and operation mode, we design the organizational structure of innovative research and development, and establish a smooth interaction mechanism with other business departments. The organizational structure of the R&D department can be an integrated industry team, market-oriented, focusing on the integration of production and research, and working together with other departments to quickly respond to market demand; It can also be a "small front-end" type subsidiary, introducing a leading core team in the industry in the form of joint venture incubation, independent of the parent company, flexible decision-making, rapid iteration of R & D innovation.

(3) Building an innovation capability system

Benefit-oriented, project-focused management systems such as R&D gate control are established to analyze and control risks from customers and markets, technologies and processes at different stages. In addition to building internal research and development capabilities, it is also necessary to cultivate mature merger and acquisition capabilities, pay attention to technical targets with appropriate external valuations at any time, and quickly achieve innovation extension or breakthrough through mergers and acquisitions.

2. End-to-end digital operation capability

Digital transformation is a globally recognized development hotspot. McKinsey's deep experience in the global oil and chemical industry shows that comprehensive digital transformation can bring 8% to 13% EBIT improvement, of which about 60% comes from the efficiency improvement brought by big data advanced analytics driven optimization.