Why 3-Year Digital Transformations Fail: Huawei's 25-Year Case for Long-Termism

Why Digital Transformation Projects Are Abandoned

The author observes that 90% of enterprises plan for only three years, and many have no long-term plan at all. Most projects are cut after 1–2 years when quick results do not appear, leading to disbanded teams and wasted investment. The core problem is identified as a lack of long-termism: organizations want immediate returns and give up when they are not visible.

Three Root Causes of Failure

1. Leadership Short-Termism

Many bosses are driven by quarterly revenue and annual profit. They demand visible results within one year, but digital transformation is a cumulative process that typically needs 3–5 years for noticeable effects and 10+ years for full impact. Unrealistic one-year targets cause projects to be cancelled when early milestones are missed.

2. Underestimating Difficulty and Duration

Leaders often think digital transformation means buying a few systems and hiring some technicians, achievable in 1–2 years. In reality it requires comprehensive reconstruction of technology, processes, organization, and culture. Huawei’s own journey — 25 years from the 1998 IPD introduction to ongoing optimization — demonstrates the true timescale.

3. Misaligned Evaluation Mechanisms

Appraisal systems focus exclusively on short-term business metrics. Digital transformation outcomes — process standardization, data integration, organizational capability — are long-term and implicit. Contributors to transformation receive poor evaluations or demotions, while those ignoring transformation for short-term gains are rewarded, creating a disincentive for long-term work.

Huawei’s Long-Termism in Practice

Strategic Persistence

Ren Zhengfei stated: “Huawei does not do opportunism; we only do strategic opportunities. Once we set a direction, we invest long-term until success.” Digital transformation has been a core strategy since 1998, unwavering through leadership changes, business shifts, and even the 2019 U.S. sanctions — during which investment was increased rather than cut.

Continuous Investment

Cumulative investment from 1998 to 2025 exceeds ¥150 billion (average ¥5.5 billion/year, growing annually). The initial IPD engagement cost $48 million, equivalent to four years of Huawei’s profit at the time. Despite internal opposition, Ren Zhengfei insisted because he viewed it as the foundation for future development.

Culture of “Success Not Necessarily in My Time”

Huawei’s culture embraces “功成不必在我，功成必定有我” (success need not be mine, but I will have contributed to it). Many transformation projects span 5–10+ years; individuals may leave before completion, yet they work rigorously knowing they are building the foundation. This intergenerational continuity enables sustained accumulation and upgrading.

Three Actionable Recommendations

1. Top Leadership Must Commit to Long-Termism

Digital transformation is a “number-one leader project.” The CEO must personally adopt a long-term mindset, recognize the 10–20 year horizon, refuse to demand quick wins, give teams adequate time and patience, and elevate transformation to corporate strategy so all employees understand it is the only path forward.

2. Create a 10-Year Strategic Plan with Phased Goals

Replace 3-year plans with at least a 10-year roadmap. The 10-year vision sets direction; it is broken into 3-year mid-term capability-building targets and 1-year concrete, quantifiable short-term wins to build confidence. Plans are adjusted periodically for environmental changes, but the overarching direction remains fixed.

3. Establish Balanced Short- and Long-Term KPIs with Fault Tolerance

Shift from purely short-term metrics to a mixed system — e.g., 60% short-term business results, 40% long-term capability indicators such as process standardization level, data quality, employee digital skills, and organizational optimization. Introduce a fault-tolerance mechanism: genuine efforts that fail are not punished, encouraging bold experimentation and innovation.

Closing Perspective

“Digital transformation has no finish line; it is forever on the road.” — Ren Zhengfei

Transformation is continuous optimization, not a one-time project. Technology, business, and customer needs keep evolving. Huawei’s 25-year journey is still ongoing. Enterprises must abandon fantasies of overnight success, adopt long-term determination, and advance step by step. The next article in the series will address the “absent top leader” pitfall.