It was great to be back speaking again at China Entrepreneur Summit in Beijing, once again the top forum for Chinese CEOs this year.
Steve, Hugh, and Michelle joined top Chinese CEOs such as Liu Chuanzhi (Lenovo), Guo Guangchang (Fosun Group), Jack Ma (Alibaba), Pony Ma (Tencent), and Dr. Liu Jiren (Neusoft) debating the new five year plan, the most pressing issues on the ground in China, and the challenges of globalizing from a Chinese base.
Whereas last year’s main theme was environmental protection and Copenhagen, this year the CEOs’ focus lay on identifying the right role for business in supporting social development and welfare. Jack Ma really captured the mood in his keynote close to the forum, urging the group to: “Count the days left in your life…we came to this life to live and have fun. We need to think about what we have, what we want, and what we are willing to give up.”
Fresh from the event, the key CEO challenges are:
• Global brands and indigenous innovation: draft five year plan marks significant shift in Chinese government policy
Government policy for the last 30 years has been on broadly to progressively open the China market to Western business to give Chinese business access to technology and commercial best practice. With the new 5 year plan, the government is widely expected to change focus to promoting the indigenous development of global brands and technological innovation by Chinese champions. This will accelerate the development of strong global Chinese competitors in a wide range of industries.
• “Winning family” culture and personalized approach to talent crucial to driving results and long term market position in China
Exceptional individuals are driving returns for top Chinese businesses; finding, attracting and holding on them is the single biggest challenge common to Chinese entrepreneurs, multi-nationals (“MNCs”), and State Owned Enterprises (“SOEs”). Successful companies aren’t just relying on financial incentives. The best companies are creating a “winning family” culture that works as a hot house for entrepreneurial talent and they are truly personalizing each employee’s experience, compensation and development.
• Large pools of capital available to globalise ambitious Chinese market leaders
China has abundant capital and Chinese IPOs, in China and abroad, typically command generous multiples. Some of these valuations appear inflated but liquidity gives Chinese companies scope for expansion and acquisition abroad. We expect the most successful examples of global expansion will be through smart partnering and use of minority stakes giving access to markets, expertise and brands, rather than high risk acquisitions. The recent Fosun acquisition of a minority stake in Club Med is a good example.
• There is a battle for China and a battle for the world. The best global companies will develop a new way of operating and win both
Domestic Chinese entrepreneurs are learning to innovate their business models and systems fast around the customer and are determined to develop indigenous technical innovation. They bring entrepreneurial spirit and a super low cost mindset to every industry they operate in. And they are determined to win globally as soon as possible.
For the Chinese entrepreneurs the next step is to use smart learnings from the best global businesses to tweak their approach for globe…Western businesses must learn how to compete with these emerging global players or risk an unpleasant surprise in the coming years.
We’ll be exploring these themes and the other elements of winning in China as we continue to interview the top 100 Chinese CEOs for our upcoming book “The Journey of Chinese CEOs”, published in mandarin by Beijing University Press in Autumn 2011 and English globally later in the year.