Xinfu in China

One of the key findings of “The Secrets of CEOs” Steve discovered that many of the businesses that are really profiting from globalisation are in the East – especially in China and India.  These companies are tuned into the needs of today’s top talent, are driving innovation at pace and are executing seamlessly and 24/7.

Haier, led by Zhang Ruimin, is one of those companies.  With turnover of more than $15bn, Haier manufactures home appliances in more than 15,000 specifications and 96 categories. Market shares of more than 30pc in Chinese refrigerators, refrigerating cabinets, air conditioners, and washing machines are balanced by strong positions in several European and US categories.

The second article of the Telegraph’s serialisation of “The New Secrets of CEOs” sees Zhang Ruimin profiled based on an extended working session with Chairman Ruimin, Steve and the Xinfu team.  As a corporate entrepreneur, Zhang Ruimin vividly illustrates one of the 5 CEO types identified in the book (for more on which see here)

Read the full Sunday Telegraph article here.

Notes

“The New Secrets of CEOs” is a completely updated edition of the bestselling “The Secrets of CEOs”.  Drawing on 200 interviews with top global CEOs from both East and West, Steve and his co-author, Andy Cave of the Telegraph, really dig into how the best CEOs are leading to win in the reset world. More on the book here.

Steve and Michelle joined the annual Boao Forum for Asia that took place over April 9-11^th weekend. Asia’s own Davos platform attracted more than 1,000 leaders in Government and global business to discuss this year’s theme: Green Recovery: Asia’s Realistic Choice for Sustainable Growth. The conference kicked-off by a charismatic speech from China’s Vice-Premier Xi Jinping (appointed successor to Premier Hu Jingtao), along with the 74^th US Treasury Secretary Henry Paulson, former Australia Prime Minister Bob Hawke, and current Danish Prime Minister Anders Fogh Rasmussen.

From the business side, Steve joined the ranks of global Chairmen, CEOs, and leading Chinese entrepreneurs in looking at Asia’s road to development and its next global challenges. With many key discussions surrounding the post-economic recession environment, there was much debate on:

- Developing new solutions: Panelist shared their thoughts on rethinking growth and adopting counter cyclical strategies. Also learning from top Asian firms who have adopted M&A strategies, “Asian countries cannot acquire Western companies without global culture” Mohamed Al-Mady, Saudi Basic Industries Corp. said, and also suggested for other CEOs to “give people time to adjust, and then do what you want to do.”

“When scoping M&A deals always look at well represented, long-term, low cost companies” (Xiong Weiping, Aluminum Corporation of China)

“It’s about finding key people to understand local business, to go to the new company” (Harsh Pati Singhania, JK Organization)

- Redefining Corporate Governance: Are companies too big to fail? What are the new building blocks for corporate governance, and how easy or complicated should this be? Fred Hu (Goldman Sachs) urged for “simple, smart, and effective regulations.” While many China housing market questions were directed at Liu Mingkang (Chairman of China Banking Regulatory Commission) who emphasized the upcoming regulations to the lending market: “Collateral cannot be used to buy a piece of land; we have changed the way loaning has been to the developers, we will be more selective, regulatory, and handle transactions internally rather than outsourcing to agencies – prevention is better than the cure!”

- Looking at new ways to lead: Does Asia have the will and drive towards a Green and sustainable environment, who will lead it? And what does the new environment mean for CEOs?

“Since the recession, China has brought the lifeline to the world economy. This means that in the new environment, Chinese companies will have to continue to save more energy, adopt a new life revolution, and recognize the China market will continue to develop which represents a challenge as well as an opportunity.” (Chen Feng, HNA Group)

“Business leaders should think about a lesson from the Chinese housewives: who do not buy the morning fresh fish at the fish market for full price, but rather wait till 5pm when the market is about to close and all fish are on sale for 50% off, while the taste is still the same!” (Wei Jiafu, COFCO)

After the conference, our questions still remain on follow-up:

- With the recognition of what must be done, and which areas need more focus coming out of the recession, how will CEOs address areas for change? How will they implement the measures for change?

- There is now a recognition of what needs to be done, but not enough of how to do it

- How does a corporation measure success? Should be more continued discussion about changes in measuring change

- Changes discussed may not be done, because entrepreneurs are over loaded, and business is still doubling, making it harder for their middle management to stay in pace with the company

-  Still worries about talent, not enough focus on smarter solutions rather than work harder or making up responses to opportunities – however, there is a real sense of belief that Eastern leaders can do it (and not necessarily copying from the West)

- Still confusion of governance model going forward, reinventing governance which is not just process related step but also involves changes in management, and risk and reward systems – danger of western companies being so risk adverse because of what has happened in the recession

You can read more about the conference coverage at the Boao Media website.

Steve and Michelle tomorrow join over 1,000 Asian CEOs and leaders on Hainan Island, China, for the 8^th Boao Forum, “Asia Going Green: The Road to Sustainable Growth”.

As usual, the forum will see Asia’s most influential leaders debate the aftermath of the global crisis, and in particular, Asia’s green challenge, with numerous global peers.  There’s much for Chinese and Asian leaders to be extremely proud of, and for Western leaders to take note of, but Steve and Michelle will also be looking to lay out the business and personal leadership challenges they also undoubtedly face. 

It promises to be a powerful exchange – and we’ll tweeting on developments throughout the conference and blogging on our thoughts and conclusions coming out of it. 

For further coverage, in particular keep an eye on CCTV, Bloomberg, CBNC, New York Times, Fortune, WSJ, and the BBC. Boao website is here.

David Eimer of the UK’s The Daily Telegraph caught up with Steve in Beijing at the China Entrepreneur Summit (read Xinfu blog report posted on December 10th here).

David got Steve’s tips on the challenge for Chinese leaders  (”The real problem for Chinese businesses when it comes to going global is that they are so hierarchical….what they’ve got to do is morph from a command and control micro-management hierarchy, while keeping the [strong] spirit of family”) and for local CEOs of multi national companies (MNCs) operating in China (”A lot of them are very frustrated at being part of a Western-managed company…. They don’t feel listened to and they question whether a lot of the Western executives have fully got their mind on things and whether they have the heart for the job. In many cases, they are realising they haven’t.”)

But above all what came through for Steve in Beijing is: the “emerging sense of confidence in China.”.

Read the full article here.

Steve and Hugh joined 1,000 Chinese CEOs, government figures and senior executives at the 8th China Entrepreneur Summit in Beijing over the weekend.

Steve spoke alongside CEOs like Jack Ma of Alibaba, Liu Chuanzhi, President, Legend (owners of Lenovo) and Yu Minhong, Chairman, New Oriental Education & Technology Group.  Warning CEOs of Chinese units of multinational businesses that the crisis would typically make their global CEOs ration capital, rely more heavily on strong Chinese growth to hit their targets and want to install stronger process oversight of Chinese subsidiaries and JVs, Steve urged Chinese CEOs to:

- Be bolder in their targets  – now is the time to go again

- Welcome the increased interest and scrutiny from their overseas HQs – but contain it appropriately and on their terms

- Take their units with them not only from the head but the heart

- If necessary adopt “guerrilla” tactics and ask forgiveness for smart commercial moves rather than fight the system to have them approved.

The China Entrepreneur Summit is The annual CEO forum in China.  Hosted by China Entrepreneur Magazine, China’s answer to Fortune, it invites the most expert Asia speakers and panelists from across China, the region and the world to find the best way through the most topical challenges.

This year’s summit focused in particular on:

1. Deep concern for the environment. One senior pannellist spoke for many when he said, ““we need to change from the old focus on big and luxury…we need a simpler, less extravagant way of life”.  With Beijing clouded in smog and tales of leaping increases in cancer and rivers choked by pollution, it is easy to feel the urgency with which reform is needed.  With massive pollution from state owned enterprises (“SOEs”) and state-sponsored activities such as public transport policy, will the government deliver?

e.g. Some private companies are stepping in themselves – “at Alibaba, the 9 senior managers take 1 day every quarter simply about water and environmental problems”  (Jack Ma)

2. Entrepreneurs’ relationship with the state. How much should entrepreneurs be expected to give back and to support civil society?  In contrast to the West, Chinese CEOs spoke openly and passionately on the critical role their businesses play in society, but there was also a strong undercurrent of feeling that the government is not doing enough to support business.  There was support from government ministers but they urged further action.  There’s no doubt the relationship between business and the government in China remains uneasy.

– “We have to balance social obligations and entrepreneurship” Liu Chuanzhi, Chairman and President, Legend Holdings

– “People and customers are key but public welfare comes first.  So, of course, pay a good salary and bonus but also you must practice people-focused management.  People must be at the core.” Cheng Siwei – Former Vice Chairman of the Standing Committee of the National People’s Congress

3. The role of SOEs. Continuing the debate between business and the government, many speakers spoke passionately about the need for the role of SOEs to be restrained to vital areas of national interest such as defence and natural resources.  Senior private company CEOs complained bitterly that SOEs, with implicit and explicit government support such as cheaper borrowing, skew many markets and restrain the growth of far more efficient and innovative private enterprises.

4. China’s increasing self confidence and desire to take its place as a leading power in the world. James McGregor is absolutely right that “the big change today is that the world is looking at China differently and China is looking at itself differently.”  Zhang Weiying, Dean of Guanghua School of Management, Peking University, where Steve spoke in October, pointed out that: “China is 20% of the world’s population.  When it is 20% of the world’s GDP, its standing will change.”

5. The need for Chinese businesses to start creating truly innovative products and, with Chinese firms starting to go out to global markets, to learn how to create global business models more quickly than the painful 20 years of Western firms gradually learning to work effectively in China.

You can read more about the conference and Steve’s role on the dedicated channel at Sina.com (in mandarin – here) and on China Entrepreneur Magazine’s website here (also in mandarin).

The conference ran from 5^th-6^th December at the Shangri-La China World Hotel in Beijing.  You’ll find pictures and footage from the conference here as we receive them.

With an average daily circulation of 300,000 and 12 million daily hits to its website, China Daily is China’s largest English language newspaper and a key opinion former*.  Steve caught up with China Daily in Beijing in October to debate where the reset global worlds leaves Chinese and global CEOs with journalist Andrew Moody.

From research for “The Secrets of CEOs”, Steve’s found that most Western CEOs are struggling: as he told Andrew,

“Western CEOs are pretty good at delivering short-term results for shareholders, but what they aren’t good at is basically having an ambition to create a great business. They aren’t naturally innovative”.

In contrast, working with and interviewing Asian CEOs, Steve and the Xinfu team have found that many

“…Indian and Chinese CEOs are very mission-driven and are very entrepreneurial. They have an ambition to build a great business. They also tend to have this characteristic of building great teams around them, close-knit groups, which in Chinese terms is similar to having a family around you.”

Read the full article on what Eastern and Western CEOs can learn from each other, their common challenge with work-life balance and how the best are developing the talents in their business here.

*Source: China Daily website, “About China Daily“.

China Daily’s Andrew Moody caught up with Steve on Haidan Street in Beijing and quizzed him on what an “average day” looks like…click here to get a sense of how Steve’s days pan out when he’s in the UK.

Look out for an in depth CEO profile of Steve in China Daily on Monday. China Daily website here.

Over the last seven years China Entrepreneur Magazine, China’s answer to Fortune Magazine, has built its annual CEO summit into The business leadership event in China. Steve is delighted to be joining the packed speaker list alongside luminaries like Ma Yun , (Chairman, Alibaba), Yang Yuanqing , (Board Chairman, Lenovo Group), Ning Gaoning (Chairman, COFCO), Wang Chuanfu, (President, BYD Group), Jin Zhiguo, (Chairman, Tsingtao Brewery), Li Yanhong, (Chairman, Baidu) to name but a few.

Full agenda, coverage of last years celebrity filled event and booking details here.

Event runs 5^th – 6^th December and is at Beijing World Hotel.

Shanghai Daily enjoyed “The Secrets of CEOs”: read the review – “Being a hot-shot CEO is not all it’s cracked up to be” – here:  http://www.shanghaidaily.com/sp/article/2009/200910/20091031/article_418021.htm