Some executives in China do not always manage to understand the strategy of their Chinese employer, we can reassure them, this is also the case for Chinese employees. I have often encountered this type of situation. Why is this?
A meteoric growth
It should be remembered that China has grown madly since reforms were launched 40 years ago. As Zhong Qinghou, founder of the Wahaha group (ex-partner of Danone) in Hangzhou, 宗庆后, pointed out in an interview a few years ago, : China is moving too fast to make plans for the next 5 or 10 years. What is true today won’t be true in 2-3 years. 1 to 2 years is the reasonable maximum (I quote from memory).
Facing fierce competition, being extremely reactive is mandatory.
On the other hand, entrepreneurs often face fierce competition in which there is no holds barred. The winning teams work schedules that would make a French labour inspector catch syncopations. Lee Kai-Fu, Taiwanese, a venture capitalist in AI in Beijing, explains it very well in his book, “The biggest change in history”.
You have to know how to turn around quickly and not stay in rigid patterns and when a dark horse, 黑马 (an outsider who wins the bet), comes along. Reactivity is certainly an asset in many businessmen I have known.
Cross the river by feeling the stones
The proverb “Cross the river by feeling the stones, 摸着石头过河” can also illustrate typical behaviour in a highly changing and swirling environment. Experiment first and move forward with the lessons learned. In fact, it has almost become a strategy. This proverb even became a slogan worn by the Deputy Prime Minister, economist Chen Yun 陈云, in 1950. It was later honoured by Deng Xiaoping, 邓小平, the “father” of reforms. It serves as a reminder of the importance of experimentation. Major theories must give way to pilot experiments that will teach lessons. In some areas, the reform policy has sought to build on pilot experiments, and it has been tried and tested to see whether the overall strategy can be applied to the entire country. Shenzhen, where the portrait of Deng Xiaoping is enthroned, was the first pilot city for the opening in China. When you look at the accomplishments of the past 40 years, you have to recognize the success.
Of course, I am not saying that long-term strategy does not exist in companies. The last twenty years have seen training companies teaching the basics of business development and management; universities now have much better curriculum. Many executives have been trained at the best institutions abroad and have returned with excellent credentials. The progress is considerable.
At the political level, moreover, next to these stones on the river, the authorities are drawing up plans for decades, see for example the article yesterday on the island of Hainan, where there are plans to turn the province into a free zone by 2050. The advantage of not having governments that can change direction with every presidential election is that it allows long-term development strategies to be held without being too disturbed.
Obviously, this subject can be developed endlessly, I give some frameworks that allow a better understanding of a changing reality, these are not absolute truths, which can apply in 100% of cases. The larger the size of a company, the clearer the strategy becomes. Moreover, we should stop on the theme of the importance of change and the strength of adaptation in China, but that’s another story for another day.
5 June 2020