Chapter 18 Successful Genes and Dangerous Short Boards

Chinese business leaders have made great achievements, but our research found that facing the future, they mainly have four dangerous shortcomings: good at offense and neglect of defense; poor management of the top team; insufficient local innovation; relying on intuition instead of Think again. In the past 30 years, China has created a large number of successful enterprises. They have grown from small to large, and have achieved remarkable achievements in improving productivity and creating job opportunities.It can be said that the leaders of these outstanding enterprises are the contributors to the rapid development of China's economy.

However, the environment facing Chinese enterprises has undergone and is undergoing tremendous changes: the degree of market opening is becoming higher and higher; the characteristics of global integration are becoming more and more obvious; competition is becoming more and more fierce; obvious market opportunities are becoming less and less ; consumers in China and around the world are becoming more and more sophisticated; the speed of technological innovation is getting faster and faster; Chinese labor and other business costs are getting higher and higher; There is increasing pressure on social responsibility.

Chinese enterprises are also accelerating changes to adapt to the external environment: they are evolving from small-scale production and operation to large-scale production and operation; they are evolving from providing low-end, single products and services to providing a full range of products and services; is evolving from a focus on local operations and competition to focusing on global operations and competition; is gradually evolving from self-seeking to customer-centric; , flexible and changeable organizational model; it is evolving from focusing only on production and operation to taking into account both production and operation and capital operation.

Facing these drastic changes, what kind of changes will the outstanding Chinese business leaders who have already achieved impressive performance need to undergo to achieve greater and sustainable success?What kind of next-generation business leaders does China need to cultivate to maintain sustainable and rapid economic growth? We have spent two full years, through in-depth interviews and research on dozens of top business leaders in various industries in China, and listening to the opinions of China's top business observers, to discover and summarize the following successful genes and characteristics of these outstanding business leaders "Short board".

The study found that the best Chinese business leaders have many excellent qualities, but the following areas are particularly prominent: *Social Responsibility * Entrepreneurship *Harmonious win-win *self-discipline The study found that the sense of social responsibility and behavior shown by some outstanding Chinese business leaders have created sustained high performance for the company. The best Chinese business leaders have shown many socially responsible behaviors: they help improve the industry's environment; support the formulation of industry norms and policies; refuse to compromise with improper industry "practices": starting from the long-term interests of the industry and enterprises And self-limiting too high corporate profits and so on.

For example, a CEO of a furniture business, because he was worried that his control over "proper business practices" would be weakened after the company became larger, specially established a strict management structure and system to strengthen management and improve the governance structure to ensure legal compliance. Compliant business operations. Chinese business leaders who demonstrate this quality practice and teach by example to ensure that the way things are done throughout the enterprise is in line with the social values ​​they espouse.They promote and defend these social values ​​inside and outside the company, sometimes even when short-term interests are jeopardized or peers are offended.

These outstanding entrepreneurs in China often work hard to create a healthy and responsible economic system.Although in many cases there is no precedent for reference, they still use their own judgment and take practical actions to promote openness, transparency and integrity. China's leading entrepreneurs believe that sustainable business success depends on a sense of ethics and responsibility.One CEO put it this way: "You can only lay the foundation for success if you have high ethical standards." Our research also shows that Chinese entrepreneurs' sense of social responsibility and self-discipline are highly positively correlated with good corporate performance (see Figure 1).

Our research found that many Chinese business leaders show a strong internal drive to continuously improve their business performance.They continue to challenge the existing achievements, establish ambitious goals, and strive to make the company bigger and stronger through acquisitions and mergers, overseas listings, global expansion, new product development, and diversified operations. "Peace is precious" and "peace produces wealth" are inherent values ​​in China.The leaders of China's leading enterprises have shown a unique behavioral characteristic of pursuing harmonious and win-win business relationships.

In the process of complex multilateral business negotiations, Chinese business leaders often need to deal with different business partners, national and local government agencies.The leaders of these leading companies are often able to demonstrate superb and effective negotiation skills and the ability to influence others, so that all parties involved can finally reach a more harmonious and satisfactory result. To achieve this kind of win-win and harmony, business leaders construct and propose multiple solutions, and then use complex influence strategies to get all parties involved to support the same solution, and this solution makes all parties agree. acceptable.In this process, the leaders of these leading companies are very concerned about not making one party's "win" based on the other party's "lose".The foundation of this quality is that everyone believes that long-term relationships are very important. Entrepreneurs realize that it is not good for all parties involved if one party "wins all".

Our research has found that Chinese business leaders also have a unique quality: the quality of self-cultivation and introspection. This quality is manifested in a willingness for self-reflection and continuous improvement, learning from experience and striving to improve various behaviors.In these reflections, they review their behavioral patterns, attitudes, and emotions, acknowledge their weaknesses, and demonstrate a desire to learn and improve.Some Chinese entrepreneurs even publicly admitted their mistakes and the lessons they should learn, showing a rare spirit of self-cultivation and self-reflection.

When Chinese business leaders take concrete actions to continuously improve and encourage others to pursue improvement, their business results will also improve. Business leaders who demonstrate this quality also seek feedback and guidance from others to continually improve their own capabilities, behavior, and business performance.Some business leaders have also established mechanisms to organize the entire company, especially among managers, to carry out such self-reflection or self-cultivation activities. For example, one company defined its company anniversary as a day of self-reflection.On this reflection day, organizational managers conduct criticism and self-criticism, collectively reflect on the gains and losses of the past year, and take practical actions to improve the organization. It is worth pointing out that Chinese enterprises and entrepreneurs have made great progress by "crossing the river by feeling the stones" and "learning war in war" when there are few precedents to refer to and no ready-made models to learn from and successful. The outstanding members of them use their weekends to participate in classroom studies, humbly ask for advice from knowledgeable people, eagerly collect and study "best practices", and constantly reflect and improve themselves. The energy shown by Chinese business leaders in self-reflection and continuous learning is rare in the history of the growth of global companies and entrepreneurs. Although Chinese business leaders have made great achievements, our research found that facing the future, they mainly have the following shortcomings and weaknesses: *Better at offense than defense * Mismanagement of the top team *Aiming at the lack of local innovation *Intuition rather than rethinking The study found that a majority of Chinese business leaders believe their biggest challenge is a talent shortage.It is understandable that Chinese enterprises with ultra-high-speed development are facing a shortage of talents and a disconnection in organizational capabilities.At the same time, the lagging and disconnection of talents and organizational construction will definitely restrict the sustainable high-speed growth of enterprises (see Figure 2). Chinese business leaders spend a lot of time and energy on offensive activities such as financing or capital restructuring, mergers and acquisitions, market expansion or adjustment, but seldom spend time on personnel training and organizational capacity building.The study found that the level of Chinese business leaders' ability to train subordinates is significantly lower than that of global business leaders. This imbalance between offense and defense is exacerbated by the lack of high-level "high participation".In developed countries, leading companies have high-level chief financial officer (CFO), chief marketing officer (CMO), chief information officer (CIO) and chief talent officer (CHO).The "senior participants" around these CEOs not only have a deep understanding of the company's business and industry, but also have a strategic vision and deep knowledge of relevant functional areas. Therefore, they can become strategic partners for the top leaders of the company.They can provide a lot of opinions and suggestions for the top leaders of enterprises, including many suggestions on personnel training and organizational capacity building.This has helped the company's internal organizational capacity building to a large extent. As for Chinese enterprises, in the past 20 years or so, they have not cultivated a large number of high-level "high-level participants", which makes the top leaders of enterprises lack the necessary internal support in balancing offense and defense.For this reason, the leaders of Chinese enterprises have to think externally about the market environment, competitive situation, mergers and acquisitions, and capital operations, and internally consider talent training, cultural shaping, and system construction.In the long run, Chinese enterprises lack too much in terms of personnel training and organizational capacity building, which ultimately affects the sustainable development of enterprises. The reflection of the president of a large private enterprise group on "emphasizing offense and neglecting defense" is quite representative: Good strategic positioning is inseparable from innovation. Innovation is closely related to the learning ability of leaders, because learning ability is directly proportional to personal ability. If your boss does not learn, there will be problems with the healthy development of your company. This is One of my views.In the second point of view, I talked about the relationship between corporate culture and corporate success, but corporate culture has a lot to do with the personality of the boss. The boss must correct his behavior and have a good moral, so that you can have the most basic foundation for success. The foundation is that character and personality are the foundation of success.The third point of view is organizational ability. You must have a good organizational ability, that is, a good management and control ability. If you are not strong in this area, everything will go astray, and your strategy will go astray. Then people’s hearts and corporate culture You can't grasp it, if you can't grasp their thoughts, it means you can't grasp their behavior. However, some entrepreneurs have begun to pay attention to this problem.In the interview, the president of an air-conditioning enterprise group not only reflected on internal talents, but also offered countermeasures: Everyone suddenly discovered that we gradually formed a consensus: talent should be discovered internally.Because the people who have been able to make achievements in the company over the years have been gradually cultivated by the company, many of whom have been cultivated from the basics, and some of them were fresh graduates more than ten years ago.At that time, it was possible to discover and train people, why not now?The reason why I can't now is because I always look out and up, instead of looking down and in.Therefore, one of our relatively big changes this year is to carefully look at the interior, and now we have discovered many talents. Poor Management of Top Teams Our research with Chinese business leaders found that many of them fail to effectively manage and build top teams—the teams they report directly to.Compared with the leaders of European and American companies, the leadership team of Chinese business leaders is weaker. The biggest problem for these corporate top teams is cooperation and trust.Many senior team members felt they had major issues with cooperation and trust. Research conducted jointly by Hay Group and Harvard University shows that a high degree of cooperation and trust among top team members is critical to a company's strategy formulation and execution.Practice has proved that more and more innovations come from a high degree of cooperation and trust among senior team members.Many innovative products and services and profit models come from a high degree of cross-departmental cooperation. Members of the senior team of Chinese companies may be very loyal to the "boss", but there are many situations where they "don't buy it" or "have heart-to-heart knots" with each other.It's hard to imagine creating a highly collaborative business and corporate culture if members at the top are unable to cooperate with each other. And the culture and behavior of cooperation is critical to provide the best solution for customers.It is difficult for a company without a high degree of internal cooperation to provide excellent service to customers. If the senior team members of the enterprise cannot cooperate, different factions and spheres of influence will likely form in the enterprise, resulting in the situation of "the left hand does not know what the right hand is doing" or even "the left hand beats the right hand" in the process of strategy execution.This has largely weakened the authority of the top-level strategy execution of the enterprise and countered the speed and efficiency of strategy execution. The top team members of Chinese companies are not clear about their specific responsibilities in strategy implementation.Our research found that many senior team members of Chinese companies are not very clear about their own specific responsibilities and roles in strategy implementation.They seem to have a division of labor, but the boundaries of each person's responsibilities are not clearly defined, which leads to arguing with each other or failing to fill in time.It is conceivable that if the division of responsibilities among the top team members of the enterprise is not clear enough, the speed and efficiency of the strategy implementation of the entire enterprise will be affected, and it will be difficult for the entire enterprise to establish a culture with clear responsibilities. This unclear responsibilities among senior team members also directly creates barriers to cooperation and trust.Because the boundaries of responsibilities are not clear, there is a need for constant "coordination" among senior team members, and it is common for "knots" to arise during this "coordination".Many high-level team members lack the habit of being open and honest, and it is difficult to "put things on the table for discussion", and the "knots" get deeper and deeper, which affects subsequent cooperation and trust. For the above-mentioned problems of the high-level team, the "top leader" needs to bear a lot of responsibility.Our research found that the leadership style of many Chinese business leaders is "paternalistic".The main manifestations of this "paternalistic" leadership style are "emphasis on kindness and power", "carrot plus stick".On the one hand, the "top leader" is very strong and coercive.But at the same time, they are very "sympathetic to their subordinates" and "love soldiers like children".From the perspective of the subordinates, they can also learn from the boss.This "coercive + affinity + coaching" leadership style is the most common leadership style of Chinese business leaders.It is precisely because of this leadership style that the leaders of Chinese companies lead their companies to victory. This "paternalistic" leadership style is very efficient. It only needs a "wise" leader to issue orders, and then the subordinates will obey.The usual situation is that what the subordinates understand must be implemented, and what they do not understand must be implemented.Even if you don't understand it, implement it against your will, and feel very unhappy, but think of the benefits that the "boss" usually does to you, just implement it. The effectiveness of this "paternalistic" leadership style in the past largely depends on the foresight of the "top leader".They do see farther than their subordinates and understand thoroughly, so they often see what their subordinates have never seen. No wonder their subordinates are willing to follow them. However, when the market environment is becoming more and more complex, changing faster, globalization is becoming more and more obvious, and business is becoming more and more difficult to do, many Chinese business leaders find that it is no longer enough to rely on their own experience and wisdom.They need to have a stronger top team to assist them in clarifying the strategy and implementing it. To build a high-level team with a high degree of cooperation, clear responsibilities, and innovation, Chinese business leaders need to strengthen their "visionary" and "democratic" leadership styles.These leadership styles are characterized by providing a clear vision and direction, “convincing” senior team members through a lot of explaining work, and involving more senior team members in major decisions. In our research, we found that there are indeed top leaders of some Chinese companies who show more "visionary" leadership styles, and the top teams they lead show a more inspiring organizational atmosphere, and at the same time, the organizational performance is also better. Another revelation is that when Chinese business leaders cross national borders to lead European and American employees, they need to adjust their own leadership styles. Hay Group conducted research on the leadership styles of European and American managers and leaders and found that the dominant leadership style of European and American managers and leaders is not "forced", but "visionary" and "friendly". type”, “democratic type” and “counseling type” combination.Therefore, if Chinese business leaders lead European and American management teams, they need to adjust their leadership styles appropriately. Insufficient innovation for the local market In the face of fewer and fewer obvious opportunities, increasingly fierce competition and declining profit levels, how to find the "blue ocean" is a huge challenge for Chinese business leaders. Finding and swimming in the "blue ocean" requires a lot of innovative activities and behaviors.These innovation activities can be innovations in product services, business models, or profit models.In the research, we did not find that Chinese business leaders have a lot of innovative behaviors or the behavior of leading innovative activities.This is even more prominent when compared with Indian business leaders. In the research conducted by the Hay Group on Indian business leaders, we found a large number of innovative behaviors, especially the innovative behaviors of Indian business leaders in terms of rooting in the domestic market and serving domestic consumers and even low-income consumers. We were impressed. The innovative activities and behaviors of Indian business leaders are not necessarily original, but they have demonstrated outstanding ability and drive to adapt best practices to the Indian market.This Indian "customization" activity might be the adoption of a human resource management tool, the Six Sigma quality movement or the advancement of a management software.They seldom copy foreign best practices, but find the right path for India.Of course, they also created many new technologies and new business models in the process. Indian business leaders have shown many innovative behaviors, such as discovering new markets, establishing a new and fairer distribution system, creating new business models, etc., and even transforming Western technologies so that Indian customers can use Cheaper fuel without sacrificing quality is everywhere in India.Provide services to customers at the bottom of society through innovation, and these services also take into account the interests of shareholders.Many companies connect their companies to India's vast underclass.Many of them entrepreneurs are willing to take action to establish and develop relationships with this bottom-level consumer group.They use different methods, some provide cheaper and better products; some provide cheaper financial services; some provide farmers with information services by setting up Internet sites in rural areas to increase income; some establish innovative distribution Channels serve consumers at the bottom of society. In contrast, we have not found a large number of innovative behaviors of Chinese business leaders, especially the lack of behaviors of looking for "blue oceans" through innovations in product services and profit models based on the characteristics of the domestic market. China's long-term development has been mainly driven by investment and exports, so there is a huge potential to stimulate development through domestic demand.China's 1.3 billion population is a huge market. Although there is a huge gap between the rich and the poor, each social and economic class has its own needs. How to creatively meet these needs is not only the responsibility of Chinese business leaders, but also the sustainable development of Chinese companies. The only way to grow.Instead of "going out" rashly under insufficient preparation, it is better to creatively develop the domestic market by looking for a "blue ocean" in China. This requires Chinese companies to have the ability to deeply understand the potential needs of consumers and customers. They want to serve customers that have never been served before, find new ways to enter the market, or create a new business model. Our research also found that many Chinese business leaders prefer to proceed from intuition rather than relying on in-depth and careful strategic thinking when processing information and making decisions. Intuition is important, especially when obvious opportunities abound, and this intuitive style of information processing and decision-making can really bring speed and efficiency.However, when business is becoming increasingly complex, competition is intensifying, information is cluttered, and obvious opportunities are decreasing, Chinese business leaders need to collect information in a more systematic and formal way, and use in-depth and careful thinking to make judgments and decisions. Instead of relying too much on "intuition, patting the head", or "crossing the river by feeling the stones". In-depth and careful thinking requires a considerable amount and quality of effective information from active practice and specific experience as the basis.Compared with their counterparts in the West or India, Chinese business leaders appear to be less extensive in gathering information, especially on consumers. Business leaders in the west or in India seem to be more proactive and adept at understanding and understanding consumer social trends, technology and industry trends, etc. Our research also found that many Chinese business leaders have a strong desire for achievement, that is, their inner desire to pursue greater success is very strong.This desire for achievement makes them dissatisfied with past successes.If they can't effectively curb their desire for achievement and prefer a "intuitive, brain-slapping" decision-making style, it is easy to make major decision-making mistakes. In our research, many Chinese business leaders made investment or other decision-making mistakes because of "intuition and head-slapping", thus wasting a lot of time and money. The president of a large home appliance group reflected on this “gut feeling” model: Relying on experience and opportunity has created a style of doing things that relies on a single way of thinking, resulting in mistakes in investment decisions and paying a price.We don't have a scientific, serious, and detailed investigation, and we haven't organically matched the big macro factors. On the other hand, the chairman of a large state-owned iron and steel company made investment mistakes and even missed opportunities because of "gut instinct".He recalled: A good project can make money. What a great opportunity in 2004 and 2005, but now the factory is losing money, and I feel very sad.Where is the future of this factory?It should be said that our understanding of this project was not deep enough and detailed enough.At that time, I thought that they were all state-owned enterprises, so there shouldn't be any problems with percentage consumption.I missed a good opportunity. At that time, it was no problem to earn 100 million yuan! The above-mentioned leadership styles and characteristics of Chinese business leaders may be appropriate for companies in the early stages of entrepreneurship or growth.But going into the future, these leadership styles and characteristics have the potential to be Achilles' heel to their continued success. After research on Chinese entrepreneurs and global benchmarking research, Hay Group has established the following quality model of a new generation of outstanding Chinese business leaders. This competency model reflects the qualities of business leaders required at different stages of corporate development: *Continuous self-cultivation: a behavioral characteristic that is willing and able to deeply examine oneself, constantly reflect, learn lessons and take actions to improve and improve oneself. *Entrepreneurial drive: a behavioral characteristic with a strong inner drive to improve the performance of the enterprise, to achieve or even exceed challenging and ambitious goals. *Seek win-win and mutual benefit: Influence stakeholders through clever strategic influence ability, and achieve the behavioral characteristics of win-win and mutual benefit while achieving the goal. *Overview of the overall strategy: the behavioral characteristics of thinking and decision-making that deeply analyze, judge and foresee major issues that affect the overall situation of the enterprise. *Exercise change leadership: Behavioral characteristics that respond to changes in the environment and internal and external challenges by pointing out new directions and actively promoting change. *Promoting social development: Through corporate or industry self-discipline and other behaviors, reflect the sense of social responsibility and stick to your own beliefs and principles.To ensure the behavioral characteristics of sustainable development of enterprises. *Improve innovation ability: Actively create an innovative atmosphere within the organization, enhance innovation ability, embrace and lead innovative behavioral characteristics. *Looking for Others: Extensive collection of information and global best practices to support behavioral characteristics of effective decision-making. *Cultivate organizational capabilities: cultivate key talents for the long-term development of the organization, and cultivate the behavioral characteristics of organizational capabilities. Our research has found that Chinese entrepreneurs have quite a lot of leadership qualities in the "entrepreneurial stage". They are diligent in learning and self-reflection, and they have the entrepreneurial spirit of constantly pursuing greater success. At the same time, they can also achieve a win-win situation through strategic influence Or a win-win partnership. The outstanding Chinese entrepreneurs also have many leadership qualities in the "growth stage". They have a strong sense of social responsibility and behavior. In order to face the future and achieve greater sustainable success, Chinese entrepreneurs need to cultivate the leadership quality of "future stage". They need to cultivate a global vision, collect effective ideas and best practices inside and outside the enterprise in a more systematic and formal way, and conduct in-depth and careful strategic thinking; Communicate to other leaders and employees to ensure strategy is implemented. They need to pay more attention to how to balance the relationship between offense and defense, internal and external, long-term and short-term, and actively devote themselves to the construction of organizational capabilities. Through effective training of talents, continuous improvement of processes and systems, and creation of corporate culture, enterprises It can be changed according to the needs, so as to achieve sustainable development. They need to pay more attention to the understanding of customer needs, especially through the discovery of unrealized needs of customers, and develop innovative profit models, products and services to meet customer needs; at the same time, they need to cultivate employees' innovative capabilities, Create an innovative atmosphere and promote the construction of an innovative culture to enhance the innovation capability of the entire organization. After nearly 30 years of struggle, the Chinese entrepreneurs who have achieved great success have reached a turning point as a group.In the face of future challenges, Chinese business leaders must have the courage to change, otherwise, they will find it difficult to achieve sustainable success.