What can we learn from Asian business? … Linda Yueh, Christina Boutrup, Milo Jones and Tendayi Viki join me at EBF19
October 1, 2019
What can we learn from those fascinating markets of Asia and beyond?
Jack Ma was rejected in the west, but thrived in the east, building Alibaba with the power of imagination and intuition. Indeed, a recent WEF study found that 90% of Asian business leaders believe that creativity is important, compared to 57% in Europe. And whilst Asia was seen as a land of imitation, it is now the leader of innovation, leaping ahead without the legacy of heritage, to seize the opportunities of changing locally and globally.
Agree, or not? And if so. what can a European business learn?
To help drive some new insights, I created a session at this year’s Thinkers50 European Business Forum 2019 where we brought 4 very different thinkers, with deep experience of Asia, but from different perspectives (click on their names to download their presentations):
Frequent viewers of British television will recognize the face and voice of Linda Yueh, an economist, broadcaster, and writer, who was previously Chief Business Correspondent for BBC News and host of several TV shows about the economy, business, and finance. In her latest book, The Great Economists: How their ideas can help up today, Linda explains the key thoughts of history’s greatest economists, how their lives and times affected their ideas, how our lives have been influenced by their work, and how they could help with the policy changes that we face today.
Here are some of her quotes:
The world-economy is going to be re-shaped by Asia in the next 10 years.
A new global middle class
- Over 1 billion people have come out of extreme poverty since 1990. The global poverty rate has dropped from 1/3 to 10%.
- The indicator of whether you are middle class is a refrigerator. Then you can afford buying things. In 2030 4,9 billion people will be middle class. The bulk of them will be in Asia.
- A SkyTrax service shows that half of the 10 best airports are in Asia.
There is a global dis-content on globalization. Creating a new global middle class and a base of prosperity is essential for political stability etc.
In many respects, poverty reduction has very little to do with political interventions but is fueled by economic growth.
The ways in which growth is happening in Asia is reflective on issues of the 21. Century. Globalization has been managed in a great way in Asia. Asia is moving up the wage ladder, and they are positive towards globalization.
Growth and globalization are welcomed in emerging economies.
History doesn’t repeat itself, but it rhymes. (Mark Twain).
We need to rebuild a new consensus about growth and globalization, to ensure an economic system that works.
Also, we should work to ensure that emerging markets don’t go down the same road as western countries when it comes to gender inequality, climate impact etc.
Milo Jones is an American based in Poland, working at IE Business School, who focuses on the impact of digital technologies on geopolitics, society and business using his experience working with Accenture, Morgan Stanley, and even CIA. Milo focuses on themes from intelligence to finance, geopolitics and cultures. In 2016, Milo also spoke at a special event organized by Harvard Business Review Korea/DBR on his application of intelligence methodologies to business situations.
Here are some of his quotes:
How does an organization like CIA with smart minds and unlimited budgets make mistakes that lead to events such an 9/11? How do they miss out and make such grand mistakes, and what can businesses learn from that?
Wohlstetter discovered that the problem is the “failure of imagination”.
But sometimes warnings are ignored. In both intel and business, especially in new markets, identity and culture define who are being listened to.
We need a new intelligence and new markets cycle, where you are aware of your own hypotheses and assumptions.
A guy in CIA originally warned everybody about Al Qaida, but he wasn’t listened to. He jumped the chain of command and told CIA leaders to capture or kill Osama Bin Laden, but he was removed from the task and not invited back in until September 12.th 2001. So why didn’t anyone listen? I think it has to with identity and culture.
In Islamic culture, the cave is a holy place. Sitting in front of a cave made Osama seem less threatening in the Western world, while at the same time appealing to followers in the Muslim world.
- Knowledge about new markets is a social construction.
- Assumptions are more important than data.
- Cultural and identity eat conventional research for breakfast
- Acknowledge that diversity is a practical issue, not an afterthought.
Christina Boutrup … the technology perspective
Christina Boutrup is a Danish author, and an expert on the Chinese world of technology, hosting radio- and TV-shows about China. She interviewed Alibaba’s founder Jack Ma and closely followed the global expansion of Chinese companies authoring several books about business in China. In her most recent book The Great Tech-revolution – How China Shapes our Future, she underscores why all decision-makers should pay attention to the Chinese tech-revolution and what companies in the West can learn from China.
Here are some of her quotes:
Chinese companies are world leaders in many of the new technologies shaping our future, including AI.
We shouldn’t underestimate Asia. Chinese companies are #1 in drones, fintech, electronic cars, solar, high speed trains and AI.
China can be world-leading in terms of digital business models.
The competition is hard in Asia. In order to catch the attention of Chinese consumers, you need to come up with something good.
We Chat is owned by Tencent, and it’s an ecosystem centered around the consumer with an emphasis on gamification.
Coffee Box is an example of a company which disrupted Starbucks’ business model by listening to the consumer and using gamification elements to catch the attention of the user.
If a business model works in China, it is very likely to be successful in the rest of the world.
Right now, China is a data cowboy land. This makes it easy for companies to use data to launch new services and products.
Asian technologies and algorithms are used in European Banks.
In terms of health and the elderly, both Europe and China are challenged. Digital healthcare solutions are developed rapidly in Asia because of a lack of doctors and relatives. They have vending machines, where you can speak to a robot doctor and receive your medicine right away.
Education is very important in Asia. Anything that can enhance a student’s learning is applauded. A lack of teachers has led to an AI teacher assistant, that can correct English or Math tests for a teacher.
It is time to copy China in terms of fast trial & error, copying the master, listening to the consumer, business models, gamification, and speed.
Tendayi Viki, a Harvard and Stanford psychologist, and part of the Strategyzer group, explores how big corporates can act like start-ups, to innovate and grow. He helps large organisations develop their ecosystems so that they can innovate for the future while managing their core business. He was shortlisted for the Thinkers50 Innovation Award and named on the Thinkers50 Radar.
Here are some of his quotes:
Success is a lousy teacher – Steve Jobs said it, and it’s true. Success cause leaders to relax and count their coins instead of continuing to innovate.
74 % of all CEOs are afraid are afraid of new entrants disputing their business models.
Success is a lousy teacher, because it affects the lens with which the view the world. We never realize how much context shapes our perception.
We have an anchoring bias, where our current knowledge shapes how we process new information.
This affects our view on disruption as well. We talk about Uber, Apple, Amazon and sometimes Whats App.
Then we compare Didi directly to Uber, Alibaba to Amazon and We Chat to What’s App, because we are anchored in our own knowledge. This leads to wrong learnings.
You can’t walk a mile in my shoes, until you take your shoes off. We need to realize that context matters.
We tend to view innovation as a side thing. But it should be the core business.
We should ask ourselves: What is really the business model of this particular company I’m about to study? What values are the costumers getting? How are that value being created? Where do the revenue come from? How is this business adaptive to the environment?
We need to anchor our thinking to the right perspective and the right lens.
Take off your own shoes, uncouple yourself from your own perspective and open your eyes anew.
Discussion: What are the key insights driving Chinese business success?
Linda: We underestimate how good China is at picking what works. They are good at micro-innovation. For Alibaba for instance, logistics is outstanding.
Christina: Gamification makes things fun. You can talk about it, send messages etc. This should inspire us in the West.
Milo: I’m not a gamer. Intelligence is a game without rules. The trick in business is to learn new games while holding on to the best elements of the old game.
Linda: Family-owned business, once they get to a certain scale, perform worse than companies with a different organization. In the west, we’ve moved away from industrial policies, but every policy is still about structuring companies and individuals, so why not have a stronger and more visible industrial policy? You can’t compete against somebody’s state.
Christina: If you want to learn from successful digital businesses, you need to really be willing to learn. Frontrunners are used to being frontrunners and masters, always innovating by finding new ways, new paths. But Mark Zuckerberg now says openly that he should have copied features from WeChat earlier. We need to learn who the master is and learn from that company. It could be your Chinese copycat. China learn from looking at masters, the best performing companies, and they keep learning from them and fine tuning their own company and products.
Tendayi: There is a leadership culture in Europe around planning and execution. There is this idea that a good leader can pick a winner, whereas we need to create an environment in which good ideas can bubble up.
Christina: Chinese innovators are pragmatic, they want to create real solutions to real problems.
Summary: What should Europe’s business leaders learn from Asia?
Christina: Listen to the customer and make it fun
Milo: Asia is a western construct, it is a very diverse place going from Pakistan to Japan, they didn’t name themselves ‘Asia’, so don’t call them that, and remember they’re separate countries.
Linda: Incorporate technology into your business practice.