Learning from Asia … applying the best ideas to European business
June 6, 2019 at Nordea, Oslo, Norway
- Download a summary of Peter Fisk’s keynote “Learning from Asia”
The world’s most dynamic markets today are in Asia.
China is the world’s second largest economy, a huge new and growing consumer market, and home to many of the world’s fastest growing companies. Alibaba to Baidu, BYD and Bytedance, China Mobile to Didi Chuxing, Haier to Huawei, SAIC to Tencent, Dalian Wanda and Xiaomi. China has shifted from imitator to innovator, fundamentally driving new technologies, new applications, and the new agenda for business.
And whilst China is growing at around 5-6%, many other Asian countries will grow even faster through the next decade: India, Bangladesh, Vietnam, Malaysia and the Philippines. Collectively these are known at the 7% club. Indeed we could add another list of great non-Chinese Asian companies like DBS and Grab in Singapore, Samsung and LG in South Korea, Uniqlo and Softbank in Japan, Reliance and Tata in India.
- Read more in my article Taming Tigers: Learning from Asian Business Leaders
Whilst the 19th century belonged to Europe, and the 20th century to America, the 21st century is Asian. In particular, it is the “Eurasian” market axis, connecting Europe and Asia, that is likely to grow most significantly. Bruno Maçães argues in his book “The Dawn of Eurasia” that the distinction between Europe and Asia has disappeared, that China’s new “Silk Road” projects are more important than the G20, and that Europe is missing the boat on the third globalisation.
Meanwhile Parag Kanna says in his recent book “5 billion people, two-thirds of the world’s mega-cities, one-third of the global economy, two-thirds of global economic growth, thirty of the Fortune 100, six of the ten largest banks, eight of the ten largest armies, five nuclear powers, massive technological innovation, the newest crop of top-ranked universities. Asia is also the world’s most ethnically, linguistically and culturally diverse region of the planet, eluding any remotely meaningful generalization beyond the geographic label itself. Even for Asians, Asia is dizzying to navigate.”
- Read more in my article The Future is Asia: 5 billion people is just a starting point
And as we move rapidly towards the 2020s, the amount of change and uncertainty in markets is likely to increase further, challenging the more structured and analytical approaches of the west. Built into Asian culture and religion is a resilience to cope with change, but also an optimism to thrive on change, which is likely to serve them well.
- Read more in my article The I Ching, the oldest guide on how to deal with uncertainty
Yet this is not just about abandoning your local markets and heading East. What is even more relevant to most companies, particularly in Western markets, is that Asian business do thing differently – they innovate, compete and grow in different ways.
25 years ago I met my wife who is half Chinese. Getting to know her family opened my eyes to a very different attitude to life and work. Whilst the following might seem nice words, I can see how they really do instil a very different approach to work, life and success. From the smallest business, to the huge new corporations, they offer us new ideas and inspiration.
17 Lessons from Asia for Europe
So what can we learn from Asian companies, that we can apply back home?
- Values: The Confucian approach is often quoted by Chinese premier Xi Jinping – a philosophy founded on social harmony and collaboration, frugality and hard work, and education – values shared across much of Asia.
- Agility: Taoism is about going with the flow, and adapting to change. The yin and yang symbolise the ability for opposites to co-exist in a positive way, communism and capitalism, centralisation and decentralisation, fast and slow.
- Long game: Private ownership gives Asian companies stability to take a longer term view. Softbank takes a 30 year investment view. Governments work to a 5 year plan, enabling strategic initiatives to thrive.
- State: Whilst this is often seen negatively, government support enables companies to grow with long-term loans, to develop new capabilities together in dedicated zones, and develop shared infrastructure like ports and rail.
- Digital first: A desire to create the future is combined with a willingness to let go of the past, and not be hampered by legacy structures, jumping to the digital world. Look at DBS in Singapore, the world’s best bank.
- Fast and intuitive: Fast decision making is a hallmark of companies like Alibaba, typically leaders in small groups, acting less democratically, and much more of intuition rather than bound by spreadsheets and business cases.
- Research: Huge investments, partly state-funded, go into new science and technologies, in particular fields such as AI, robotics, biotech, and sustainable energy. 3 Chinese electric car companies now outsell Tesla, led by DYB.
- Experimentation: The fast and intuitive approach lends itself to constant experimentation. Companies like Xiaomi continually try new ideas to see what takes off with its huge consumer audiences.
- Scale: The huge size of Asian markets, 5 billion people compared to 1 billion on each other continent, means that even niche ideas have significant audiences, and can then be scaled rapidly though networks and give efficiencies.
- Entrepreneurial: Many western companies struggle with how corporations can be like start-ups. Haier transformed their business into 10,000 micro businesses under one roof, calling it their Rendanheyi model.
- Copying: Another seemingly taboo subject, but still what Chinese companies excel at (as does Apple). Meituan Dianping was recently ranked the world’s most innovative company, yet copies and tweaks business models.
- Ecosystem: Asian businesses are not afraid to openly work together. Alibaba and Tencent are like “Google plus Amazon plus Facebook plus eBay plus payment plus logistics plus wholesale” all in one. Platform models are the norm.
- Relationships: Famously, the Asian concept of “gunxia” plays a huge role in many of these aspects, a relationship based on face and trust, where businesses and individuals commit to collaborate without hussle or strong-armed deals.
- Leadership: We probably know more CEOs of Asian companies than western companies. Why is this? Because trust in companies comes through people, and particularly in ecosystems of employees, partners and customers.
- World view: Many Asian companies see the world, rather than local markets, as their home. Xiaomi for example sees natural affinity and rapid growth across similar emerging markets, from India to Brazil and Mexico.
- Education: Back to the Confucian idea at the beginning, education becomes key to future success. China has 4 times more STEM students than USA, and 33% of all students study engineering compared to 7% in USA.
- Frugal: Whilst rich young Asians have a huge appetite for partying and designer brands, overall they have a frugal attitude and most people save hard. Net household savings in China are 38% compared to 18% in USA and 4% in Europe.
- Hardwork: Jack Ma swears by it: the 996. Which means working long hours 9am to 9pm 6 days every week. Whilst the west have taken life easier, the Asians are working hard.
You may agree or disagree. What else would you add? You may find that the state interventionist approach is not fair, destabilises competition, and that many of these companies would have failed in their infancy but for such support. You may argue that the Asian “heads down” work ethic could easily be supplanted by machines in an emerging world of AI and robotics, and that Europe is better focused on more human, creative and added-value skills and work. As you walk around Shanghai, you may feel uncomfortable that the Chinese police evaluate you with their data-powered AR-enabled dark glasses, or how social credits drive compliant behaviour, and aspects of freedom and human rights are ignored. Yet Asian companies are fascinating, creative and not going away.
- Read my in-depth stories of many of these Asian companies here 100 Gamechanger Case Studies
This year’s Thinkers50 European Business Forum, bringing together the world’s top business thinkers with Europe’s business leaders, focuses on this topic. How can European businesses learn from the approaches of Asian companies. How can we take the best new ideas and apply them to our own companies here in Europe? For two inspiring days in Odense, Denmark – itself a hub of 21st century robotics – we bring together many different perspectives on this challenge.
In the European Business Lecture 2019, Alex Osterwalder gives his view on how Europe’s companies can be invincible. Also Erin Meyer on how they can work better together, top strategist Scott Anthony on innovating in dual transformation, Kjell Nordstrom gets funky again, Irene Yuan Son takes us to Africa, Navi Radjou contrasts India and America, Erica Dhawan gets you more connected, Haiyan Wang learns from China, and Howard Yu helps us leap forwards in new ways.
I will again be hosting the event, and look forward to seeing you at “the Davos of business thinking” on 25-26 September.
- Learn more of the best ideas from Asia at the Thinkers50 European Business Forum 2019
The most innovative businesses see the world differently.
They don’t just seek to imitate the success of others, to compete in the markets of today, to frame themselves by their relative differences to competitors. Instead they play their own game.
These companies go beyond innovating their products and services, their customer experienes and business models. They seek to innovate how their markets work.
Think of it like a sports game. How could you change the game? It could be anything from the pitch dimensions to rules of play, the team composition to the measures of success, the role of the referee to the participation of fans. Even the name of the game.
Now look at today’s most disruptive innovators – 23andMe to Airbnb, Brewdog to Buzzfeed, Casper to Coursera – they reframe, reimagine and redefine the market on their terms – who is it for, why people buy, what they pay and get, and how they work.
I’ve met and profiled over 250 “gamechanger” companies on my travels, in almost every sector, and in every part of the world. Corporate giants and start-ups, from Abu Dhabi to Berlin, Colombo to Qingdao.
There is no one way to change the game, but there are definitely some common traits:
- Audacious – Gamechangers are visionary and innovative, but also daring and original; they seek to shape the future to their advantage.
- Purposeful – They seek to make life better, in some relevant and inspiring way; they have a higher motive than just making money.
- Networked – Gamechangers harness the power of networks, digital and physical, both business and customer networks, to exponentially reach further faster.
- Intelligent – They use big data analytics and algorithms, machine learning and AI, to be smart and efficient, personal and predictive.
- Collaborative – Gamechangers work with others, from ecosystems to platforms, social networks and co-creation, to achieve more together.
- Enabling – They focus not on what they do, but what they enable people to do; and thereby redefine their marketspace, find new opportunities and redefine value.
- Commercial – Gamechangers take a longer-term perspective, adopting new business models, and recalibrating the measures of progress and success.
Do you have a future mindset?
Today’s business leaders need a future mindset. That sounds obvious, but isn’t.
Most leaders have a “fixed mindset”. They keep stretching the old models of success. They stay loyal to the model that made them great, seeking to squeeze and tweak it for as long as possible. They seek perfection – to optimise what they currently do – which leads to efficiency and incremental gains.
Instead a “future mindset” is prepared to let go of the past. To explore the future, to experiment with new ways of working and winning. Failure is a way to learn, and innovation becomes the norm. Change is relentless inside, as it is outside. Innovation is their lifeblood. Like Jeff Bezos loves to say “it is always day one”.
With a future mindset, the CEO needs new attributes:
- Sense maker – to interpret a fast and confusing world, to see new patterns and opportunities, what is relevant and not, to shape your own vision.
- Radical optimist – to inspire people with a stretching ambition, positive and distinctive, to be audacious, to see the possibilities when others only see risk.
- Future hacker – they start from the “future back”, with clarity of purpose and intent, encouraging ideas and experiments, leveraging resource and scale.
- Ideas connector – da Vinci said innovation is about making unusual connections; connecting new people, new partners, new capabilities and new ideas.
- Emotionally agile – whilst organisational agility is essential, emotional agility matters even more; to cope with change, to be intuitive in making sense, and making choices.
- Entrepreneur at large – keeping the founders mentality alive, hands-on working with project teams to infuse the mindset, to be the catalyst and coach.
- Having grit – “gamechanger” leaders need to go against the grain, to persist but know when to move on, to have self belief and confidence, guts and resilience.
The future is a better place to start
Start from the “future back”.
Trying to evolve in today’s complex and confused world is unlikely to lead you towards a bright and distinctive future. It will extend your life a little longer, but it will be tough and uninspiring, with diminishing returns.
Instead jump to the future. I tend to start with five years ahead, although it may differ by company. 5 years is long enough to change the world, but close enough to be real. Start by creating a positive, collective and inspiring vision of the future market. What will it be like? What will people want? Why? How? Where? Then consider how to win in this new world.
This is where “moonshot thinking” can be really useful. “Why be 10% better, when you could be 10 times better?” 10 times more profits, more customers, more quality, reduced cost, reduced time. Whatever. By giving yourself a “How could we do it 10x better” challenge you take a new perspective, solve problems in different ways.
Be inspired by ideas from other places.
Explore how ARM or GE, Inditex or Netflix, Glossier or Novo Nordisk have changed their markets. Choose any of my 100+ “gamechanger” companies! How did they do it? How did customers respond? (Remember, they often serve the same customers as you!). You can’t learn much from competitors, but you can learn a lot from relevant parallels.
Copy. Adapt. Paste.
Customer insight also matters. Deep dives and design thinking, exploring the emerging trends and deviant behaviours. This can enhance and validate your ideas, but the problem with most customer insight is that it is filtered by our current world. You need something to disrupt your thinking.
I have a great box of disruptive techniques. Some are really simple – like break then remake the rules, like imagine its free then find a way to make money, like reverse polarities and many more. The point is to disrupt your conventional thinking.
From this, ideas rapidly emerge. You need lots of ideas about the future. But these are fragments of the real answer. The real creativity comes in fusing together into bigger “concepts”. These could be customer solutions, or new ways of working, new revenue streams, or new business models, and new market scenarios.
Once you have a clear and collective ambition for the future, it’s time to work backwards. “If this is how we want to be in 5 years, where do we need to get to in 3 years, and then in 1 year? Therefore what do we need to start doing now?” You develop a “horizon plan” for your business; a strategy roadmap if you like, but developed backwards.
The important thing is that by working backwards, you have jumped out of the morass of today. You’ve avoided the assumptions, limitations, problems and priorities of today’s thinking. You have a more inspiring “gamechanging” future, and have started to map out the steps to get there. Most likely with different priorities in the short-term too.
Of course the steps on this journey might change, but it’s going to be an exciting adventure.
Change the way we think, resolve the conflicts
In today’s busineses, we have created artificial divides in how we think and operate. Digital and physical seem like two different worlds, global and local seem like alternative strategies that cannot combine, many still struggle to align value to customers and shareholders in a mutually reinforcing way, and short and long-termism continues to confuse our priorities.
Our thinking within business, has created separate and apparently conflicting approaches. The opportunity is to make the combination of both approaches world – “fusions” if you like – to be innovative in the way you combine apparent opposites.
Digital and physical are two sides of the same coin.
There is only one world, unless you believe Ray Kurzweil, and it is the real one. It’s human and physical. Digital technologies are incredibly powerful, enabling people to connect, to work, to learn, to play in new ways. From mobile phones to blockchains, 3D printing and augmented reality, digital allows us to do more, do it faster, do things we could never do before. But it’s still about humanity.
Start with people. How can you enable them to achieve more? To live better, to have more fun, to do better for the world. Whatever matters. I work closely with Richard Branson and his Virgin teams. Their mindset is to “start from the outside, and then work in”. Design a better customer experience. Built on your ambition and insight, and then explore how you could deliver it with new and existing capabilities.
Global and local are opportunities for every business.
I love Amazon’s “Treasure Truck” … Most of us have never connected with Amazon beyond the website and the delivery guy. Amazon is huge, global and anonymous. But the Treasure Truck is real. It travels around the country, bringing its pop-up store to local neighbourhoods, fun and games, bargains and demos. For Amazon, it’s a chance to make real connections, listen to people, and to be local.
We can all see a backlash in society against relentless globalisation, huge corporations, and social inequality. We see a lack of trust in brands, and know that authenticity matters. Etsy shows us that even the smallest and most local artisan businesses can also be global. For every business, local and global markets are within reach, however it’s also about combining scale and standardisation, with relevance and individuality.
Ideas and networks should be the core of your business.
Gamechanger businesses need a compelling idea, a core purpose, an inspiring proposition, that can spread fast and contagiously. In a digitally-fuelled world, the most innovative businesses embrace “ideas and networks” to drive exponential impact – like WhatsApp creating $19bn in three years, Airbnb $40bn in 9 years, Alibaba $476bn in 18 years, Amazon $740bn in 23 years.
Think about that concept of “exponential” … The power of networks – be it franchisees, or distributors, or customers and users – lies not in the number of members, but in the connections between them. Networks have a multiplying effect. Exponential. Consider, for example, Rapha, the sportwear brand that brings together people with a passion for cycling, who conveniently meet at their “Cycle Club” stores, and buy their premium gear. A fantastic “ideas and networks” business.
Finally this idea of short-term and long-term being in conflict with each other.
Jeff Bezos never has this problem, nor Elon Musk, nor Richard Branson. They focus on the long-term, recognising it will require some years of investment to get there. They all of course lead privately-owned companies. But every public company has the same ambition to innovate and grow. And so do most of their investors, actually.
The reality is that any company’s stock market performance is based on its future earnings potential, not its past. The better you can engage with equity analysts, journalists and investors themselves to explain why you will deliver a better future worth waiting for, then you get their support. If you don’t engage them in your future vision, plans and innovations, then they will default to looking for short-term evidence. It’s really in our hands, to work together to create a future we want to invest in. And to share the greater risk and rewards.
Time to embrace your future mindset
We live in an incredible time … More change in the next 10 years than in the last 250 years … remember? I know that sounds a little crazy, but think about Hyperloop in 3 years, a tipping point to electric cars in 5 years, Mars missions in 8 years. They are all real, and possible.
Digital platforms connecting buyers and sellers in new ways, blockchain having the potential to transform relationships and trust, 3d printing having the potential to transform value chains to deliver anything personalised and on-demand, AI and robotics giving us the capabilities to be superhuman in our minds and bodies.
These are just some of the fantastic new capabilities that enable us to innovate beyond what we can even imagine today. The future isn’t like the future used to be. We cannot just evolve or extrapolate the past. Today’s future is discontinuous, disruptive, different.
It is imagination that will move us forwards … unlocking the technological possibilities, applying them to real problems and opportunities, to drive innovation and growth in every industry, in every part of our lives.
Imagine a world where you press “print” to get the dress of your dreams, the food of your fantasies, or the spare parts for your car. Instantly, personalised and on demand. Think then what does that mean if we don’t need the huge scale of manufacturing plants, warehousing and transportation. Maybe we will even subscribe to the IP catalogues of brands, rather than buy standard products, in the ways we currently subscribe to Netflix.
Time to embrace your growth mindset … Unlock your Einstein dreams and Picasso passion … Embrace your Mandela courage and Ghandi spirit. Be more curious, be more intuitive, be more human. Ask more questions. Don’t be afraid to have audacious ideas, to challenge the old models of success, and turn future ambitions into practical profitable reality.
How else did Zespri reinvent the Chinese gooseberry as the kiwi fruit? How else will SpaceX reach Mars by 2025? How else did Netflix came to be, or NuTonomy, or Nespresso, or Nyx?
This is why 23andMe’s Anne Wojicki wont give up in her quest to make DNA analysis available to everyone, and to ultimately find a cure for cancer. And it’s why Jack Ma didn’t give up as he rose from $1000-per year English teacher to technological royalty.
The secret is the future mindset.
To realise that the future is malleable. So we need to grab hold of it, and shape it in our own vision. To our advantage.
This is what “gamechangers” do.
- Article: The 10x Leader
- Article: Amplifying Potential
- Book: “Gamechangers: Are you ready to change the world?“
- Book: “Business Genius: A more inspired approach to leadership”
- Workshop: “Gamechangers Program: Leading for smarter innovation and profitable growth”
- Workshop: “Inspiring Leadership … future, people and change“
- Download a summary of Peter Fisk’s keynote “Gamechangers”
Time for business leaders to “seize the day” or, more appropriately, bǎ wò dāng xià (把握当下).
- 0830 … Introduction by Snorre Storset, Head of Nordea Norway
- 0840 … 7 Wonders of the New Business World, Keynote by Peter Fisk
- 0940 … Q&A, Hosted by Nordea
- 1000 … Case Study of Scatec Solar
- 1030 … Case Study of Telenor (to be confirmed)
- 1100 … Round table discussion, facilitated by Peter Fisk
- 1130 … Lunch