Peter Fisk

On 10 December 1969, Macquarie’s predecessor organisation, Hill Samuel Australia, opened its doors with three staff and an ambition to provide advisory and investment banking services of an international standard to the Australian market.

Now we are a global business operating in over 25 countries and with specialist expertise in areas such as resources, agriculture and commodities, energy and infrastructure, with a particular knowledge of the Asia-Pacific region.

Since its inception, Macquarie has differentiated itself by focusing on new opportunities, both in product and geography, progressively building expertise in these disciplines and expanding into adjacent areas.

Banks in Australia are taking the lead in terms of innovative banking, with Sydney-headquartered Macquarie Bank being the fastest among them. This was best exemplified in September 2017, when Macquarie Bank became the first bank in Australia to launch an open banking platform that leverages application programming interface (API) technology. Through API, the platform can connect securely with fintech start-ups and apps; this in turn allows customers to share their data (should they wish) so they can utilise third-party products and services. According to the bank, its open banking platform brings greater choice to customers. The platform was developed as a result of customers requesting to connect their information with their favourite accounting and budgeting apps and software, among other useful services.

https://www.youtube.com/watch?v=aSV7rJqvmKo

Justin Woolverton, the founder of Halo Top ice-cream, has heard the question before. Asked whether Unilever has tried to acquire the low-sugar, high-protein brand that has enjoyed explosive growth in the US, he sighs: “I think we’ve been approached by every major player and every private equity firm in the US, to be honest with you.”

Unilever considered paying $2bn for the five-year-old company, according a New York Post report this month. The reason for all the interest is that Halo Top sales grew 2,500 per cent year-on-year in 2016; it has taken a 5 per cent scoop of the US ice-cream market within two years. That rate of growth is enough to make multinational food producers choke, given annual sales growth was languishing at an average of 2-3 per cent last year.  “I’m not sure a food company has grown faster in recent history,” says Mr Woolverton. “So it’s been a lot of holding on to the bucking mustang or whatever the metaphor is there.”

Halo Top’s big selling point is that a whole tub contains 280-360 calories — roughly a third of an equivalent pint of Ben & Jerry’s or Nestlé’s Häagen-Dazs. The calorie count is displayed in big numbers at the centre of its gold-rimmed, Instagram-friendly packs, which also highlight its protein content.  This means consumers can scoff a whole tub of caramel macchiato or pancakes and waffles ice-cream for the calorific equivalent of a chicken sandwich.

Halo Top cuts out sugar and sweetens with stevia, a sweetener from a leafy shrub used increasingly in everything from “sugar” cubes to fizzy drinks. The ice cream also contains erythritol, a no-calorie sugar alcohol which adds texture. Both ingredients can be called “natural”.  There is milk, cream — and air. That might not be to everyone’s liking but when a science journalist for GQ magazine wrote about eating nothing but Halo Top for 10 days — and lost 10lbs in weight — sales started to rocket.

“We didn’t even know that article was coming, we never would recommend anybody do that,” says Mr Woolverton, who got the idea for the business from concoctions made in his Los Angeles kitchen when he was a bored lawyer. By August, Halo Top’s pint-sized tubs were outselling Ben & Jerry’s and Nestlé’s Häagen-Dazs for the first. In the three months to August 6, it had sales of $86.9m against, respectively, $83m and $79m according to IRI, the market research group.

Last October, Unilever, the world’s biggest ice cream manufacturer with Magnum and Ben & Jerry’s, reported a fall in volumes in its refreshment division. Speaking at the time, Graeme Pitkethly, Unilever’s finance director, highlighted how “very, very quickly” Halo Top had “taken 1.5 share points from us”.

Update: Extract from article in FT, April 2019

In mid-2017, the business partners began to determine how to get Halo Top on sale in as many countries as possible, as fast as possible. This was harder than they expected. Since their ice cream was manufactured in the US, it would have to be shipped internationally and be kept frozen during transit. Figuring out local regulations and securing distribution were also a headache. “I felt like I was banging my head against the wall because we were having to reinvent the wheel for every new market,” says Bouton. I felt we were having to reinvent the wheel for every new market Business partner Douglas Bouton

Then over the summer of 2017, Bouton heard from a stranger offering to help. Matt Fulbrook, a former sales director for Ben & Jerry’s in the UK, sent him an email, asking if Halo Top had thought of expanding to the UK. “We are a team of three ice cream guys with over 50 years collective experience within the UK ice cream sector . . . and know there could be an opportunity here for you,” Fulbook wrote. Within weeks, the two had met and signed a deal under which Fulbrook’s company, Brand of Brothers, would help Halo Top expand to Europe in exchange for a commission on sales.

That connection enabled Halo Top to obtain UK distribution quickly. Tesco was the first to sign up, and by the fourth quarter of 2017, eight other customers, including supermarkets Sainsbury’s. Morrisons and Asda, had also agreed to stock the ice cream. On the branding side, Halo Top knew it had to tailor its advertising and marketing for a British audience or risk not connecting with consumers as it had in the US. “Our brand’s voice has to be authentic and genuine — the antithesis of the big corporation or conglomerate,” says Bouton.

Halo Top hired local staff and ad agencies, and produced an ice cream flavour called Lemon Wedding Cake: a homage to the choice of Meghan Markle and Prince Harry for their wedding cake last year. Halo Top’s efforts appear to be paying off: in its first year on the market, the company recorded UK sales of £20.2m, according to IRi. The group found a contract manufacturer in Germany, which will soon start making the ice cream that is sold in continental Europe, replacing stock currently shipped across the Atlantic. Halo Top has also started selling in the Netherlands and Germany.

“We’re in 12 countries right now,” says Bouton. “If we wanted to, we could double that quickly, but we want to go slower to make sure we do it right.”

Depop was founded in Milan during 2011 by Simon Beckerman, the co-founder of the culture magazine, PIG, and popular sunglasses brand RetroSuperFuture.

Originally a social network where PIG’s readers could buy items featured in the magazine. After realizing that Depop needed a selling function, Beckerman re-envisioned the app as a global marketplace — a mobile space where you can see what your friends and the people you’re inspired by are liking, buying, and selling.

In turn, your friends and creative influencers all over the world can see the things you like, buy, and sell, and are inspired by you. This ecosystem has supported Depop becoming a global conduit of connection, not only in m-commerce, but culture, design, and creative communities around the world.

“The idea was to attract a whole new generation of young people who could not only use the site to buy and sell in a modern way, but also have fun in discovering what is cool in fashion and design.” Beckerman recently told the FT.

In the short time since it started, Depop’s user-base has climbed to over 10 million, and while it is still widely the realm of teenagers and twentysomethings, an older contingency is also catching on (thanks in part to celebrity participants, including the former basketball star Shaquille O’Neal and the burlesque performer Dita Von Teese — both of whom have Depop stores).

“We have something like 350,000 to 400,000 active users a day,” says Beckerman, “seventy per cent of whom are female, and a majority of whom are aged between 16 and 26.” He says that there are approximately 22,000 sales a day — some made directly online (via PayPal) and some that “allow people to transact by hand”. The company generates its own money by taking a 10 per cent cut of the digital sales, though it does not take a percentage if the seller and buyer agree to meet in person to complete a transaction.

For those unfamiliar with its workings, Depop is a crafty amalgamation of eBay’s entrepreneurial machinations, Craigslist’s lo-fi skeleton and Instagram’s voracious social interconnectivity. The platform is predominantly used through an app, though, like Instagram, it can also be viewed on a desktop. Participation is simple. Vendors post images of whatever it is they’re looking to offload and, when something sells, a tiny yellow “Sold” label appears on the bottom-left corner of the image. Unlike eBay, Depop’s sellers can leave their transacted items on their profiles — creating a curated retail persona that, in time, amasses followers. These followers “like” and comment on products; they can also communicate with vendors independently. Generally, the more followers a seller has, the more lucrative their store will be.

The Depop sales lingo is a millennial art. “Hit me wiv sum offaz [flying money emoji] [money bag emoji] [flying money emoji],” reads the biography on 18-year-old Momos Weighill’s Depop page (@sarweighill). Her profile picture depicts somebody wearing Burberry plaid-trimmed Nike trainers with matching trousers. And her inventory is rife with 1990s and 2000s swag, including a Gucci bikini and sunglasses with coloured lenses — the kind once favoured by Geri Halliwell. Weighill joined the site quite accidentally. “I bought two pairs of yellow and red Versace trousers for £10, but they didn’t fit. I put them up on Depop on the off-chance someone might want them, and they sold for £45 each within three days. I carried on from there.”

For Depop’s users, they boast a consistently hand-curated explore page and are embarking on the brick and mortar retail world with stores in LA and NYC. The business is growing rapidly strengthened community, and continue to add to the brand through a series of collaborations. They’ve worked with major brands like Dickies as well as entrepreneurs like the New York vintage shop owner, Procell, and LA-based textile artist, Uzumaki Cepeda.

In 2018 they launched the IRL to their URL with their version of a brick and mortar on Sunset Boulevard in Los Angeles which actually appears much more like an experiential marketing activation rather than a traditional retail space because it is not just a place for shopping. Moving product is probably its lowest priority. Inside, app users can attend workshops centered on improving their Depop stores like how to style fashion and lifestyle photos, source vintage, brand building and other skills to help use their account like an entrepreneur. They can also shoot photos of their products there or book time with the in-house team to shoot it for them.

It was here their collaboration with Cepada became an experience in addition to selling her art in-app. Cepeda’s art is rooted in creating her interpretation of safe spaces through utilizing brightly colored faux fur. For the event, she did a set design that attendees were able to shoot photos in. They also celebrated Go Skate Day with the Dickies Girls. “There was a custom skate ramp in the parking lot and Dickies Girl launched their Depop shop with some fun new merchandise which was available for sale throughout the space.”

Update 2018. Extract from Courier interview with Maria Raga, now CEO.

Just inside Depop’s front door, there’s a 1960s-esque counter on the wall; every few seconds the numbers tick over, clocking up yet another sale on the mobile app since midnight. When Courier visits, mid-afternoon, it reads 8,094.

But nobody is paying the ticker any attention. There’s a baby in the office, and she has attracted quite a fan club. A gaggle of software engineers, stylists, accountants and strategists have gathered around her pram for some communal cooing.

Many of Depop’s nine million users are closer in age to this baby than her parents: 80% are under 25. They’ve also mastered a very different way of making money to the proverbial paper round – some entrepreneurial teens are earning thousands of pounds every month hawking their unloved trainers, mums’ vintage jackets and last season’s sweaters. It’s this generation’s Ebay, completely changing the way millions buy and sell things – and it’s cool.

Users love Depop because it’s more than just a way to make extra cash; it’s also a social network. The app looks more like Instagram than Amazon, with feeds filled with photos of fresh-faced teens posing in clothes in their bedrooms.

And it has global appeal. Worldwide sales hit £170m in 2017, and the US is fast closing in on the UK as its biggest market. No surprise then, that when the company announced its latest £14m investment round in February, it promised to head state-side soon.

Tough times

There was a time, though, when things weren’t looking so rosy. When Maria Raga became CEO in early 2016, the company’s founder and creative compass Simon Beckerman had recently left after a disagreement with the board. Staff were also heading off, fast – and there was the small matter of a £6.5m fundraising round to close. ‘It was a bit tricky,’ says Raga, a fast-talking Spaniard who joined Depop in 2014 as chief operating officer, via Insead business school in France, Bain consultancy and Groupon.

When the storm came, the board elected her CEO. Somebody more used to suits than sneakers, Raga suddenly found herself at the helm of a creative company which had, in essence, lost its way.

‘There was a lack of a unified vision for the business, and people started to not believe,’ she says. The business had grown faster than the team behind it, and the stretch marks were starting to show.

It’s been quite the turnaround. How, then, did Raga do it?

Re: vision

Like any experienced strategist, she started by defining the company’s mission – and immediately ran into difficulties. ‘How was I supposed to come up with a vision when I didn’t found the company?’ she says. ‘It’s one of the toughest things [to do] when a business is already up and running, because there’s something that people believe in, but it’s not properly articulated.’

So she took a risk and brought back Beckerman, the founder, as creative director. Before starting Depop in 2011, he launched pop-culture magazine Pig in his native Italy, and Retro Superfuture, a sunglasses brand made famous by the likes of Kanye, Lady Gaga and Beyonce. (‘These ones are actually his brand’s,’ says Raga, pulling off a pair of thick-rimmed, oversized frames.) Raga didn’t need to beg: Beckerman was eager to come back. ‘Now it doesn’t even feel like he left the company,’ she says. The combination of the two of them, one investor says, is Depop’s ‘magic ingredient’.

Two years on, Beckerman remains heavily involved, poking his head around the door mid-interview to ask Raga a quick question. ‘We sit down multiple times a day,’ he says. ‘Maria’s a super pragmatic person. She’s able to download my brain and make it more structured.’

If Depop were a car

With Beckerman back onboard, Raga’s next step toward defining the vision (and pulling the company back together) has become a signature trait of her management style. She asked questions – of her team and her users: ‘We wanted to understand what people thought about us. So, if Depop were a magazine, what kind of magazine would it be? If Depop were a car, what type of car would it be?’ The answers were all over the place – from high fashion titles to Hello! magazine.

A branding agency was enlisted to help pin down Depop’s personality and a defined mission was identified: ‘To empower creative minds.’ A new version of the app was launched shortly after.

Having a clear idea of what the brand is and where it’s going has helped define which users to go after, hone marketing strategies and work out where to focus expansion efforts, says Raga. More than anything, she says, it’s helped her decide what not to do. She’s wary, though, of merely bandying the mission statement around – ‘if you just put the sentence on the wall, that doesn’t work’ – and says for it to have any impact, every decision must be made in relation to it.

Selling state-side

Depop’s biggest move yet was its expansion into the US last month. Over a third of Depop’s users are already based there, but haven’t yet had a physical touchpoint with the brand.

That’s all set to change now that 3531 West Sunset Boulevard, Depop’s first pop-up retail space, has opened in Silverlake, LA. ‘To be creative, people have to connect, to get inspired by others,’ says Raga. Depop’s app is inherently social – users build networks, start conversations, follow and refer one another. The hope is, if users also meet in person, their devotion will be further strengthened.

Calling the LA site – and the New York space that will follow in April – ‘pop-ups’ sells them short; they will double up as offices for local customer support and partnerships teams, while also giving users a space in which to sell products, take photos, host events and workshops.

It’s not an untested idea: in a less formal way, Depop has been meeting its users in person for years. They regularly visit the Shoreditch HQ for everything from photography workshops to lessons in how to spot a fake, and feedback sessions with staff over pizza. The only reason these events haven’t been open to the wider public, Raga hints, is a practical one: Depop is based on the fourth floor of a converted warehouse – and the lifts are highly unpredictable.

Any questions?

Raga, too, likes to meet Depop users, inside and outside the office – and sometimes in unlikely locations. Recently, she was invited to speak at Eton (the schoolboys are apparently big Depop users). She turned up with a handful of merchandise and promised prizes for the best questions asked. The 14-year-olds impressed her: ‘They were asking us when we are going to use blockchain.’ Although she says 2018 won’t be the year Depop moves into blockchain, 38-year-old Raga seems like somebody who’s always up for trying out something new.

When we meet, she’s wearing a second-hand Acne jacket recently bought from Depop – much to Acne-fan and marketing strategist Tainá Vilela’s delight. Speaking of her boss, Vilela says: ‘Even though we are two worlds apart – she comes from a very corporate background, and I come from a creative background – she’s always trying to find points where we can connect and communicate. She’s always interested in understanding things better.’

With the company too, Raga’s open to experimenting with what might seem like tech world clichés. Depop’s people team have introduced several initiatives to help staff across departments get to know each other. ‘We have this “buddy-up” thing, which is hilarious,’ Raga says, raising her eyebrows: people who might never usually speak to one another are given a small budget to hang out. Although clearly sceptical of the initiative at first, she says: ‘You may think it’s a waste of time, but it does make a difference.’

This openness has filtered through the company. Vilela, who’s worked with Raga for three and a half years, says: ‘I can go to someone and say, “Why don’t we do something this way?”’ It’s been a very deliberate cultural shift.

Since becoming CEO, Raga’s expanded the leadership teams, and ‘put a lot of emphasis on people’s roles’: she didn’t want the mass exodus the company suffered in early 2016 reoccurring. She regularly sends emails with company updates, quarterly reports or even to explain crises. There are ‘all-hands’ meetings where the whole team gathers, and on Fridays at 5pm, people from all departments start drinking beers and playing video games together. It would’ve been an improbable scene back in early 2016.

‘Maria’s very lovable,’ says Beckerman. ‘The team loves her and she always works with them in the same direction.’

‘She’s grown the trust and the loyalty of the whole of the business,’ echoes Rebecca Hunt, an early stage investor at Octopus Ventures, and the latest member of Depop’s board. Hunt’s known Raga since before she became CEO, and has seen her grow with the role. ‘She took over in difficult circumstances, and she’s shown herself to have a high degree of emotional intelligence.

‘She also has a huge amount of humility – she has no idea how good she is. She calls at the end of the month, says “Sorry we’re half a percent behind our numbers,” and I just want to kiss her.’

1,000% growth

In the boardroom, though, Raga has to play hardball. Some investors have pushed for the app to introduce paid-for features, such as one which would bump paying users’ profiles to the top of a page. Introducing this, though, would tamper with Depop’s ‘drop page’ – a list of what’s trending and profiles Depop’s team have curated. ‘The moment you start allowing people to promote themselves by paying, that’s completely diluted,’ says Raga. ‘One of the things that makes Depop very special is the curation side of things.’ It’s a dilemma currently without an answer.

‘There’s a lot of emphasis on putting a lot of money into marketing and growing the business fast,’ adds Raga. ‘I’ve learned to be comfortable with saying, “You don’t have to go from 100% to 1000% growth”.

‘I don’t think you have to grow fast to be successful, and when you’re building a marketplace that has a lot of emphasis on community, it has to be done in a very credible and authentic way. I’m very happy growing 100% year-on-year, so why push it?’

In Hong Kong there is a great 100 year old business that explains our future potential. For much of the last century Li and Fung was focused on low-cost manufacturing of textiles. That was until salary levels grew, and places like Indonesia were able to achieve much lower cost bases.  The business reinvented itself as a virtual resource network, helping brands to find the right partners for the business, in terms of expertise, quality, and price.

Walk into a Li and Fung office in Sao Paulo or Istanbul, Barcelona or Toronto – or any one of their 300 offices in over 50 countries – and the small team of sourcing experts will help you find the best designers, manufacturers and distributors for your brand. Every pair of Levi jeans you buy are made with the help of Li and Fung, and around 40% of the world’s textiles. If you need finance, they’ll find you an investor, and if you need merchandising, processing or customer service, they can find the right partner for that too. Their business model can be based on fees, on commissions, or an agreed mix.

Actually, all you need is a good idea. Take it to Li and Fung and they can make it happen with you.

Clothing makes up around two-thirds of the business, with furniture and home furnishings, beauty and personal care products, fashion accessories and general merchandising, such as seasonal gifts, constituting the rest. employs about 22,000 people worldwide. It does product design and development, raw materials and factory sourcing and capacity building, vendor compliance and distribution. It has over 250 offices in 40 markets. It works with 15,000 suppliers to service 8,000 customers.

Li & Fung offers services in product design and development, raw materials and factory sourcing and capacity building, vendor compliance and distribution.

Historically, buyers have either purchased fully developed products from domestic importers or overseas traders (Principal Traders) or through their own in-house sourcing teams. Today, buyers source their products via all these channels through the company’s trading network either through agency-based sourcing or product-focused services across a wide range of product categories.

In a typical agency-based sourcing arrangement, a sourcing agent oversees product development, negotiation of price, the locating of factories, procurement of raw materials and components, quality control, factory compliance, order processing and manufacturing control and logistics. In a typical product-focused agreement, a buyer is presented with a collection of product samples for the customer’s target market designed and developed by the Principal Agent. The buyer selects a range of samples and negotiates the price with the Principal Trader. Once the order is finalized, the Principal Trader works with its vendor base to produce and deliver the products.

John Hagel uses Li & Fung as an example of a “pull platform” in the report “Business ecosystems come of age”. He describes such a platform connects participants with the “capabilities of others and make them available to their customers in ways that create significant value for platform participants and customers.” He writes that pull platforms are scalable and instead of becoming “unwieldy with greater numbers of participants, they become only more capable and valuable.” He says pull platforms are important owing to two factors: digitization and globalization. Although companies have seen the benefits in terms of lean manufacturing and inventory management, within well defined supply chains, the real potential of the pull-based approach has yet to be realised.

• Li and Fung’s Three Year Plan: The Speed Playbook
• Li and Fung’s Three Year Plan: The Digitalisation Playbook
• Li and Fung’s Three Year Plan: Supply Chain of the Future

Spanish startup Gik Live! make wine that is naturally neon blue. They extract a pigment from the skin of the red grape (called anthocyanin) which gives the neon blue hue. Some winemakers have called it “blasphemous,” but the founders say the wine is safe to drink.

“This is not something that’s done in a lab at all,” said co-founder Taig Mac Carthy. “This is all pigments, they come from nature, and so do the grapes. The making of this is 100% natural.”It took two years of testing to get the recipe right.

The drink is made using different varieties of red and white grapes from around Spain, including the wine regions of Castilla la Mancha and Rioja. Anthocyanin, a pigment from the red grapes’ skin, and indigotine, which is derived from plants, give the wine its bluish colouring Non-caloric sweeteners are then used to modify the flavour and create a sweet drink with 11.5 per cent alcohol per volume.

The six founders are all in their twenties. They raised Euro 40,000 between them to start their business with help from The University of the Basque Country. The wine has a very sweet taste and it’s similar to white wine. It’s sold in over 25 countries at a shelf price of Euro 15.

The company was challenged legally in Spain about whether it could be called a wine. Some tweaks to the composition eventually allowed it to fit into the category definition, but it is certainly not trying to conform. Early clients are equally split between men and women and aged between 25 and 34 years old, according to Gik’s online data.

Whilst wine tasters have given the wine mixed reviews, its target audience of millennials have been most positive, less due to the flavour and more due to the Instagram-ability of the blue hue.

“I love how magical the blue color will look in my Instagrams, but the taste wasn’t exactly up my alley – it tasted a little more like a cocktail than wine. I probably wouldn’t seek this bottle out, but if it was the only alcohol option at a party, I could certainly get lit on it.” said one.

The producers suggest pairing the wine with sushi, nachos with guacamole or pasta carbonara with music from James Blake or Alt J in the background. Aritz Lopez, co-founder of Gik, said that in Spain new generations are not used to traditional wine, they prefer beers, liquors or cocktails.

Lopez said Gik spent two years working with the University of the Basque Country, which provided them with a laboratory and a team of chemical engineers.

The blue colour has its own meaning and was inspired by the concept of Blue Ocean Strategy.

“The book says there are two kind of oceans: the red ones, full of sharks (competitors) fighting against each other for a few fishes (customers) and turning the ocean red because of the blood. And it talked about creating blue oceans; oceans where, thanks to creativity and innovation, everyone could be free,” Lopez said.

“It sounded like poetry to us, so it could not be any other colour,“ he added.

Haier, now the world’s largest white goods business, recently celebrated 10 years of its rendanheyi (or win-win) business model. CEO Zhang Rhuimin sees the approach as a way to stay small and focused – maintaining the entrepreneurship, intimacy and speed of a start-up – despite now being a $32 billion multinational with 70,000 employees. Haier is actually a family of 200 micro-businesses, each largely autonomous, and 70% of them with revenues exceeding $20 million last year.

The Qingdao-based company has stretched far beyond its refrigerator origins of 1984, now on the cutting edge of robotics and connected home devices. Just this year it launched Coton, a pocked-size washing machine, ready for any emergency. Haier is a shareholder in each of its micro-business, alongside all of its employees, who share in their own profits.

Rhuimin, who has seen Rendanheyi deliver 28% annual growth for the last 10 years, and profits grow by 1200%, is now looking to co-creation as the next phases in his journey, and for Haier to become leading player in the sharing economy.

Yoshiaki Ito, Haier’s CEO and President for Asia, on winning in an era of hyperconnectivity – where consumers are more connected to information and are relying on the Internet for information, not the manufacturers:

https://www.youtube.com/watch?v=bOw0F4_9-8g

Zhang Ruimin has led several revolutions at Haier since 1984. Under his leadership, Haier was transformed from a near-bankrupt manufacturer of poor quality refrigerators to the world’s largest white goods manufacturer (with a 10.2% retail market share, by volume). They manage to move before they really need to. They are rarely late in adapting.  They seem to have a masterful sense of timing—selecting the right moment to abolish the old and embrace the new.

Zhang says that ‘successful companies move with the times’. But instead of only talking about it (like so many others) he also walks his talk. Over 30 years he has led Haier through five strategic cycles—with great success.

There are 5 phases in the Haier story:

Stuart Crainer from Thinkers50 reports from the first International Rendanheyi Model Forum in Qingdao, China:

Some thirty years ago I went to interview Peter Drucker in London. At the time, I knew very little of his work.  He was an old man who had written a few important books.  When you are young you tend not to worry about such details.  Suffice to say, I was sketchily prepared to interview the founding father of modern management in any vaguely intelligent way.

During the interview, my eyes were opened. Drucker was a veritable fount of knowledge and stories.  As a child in Vienna he had met Sigmund Freud. He was also an expert on Japanese art.  And he re-read Jane Austen annually to remind himself of what great writing is.

There was much more. Drucker talked for an hour or two. Along the way he commented that the book we all want to write is, ‘How to make a million and still go to heaven’.  I would still like to write this.  I escorted him down the road to a pharmacy — as I remember, he needed something for an old skiing injury.

I left my meeting with Drucker convinced of the timeless nature of management — after all, it took management to tend the Hanging Gardens of Babylon or to build the Great Wall of China.  Drucker taught me that management was also universal and had the power to change the world.

I was not alone.

Also during the 1980s in Qingdao in China, a young man by the name of Zhang Ruimin discovered an old, battered copy of Drucker’s The Effective Executive.  The book opened his eyes.

Fast forward to 2017 and I am sitting in a state of the art conference venue in Qingdao and alongside me is Zhang Ruimin, chairman and CEO of the world’s largest white goods manufacturer, Haier.

Under Zhang’s hugely innovative leadership, Haier has evolved from a basically bankrupt manufacturer of poor quality fridges to one of the most innovative companies in the world in terms of its management.

https://www.youtube.com/watch?v=ysPtIplTN5o

Haier’s business philosophy is called ‘Rendanheyi’.  To the outsider it appears hugely complex, a large company basically deconstructed into a freewheeling entrepreneurial spider’s web. Middle managers (some 13,000 of them) were eliminated in one dramatic swoop.  Instead of forming another line in the hierarchy, they now have the opportunity to be CEOs of their own businesses within the company.  This has spawned hundreds of micro-enterprises. Wages are directly linked to the amount of value generated by individuals, all individuals.  The author Danah Zohar describes Haier as a “quantum organization”, one in line with the laws of quantum physics rather than the linear world of Newton.

Haier’s model has developed its own — sometimes perplexing and lost somewhere in translation — language but at its heart are a number of key points:

1. Change leads to change.  Haier seems addicted to change.  At every stage when it looks as though a period of calm would be the answer, the energetic Zhang Ruimin has driven through even more change.  Instead of being an isolated initiative or a programme, change is viewed by Haier as a fact of life. It is.

2. Level 5 management: Jim Collins refers to Level 5 leaders.  These are leaders characterized by humility rather than the over-arching egos often on display in the C-suite.  What is interesting about Haier is that humility has become a core part of the company’s culture as well as Zhang Ruimin’s personality.

This is manifest in a variety of ways.  For example, when it takes over companies it does not send over a large swat team to convert the acquired company to their Haier way.  Instead it plays a long and gentle game of persuasion.  A handful of Haier executives may be sent to the acquired company.  Their role tends to be passive rather than active.  It is not missionary work. Instead they wait to be asked, ‘How would you handle this at Haier?’ When Zhang Ruimin visited the United States earlier this year he didn’t visit the company’s most eye catching acquisition, GE Appliances. He was content to let the company find its own way. It is difficult to imagine a Western CEO employing such an arms-length approach to assimilating a business into an already successful organization.

3. Learning constantly.  The lead, as ever, must come from the top.  Zhang Ruimin is a voracious reader.  One of his aides shakes his head at the very thought of how many books he gets through. ‘If we are sitting in an airport lounge he will be there reading a new book he has just picked up. Five a week he gets through sometimes.’

Talking to Zhang the truth of this is quickly apparent. He is hugely well read.  His conversation moves easily from quantum physics to Henry Mintzberg, from Drucker to blue ocean strategy.  He quotes from Kant and Frederick Taylor as well as Chinese inspirations. For a senior business leader, this is highly unusual – perhaps unique.  CEOs, for one reason or another, generally prefer to spend their time differently than devouring the latest business blockbuster.

To the self-educated Zhang Ruimin learning is as natural as breathing.  From early on in Haier’s development he has traveled to meet up with the world’s leading thinkers.  He picks their brains and cherishes the conversations.  Hardly a week goes by without a business luminary visiting Qingdao to meet with Zhang.  Some, such as Gary Hamel, have become intellectual sparring partners.  Hamel’s anti-bureaucracy message has found a willing disciple in Zhang.

And Zhang is not alone.  Listening to the CEOs of Haier micro enterprises it is clear that they are enthusiastic converts. They are effectively creating their own businesses under the Haier umbrella.  The corporate home is reincarnated as an incubator, a platform for individuals and the organization to grow. And so, entrepreneurial energy and dedication — ‘You may see the marks under my eyes, I have been awake for 30 hours,’ one of the microenterprise leaders confides — becomes part of the corporate fabric, or the very loose and large tent which now constitutes a modern corporation.

Stuart adds one anecdote to conclude:

A few weeks ago, we had a tortuous problem with our bank.  We talked to low level employees who were very pleasant but essentially powerless.  Emails to senior directors were rejected.  This situation is all too common in large organizations.  People on the frontline have been stripped of independent decision making and organizational power. Meanwhile, senior executives come up with strategies and seem careless of their execution. In such organizations there is a managerial vacuum.

Management is at a crossroads.  The robotic age will alter the world of work in fundamental ways. The negative perception is that jobs will be lost and that is the end of the story.  Jobs will, indeed, be lost, but therein lies an opportunity.  It frees up workers to assume the innovative position of responsibility created by Haier.

Companies exist to create and retain customers.  Zero distance to the customer is one of many Haier mantras. It is one which Peter Drucker would have approved of.

Go-Jek is Indonesia’s first unicorn is currently the fastest growing start-up in South Asia and the largest in Indonesia in terms of valuation, funding raised and number of transactions.

Go-Jek is one of the fastest-growing and most visible tech startups in Indonesia. It uses previously informal motorcycle taxis — ojeks — to courier, transport and provide shopping services to its users. Instead of heading out into congested streets, people now simply use the Go-Jek mobile app to book a motorbike taxi, order a food delivery or even door-to-door cleaning services, beauticians and masseuses. After partnering with some of Indonesia’s biggest banks, the firm is in the process of making its payment system cash free.

It has partnered with over 300,000 two wheel and four wheel drivers and 5,000 trucks across Indonesia, all of whom, collectively cover an average distance of 7 million kilometres each day.

Go-Jek is now the largest food delivery company in the world outside the China market, and is the equivalent of three Indian Unicorns combined in the transport, food delivery and payments markets. With over 40 million app downloads, Go-Jek’s platform powers the Indonesian equivalents of Indian Taxi Aggregators, Food Delivery Start Ups, HyperLocal Start Ups, Digital Wallet startups and Home Service based startups, all in one, at a comparable scale. Its GO-FOOD business alone does more daily orders than all Indian food tech start-ups combined.

This mobile app service now has some 200,000 freelance drivers, and millions of downloads. Its success is down to the huge congestion in Jakarta. The capital of Indonesia has an estimated population of more than 10 million people and is home to about 18 million vehicles.

The disruption potential is enormous. Currently, the average speed a car can travel across Jakarta is about 8kmh, a situation economists agree is hurting the city’s growth capacity. Business visitors say they usually schedule just one meeting per day as the traffic is too bad to accommodate two. The motorcycle taxis are changing that rapidly.

 

goHenry helps young people learn how to manage money responsibly under the guidance of their parents. Combining web and mobile apps, with a Prepaid Debit Card with Parental Controls, goHenry gives 6 to 18 year olds hands on experience of managing money within a safe and controlled environment.

Set up by a small group of parents and friends, unable to find the right tools to teach their own children about money. In the time that has passed since our first members joined goHenry, we have developed to incorporate more and more features, making it an invaluable tool for young people and their parents – 80% of whom tell us it’s helped their children become more financially responsible.

In 2016, goHenry saw incredible success with our Crowdfunding campaign with Crowdcube. Our original target was £2million which we reached during the first 48 hours after we opened our funding round to our members. It has been great to see how many parents believe in goHenry so much that they wanted to become our investors too. We raised £4 million in total, happily exceeding our expectations.

https://www.youtube.com/watch?v=FVMXHIGYQ3g

goHenry is designed to create a way for kids to build financial independence and responsibility – all whilst being safely and remotely overseen by their parents. Parents set up an online bank account, with their children’s account linked to their own. Children have their own debit cards, which they can use within the parameters parents set. Due to the careful rules, there is no risk of the children going into debt or overdrafts, and parents can limit where the debit cards are used (both online and in shops), as well as immediately block the cards if they get lost or stolen.

This is the first digital banking company aimed specifically at families. Visa debit cards and mobile banking apps are specifically designed for children as young as 6, resulting in safeguards that aren’t available with other leading debit cards, which usually have a minimum age of 11 for their users. Children have the chance to learn about responsibility and finances in their own way through a number of unique opportunities offered, such as choosing themselves how much to save each week or doing set chores to earn extra money. Parents receive real-time spending notifications and can view their children’s earning, saving and spending habits with ease on both mobile and web applications, giving them unparalleled control.

With 78% of children in the UK alone receiving pocket money, and similar figures in North America and Europe, there is a large potential audience, especially by decreasing the minimum age. With over half a million users in the UK alone already, goHenry has the potential for a lot of future growth.

 

Grail is a life sciences company whose mission is to detect cancer early, when it can be cured. GRAIL is using the power of high-intensity sequencing, population-scale clinical trials, and state of the art Computer Science and Data Science to enhance the scientific understanding of cancer biology and develop blood tests for early-stage cancer detection.

Grail’s mission is to detect cancer early – even before any symptoms appear. Although not yet fully understood, scientists believe that people who go onto develop cancer initially possess tiny amounts of tumor DNA (ctDNA) in their circulatory systems. If scientists can pick up on this before a tumor develops, the chances of surviving the cancer are greatly increased.

In order to understand this process better, scientists from Grail are collecting vast amounts of this ctDNA data, with the intention of using it to build intelligent prediction models. Once the trials are concluded, it should be possible to develop products which will be able to detect cancer early in asymptomatic individuals, giving people far better odds for being cured.

Effective screening only exists for a few cancer types, meaning most cancer is detected in later stages, when survival rates are much lower. Reliable detection of cancer at an early stage before symptoms appear has the potential to dramatically decrease global cancer mortality.

Investors behind this early-cancer screening project include Bill Gates, Jeff Bezos and genetic analysts Illumina, with total funding currently sitting at $1 billion. The majority of which comes from the $900 million gained in a series B funding round in March this year, with the lead investment from ARCH Venture partners.

 

The “most promising startup in Israel for 2015″​ (according to Globes), StoreDot is a leader in the innovation of materials and their device applications, developing ground-breaking technologies based on a unique methodology for the design, synthesis and tuning of new organic compounds. These proprietary compounds dramatically improve the performance of a range of devices, including batteries, displays, sensors and digital memory.

The battery system works like a highly dense energy sponge that soaks up enough power to run in just five minutes, storing it to last an entire day. The FlashBattery architecture also withstands sufficient charge/discharge cycles, thereby allowing fast charging without the need to replace the battery over the phone’s lifetime. Competing technologies are based on heavy and toxic metals. By contrast, StoreDot’s organic compounds are non-toxic and environmentally safe. Moreover, they are readily available and manufactured at a fraction of the cost.

Compatible with smartphones, tablets, and laptops, the FlashBattery is set to revolutionise phone charging. This unique technology not only has the potential to become the ultimate fast-charging standard in mobile devices, but also in electric power tools, toys, home appliances and others. StoreDot have announced they are in the advanced stages of development for electric vehicles using their FlashBattery technology, with their battery pack offering up to 300 miles on a five minute charge.

By 2020, there should be 6.1 billion smart phone owners. The ability to charge a smartphone fully and safely in five minutes clearly has a global market.