Find­ing the right growth pre­scrip­tion

China Daily (Canada) - - BUSINESS - By ZHENG YANGPENG zhengyang­peng@chi­nadaily.

New chal­lenges and in­tense com­pe­ti­tion can of­ten prove to be tough for most com­pa­nies. But they also pro­vide an op­por­tu­nity of a lifetime for suc­cess, says Richard Lesser, global pres­i­dent and chief ex­ec­u­tive of the Bos­ton Con­sult­ing Group.

“The more the world changes, the more you can’t use the past to guide the fu­ture. To win in this world of un­cer­tainty, there is no magic bul­let, but just ‘learn­ing, learn­ing and learn­ing’; ‘adapt­ing, adapt­ing and adapt­ing’,” said the head of the US-based global con­sult­ing firm.

Lesser, who took the helm in 2013, said that though the task ap­pears to be easy, it is not so, and com­pa­nies need some­one from the out­side to guide them through the maze.

“They need com­pa­nies like BCG who can help them with their wealth of global wis­dom and ex­ten­sive lo­cal in­sights.”

Though most peo­ple would dis­miss such claims as hy­per­bole, Lesser begs to dif­fer. “About 90 per­cent of our over 400 em­ploy­ees in China are Chi­nese. We have 850 part­ners in 50 coun­tries, and about 70 per­cent of them are based out­side the US,” he said.

“We do not rep­re­sent or be­long to any par­tic­u­lar coun­try. We are not a Ger­man firm or a US firm. In­stead, we would like to be known as a global part­ner­ship. Our fo­cus is on build­ing lo­cal ca­pa­bil­ity, lo­cal tal­ent and then in­fus­ing them to­gether to pro­vide the best ex­per­tise,” said Lesser.

“I think our clients also re­al­ize this. They see that our teams in China are mostly Chi­nese, but also see in­puts from Europe, US, and In­dia. We do the same in other mar­kets. This is the spirit and essence of BCG,” Lesser said.

Lesser, a fre­quent globetrotter, said that BCG be­came the first global con­sult­ing firm to get a li­cense in China in 1993. Since then BCG has been re­cruit­ing lo­cally and train­ing mas­sively in China and fo­cus­ing on hav­ing a di­verse cross­sec­tion of views.

“Our part­ners meet twice a year and share and learn from each other’s ex­pe­ri­ences,” he said.

Though meet­ings are an es­sen­tial part of the learn­ing process, the BCG ethos frowns “blue-sky” think­ing or ideas that clients can­not use, or are some­thing that they al­ready know, said Lesser, adding that the em­pha­sis is on “ideas that can re­ally drive the change”.

Christoph Nettesheim, se­nior part­ner and for­mer man­ag­ing di­rec­tor of BCG Greater China, said that un­like other firms, BCG does not deal with com­pa­nies who just want to out­source some work “to get things done with­out our views”.

Lesser said: “That is not our type of work or business. We are di­rect and can­did with all our clients. We have told many com­pa­nies that if they know the an­swer to their prob­lems and are just look­ing for a con­sul­tant to put their stamp of ap­proval on it, then we are not the right per­sons for it.

“We are the peo­ple that com­pa­nies turn to when they en­counter dif­fi­cult sit­u­a­tions and need cus­tom­ized so­lu­tions along with a ded­i­cated set of con­sul­tants work­ing with them.”

That strat­egy seems to have more than paid off for the global company. BCG’s China business has recorded faster growth this year than what it achieved last year. Its Chi­nese com­pa­nies unit has de­liv­ered the strong­est growth — a re­mark­able achieve­ment given that the con­sult­ing company faced stiff com­pe­ti­tion from lo­cal play­ers, which claim to un­der­stand China bet­ter.

The abil­ity to adapt has al­ways been the core of what BCG calls its “win­ning for­mula” for cor­po­ra­tions. Asked if Chi­nese com­pa­nies’ sit­u­a­tional re­flexes have im­proved, Lesser said some have while some have not.

“Alibaba is one of the most adap­tive, rapidly chang­ing com­pa­nies in the world. Huawei com­petes in over 100 coun­tries and is in­cred­i­bly good at un­der­stand­ing the lo­cal en­vi­ron­ment. The chair­man of Haier has spo­ken ex­ten­sively about the im­por­tance of be­ing adap­tive and in cre­at­ing or­ga­ni­za­tional flex­i­bil­ity and re­spon­sive­ness. So there are ex­am­ples from China that are as good as any­where else in the world,” he said.

How­ever, for many Chi­nese com­pa­nies it has not been the case. Their fo­cus has been “on win­ning the home mar­ket in a lo­cal en­vi­ron­ment”. Their strong growth drives home the point that if you have a win­ning for­mula, then there is no need to change it, he said.

But it is equally im­por­tant for th­ese com­pa­nies to re­al­ize that be­ing adap­tive is the key to long-term suc­cess and di­ver­sity in lead­er­ship is one of the best ways to achieve this goal.

“If every­body grows up with the same model, then their abil­ity to tackle change, chal­lenge each other, or come up with new ways of work­ing di­min­ishes,” he said.

Another key com­po­nent of the win­ning for­mula — in­no­va­tion — is in­creas­ingly crit­i­cal in China where wages are ris­ing and growth has slowed.

“What has been true un­til quite re­cently is if one sim­ply op­er­ates in a highly pro­duc­tive way, fo­cus­ing on un­der­stand­ing the lo­cal mar­ket and driv­ing down the costs — then that’s a strong base to be highly com­pet­i­tive.

“But it is in­creas­ingly be­com­ing clear, some­thing that we re­peat­edly tell our clients, that the pre­vi­ous goal for win­ning has changed. Eco­nomic growth has mod­er­ated, while wage pres­sures and com­pe­ti­tion are ris­ing.

“Com­pa­nies will nec­es­sar­ily have to push them­selves to change, and the key el­e­ments of that are more dif­fer­en­ti­a­tion, be­ing adap­tive and in­no­va­tion,” he said.

Nettesheim said that though the common per­cep­tion is of Chi­nese com­pa­nies lag­ging in in­no­va­tion, in re­al­ity it is the “Chi­nese way” of “ex­per­i­men­ta­tion” that is much more suited to to­day’s world.

“It’s a dif­fer­ent model. My sense is that many Asian and Chi­nese com­pa­nies are bet­ter at re­ally test­ing the new way of ap­proaches — be it new prod­ucts, new pro­cesses or new business mod­els — and in rolling them out rapidly. If you think of to­day’s world — which is volatile and where it is dif­fi­cult to pre­dict the long-term fu­ture — then this way of ‘con­stant in­cre­men­tal ex­per­i­men­ta­tion’ is much more suited,” he said.


A view of the fi­nan­cial dis­trict from the Bund in Shang­hai on Sept 20. The city has played a lead role in at­tract­ing for­eign in­vest­ment and is now the sec­ond head­quar­ters for sev­eral multi­na­tional com­pa­nies. For­eign con­sul­tan­cies like BCG have also ben­e­fited from China’s rapid eco­nomic growth with a slew of business op­por­tu­ni­ties.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.