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August 15, 2013

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Corporate China taps can-do spirit of innovation

FOR many decades until the end of June this year, I had bought into a popular stereotype of Corporate China as a haven of copycats and guanxiology.

Indeed, even today, if you look at domestically designed cars and high-rises, they are more often than not copies of Western designs. If you look at business deals, a lot of them are done with guanxi (connections) and greasing of palms.

But that’s far from the whole story.

I learned about a different Corporate China, which is surprisingly innovative, at the weeklong Orchestrating Winning Performance (OWP) program I attended at IMD (International Institute for Management Development), Lausanne, Switzerland, at the end of June.

Xiang ge ban fa

“In China, the most common phrase in conversations is xiang ge ban fa (let’s find a way), not guanxi,” said Winter Nie, professor of operations and service management at IMD. “Everything is difficult, but nothing is impossible.”

“The real revolution of China’s economic reform and opening is psychological,” she observed. “It’s the ‘we can do it’ spirit.” She is the author of two definitive books on Corporate China: “In the Shadow of the Dragon: The Global Expansion of Chinese Companies — and How It Will Change Business Forever” (2012), and “Made in China: Secrets of China’s Dynamic Entrepreneurs” (2009).

So, how does Corporate China xiang ge ban fa in the face of cut-throat competition on the home turf and abroad? Professor Winter Nie gave a few illustrative examples.

Have you heard of cell phones with many sound amplifiers? Have you seen a watch with the image of a Buddha and all the Buddhist music and mantras that help you meditate wherever you go? Have you found a cell phone whose battery can last a few hundred days?

Maybe not, but they are all available in China.

Migrant workers often dance in public squares, so they need handy sound amplifiers. Savvy business people then create cell phones that can be used as perfect loudspeakers.

In Buddhist meditation, people used to visit a temple and sit there, listening to music and mantras on the spot. With a “Buddhist” watch, however, people can now meditate anywhere, anytime.

Hate to recharge your cell phone many times a day? Ok, now you have a cell phone that seems to have endless power.

Those were just a few of the examples professor Winter Nie mentioned at the IMD program to illustrate an often-neglected world of Chinese business. Those creations may not be miracles, but they were at least good news for Corporate China, long considered by the outside world as lacking an innovation-friendly culture.

If you are still not surprised by those Chinese innovation stories, have a look at the Internet landscape in China. China’s Internet business is dominated by home-grown players with innovations catering to Chinese tastes.

For instance, QQ instant message has beaten MSN in no small measure.

Also speaking at the Orchestrating Winning Performance program, professor Stephane Garelli, director of the World Competitiveness Center at IMD, said one of the characteristics of today’s world economy is the emergence of new brands from China and the rest of the developing world, like Huawei and Haier.

Huawei has been so successful in America (at first targeting lower-income customers) that some users mistake Huawei phones for Hawaii phones, said professor Winter Nie jokingly.



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