Winning In China: A Systematic Approach To Strategy And Transformation
In Episode 45 of MING Labs’ podcast Lost In Transformation, we talk to Sasa Saric, Managing Partner at hivetime, and Markus Schwarz, Executive VP at Alfmeier Automotive Systems Asia.
Listen to this episode to learn from both the client’s and consultant’s perspective how their transformation journey over the past years worked, with a specific focus on strategic and cultural change, and implementing localized initiatives to win in China.
4 Main Takeaways From This Episode
01 Winning in China: 4 cultural aspects to be aware of. To give us some context about the situation of transformational work in China in 2017, when hivetime and Alfmeier started working together, Sasa highlights a much more intensified competition as the Chinese government declared a move from double digit to single digit growth. He points out four important factors as part of their ‘winning in China’ framework, focusing on cultural aspects: First, you have to commit and be serious about making business in China.
Second, it’s important to grand your team in China adequate autonomy. “They have to be able to run in the market at their own discretion. Of course, within a framework.” Third, the team in China has to have a strategic and a leadership maturity. This step is all about the organizational and cultural setup of the company. And lastly, you have to have your core assets and innovation capability in China. Hivetime came in to help Alfmeier’s team in Shanghai to develop their strategic capabilities step-by-step and to lead the company forward. (Listen from 10:42 min)
02 The beginning is always the hardest: Get the bigger picture of your company first to lay the groundwork for future initiatives. When asked about sharing the early steps of Alfmeier’s transformation journey, Markus emphasizes to break down the company’s value stream map and to make the management team understand how the company works and makes money. During this exercise, he noticed that his view of the company’s value was different from another member’s. Where hivetime’s process especially helps “is really to start discussions and to come to a common understanding of a specific point, like value stream mapping. That’s the company. Where are we good at? Where do we have areas for improvement?”
Always start with an external analysis to work out your current stand point. Does your corporate strategy fit one-to-one to China or do you have to make some adjustments? What is different? What does the market look like and who are your competitors? Once the big picture is painted, you define where you want to be five years from now and more importantly: how you want to get there. “And that’s when it becomes interesting. When you basically then really start to work on these initiatives.” (Listen from 17:18 min)
03 Communication as the biggest learning to grow and foster your team’s culture and strategy. The biggest takeaway from the whole transformation journey? “For me, it’s definitely communication,” stresses Markus. “You need to basically keep this topic alive by communicating it and also taking it in your, I would say, DNA as a company. It needs to always be visual.”
With Alfmeier’s team in China having matured and established its own strategic capabilities, they even implemented the company’s leadership values: ownership, trust, respect, recognition. “We implemented this also in those initiatives and strategy, to build up a culture which is then able to really run on their own, and take this ownership to another level to basically drive those topics.” (Listen from 28:28 min)
04 Connect your transformation to the market and it becomes a powerful driver. When thinking back on what actually makes a good transformation process, Sasa remembers an important quote from David Whiteing, COO of Standard Chartered Bank. “He was the one who put this into words for us. And he says: If you start a transformation, you should actually start from the wolf.’ Who is your objective benchmarking of success?”
This is typically the customer. And starting from the customer means starting from the market. “That’s something that we have learned over the years to really build the transformation around it. To really ask ‘why does the company have to transform?’ And the market and the customers are the most convincing drivers of change. If you can connect your transformation to the market — which is actually about your survival and whether you are prosperous in the coming years — it becomes such a powerful driver.” (Listen from 47:39 min)