Last week's Inner Circle in Hong Kong was on the topic of reinvention. Specifically, it was "System Reset: Leading the Reinvention of Business." This is the same topic we discussed recently at an Inner Circle I facilitated in London, so I was curious as to how the two groups would differ in their discussion.
Differ they did. In London, Inner Circle participants focused on the pressure placed on businesses to use technology more intelligently in servicing their customers. They talked of the need to update products and services to meet competition from nimbler, more agile (generally smaller) companies who are not burdened by the legacy processes and manpower that saddle many large corporations. The reinvention aspect of the discussion had much to do with the difficulties--and dangers--of maintaining the status quo when the world is moving quickly towards other offerings. Lots of hand-wringing over the fact that whatever made one's company successful cannot now be depended upon to lead it to future success. In fact, those products, procedures, processes, services of the past may well be what prevents companies from moving ahead. They get stuck in the past, where they are comfortable.
In Hong Kong, the topic led in another direction, more geographically focused. The Chinese companies who have been doing the bulk of their business within China's borders, are being forced to think globally, moving beyond China's borders to find customers, suppliers, even employees. The Western companies who have been doing the bulk of their business outside Asia are now eager to do business within China. Both groups are challenged by the need to reinvent the way they look at the world and what is required for them to sustain their successful businesses.
The Chinese companies are challenged by the loss of protection they have enjoyed thanks to Chinese government oversight of their activities. Suddenly they are forced to compete on Western terms, many of which are truly foreign to them. And those that try to do business in the United States are surprised and discouraged by the protectionism exhibited by US Congress and others who feel threatened by the cheap labor and goods offered by the Chinese.
The Western companies are dazzled by the huge numbers of prospective customers they envision when they look at China but soon recognize that the potential is in some ways illusory: for one thing, only a fraction of Chinese can afford the goods they may be offering. Moreover, the complications of getting appropriate licenses, community and regional approvals, local "blessing" from authorities who can cause grief if they are not obeyed--all these distractions from the business at hand are time consuming, expensive and exhausting. And they can in fact prevent you from doing business at all, as is the case of Google and others who have fallen victim to Chinese censorship.
For many Chinese companies, the topic of re-invention seems misplaced; they are still in the invention phase. For the Western companies, it is not so much that they have to re-invent what they do; it is more that they have to re-invent how they think so that they don't get bogged down by frustrating roadblocks set up by authorities who appear to be bent on slowing their access to Chinese markets and customers.
All participants agreed, however, that technology has changed the name of the game regardless of where you are doing business, and it will increasingly erase the importance that geographical borders now have. But we have ways to go to get there. All agreed that conversations like the Inner Circle, with its diversity of opinions and industries represented, is helpful in sorting out the priorities for business leaders responsible for making the right decisions about their companies' direction in this fast-paced global marketplace.