To cope with the magnitude of the challenges China poses, multinational companies need to develop a style of leadership that will succeed over time in these fast-paced settings. In their work on vigilant leaders, George Day and Paul Schoemaker, two professors at the University of Pennsylvania’s Wharton School, identify three key traits of such people, all of which are highly relevant for doing business in China:
• Long time horizons. A vigilant leader’s time horizon encompasses a decade or more. An operational leader is focused on the short term. The vigilant leader’s job is to take the company to a new stage in its history; the core task of operational figures is to improve performance at the current stage. Vigilant leaders employ their imagination to probe for potential second-order effects and long-range trends.
• External focus. Vigilant leaders are open to new ideas, seek diverse perspectives, listen to a wide array of sources, and foster broad social and professional networks. Operational leaders are more narrowly focused, have less interest in outside opinions, and confine their networking to familiar settings.
• Organizational skills. Vigilant leaders enable their people to make decisions and create slack to explore areas outside their main
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focus. Operational leaders are more controlling, focus on efficiency and cost cutting, and don’t explore outside potential.
In China, companies have to be able to trade off the conflicts involved in the activities of vigilant leaders. They need decisions made fast, without constantly having to seek permission from above or, worse still, from headquarters outside the country. But such decisions have to be made within the framework of a long time horizon; shortterm mistakes can be tolerated, provided they also serve other functions, such as testing new ideas or adding to the company’s experience and knowledge base.
Chinese companies need operational managers to improve the efficiency of their businesses, especially in the face of China’s ever more competitive environment, but they also need vigilant leaders: executives willing to look outside the company or beyond its normal remit of operations to discover ideas and opportunities that could potentially transform the scale or scope of their business and take it to a new height.
The very best Chinese business executives are good examples of vigilant leaders. I have mentioned many of them in this book, and others are becoming more familiar to the public as their companies gain prominence. They include Lenovo’s Liu Chuanzhi; Haier’s Zhang Ruimin; Hengan’s Xu Lianjie; Dongxiang’s Chen Yihong; Li Ning’s Li Ning and Zhang Zhiyong; BYD’s Wang Chuanfu; and Mindray’s Xu Hang. Before long, some of these individuals, and other Chinese executives as well, will stand among the recognized models of global business leadership.
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EPILOGUE