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Succeeding in a new era of globalisation

Willis Towers Watson at WEF meeting in Dalian, China

Cyber Risk Management|Future of Work|Talent|Total Rewards

July 18, 2019

The World Economic Forum (WEF) Annual Meeting of New Champions was held in Dalian, China, from 1 to 3 July 2019. As a global strategic partner, Willis Towers Watson was invited to attend.

This year's annual conference theme focuses on “Leadership 4.0: Succeeding in a new era of globalisation”, inspiring participating leaders to explore new strategic models to address global environmental challenges, regional competition, economic disparities, and technological change. Willis Towers Watson (WTW) participated as a WEF Strategic Partner.

With only four decades, many Chinese business leaders have grown from self-taught factory managers to highly sophisticated international tycoons. Participating as a key panelist at the session on “China’s new business leaders”, Smilla Yuan spoke about the type of skills Chinese business leaders need to have in order to thrive and stay competitive in today’s challenging market environment.

Below is a summary transcript of Smilla’s participation at the session.

For the full text (in Chinese), please visit our Chinese website.

Most prominent characteristics and qualities of current Chinese entrepreneurs

Chinese entrepreneurs have always stood at the forefront of China's economic development, and led social and economic changes. At the same time, they are still a very respectable group, and their traits and characteristics are very obvious. By comparing both the contemporary Chinese entrepreneurs and overseas entrepreneurs, we find that Chinese entrepreneurs reflect the following qualities:

  1. Aggressive/results-oriented: Chinese entrepreneurs have a strong enterprising spirit, pursue extraordinary growth, believe in miracles, and be good at creating miracles.
  2. Actively looking for changes / agile to changes: Acceptance of uncertain factors, has a sense of risks, initiate changes, flexible to changes, and response to environmental / policy changes.
  3. Open-minded/willingness to explore: Embrace Internet, Artificial Intelligence (AI), big data transformation, and has a huge interest and commitment to reshaping business models and implementing the latest management concepts and tools.
  4. Benefit-sharing/tangible incentives: Focus on corporate and personnel management including ‘strong profit-sharing’ and ‘tangible incentives’, while the global enterprises tend to focus on the ‘risk and return balance’ incentive system.
  5. Traditional culture/Western system: More and more overseas entrepreneurs return China to understand the essence of the Chinese traditional culture. They combine the management of Western systems and establish their own distinctive culture to leave their mark.

Gap and weakness of Chinese entrepreneurs

  1. Strategic vision/long-term thinking: strategic vision and long-term vision are relatively lacking, pursuing quick wins and lack of patience.
  2. Inclusiveness/diversification: The world is increasingly emphasising on cooperation and mutual benefit. In business model and management - how can a company be more inclusive and diversified in its workforce, how does one empower, increase employee engagement to maximise the effectiveness of its employees?
  3. Humanism/Care for personnel: In an era where AI can help people from performing repetitive work tasks, how do we respect one’s personality, and understand the expectations and requirements of the new generation’s workforce?

Difference between first generation of entrepreneurs in the new economy and the second generation of entrepreneurs inherited by wealth

  1. The second generation of entrepreneurs has a strong educational background. Many of them are educated in domestic or overseas top ranking universities, and has overseas study experience. Their focus is mainly on industries such as services, the Internet, high technology, health and medical services, and AI-type of emerging jobs.
  2. Original intention of the entrepreneurship and management philosophy: The new generation focuses on ‘self-achievement’ rather than survival as a motivation for entrepreneurship, and the management has more "people-oriented ideas", regardless of the industry they choose to enter or in the internal management of the enterprise.
  3. The second generation originates from a wealthy family or has a certain entrepreneurial and economic foundation. Their starting point for entrepreneurship is relatively high, focusing on emerging industries and international markets.
  4. Have the ability to manage capital, their own broad knowledge and comprehensive understanding of business management
  5. They tend to be children who grew up under a ‘magnifying glass’. Regardless of whether this is an advantage or disadvantage, they may be misunderstood easily. They are trapped with an ‘idol burden’ and hence it is more difficult for them to develop a natural "self."

Regardless of the path, we believe that the leadership of Chinese entrepreneurs can be upgraded to the next stage. We hope that the entrepreneurs can be more "people-oriented". In the era of AI, more work will be automated and hence it will be important to pay more attention to people’s needs. This will help to bring a good breakthrough among the new generation.

Challenges faced by Chinese entrepreneurs' in the process of internationalisation

Although the recent US-China trade friction has brought many uncertainties, the pace of Chinese entrepreneurs venturing out has not been greatly affected.

Professors in Central Europe have a point of view on this: the internationalisation path of Chinese enterprises is called reverse upgrade, that is, by acquiring resources, and then strengthen their home market and enhance competitiveness, and thereafter invest in the real internationalisation process. I am fully aligned with this statement. In my view, many international companies do not fall into the real definition of global enterprises, and rather - Chinese companies with global business. In the process of enterprise nationalisation, entrepreneurs and organisations need to have a global mindset, specifically including three capabilities:

  • Intellectual ability - global business mindset, cognitive complexity, international perspective
  • Psychological ability - pursuing diversity, eager to take risks, confidence
  • Social skills - cross-cultural empathy, interpersonal influence (negotiation ability), diplomatic ability

In our daily work, we interact with many Chinese companies. We found that Chinese entrepreneurs have a strong interest in truly becoming a global enterprise. More and more Chinese companies are beginning to think about how they can build a global enterprise spirit.

For Chinese entrepreneurs, there is still a big room for adjustments and changes. They are mainly in two areas:

  1. Mindset: Diversification and tolerance, cross-cultural empathy, risk awareness, diplomatic ability;
  2. Management methodology: Management and control system, strengthening of systematic management, "humanism" management philosophy.

Only when the entire group of Chinese entrepreneurs make a change, then it can achieve success in the process of internationalisation. Enhance the global business acumen and international vision, establish a corporate culture and adapt to the local sub-culture, and through the path of reverse upgrade, more Chinese companies can have access to not only resources but also overseas operations and management experience, but also the willingness to learn to build a truly global company.

As a key panelist participating in the discussion on the global cyber risks, Wise Xu highlighted the following:

For the first time, cyber attacks are among the top five security risks in the world

Many industries are unprepared for the potential risks and responsibilities that new technologies can bring, including new threats to public safety, physical damage, and catastrophic systemic attacks on shared public infrastructure. Cyber attacks in critical infrastructure industries can have a knock-on effect, resulting in economic losses, industrial disruptions, and in some cases casualties, which can be catastrophic.

Therefore, for example, when we look at the risks of the aviation industry, especially cyber risks, we see external pressures from governments and regulators around the world, such as GDPR and NISD, which often have different and contradictory views. We see industry pressure from the same industry, suppliers and stakeholders to drive the aviation industry to be more innovative and customer-centric through the adoption of new technologies and ways of working, whether it is partnerships and alliances, or actively exploring. A new way to achieve passenger, freight and profit growth.

Interconnection brings more risks

The diversity of people and goods transported around the world poses a challenge to the insurance industry. The interconnected and dependent systems of public and private systems are critical to the aerospace industry. As efficiency continues to increase, the aerospace industry will increasingly connect with third-party suppliers, and the relationship with key components (such as the Internet of Things) will continue to challenge the industry's risk profile.

Response from the insurance industry

The insurance industry must be able to respond quickly and comprehensively to new challenges. Regardless of whether it is a new distribution model, a changing regulatory environment, geopolitical uncertainty, new inter-network, big data or malicious cyberattacks, Willis Towers Watson is ready to provide the best solution for this type of problem, providing confidence in the current and future risk management of its customers.

Traditional insurance solutions cannot cover such new risks. But with big data analytics and an in-depth understanding of the industry, we can and have designed solutions that not only the transfer risks, but also help the aerospace industry identify and analyse these new risks so they can avoid, mitigate and/or transfer such risks.

Collaboration is essential

WTW’s partnership with the WEF and its network partners to develop industrial IoT agreements is critical to the success of global cybersecurity. We are already working with the Cyber Security Center (C4C) and the Fourth Industrial Revolution Center (C4IR) to advance this programme. In the context of Globalisation 4.0, WTW will be able to help more companies with professional insights and best practices, risk management and control, adapting to a new era of globalisation.

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Clara Goh
Public Relations Lead, Asia Pacific
and Human Capital & Benefits

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