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In this installment of Creative Leadership Under Crisis, we were fortunate to invite CHEN Pin, Founder and Chairwoman of Eral Group, to talk with us. As a corporate group, the Eral group covers down clothing, down home textiles, manufacturing and processing, culture and entertainment, private health management, etc. Eral’s vision is to become a global expert in down. In the past few years, it has laid a solid foundation for this vision through digital transformation. Starting from 2017, IDEO has worked with Eral on a series of projects, helping the company make their vision consumer-oriented and drive the transformation. We hope this interview resonates with and brings inspiration to small and medium-sized Chinese private enterprises that are undergoing similar transformation at the moment.

1. An Inside-Out Approach for Change at the Bottom

Q: What are some of the impacts of COVID-19 on your business? How did your company react?

Eral’s current business is still based on an offline distribution model. Our dealers’ businesses were hit the most by the outbreak. All of a sudden, they had no income. Many were somehow at a loss for what to do and hoped for us to support them.

In response to such sudden and unexpected external challenges, we adopted an inside-out approach for change. This is because only when we internally get rid of the previous way of doing things can we make a change to the world, and thus bring changes to our dealers. For example, we started to advocate a platform mindset, encouraging all employees to get involved in marketing and take the retail business online. In fact, we are already behind the industry in this area, as we encountered many obstacles internally before the pandemic.

Now all the obstacles are suddenly gone. Everyone thinks we must give it a try. It’s better to take a step forward than not to

Q: What are some challenges and learnings in making these new attempts?

First of all, we need to adopt a lot of new tools, and many of them are already at our fingertips, such as community marketing and H5. As we tried these tools, it turned out that many methods that seem to be effective today may not continue to be effective in the future. We kept asking ourselves, “How might we break through ‘acquaintance marketing’ to practice true community marketing? Besides product display, what are some other interactions that we can put on H5 to engage consumers? Apart from selling goods, how might live streaming help build the brand?”

But first and foremost, we need to truly understand these tools and know how using them connects to our business goals. Many of us are quite familiar with offline marketing approaches and know what can be achieved with them, such as increasing brand exposure through offline billboards, showcasing products through window display, etc. However, when everything goes online, we need to know not only how to create a consistent experience by using these new tools, but also how these tools fundamentally differ when applied online vs. offline.

2. Creativity vs. Competency

Q: As a leader, how do you help teams navigate the current uncertainties?

Eral has been making many new attempts and changes over the past few years. At the Group level, we have begun to expand to areas that are closely tied to people’s daily lives, such as culture and entertainment, private health management, etc. No matter what we do, we always hold tight to our Group’s vision: Design for the Sensory Experience of Life. These new businesses have enabled us to attract many young people with entrepreneurial thinking. Nevertheless, we are facing some new challenges in the apparel and home textile business, though this is what we’ve been doing for more than 20 years. In addition to the pressure from the market and competitors, many veteran employees feel that they want to change, but are not able to or they’re not sure if they have the capability to adapt to this era. Personally I think this is not entirely due to their lack of capability, but that they are yet to be truly activated.

So after the Chinese New Year, I had one-on-one conversations with many of our veteran employees and convened people from different business units, in order for them to “freely complain” in groups and talk boldly about the company.

I’m doing this mainly because I find myself no longer knowing our employees. So I want to re-establish the conversation to make them feel hopeful, as we are working hard to make a change, from top to bottom.

Q: What type of organization is best fitted to survive crises like this and be sustainable in an ever-evolving market?

An enterprise’s ability to innovate comes from the creativity of its people. In the past, competency was most valued by companies when it came to talent, and all decisions were made in a target-oriented manner. However, what businesses need now and in the future is creativity. We need to be talent-oriented by tapping into the potential of our people.

I think great talents know how to unite knowledge and action, and they're resilient.

I believe that people’s potential is too deep to be known and too broad to be framed. Therefore, when designing an organization, we must put aside our titles and design for roles, with a focus on responsibility and mission. This helps talent see more clearly and set higher goals, and guides them to reinforce their roles.

3. When Business Transformation Encounters a Pandemic

Q: Eral initiated the transformation plan last year, but will the plan be affected given the pandemic?

In fact, I was a lot more anxious a year ago than I am now. At that time, I only knew we must change but didn't know where the company should head. Now I am just a little worried, but not anxious. This is because I clearly know where we should go after the rebranding project we did last year. The most important thing now is to calm down, not to compare or benchmark, but just do what we want to do, as we have already clarified our ambition with the help of professional agencies.

Do not raise the banner of making transformational changes, but take small steps instead, one step at a time.

Q: In this process, what qualities do you think leaders need to have in order to survive crises like this?

First, a keen sense of prejudgment. Through the bold transformation over the past year, I witnessed the impact of prejudgment on business. It is actually a form of forward thinking. Whether a company can overcome a crisis lies in what it has done in the past and for the future, not what it is doing now. Companies must push further than where they are today to prepare in advance

Another important quality is decisiveness—whether you dare to continue to transform at this time. Having a clear vision is thus very critical, as it serves as the benchmark of all strategic decisions and is the very reason why we persist in doing this.

Persist in what you believe, and believe what you persist in.

Interview time: April 17, 2020