By Tony Wong, Partner and Managing Director, IDEO China
For almost two years now, IDEO has been working alongside Tsinghua University, one of China’s most preeminent universities to take cohorts of 30 CEOs and founders of companies in China to explore the role of creativity and design in business. And while that collective journey has prompted a number of heated conversations and revealing insights, nothing could prepare us for the intensity of thought and urgency of action that COVID-19 has created. In our first virtual meet-up since the crisis began, one of the executives in the program eloquently framed a mindset around the challenge that was most enlightening—“Great companies are the children of winter.”
This outbreak has pulled China firmly into the winter over the last few weeks. But as the Chinese word “wéi jī” (危机) suggests, when there is a danger (危), opportunities (机) emerge. Our recent exchanges with our friends and peers within the IDEO network give us plenty of hope and optimism that the “children” who have the resilience to take advantage of these opportunities will become the next generation of great Chinese companies for years to come.
As damaging as COVID-19 has been to their respective businesses, these leaders are embracing this setback with a strong sense of resilience, and a deep belief that it is a great opportunity to accelerate towards a fitter business for an evolving China. These leaders are not only looking to rebuild their businesses, but to use this setback as a moment to reflect and recreate organizations that are focused on listening and adapting to customers' rapidly evolving needs. This will help them become more competitive in generating more sustainable and longer-term growth. What is inspiring for us is how their different leadership mindsets are informing the way they are approaching their respective business strategies. Extreme constraints are forcing these leaders to re-examine their leadership philosophies and ask new questions of their businesses.
Over the next few weeks, we will explore what is in the minds of business leaders in China as we start the economic recovery. We will host a series of conversations with individuals who represent three important leadership modes that surfaced from our exchanges: The Accelerator, The Explorer, and The Optimizer. We will hear their views on creativity and the role of design as they form new strategies and make changes to enable their recovery.
“This crisis has forced us to (finally) work on things that we have been procrastinating on.”
A great number of companies have built their success on operational efficiency, allocating processes and resources into independent functions and specializations. While these organizational structures have enabled these companies to be operationally competitive, it also makes them less nimble to pivot from their core competencies in these unpredictable business environments. The capacity for organizations to successfully create, embrace, and execute on new ideas is now more urgent than ever.
COVID-19 is allowing some of these organizations to accelerate this transformation. The extended “break” has given them a new lens to reflect on their priorities. The daily demand that has prevented change has suddenly disappeared. But with that, these leaders now need to prepare their organizations to get comfortable with not knowing, to continue to move down the path of becoming learning organizations that are capable of embracing issues that don’t initially make sense, and to develop the capability to act upon new learnings in the changed environment. The practice of design can help organizations navigate this ambiguity by creating tangible scenarios that challenge the existing functional competencies. This pushes and enables companies to navigate uncertainties with greater ease.
How are some leaders leveraging this precious “down time” to transform into a future-fit organization? Why might these new organizations be better prepared for the post-COVID-19 China?
"No one really knows what the future holds, industry norms change in times of crisis. People have lived differently over the past couple of months, new needs and desires are emerging from this new way of living. We are running the risk of our business being fundamentally disconnected from the market and workforce we are trying to serve. We need a renewed focus that has to start with the needs of the market.”
These are uncertain times for many leaders as they navigate the “new normal”, but it is also a huge opportunity to shape new trends rather than reacting to them. These leaders are taking a human-centered view to identify and solve emerging challenges, from having to manage a remote workforce to creating new contactless services for their customers. Human-centered design aims to understand people’s needs and latent motivations, to discover insights that go beyond what is on the surface, and to identify opportunities that are underserved by existing products and services on the market. It contributes to strategies and solutions as leaders look to create offers that change market trends and enable new industries. One can therefore argue this approach is even more powerful in the times of an economic crisis, a way to enable collaborations with experts from all different angles to navigate this unprecentedtime, and to set new ‘rules’ for industries as they reset towards their ‘new normal’.
How are these leaders applying human-centered design in their post COVID-19 strategy? How does this approach complement other ongoing changes in their business plans?
"Those who can survive this crisis will inherit a new market with fewer competitors and more customers. Now is the time for us to build on our strengths and find creative ways to scale and improve our existing business."
These leaders are foreseeing a less competitive market in the not-too-distant future and are looking to make bold bets to further scale their businesses. They are taking a “build to think” approach in finding new solutions: designing prototypes to gather input, to provoke new questions, and to co-design with users and makers. This approach can create more systemic solutions that balance the needs of many, reset for a more sustainable growth, and perhaps most importantly, de-risk their investment in this uncertain future.
How are these leaders prototyping to take advantage of a rapidly changing post-COVID-19 market? What are the creative ways they are de-risking their investments as they scale in this unknown environment?
It is important to remember that Corporate China has been on a journey of transformation for quite a while. Many aspects of these leadership modes and behaviours have simply been activated more boldly after deep reflection on this unprecedented crisis. The economic miracle over the last few decades has produced an army of highly efficient companies in China that are now able to produce goods that are comparable to the best in the world, with the high speed rail network being a leading example. But with the rising labour cost and an increasingly wealthy domestic consumption market, many businesses have already recognized the need to reinvent themselves in this transforming economy.
Many have acknowledged that their next wave of growth will require acquiring skills that are not about being more efficient in solving problems of the past, but solving new problems that are emerging from a China that is now setting benchmarks for the rest of the world. China’s ability to leverage digital technologies to inform, communicate, and problem-solve during this outbreak is a point of reference that other countries are now pointing to as they try to overcome their own situations.
With this context in mind, we look forward to diving into the minds of these business leaders in China to learn about the action they are taking to overcome this crisis and the opportunities (机) that are surfacing as we recover from the danger (危). We will publish a series of these conversations in the next few weeks, and we hope they will provoke new thoughts, learnings, and discussions. How might we leverage these newfound constraints as fertile ground to unleash an unprecedented level of creativity?
Read each of the interviews here:
Illustrations by Yue Yuan