China CEO Forum: Across the Errors of Transition

The Success Rate of Transition Very Low for Enterprises - Usually Less Than 50%

Sep 30, 2011, 09:00 ET from Managers Magazine

BEIJING, Sept. 30, 2011 /PRNewswire-Asia/ -- It is found by the research of Managers Magazine, that many enterprises have a very low success rate on the road of transition - usually less than 50%, turning into a phenomenon of 'waiting for death without transition but finding death with transition.' An important reason is that some enterprises walked into the errors of thinking using old ideas and management models to manipulate an innovative self-breakthrough. At the 5th China CEO Forum held on Sep. 24th 2011, the president of Managers Magazine Yu Shaowen said, "Many shoes processing enterprises still use old ideas and management models, and stay at the simple processing level. Such enterprises will die during the transition, because the labor cost has increased in China, while it remains cheaper in Vietnam."

According to Yu Shaowen, Chinese enterprises, especially medium and small-size ones, are experiencing a transition of Phoenix Nirvana. It is for sure that a batch of them would have to stop production, shut down or close. That is not a bad thing. Otherwise the transition of development strategy, economic structure and growth quality will be empty talk in China. It is only because of the financial crisis in 2008 and 4000 billions of investment that this of which could have occurred earlier is delayed and a cause of discussion today. This is exactly the best window period for Chinese enterprises to innovate their management, and also the best opportunity to reshuffle enterprises.

Therefore, as the top business forum in China, this session of China CEO Forum positioned its Topic at: New Thinking on Transformation and Growth - Growth Strategies in the New Environment, and engaged in an in-depth communication from the viewpoints of new growth, management and competition ideas. This conference attracted numerous world-class experts and entrepreneurs around the world to gather in Beijing, such as Pankaj Ghemawat, the globally famous economist and strategist; John Quelch, the famous marketing expert; Qian Yingyi, the well-known economist and the president of College for Economics and Management at Tsinghua University; Yu Bin, Director of the State Council Development Research Center of Macroeconomic Research Department; Zhang Yin, the chairman of Nine Dragons Paper Holdings Ltd.; Tang Jun, the president of New Huadu Industrial Group and so on, the number of registered forum guests has exceeded 1000, and over 100 media attended and covered this conference.

"Our discussions on growth and transition this year aim at finding new opportunities and directions. The original intention is nice, however, we should pay more attention to the errors and traps during such transition," Yu Shaowen warned the Chinese enterprises. Many enterprises blindly diversified expansion, which is also a big error of business transition, particularly for the multiple rash advances after the state has launched new strategic industries. Another example is Li Ning, who has never suffered losses in diversification and now begins to enter the real estate. This way of transition is in fact a shortsighted gain principle. While to some other enterprises, there is another problem of 'excessive transition', which means they advanced too rashly in brand extension, the diversified products developed by these enterprises have exceeded the limit that a brand can bear; their financial situation overdrew excessively, and finally resulted in a tight cash flow.

Yu Shaowen also pointed out optimistically that the transition of enterprises in current phase was not a gray. The examples of successful transition of enterprises also made people inspired. "FOXCOON has built up a new business empire starting from OEM through successful layout in solar energy, environmental protection, real estate and a new generation of communications. Wanda's Talent Fishing Strategy helped local government to build performance complex and accumulate high-quality tourism assets; UIP's alliance of business gangs clustered advantages; CMSB's management in micro-enterprise long tails, innovative products and risk control systems… In addition Nine Dragons Paper, Huawei, Shaanxi Blower Group, Fosun, Jingdong, and Sany Heavy Industry etc. are also good examples. Under the complicated economic environment, all these enterprises gained a new round of high speed growth through initiative changes and innovations, so there should be causes, logics and concepts worth unearthing behind them.

It is reported that the scale of 5th China CEO Forum is bigger than that of the former sessions, and has higher bright spot frequency. John Quelch described future marketing tools and trends, especially mentioning how to attract consumers in the era of social media. Tang Jun, New Huadu president, having been in a few public events recently, made a high-key appearance again at this conference. His speech received lots of applause and laughs as usual, and became one of the most welcome guest speakers in the conference. Wu Changjiang, the president of NVC Lighting Holdings Limited and is deep in the betting storm, appeared in public and discussed his thoughts.

As introduced by the organizer, the China CEO Forum always emphasizes international characteristics; every year the world's most influential management masters will be invited to bring the latest and most current management ideas to China, to have a collision of thoughts with Chinese entrepreneurs. It definitely practices the purpose of Managers magazine to influence the management practice of both China and the world.

SOURCE Managers Magazine