China offers new approaches to innovation

Shanghai China

I recently returned from an exciting few weeks in Shanghai, China, teaching, working with Innovationedge clients and studying the Chinese marketplace.

As I wrote about in my weekly newspaper column, my colleague Pat Clusman and I were honored to be able to deliver innovation programs to Chinese companies, multinational organizations and government agencies at the China Institute for Innovation.

The institute is a leading innovation education, training, research and networking organization in China. As leaders in innovation, we were invited to share some of our perspectives and approaches with Chinese corporate executives and representatives.

The goals of the attendees were multifaceted. They not only wanted to understand and master the principles and practices of innovation, but they also had an enthusiastic desire to help their organizations succeed in a global innovation-driven economy. Interactive exercises and case studies that were focused on how to “rewire” business, marketing and innovation strategies were used to demonstrate how to better apply the right combination of innovation levers for delivering business growth and the best customer experience.

Not only did our Chinese attendees get a new perspective on Western innovation, we came out of the classes with a new appreciation for the Chinese enthusiasm for productivity.

During the latter part of our visit, we also spent some time to better understand the current state of the Chinese marketplace. With significant cultural differences, multinational companies are often struggling to succeed in the retail market in China. These companies frequently try to simply directly transfer their Western business models to the country. Best Buy is one of the most recent examples of a company that put substantial effort into China since 2005. However they continued to struggle with their service model and recently made the decision to pull out of the Chinese market.

Successful retailers like Kentucky Fried Chicken, Pizza Hut and Carrefour continually demonstrate that they are willing to adjust the value proposition to succeed in the China market. The successful companies have developed a deep understanding of the attitudes and beliefs of Chinese consumers and how their brand fits these needs.

Of course as one of the exceptions, it was interesting to see that Apple has been successful by keeping the same store formats as it does at its other worldwide locations.

As far as the city of Shanghai itself, it was impressive. I have been to China several times and I am always amazed by the amount of change each time. With a population of over 28 million, it is quite a bit larger population-wise than even New York City. I can’t understate how active the city was, and the energetic image it projected.

Night travels were illuminated with mile after mile of high-rise LED lighting. It wasn’t linearly concentrated like the Vegas strip, but sustained in every direction throughout the city. Flashing multicolored rainbow bridges, and LED waterfalls down the sides of high-rise buildings were quite a spectacle. There were even “high-rise” LED thermometers. Combine that with the beautiful calligraphy of their written language and it wasn’t hard to imagine being on another world.

A stroll through the market areas, where we visited manufacturers, distributers and the local merchants was also quite educational for us. The manufacturing nature of their economy was on full display there. Whatever you needed in the way of parts or machinery it looked like you could find. I’ve never seen such a concentrated and diverse selection of, well, pretty much everything.

The city, the people and the cultural experiences made for a very memorable and educational trip, not only we hope for our attendees but certainly also for ourselves.

We have been invited back several more times this year to deliver new programs on business strategy and consumer-driven innovation. My team and I are certainly looking forward to returning.

We love the wonderful Chinese food too, and there was certainly no shortage of that.

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