Executive Briefings

Chinese, Indian Entrepreneurs Differ from Western Counterparts on Business Model, ROI Strategies

Ever since Frederick Taylor's early writing on industrial efficiency - followed by the work of Peter Drucker, Alfred Chandler, and others - the modern Western corporation has been managed according to a tightly defined set of rules and norms. A clear corporate strategy calls for earning at least the cost of capital, growing at a higher rate than the overall market, and managing the portfolio to a "logic" - periodically pruning poorly performing businesses. And with Wall Street analysts ready to applaud CEOs for making their numbers or pulverize them for a one-cent per share miss, there is often little opportunity to change course.

But speak to entrepreneurs in China and India, and you'll soon hear that they think about strategy in a strikingly different way. For instance, these leaders have recognized that traditional return-on-investment calculations are not very relevant. This is because all the value sits in the terminal value of the company - given the massive growth. They believe that when growth is this dynamic you need to be faster, more creative and more willing to learn as you go. For them, value creation derives from confidence and comfort with ambiguity, backed up by investment, talent, and fast cycles - and not from pre-programmed business plans and projections to two decimal places.

Ambitious, audacious, adaptive, aggressive when necessary - these business leaders have what we call the accelerator mindset.

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Keywords: supply chain management, Eastern vs. Western business strategy models

But speak to entrepreneurs in China and India, and you'll soon hear that they think about strategy in a strikingly different way. For instance, these leaders have recognized that traditional return-on-investment calculations are not very relevant. This is because all the value sits in the terminal value of the company - given the massive growth. They believe that when growth is this dynamic you need to be faster, more creative and more willing to learn as you go. For them, value creation derives from confidence and comfort with ambiguity, backed up by investment, talent, and fast cycles - and not from pre-programmed business plans and projections to two decimal places.

Ambitious, audacious, adaptive, aggressive when necessary - these business leaders have what we call the accelerator mindset.

Read Full Article


Keywords: supply chain management, Eastern vs. Western business strategy models