Sheng Hong: Embrace Changes with An Open Mind

Sheng Hong
Participant of KEDGE EA-DBA Programme
Vice-President, Board Member & Corporate Secretary
of IKD Co., Ltd.

"In line with the current global strategy of the company which targets Europe as the next M&A destination, I chose to attend the EA-DBA programme in KEDGE, not only to recruit potential industry talents in the presence of the school’s network in Europe, but also, more importantly, to strive for a continuous self-improvement.

I’ve worked in the manufacturing industry (mainly in auto parts) for many years and have accumulated significant practical experience in this area. Through the DBA learning, I hope to carry out some in-depth academic researches and come to a methodology that I can share with others. Laying a solid basis integrating theory and practice, the study may also offer me the opportunity to live the life differently as a professor and help more people to accomplish greater achievements.

I’m an open-minded person. In my eyes, one should not always stay in his or her comfort zone. Life will be easier if we do so, but in this fast-changing and evolving society, remaining stagnant is equal to being eliminated. Therefore, we should embrace the changes bravely with open minds."

“Turn down the rule of ‘every new sovereign brings his own courtiers’ and be the decision-maker”

Before, I have joined some large international companies such as ALSTOM. Generally speaking, the management in foreign companies is more standarlised, the employees promoted step by step and their career path well planned. But as a Chinese, once admitted into top management, one will inevitably be trapped by the “glass ceiling” and can hardly have the final say in decision-makings. The Chinese executives working in foreign companies face also another challenge which is the frequent changes of company leaders. “Every new sovereign brings his own courtiers”. One can only adapt to it or find another foreign company to start all over again. I’ve been in this situation as well and finally, after due consideration, I decided to join the entrepreneurs team of IKD, take the future into my hands and grow together with the company. The transition is tough, but filled with happiness and personal accomplishment.

“Seize the opportunity and become leader of the industry”

After 20 years’ development, our country has witnessed an overall improvement in its manufacturing industry which is gradually reducing its dependence on low-cost labour and making the transition into a more upgraded and systematic industry.

In view of the rising labour costs in China, the question of vital importance now is how to maintain the competitiveness of Chinese manufacturing in the global market. It seems to me that its future development could be focused on two directions:

 Firstly, the intelligent manufacturing. Through the digital management of manufacturing process, improving the management level and productivity.

Secondly, the globalisation. Through M&A and establishment of factories oversea, learning the advanced management system and reducing the general cost in order to enhance the company’s position in the global market.

Although European and American companies also move forward in that direction, the Chinese companies could be one step ahead by “overtaking in the corner”. Many new technologies are quite costly before their generalisation. But when they become popular, China’s advantages in economic scale and number of consumers will be fully reflected. Taking the auto industry as an example, the New Energy Vehicles (NEVs) greatly promoted now in China is exactly the breakthrough that we’ve made by means of our advantages in the areas of capital, market and industry scale.

While western countries are leading the way in some technology fields, their markets are stablised and often lack the impetus to invest in new technologies and equipment. At the same time, Chinese companies are benefiting from “The Belt and Road Initiative” and the popularisation of new technologies such as mobile Internet. They are encouraged to establish global manufacturing bases, participate in the global competition, and become industry leaders by achieving an explosive growth.

To be sure, the local enterprises who take the place in the Chinese market must have their own strength. The question is if their success can be reproduced in the international market and if so, how? Finding out the answer and providing instructive suggestions to the Chinese companies navigating their way in oversea markets is the fundamental purpose for me to participate in the DBA programme.

“Equity incentive is not a panacea and could even negatively affect the management of the company”

The original intention of choosing equity incentive as the topic of my DBA research is to well manage the local employees by means of making the most of this tool in oversea M&A. However, after having studied an abundant number of cases, it seems to me that the equity incentive is not a panacea and can only be effective within a certain range. The cultural differences play an important role in it.

In a country like the United States known for its expertise in capital market operation, the acceptance of equity incentive is relatively high; on the contrary, in European countries where family business occupies a big share and the managers are generally well paid, it is quite difficult to promote the equity incentive (after all, for the shareholders, the management of the company requires an enormous investment of energy. And if the superiors are too cautious or likely to go to the extremes, people would surely prefer a high remuneration with stability instead of taking the risks that they can hardly control.)

“Remain true to the original aspiration in a highly-materialistic society”

When I was working in foreign companies, instead of acting in the company’s best interest, I paid more attention to my hierarchic positioning and the treatment I received. And after I become the owner of the company, I attend to all the details from a management point of view including the travel and mission expenses of my own. Comfortable with economy class trip and budget hotel, now I feel more relaxed and happier with my work.

When you work as professional manager, you only need to comply with your boss’s order and consider for your department’s interest. But when you start to conduct your own business, you have to make sound business decisions and be responsible for the company and every member of the community including all the employees and shareholders. This psychological transition is the biggest change I’ve experienced since I am involved in entrepreneurial activities.

Today’s world is predominated by the worship of money. Many are crazy about taking the shortcuts and making quick money. However, people with this kind of mentality incline to forget their original intention and be misled in their career life. My suggestion is to set a long-term goal and make adjustments in the process. You will have a better development with a strategic vision and a loyalty to your heart.

Reprinted from Shanghai Airline Feb. 2018

Original Chinese copy by BIAN Lingli