CEO Interviews at Fortune Global Forum: Zhang Xin
- January 29, 2018
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One of the highlights of the Fortune Global Forum were the really fantastic interviews with the CEOs of amazing companies. Even for CEOs, these are heroes that are looked up to in large part. Each one of them had a way of distilling really important initiatives in their companies down to *very* simple phrasing that anyone could remember. This is part of a series of short posts based on my notes in each session:
Zhang Xin of SOHO
Zhang’s backstory is rather incredible – sent from Beijing to a farm during the cultural revolution. When asked about it she said that she had surprisingly fond memories – fresh apples and a pig to take care of – exciting stuff for a five year-old. Around 1980(?) she went to Hong Kong with her mother. Walked across the bridge from Shenzhen to Hong Kong. Her mother worked for the foreign press as a Chinese translator. Her mother was a big influence on her. In the days of the Cultural Revolution, everyone worked – men and women. No stay-at-home housewives in China. Nor husbands. And men and women earned exactly the same salary (albeit a very low salary).
Zhang started out working in factories in Hong Kong (yes, they used to have factories in Hong Kong!) and they didn’t know enough English to get a good job in Hong Kong. Hong Kong was a manufacturing hub for garments and electronics where a building might have a “factory” on each floor. In the evenings she went to school to study.
She was desperate to improve her living and working conditions and went to England with just enough to get on a plane. It was her first time being in a place that wasn’t predominantly Chinese. She stopped someone in the street who looked Asian, and she responded in Chinese and helped connect Zhang with her first job. And like Hong Kong, she worked and went to school at Cambridge. Then on to Goldman Sachs.
By the 90’s, she was working for Goldman Sachs. But within just a few years she was anxious to make another change. She had been gone from China for 15 years and wanted to move back. She and her husband started SOHO and have made China home base ever since.
Zhang tells yet another story of an entrepreneur who was told know dozens if not 100 times before getting the funding together to start building in China. And then the 1997/1998 Asian financial crisis came and made it hard again. It’s clear that working with Zhang is tough – she is a demanding CEO – but also rewarding. She helped launch Zaha Hadid despite butting heads, and built so many buildings together. She loves working with artists (architects). An interesting story about firing Zaha Hadid once. Then three years later hiring her again. I thought the story reveals both her firmness and toughness in standing for what she believes is the right answer – but also her willingness to change her mind when circumstances change- to let the past be the past. (Examples of this with the other CEO’s interviewed are plentiful).
Zhang also discussed the business model – which evolved from Buy-and-sell to buy-and-hold. Eventually they started offering co-working space. In the early days, SOHO innovated in China by building move-in-ready homes and buildings, rather than just empty shells, which was the previous tradition. They originally thought they would build small office home office spaces – live-work space – but then built pure office buildings. Not afraid to pivot as the times change.
If I heard her right, they have something like 55 or 60 million square feet of office buildings now. In her view the cities have finished urbanizing. So what’s next?
She sees a lot of excess capacity in buildings and a lot of startups, so now they’re into startup coworking spaces. Uber and Mobike started in SOHO buildings for example. Small world. SOHO currently offering 20,000 desks so her belief is that they are just scratching the surface on the market, which she estimates north of 200,000 desks.
Asked about global expansion, Zhang says the focus stays on China for now – because the business is very much a brand business and the SOHO brand is very strong in China.