Impressions from Fortune Global Forum 2017
- January 2, 2018
- 2 Comments
After attending Fortune Global Forum for the first time, I wanted to share some impressions – and yet it is almost too much to convey in a blog post. I’ll also post my notes over the next few days/weeks from the sessions with CEOs and Chairpersons over the course of the event.
- The attendees and event are impressive
- Apple’s iPhone is doing just fine
- Guangzhou really knows how to roll out the red carpet
- The single market in China is huge
- China’s self-confidence is apparent
- A real need to talk about social good
- A sense that the USA has left a real void in the Asian international politics
- Everyone is challenged with digital experiences and digital transformations
- A real sense of optimism going forward
You can find Fortune’s coverage of the event on this page. Given the incredibly high production values of the event, you can understand that their coverage is top notch. I have to say, however, that finding this page was harder than I thought it would be on Fortune’s site. I had to google for it. Such is life in
The attendees. What can you say about an event that features a governor in China, Justin Trudeau of Canada, Tim Cook of Apple, and the CEOs of SOHO, Tencent, Alibaba, Foxconn, Haier, and others? The speakers – and the people in the audience – are impressive.
Also, I was really pleased to meet some of my own heroes – writers and editors like Adam Lashinsky and Allan Murray and others – whom I have been reading in print and online for more than 20 years. I was really impressed by everyone I had time to talk to from the Fortune organization as well.
By the way, the iPhone is doing just fine in China. There were a lot of people carrying in iPhone 7, 8, or X. I didn’t see a lot of Android devices, overall, though they were obviously present. The iPhone as status symbol is alive and well. When I say I saw a lot of them – the majority of the phones I spotted at the conference were iPhones. Apple is capturing the part of the market that everyone wants.
After the Forum, I stopped in Hong Kong for a few days before coming home. It turns out that the Apple Store in Hong Kong was as crowded as ever, with a queue for phones or genius bar appointments (not sure which) going down the hall, and the three stories of wide open spaces were filled with customers and red-shirted Apple employees. Hong Kong provides some breath-taking views and my brand-new iPhone X came in handy – the night time and low light pictures were considerably better than my previous iPhone would have taken.
Guangzhou really rolls out the red carpet. Our arrival experience – at the train station – included expedited processing through customs and immigration, and a courtesy car (manufactured by home-town auto company GAC) from the station to the hotel. When the conference departed the hotel for an excursion (a dinner event at a public park for example, or another event at the Canton Tower), streets were blockaded to provide smooth transportation from point A to point B. I don’t have a sense for whether this was for security reasons or for making a great impression on guests – but when you picture a 4-lane highway shut down so that a fleet of tour buses can enter and exit easily – you have a sense for the magnitude of inconvenience it must have had on daily commuters.
The reception at Sun Yat-Sen Memorial Hall was exceptional. The reception at Canton Tour topped it – with a buffet of Chinese foods, several musical performances, and a light show performed by 100’s of synchronized drones flying over the Pearl River. Next year the conference moves to Canada, and I have to admit I wonder how any city in North America would compete with the level of turnout that Guangzhou exhibited. They left no stone un-turned. Many of the staff were volunteers from local universities who knew enough English to converse with those of us who don’t speak enough Mandarin (nor Cantonese).
They also turned off the great firewall, to large extent. Connections to Twitter and Facebook were open for business, which apparently is not the norm. Much to my relief, I did not have to go through social media withdrawal while visiting.
Large Chinese companies are now 115 of the Global 500 – and soon will pass the US for the country with the most companies in the Global 500. 20 years ago, there might not have been any on the Global 500 list.
Chinese startups are, largely, focused on their home markets. But when they choose to go international, they have access to deep wells of capital, and revenue, at that time. And due to the complications for startups in other countries operating in China, they may face limited external competition at home (but, it appears to me, plenty of home-turf competition is evident).
From Fortune’s Adam Lashinsky:
As my colleagues and I prepare to leave Guangzhou and return home, we’re taking time to reflect on the magnitude of our experience in China this week. The scale of China can’t properly be described; it needs to be experienced. In fact, Cisco (CSCO, -0.70%) CEO Chuck Robbins spoke Thursday about a conversation he had recently with a fellow Silicon Valley CEO who doesn’t see the need to visit China because he doesn’t have any business there. Robbins’ conclusion: This CEO will be sorry.
A topic I heard come up in a panel was would the government let these companies succeed OR FAIL – and the significant example of this was a bike sharing startup that had just gone under a few days or weeks prior. The sentiment was that China doesn’t mind that investors can lose money in startups – it helps keep the speculation (somewhat) under control.
Chinese companies have an innate sense of confidence. You can sense the confidence of most of the companies present at the Forum. Part of that confidence is founded on business success. Part of that confidence is founded on a fundamental belief in Chinese work ethic and intelligence. Part of that confidence is founded on trust in the investments in infrastructure and educational systems. And a big part of it, it appeared to me, was based on the transition – still in progress – from an economy that relies mostly on copying, to one that relies increasingly on innovating.
An overarching theme of the week has been how China has ceased to be a copycat and instead has become an innovation leader. Jerry Yang, the Yahoo co-founder, presented an interesting thesis as to what changed. [..] He notes that Chinese Internet companies certainly were imitating their U.S. counterparts until the 2008-2009 financial crisis, which hit the Internet advertising market hard. Chinese leaders like Alibaba and Tencent pivoted their business and never looked back.
More on that in another post.
Many Chinese CEOs talked about charity. What I found interesting is that they talk about it differently than US-based companies do. I couldn’t tell if the differences are cultural, or just China’s CEO’s figuring out what it means to do good works in a country where many things are provided by the state. For example, one CEO was asked why their charity for college tuition only applies to attending university outside of China? And the answer was simple: University inside China is free… So the context of the Chinese economy and culture affects how charitable works are thought of and conceived. You might think that with state services, companies would be less inclined to do these works – but I sensed a strong need to communicate a company’s mission to do social good, emanating from almost every CEO who spoke.
Yes, the subject of American Politics came up. In general, all speakers agreed that regardless of whether they liked President Trump (or his policies), there was a real void in Asia since the beginning of his administration. Most expressed that pulling out of TPP was a mis-step, and that regardless, the USA was not on the field. This is perceived as ceding the influence to China, at a moment when many countries in the region would welcome a counter-balance – if for nothing else, to give them more negotiating leverage. Fortune has great coverage of an interview that included Hank Paulson.
Everyone is challenged with digital experiences and digital transformations. Every C-level executive that I spoke with agreed that digital experiences – and digital transformations – are a real pain point. When asked what we do at BP3, I explained the kinds of problems we work with our clients to solve, and that you could boil it down to connecting digital experiences with the actual operations, processes, and systems of our clients: we’re a digital operations company. And I asked if they’re seeing these challenges. Usually I never got to ask the question before they volunteered it.
Everyone is experiencing this disconnect – in their own businesses, or in the businesses they interact with – the disconnect between how it should work, and how it does work. All too often the prescriptions from digital native companies sound like things that simply can’t be done by incumbents that pre-date digital experiences:
- fail fast
- innovate or die
- you have to have our culture
- you have to not have the baggage of a legacy business
What we need, instead, are prescriptions that non-digital-native – or incumbents – that can be turned into action. Prescriptions that:
- don’t have to wait for our legacy business to die
- don’t have to wait for our culture to change
- don’t require a magical innovation to happen
- and don’t require us to do something anathema to our business (e.g. “Fail fast” in the airplane business).
It doesn’t mean that cultural change, innovation, faster learning cycles, and restructuring legacy businesses aren’t important. But let’s not make the future dependent on a 5 year plan before we get started.
Optimism for the Future. If there was anything I took away from the conference it was a sense of optimism for the future. China’s CEOs are optimistic about their own fortune’s and the world’s. Those that are engaged on the international stage and global markets are also bullish on engaging with different cultures and countries. The European and North American CEOs present were similarly bullish on China and the world economy. And that optimism is reflected in the investing climate as well.
It was, quite honestly, a good way to book-end 2017 and recharge the batteries for 2018. I find other people’s excitement and optimism infectious. Now if we could only get that excitement without the resulting jet lag!