Management lessons from Chinese business and philosophy | Fang Ruan

Summary

The script narrates a management consultant's journey of discovering innovative management practices in China, inspired by the dumplings from Dumpling Xi. It highlights Gāo Défú's 'two-hat model' empowering regional managers with dual roles, leading to a successful digital transformation. The narrative contrasts this with traditional Confucian hierarchy and introduces alternative approaches from Taoism, exemplified by Xiaohongshu's 'Signature Program' fostering a collaborative environment. It concludes by discussing centralized innovation at Ping An, illustrating the balance between traditional and modern management philosophies.

Takeaways

• 🥟 The speaker's love for dumplings, particularly their mother's cooking, led to a discovery of a restaurant's dumplings that evoked a sense of homecoming.
• 🧐 The speaker's professional background as a management consultant sparked an interest in understanding the success behind Dumpling Xi's dumplings.
• 📈 Gāo Défú's Dumpling Xi experienced a surge in demand but faced challenges due to the rise of online food delivery services.
• 🎩 Gāo introduced an innovative 'two-hat model', utilizing regional managers for dual roles without formal training, emphasizing natural strengths and a growth mindset.
• 🤔 Initially, the two-hat model faced skepticism and sales fluctuations, but Gāo's persistence paid off as the model led to a resurgence in sales and innovation.
• 📚 The company's ability to integrate new capabilities into company policies set it apart, contrasting with the common challenge of converting individual best practices into long-term company strategies.
• 🏛 The approach taken by Gāo contradicts traditional Chinese management styles influenced by Confucianism, which values seniority and authority.
• 🌱 The script highlights the emergence of new management approaches that embrace change and innovation in response to evolving business environments and workforce demographics.
• 🌐 Another example is Miranda Qu's 'Signature Program' at Xiaohongshu, which fostered a collaborative environment by using avatars to break down hierarchical barriers.
• 🚗 Ping An Insurance serves as a counterexample, illustrating the challenges of bottom-up innovation in a large, diversified organization, opting for a centralized approach to innovation.
• 💡 The unconventional management mechanisms discussed in the script are likened to Taoist philosophy, which advocates for natural progression and context shaping over direct control.

Q & A

What is the speaker's initial impression of Dumpling Xi's dumplings?

The speaker was pleasantly surprised by the dumplings from Dumpling Xi, as they had a 'flavor of going home,' being fresh, chewy, and unexpected.

What is the speaker's profession, and how does it relate to the story of Dumpling Xi?

The speaker is a management consultant, which naturally led them to be interested in understanding the reasons behind the success of Dumpling Xi's dumplings and the management strategies employed by the company.

What was the challenge faced by Gāo Défú, the founder of Dumpling Xi, three years ago?

Three years ago, Gāo Défú faced a challenge where the demand for his dumplings was high due to consumers' desire for healthy food, but the growth of online food delivery services was causing consumers to stay away from visiting the stores.

What unconventional management approach did Gāo Défú invent to address the challenges faced by his company?

Gāo Défú invented a 'two-hat model,' where he invited five successful regional heads to take on a second role at headquarters without formal training or experience in that field, while still managing their regional responsibilities.

How did the initial phase of the two-hat model impact the company's sales?

In the first three months of implementing the two-hat model, the company's sales fluctuated, with some even dropping by 20 percent as the regional heads learned new skills while still performing their regular duties.

What significant change occurred in the company after the transition period of the two-hat model?

After the transition period, sales rebounded, and within a year, the company began launching its fresh and spicy dumplings online. This was followed by attracting more talents with startup dreams and translating individual new capabilities into company policies.

What is the difference between the traditional Chinese management approach and the approach taken by Gāo Défú?

The traditional Chinese management approach, influenced by Confucianism, values seniority and authority, ensuring order and harmony. Gāo Défú's approach, on the other hand, is more about empowering frontline managers, tolerating mistakes, and encouraging ideas from below, which is less common in China.

What is Miranda Qu's 'Signature Program' at Xiaohongshu, and how does it address the hierarchy issue?

Miranda Qu's 'Signature Program' at Xiaohongshu involves each employee choosing an avatar character to represent them in digital communication channels. This program fosters a collaborative environment by encouraging interactions based on shared interests in characters, rather than hierarchical positions.

How did the 'Signature Program' impact the company culture and innovation at Xiaohongshu?

The 'Signature Program' played a pivotal role in fostering a collaborative environment at Xiaohongshu, eliminating the teacher issue, and leading to the company being ranked as one of the most innovative Chinese companies by Forbes.

What alternative approach did Ping An take to innovate given its large size and diverse sectors?

Ping An, being a large company with 400,000 employees and multiple sectors, adopted a centralized approach to innovation. The founder, Ma Mingzhe, positioned the headquarters as the 'steering wheel,' directing innovations and new ideas to its subsidiaries.

How do the management approaches of Gāo, Qu, and Ma relate to traditional Chinese philosophies?

Gāo's two-hat approach, Qu's signature program, and Ma's steering wheel approach are not aligned with Confucianism, which emphasizes organization and regulation. Instead, they are more akin to Taoism, which believes in letting things work to their perfection naturally and supporting their natural state, allowing for spontaneous transformation.