Monday, May 9, 2011

Winning From The Edge

Last week I was back home in New Zealand, speaking to Deloitte alumni in Auckland and Wellington. Deloitte NZ CEO Murray Jack and his team had a great energy, and a vital question to ask: How can New Zealand win from the edge? It’s a time-honored theme for a country half a world away from most places, and more relevant than ever in an era of massive power shifts.

I started with a story that I feel sheds a good deal of light on the answer. A few days earlier I’d met a few young New Zealand entrepreneurs with some great ideas, ready to take on the world (stand up Stolen Rum (The Rum Runners) and 90 Seconds). Their concepts were exciting and they were up for anything. The only problem was where they were setting their sights: Melbourne. Sydney. London. Having been in Beijing earlier in the week, talking to students just as hungry to engage with the world as these aspiring young New Zealanders, the absurdity of it struck me powerfully. Here we are with China, the world’s most populous nation, with a rapidly growing economy not far from our doorstep, waiting with open arms, and still we’re obsessed with the mature markets of Australia and the UK! These are not markets to ignore, but there are other markets to prioritize for targeting your big idea. New Zealand will always be on the edge – which is a good thing – but the world is coming closer. We just need to open our eyes to the biggest opportunity, then act. To win from the edge we need to get enraged with the well-worn path to the status quo and adopt new thinking about how to succeed in the world. We need to start making things happen with China.


Dave said...

Great to see you Kevin - your advice has been absorbed and we are planning next steps into China.

90 Seconds crew!

Richard Cross said...

Kevin , really like your championing of the edge, pushing me back to the edge in my research and work as well as contacts.

My corporate and consultancy experience is that there’s a balance . It’s where interesting people hang out and change happens. On the other hand Edges tend to be filled with people who are risk takers, the Jim Morrison's who’ live out there on the edge all the time to make up for those of us who choose to play it safe all the time.’ What I’ve really learned is that playing safe is needed some of the time but it’s not a winning career strategy. It just leads to more of the same.

John Seely Brown who was the research guru at PARC and somewhat coincidentally is now at the Deloitte Center for the Edge
proposes that those at the Edge connect more readily with each other because they all confront significant challenges in addressing the growth opportunities.- Since there is so much growth potential for everyone, they are more willing to share insights and learning. He talks about how we need to take organizations to the edge in order to strengthen the core, Though he’s a mathematician, he didn’t doesn’t get enraged to often, he’s an extraordinarily passionate person. And curious - check this out for his learning from the edge of surfing He’s always believed the edge is where the action is.

Reflecting about the Edge and China a couple of weeks ago my man with the Eastern European Edge(he's 83 and as sharp as ever) introduced me and others to Igor Yurgens one of President Dmitry Medvedev ‘s Economic advisers and a privilege to meet. At one point Igor was first vice-president of Renaissance Capital run by New Zealand’s ‘ambassador of the Edge’ Steve Jennings but I don’t believe he works for them nowadays. One observation Yurgens made reflects your comments. If I remember it right;(it was one of those evenings) he said the question is , will we be part of you guys, the broader West? Shall we go the third way? Or shall we be the satellite of China? To which nobody has exact answers but we should still try to give them’. - If someone of his stature is taking these questions seriously then we should too. He also added ‘China is a great country with a great culture. It is spreading it‘s wings.‘ Although he did add the one party rule made him feel ‘all their problems are ahead of them not behind them.‘

All the more reason for us all and not just NZ to go to the next edge in China.

Chris Simon said...

Always thought NZ was the land of the long working idea and obviously well recognised across Europe. Agree about China. Many Europeans or Australians sometimes make mistake of setting up shop there, without proper local Chinese partnerships in place. The “can do” attitude of NZ and “know how” attitude of China could really work. Also, wanted to congratulate Saatchi’s on the “Hello, Future” Moby Music Video contest they organised with Vimeo. It was a very artful and emotional online film making showcase; and Moby’s new music, as always, moving and inventive.

Ollie said...

Good luck going into China 90seconds crew!

netfilms crew

Ben Shipley said...

Great to see you're still getting to connect with some of the cream of kiwi talent Kevin.

Completely agree with you that New Zealand is often blind to the enormity of the market that has developed in China. After spending five years in Shanghai, running an agency that focussed on connecting New Zealand brands with an audience up there, I can absolutely confirm that kiwi products can make it in market.

I think though, that blanket advice on taking your business or business model to China needs to be taken with a grain of salt.

Chinese business relationships have been written about almost to exhaustion. Most China hands will talk about Gaunxi, the mystic system of relationships that enable success in the Middle Kingdom.

I believe it is slightly simpler to understand than that. Relationships in China work best on a concept of value forward. Too many kiwi companies sign a contract and wait for the revenue to roll in, often finding they've been stripped of IP and the opportunity in short order.

A better approach would be assume success and start talking about what the next opportunity of your to grow together is. Alternatively, you could have a high quality, hard to source and impossible to replicate inside China, like Stolen Rum.

I do take exception of your advice to Tim and the team at 90 seconds to focus on China. They have a great business model that taps a developed market condition of a gap between cheap corporate "talking head" videos and the lofty production values of the ad industry.

While I question whether that niche is even present in China, their low cost, systematized model would be quickly emulated in a country that has been exceptionally well trained in finding efficiency and driving the lowest "China price".

The idea that you could be a billionaire if you could just sell one dollars worth of anything to everyone in China has been brightening the eyes of many an expat since the British flooded the country with Opium. The reality is that any product cheap and uniform enough in nature to appeal to the breadth of the country will be copied, distributed and priced cheaper in less time than you can bring a product to market.

New Zealand is a long way from anywhere, filled with people who are paid pretty damn well by international standards. Does it not make sense to seek high value exchange scenarios where premium products and services make the most of our geographical disadvantages and bring enough gold to keep the place an incredibly special country to live in?