W. Chan Kim and Renée Mauborgne were recently in Taiwan to appear at the seventh edition of the International Gurus Forum, co-organized by CommonWealth Magazine and E.Sun Financial Holdings Corporations (E.Sun FHC), which kicked off on November 12.

Like an impassioned revolutionary on stage, W. Chan Kim showed off his oratory skill and a whole bag of physical gestures; meanwhile, Mauborgne was the picture of a gently coaxing mentor, as together they guided an audience of 3,000 Taiwanese entrepreneurs through the salient points of their new title, Blue Ocean Shift.

Audience at the 2018 International Gurus Forum (Source: CW)

They believe the first steps Taiwanese enterprises should make are to know that they are not completely lacking, clearly see what they do have, and learn all about the areas in which they do lack. Taiwan should see what it has going for it, namely excellent cost discipline and high caliber professionals; meanwhile, it also needs to acquire the ability to create value.

The authors believe that, from an economic standpoint, the smart machines, digital technology, and globalized production of the future mean increased supply, but with unchanged demand, making the world into a great big red ocean. Accordingly, if enterprises simply concentrate on defeating their competitors, it will be difficult to offer their customers new value, thereby limiting growth.

We distilled five key steps from the co-authors’ combined 2.5 hours of lectures:

Insight 1: From positioning within to creating beyond, “the Silicon Valley model only has a 10-percent success rate, so would you encourage kids to start a new venture?” stated W. Chan Kim, inadvertently throwing out a question to the audience. And the answer to this is all too clear.

On the other hand, if we could raise the rate of successes, parents would be much likelier to encourage their children to innovate. And Blue Ocean Shift offers methods for creating beyond existing markets.

Looking back on America in the 1970s, the U.S. media was abuzz with talk of the rise of Japan, as products made by the likes of Sony, Toyota, and Yamaha hit the American market. “The Japanese are coming” thus became the nightmare of U.S. enterprise.

W. Chan Kim recalls that competitive strategy comprised the main tenet of business studies at the time. Under this approach, every enterprise’s strategy was to map out its own industry, identify competitors, and further analyze ways to defeat their competitors. Kim describes this as a Red Ocean, which is full of sharks biting and eating each other, thus turning the water red with blood. (Read: Debunking the ‘Top-down’ Model)

However, both Kim and Mauborgne believe that competition theory is not what enterprise strategy is all about. In 10 years, they have seen the likes of Microsoft and Google recognize that the market can rely on creation rather than competition.

This prompted the duo to write Blue Ocean Strategy, which quickly attracted notice far and wide. And they heard all about how enterprises around the world implemented blue ocean strategy and the problems they faced. These include how to assemble the right blue ocean team, and how people within the organization can identify opportunities without subjecting themselves to constraints.

Thirteen years later, the authors collected information on the the blue ocean transformation of enterprises, non-profit organizations and governments around the world, resulting in the new book Blue Ocean Shift.

“Psychology tells us that, as long as you have the tools, everybody is confident. It’s like driving a car, knowing how to get from here to there,” relates Kim. The book divides creating a market into five parts, i.e. self-awareness, knowledge of others, imagining future customers, decision-making, and taking action.

Insight 2: Start looking for the blue ocean before the situation deteriorates.

Mauborgne says that when enterprises are in the Valley of Death, the company lacks resources, and staff members are fearful for the future, making it the worst time.

Professor Ji-Ren Lee of National Taiwan University also remarked that companies must incorporate making the blue ocean shift into a part of business operation. Plans must be made in plenty of time to anticipate rapid company sales growth.

Panelists at the 2018 International Gurus Forum (Source: Justin Wu)

“There’s nothing new under the sun. All the new things are created by people, and then copied by other people. And after a lot of people copy, they go overboard with competition, which is when other people create something else. And the cycle repeats,” describes W. Chan Kim.

Creating, copying, and competing in the market in an endless cycle means that enterprises must always remain vigilant and plan far into the future.

Actifry, a fryer invented by France’s SEB Groupe, can fry two pounds of French fries with just a teaspoon of oil, reducing calories by 40% over conventional fries. Company stock soared with the introduction of this product.

Five years later, when Phillips introduced its own fryer, Kim told SEB not to worry. Having already made their money, they were destined to take another step forward.

Insight 3: Trust senior staff.

Along the same lines, E.Sun Financial Holding Co. president and managing director Joseph Huang and Delta Electronics CEO Bruce Cheng shared their experiences with enterprise transformation. Both of them brought up the recruitment of new talent, the former recruiting technology talent, and the latter looking for software brains. (Read: Behind E.Sun’s Historic ‘Jiaoxi Meeting’)

However, citing her multinational consulting experience, Mauborgne cautioned enterprises not to underestimate the people already placed inside their organizations.

Blue Ocean Shift contains three main tenets: One must have a blue ocean perspective, tools for creating markets, and a humanistic approach. Among these, enterprises frequently overlook humanistic processes.

“Most books that talk about strategy don’t talk about people. But it is people who work at companies, and people have both ambitions and fears. If you don’t understand human nature and you tell them to transform, they’ll pay lip service and agree on the surface while dragging their feet in reality,” says Mauborgne. (Read: ‘Farewell, Taiwan’)

Instead of directly resorting to transformation, it is preferable to let staff members first understand the perilous environment in which they are situated; and rather than issuing top-down commands, it is better to enlist interdepartmental staff to pool their intellectual resources and strategize together.

When everyone has made first-hand discoveries, they are more willing to take on the obligations necessary to see organizational transformation through. And when each individual has witnessed buyers’ pain points, it produces positive motivations, thereby engendering change.

Insight 4: Blue ocean strategy does not equate to disruptive innovation.

Many people equate blue ocean strategy with disruptive innovation. This is a common misconception. Shattering this myth, W. Chan Kim says that the key point is not the technology itself, but how it makes life more convenient and enjoyable. (Read: Who Says AI Gurus Ignore Taiwan?)

Technology does not have to be the most cutting-edge AI, Blockchain, or Industry 4.0; rather, current technology can be employed and combined to yield results. (Read: Can Taiwan Find an AI Niche?)

The Sony Walkman combined speaker and stereo technology to turn shoulder-carried boomboxes blasting out in public parks into personal music players that could be enjoyed while riding the bus, the metro, or anywhere else one goes.

Targeting people who previously never played video games, Nintendo designed its Wii as a game center that even grandma and grandpa could learn to enjoy in one day. With the Wii, electronic games became synonymous with fun for the whole family.

UK-based financial technology (FinTech) company, Prodigy Finance, targeted students from top schools. Looking to the future rather than examining the students’ past credit history, they resolved the issue of overseas students being unable to apply for student loans.

“Even if a super smart Taiwanese student got into Harvard, he would be unable to borrow money from a U.S. bank, because the bank would require collateral and a guarantor, or would want to look at his credit history in the U.S., which a student who has just arrived from Taiwan would never have.”

W. Chan Kim was effusive in his praise of the bank’s innovation, saying, “The banking industry has been around for 500 years, yet no one thought of this. Because banks neglected to think of this group of people as potential customers.”

Insight 5: Lessons from Amazon.

Blue ocean strategy is not just an offensive strategy, but also an effective defensive strategy.

Amazon, which transformed itself from an online bookseller into a multinational e-Commerce behemoth, effectively applied blue ocean strategy to expand its operational scope, prompting even Mauborgne’s mother to marvel. From the start, founder Jeff Bezos’s online bookstore fed buyers recommendations every time they purchased a book. And as soon as a transaction was completed, the customer would receive a confirmation in their email. These aspects of their service impressed customers and increased their loyalty to Amazon.

Outsiders looking in at Amazon recall its successes. Yet Mauborgne reminds us of Amazon’s litany of failures.

At first, Amazon wanted to compete with eBay, but folded up its tent and went home. It also had ambitions to replace Google as the top search engine, similarly resulting in the closure of A9 Search. It also sought to compete with Zappos through online shoe retailer Endless, which resulted in defeat and ultimately Amazon’s acquisition of Zappos. And not wanting to take a back seat to Apple’s iPhone, Amazon introduced the Fire Phone, which was soundly trashed in the open market.

Mauborgne relates that Amazon’s experience can be summarized to draw two key insights: First, reliance on platforms alone does not mean being able to create a blue ocean. Second, the best way to face the blue ocean competition of others is to become blue ocean yourself. (Read: Survival Guide of a “Small Market” Nation)

Translated by David Toman
Edited by Sharon Tseng

Authoritatively administrate long-term high-impact e-business via parallel web services. Synergistically synergize equity invested infrastructures whereas integrated infrastructures. Globally whiteboard customer directed resources after multimedia based metrics. Assertively strategize standardized strategic theme areas vis-a-vis impactful catalysts for change. Details

“畢業保證了就業。”這個簡單的口號吸引了人們的注意和喜愛,並幫助復興了一所垂死的學校。

中午到了,音樂開始輕柔地播放。“當’我們是家人’開始播放時,每個人都知道現在是12點……午餐時間,”校長施光勳笑著說道。台南台江大道門口的標誌,中國信託的商標玉綠色背景,中文字符為  中國信託商業銀行金融管理學院

該學院從Hsingkuo管理學院的遺體中崛起,這是一個由教育部關閉的機構,由於招聘不力和學生入學率的下降。在接管業務後,CTBC慈善基金會改名為CTBC財務管理學院,並在短短兩年內證明了其優秀的學生招聘能力。

去年,1300多名候選人在CTCB畢業時盯著慷慨獎學金和就業前景的承諾,爭奪150個名額。與此同時,140多名申請人在新的財務管理研究生院中競爭了15個名額,所有被錄取的人都被錄取。

幫助弱勢群體

從招生一開始,該機構就設定了幫助弱勢群體和培養技術人員的方向。施先生訪問了台灣50多所高中和職業學校,與台南第一高中,台南女子高中,台北第一女子高中等機構建立了戰略聯盟,鼓勵貧困學生推薦,同時招募優秀學生。學生們。“我們強調我們作為一所小而優秀的學校的質量,致力於培訓國際金融專業人士。因此,我們將每個學生視為未來的銀行經理,“Shih說,概述了學校的明確目標。

Tsai Tung-hsuan,運動眼鏡和時尚的平頂髮型,在他的高考中獲得71分,但決定入讀CTCB財務管理學院。“起初我有預設醫學設計,但當我看到他們提供獎學金和海外實習(在CTCB FMC),我想我可能嘗試不同的路線,”他說。在通過聯合項目在賓夕法尼亞大學沃頓商學院擔任交換學生之後,他正準備在中國信託獲得一些工作經驗,然後再做出未來的決定。

鑑於其強調培訓金融專業人員,所有CTBC財務管理學院的課程都設計有實用的實踐經驗。每個部門都必須與CTCB的招聘部門保持溝通,同時規劃課程和課程結構。以商業和經濟法部為例,課程委員會包括CTCB的法律顧問,人力資源主管和培訓部門主管,他們在學年開始時與部門主管和大學校長一起制定課程結構。符合他們的專業領域。

“教師設計的課程大綱被送去進行外部審查和推薦,”商業和經濟法系主任Cheng Chin-che報導。Cheng補充說,經理和教授一起工作可以相互激勵,創造更好的課程設計,包括與台南行政執法機構簽署諒解備忘錄,並讓行政法學生參加學習旅行。“金融業人員需要知道如何處理政府債務,”他說。

“台灣的學術領域很少向客戶詢問他們想要什麼。但我們首先要問的是,“Shih說,他將金融業稱為”客戶“,對合格人才的需求量很大。考慮到這一點,學校現有部門的學生,即銀行和金融系,商業和經濟法係以及工商管理系,必須獲得9個專業認證和執照才能畢業。

‘精品’培訓方法

為了順應金融業的氣候,學院特別努力培養學生的廣泛技能,甚至打高爾夫和網球需要體育課程,聘請專業教練培訓他們。

儘管如此,由於所有內容都是根據金融行業的標準來衡量的,因此CTCB財務管理學院通常被學術界稱為“職業培訓中心”,根據該定義,它不具備學院或大學的資格。

這至少不會打擾Shih。“經營職業培訓中心太容易了。為什麼我們要讓自己這麼努力?“他問道。該學院希望培養未來的管理人員,具備獨立工作技能的人才能成為真正的銀行家,不僅僅是在中國信託,而是在世界各地的銀行。“我們希望成為一家精品店,而不是自助餐,”他補充道。

CTCB財務管理學院設定了1200名學生的目標,並沒有追求普通大學的多學科方法。該機構能否成為未來高校的新模式還有待觀察。

David Toman翻譯自中文

Having arrived in Taipei around noon, Ms. Chang from Tainan manages to inspect three properties before 4 p.m., and then finishes her house hunting, signing a contract for a NT$30 million home. Across the Taiwan Strait at Shanghai’s Pudong International Airport, Mr. Cheng, a China-based Taiwanese businessman, takes advantage of a short vacation to fly to Taiwan, where he finds and buys his dream home for retirement in just one afternoon. These deals are owed to a Yung Ching Realty app that enables users to look for homes while exploring the property’s neighborhood and scenery in Google street view. Thanks to the app, users typically eliminate more than 80 percent of available homes that do not meet their needs or expectations and then, supported by the professional advice of experienced Yung Ching Realty agents, quickly settle on a matching property, smoothly completing the transaction.

The main reason behind the company’s ability to close real estate deals faster is Yung Ching Realty Group Chairman Sun Ching-yu’s “insistence on innovation”. An analytical thinker, Sun accurately foresaw the rise of the Internet era and the spread of mobile tools, and therefore kept pushing for the development of innovative mobile apps.

The Yung Ching Realty Group quickly expanded after 2000, becoming Taiwan’s largest real estate brokerage chain. At the same time, the group led the transformation of Taiwan’s real estate industry from a low-tech conventional industry into a high-tech brokerage business.

On the Impact of Technology

“We are very lucky because the world is in a big transformation because of technology. This new technology will create a lot of successful people, interesting careers but honestly every new technology will create social problems.

“If we don’t align together, human beings are going to fight each other, because each technology revolution makes the world unbalanced.”

On the Key to Success

“To gain success a person will need high EQ; if you don’t want to lose quickly you will need a high IQ, and if you want to be respected you need high LQ – the IQ of love.”

On Women in Business

“If you want your company to be successful; if you want your company to operate with wisdom, with care, then women are the best.

“37% of senior management in Alibaba are women. Part of the ‘secret sauce’ of our success is because we have so many women colleagues.”

On the Future of Globalization

“I think globalization cannot be stopped – no-one can stop globalization, no-one can stop trade. If trade stops, the world stops. Trade is the way to dissolve the war not cause the war.

“Global trade must be simple and modernized; it must be inclusive so everyone has the same opportunity. The next generation of globalization must be inclusive.”

On the Impact of Artificial Intelligence

“Artificial intelligence, big data is a threat to human beings. I think AI should support human beings. Technology should always do something that enables people, not disable people.

“The computer will always be smarter than you are; they never forget, they never get angry. But computers can never be as wise a man. The AI and robots are going to kill a lot of jobs, because in the future it’ll be done by machines. Service industries offer hope – but they must be done uniquely.”

On Learning from Failure

“Learn from your mistakes – no matter how smart you are you will learn from them. We must share the mistakes with others.

“My thinking is that – if you want to be successful, learn from the other peoples’ mistakes, don’t learn from success stories. The book I want to write is “Alibaba: 1,001 Mistakes“.

On the Value of Teamwork

“You don’t need to know a lot of things, but you need to find the people who are smarter than you are. My job is to make sure smart people are working together.”

“The best way to promote your company is through your product or services, or employees.”

On the Education Challenge

“A teacher should learn all the time; a teacher should share all the time. Education is a big challenge now – if we do not change the way we teach thirty years later we will be in trouble.

“We cannot teach our kids to compete with the machines who are smarter – we have to teach our kids something unique. In this way, 30 years later, kids will have a chance.”

On the Responsibilities of Tech Giants

“Google, Facebook, Amazon and AliBaba – we are the luckiest companies of this century. But we have the responsibility to have a good heart, and do something good. Make sure that everything you do is for the future.”

Authoritatively administrate long-term high-impact e-business via parallel web services. Synergistically synergize equity invested infrastructures whereas integrated infrastructures. Globally whiteboard customer directed resources after multimedia based metrics. Assertively strategize standardized strategic theme areas vis-a-vis impactful catalysts for change. Details

E.Sun Financial Holdings Co. got its start 26 years ago when it was founded by a group of professional managers. Since then, its capital has risen 10-fold, and its assets under management have grown to over NT$2 trillion. Over the past 10 years the average shareholder rate of return has exceeded 10 percent, the highest among financial holding companies (FHCs) in Taiwan.

The company has long been one of the favorite FHCs of foreign investors, who now hold more than 50 percent of its shares, and it was the first Taiwanese enterprise in the financial sector to be selected to DJSI World, a Dow Jones Sustainability Index.

A Bold Succession Plan

In 1992, then Hua Nan Commercial Bank Vice President Huang Yung-jen mobilized professional managers in the banking sector and investors in old-economy industries to found E.Sun Commercial Bank. The bank was then used to form E.Sun Financial Holdings in 2001, and Huang became chairman of the new organization.

In 2008, E.Sun Financial Holdings President Hou Yung-hsiung retired, and Huang tapped Joseph N.C. Huang, the financial holding company’s chief strategy officer at the time, to replace Hou. At 43 years old, Joseph Huang became the youngest person ever to head an FHC in Taiwan, a record that has yet to be broken.

E.Sun Financial Holdings Chairman Huang Yung-jen chooses people based on their character. Joseph Huang is a strong communicator who is flexible within limits and willing to help others. (Image: Chieh-Ying Chiu)

Particularly impressive was that “Huang Yung-jen was able to get everybody to buy into this succession. No senior executives resigned. They all stayed on to help Joseph Huang,” says Ko Chen-en, emeritus professor of accounting at National Taiwan University (NTU) and an independent director on E.Sun Financial Holdings’ board.

With so many Taiwanese companies facing succession dilemmas, how was E.Sun able to make the transition so smoothly?

The Jiaoxi Meeting – A Succession Model Is Born

It depended on a long period of succession planning. Huang Yung-jen recalls that in the years before Hou retired, he discussed the succession issue on several occasions, with the decisive meeting coming in Jiaoxi, a hot-spring resort town in Yilan County.

At the time, he invited all of E. Sun Financial Holdings vice president-level executives to an upscale hotel in the resort town and told them in advance there was no need to prepare anything for the gathering.

On the day of the meeting, Huang Yung-jen closed the door and handed each of the attendees a blank piece of paper. He asked them a question for them to answer in writing: “What are the qualifications needed for E.Sun’s successor?”

The answers were summarized into three main qualifications: 1) The person had to be committed to E.Sun; 2) had to have professional and leadership capabilities; and 3) had to be widely respected in the financial services sector. The three attributes were clearly defined.

After the attendees racked their brains to come up with those three qualifications and the results were compiled, Huang Yung-jen then took a second piece of paper with the names of all of the vice presidents on it and asked attendees to recommend who best met those qualifications.

They were to choose one or more names of people on the list or of somebody not on the list, and if they chose more than one candidate, they had to rank them in order of preference. Most importantly, Huang said, was that they had to explain why they recommended the people they did.

A total of four vice presidents were chosen by the group, with Joseph Huang receiving the most votes. But the others also drew a fair amount of support, according to Huang Yung-jen, who did not announce the results that day and did not reveal the vote tallies to anyone. Instead, he asked everybody in attendance to think more about who was the most appropriate E.Sun successor based on the three main qualifications they identified.