Arthur Yeung, a business book author who has served as Senior Management Advisor at Tencent, a board member of seven other listed companies, senior advisor to CEOs, and as an investor in numerous startups, began a new role this week as head of the Cathay Connect & Consult Platform at Cathay Capital, a global investment platform focused on cross-border investment that supports the international expansion of startups and middle-market companies in Europe, North America, Asia and Africa. Strategic investors in the group’s fund include the energy giant Total, automotive parts manufacturer Valeo, tire maker Michelin, the insurer BNP Paribas Cardif, the container transport and shipping company CMA CGM and Groupe Seb, a manufacturer of small home appliances.
The Cathay Connect & Consult platform will carry out three missions: facilitating regular exchanges among CEOs from Asia, Europe, the U.S., and elsewhere to aid international expansion through insight-sharing and collaboration; building up relationships between established corporate leaders and promising entrepreneurs; and offering in-depth strategic guidance, CEO coaching, and consulting support for a selective number of portfolio companies. Yeung is also taking on a role, along with Ming-po Cai, the fund’s co-founder, in creating Cathay Entrepreneurship at Cathay Capital.
Yeung has been a member of Chinese Internet giant Tencent Holdings’ executive team since 2008, playing a key role in enhancing organizational innovation, transformation and capability building at Tencent and its strategic partners during the last decade of rapid growth. He also serves as Dean of TencentX University, an institution which offers integrated learning programs for 300+ CEOs in internet-related industries from Tencent’s ecosystem.
After receiving his Ph.D. from the University of Michigan, Yeung went on to build a career that spans the academic, corporate, and investment worlds. As a professor, he taught at the University of Michigan and the China Europe International Business School (CEIBS). As a full-time corporate executive, he served as Chief HR Officer for the Acer Group from 1998 to 2002. Reporting directly to the Chairman & CEO, he worked closely with the top management team to radically transform Acer. Yeung’s broad expertise includes building organizational capability for strategic implementation, reinventing organizations in fast changing and disruptive environments, developing leadership for business growth, and leading large-scale organizational transformation. He is the author of “Reinventing the Organization” published by Harvard Business Review Press and “Building Organizational Capability,” one of the best-selling management books in China.
He recently spoke to The Innovator about what companies can learn from Chinese Internet players and how they can reinvent their organizations.
Q: Tell us about your role at Tencent
AY: I have served as Senior Management Advisor since 2008. My principal role is to focus on organizational innovation. I have played the role of catalyst and facilitator in the major transformations at Tencent which occurred in 2012 and in 2018. I helped the leadership team to reach a consensus on what the future looks like and the current challenges the company faces so the leadership team could formulate a plan on how to move forward, including strategic direction, organization realignment, leadership appointment, and management support. For example, in 2018 all the leaders had a shared view on how Tencent could apply digital technology in areas such as cloud computing, AI, Big Data and cyber security on a massive scale to the industrial Internet. We decided to aggressively embrace the industrial Internet and set up a new business group called Cloud and Smart Industries Group. We looked at who had the right experience to become leaders in this area. We made the necessary internal alignments and we looked at ways to strengthen our internal platform, especially our platform for sharing our core technologies and tools. In the past each unit had their own technical support infrastructure. We wanted to be sure there was a shared technology structure on the cloud so that people could share the technology and share the development tools and share the code rather than reinventing the wheel every time. Tencent has a lot of content so we wanted to integrate it and share it on a platform so other business units could make use of this. The idea was to have the same format and labeling so that all units can share content, share data and technological infrastructure. Once we were able to do that Tencent could make more personalized recommendation and have a more complete view of clients.
I also help the company with its focus on strategic partners. Tencent has invested in more than 800 companies to enrich its ecosystems in three categories: product and service offerings, technical know how, and entry into key new markets in verticals such as banking and manufacturing, areas where we need to partner to understand how to best access those industries. Tencent Consult focuses on the top 50 of those 800 companies. We provide insight information sharing among CEOs, free-of-charge consulting and networking opportunities. The concept is very similar to the Cathay Connect and Consult service Ming Po and I are planning.
I am also involved with TencentX University. It gives an integrated learning experience to CEOs at companies that we hope at some time in future will grow as fast as Tencent. Some may be collaborating with Tencent in business while others may also become our strategic partners and receive investment from Tencent.
Q: How can Western companies adapt the principles and practices of market-oriented ecosystems like Tencent’s to their organizations?
AY: My advice to any company is that the leadership team needs to focus on and anticipate the future: to look three, five or even ten years ahead at demographics, social issues, economics and politics and then share their view about the key trends that will shift the future with the rest of the company. Many leadership teams focus too much on the past. If you can’t imagine the future it is very hard to do the rest. You need to identify what could be the major challenges and which could become major opportunities. The first step for Tencent in 2018 was to identify the trends, figure out how we are going to focus on these trends and identify growth opportunities through customers, regions, or businesses. We had to decide if we were going to grow based on current or new customers, to focus the majority of our efforts on reaching out to a different user base or increase spending per customer. For example, at Tencent, we were looking at how we could strengthen our focus on the consumer Internet and make better use of content sharing and personalized recommendations to increase spending per customer. We could also grow around regions. We decided to have a greater presence in international markets, especially in the online gaming business. Finally, we decided that we could grow around new business opportunities such as the industrial Internet.
After deciding the growth strategies to pursue, the third thing was to design the kind of organization we needed. We needed to be customer centric, to be much more innovative in making use of technology to develop new products and new business models and in our marketing. In such a fast changing and unpredictable market, you, as a company, can either disrupt or to be disrupted. The choice is yours. There is a need to get a strong commitment from the leadership as a whole before reinventing your organization, starting from a shared view on the future, the growth opportunities to pursue, and the organization needed to execute the growth strategies.
Q: How do you advise companies to bring in the right talent and move it through their ecosystem?
AY: If you want to embrace a new kind of organization the talent you will need will be quite different. Companies need to be very clear on what kind of talent they need. In today’s digital economy, the talent will need to be much more technologically savvy. Decisions — whether they concern new product creations, sales or marketing — will need to be more data driven rather than based on experience or intuition. Companies need to have leaders who are much more agile and flexible and willing to seek opportunities rather than being stuck in doing things the way they have always been done. Look at what Satya [Nadella, the CEO of Microsoft] has done: He has turned around a company culture that was based on ‘we know it all’ to one where people want to ‘learn it all’. Try to find people with this kind of attitude and promote them. There will always be a certain number of people who can’t change. Set them aside so they don’t become obstacles.
Q: How do you plan to use your expertise to aid Cathay’s Connect and Consult service?
AY: My plan is to strengthen and magnify the tremendous wealth of knowledge and resources that residedin our ecosystem partners, ranging from investors like established corporates, family offices and institutional investors to our portfolio companies and early startups around the world. Cathay’s Connect and Consult Platform aims to serve as a bridge to bring the right people to discuss the right topics at the right time. For example, it is very important for large corporates to share what they have learned with their counterparts in similar sectors in different parts of the world, regardless of whether they are from Europe, Asia, or North America. Senior leadership of companies can learn from each other. We will also organize in-depth benchmarking visits of some of the successful and most innovative companies in different parts of the world and invite their senior executives to talk about their business, organization, and culture. Then, after one day of in-depth case studies, we will organize a time for each corporate group to digest what they have learned and decide how they might apply it.
At the same time we want to build a bridge between the corporates and the young entrepreneurs so that they can have a better understanding and can learn from each other about products and technologies.
And, we plan to go deeper with a select group of portfolio companies and coach them on a more regular basis. So, in sum, Cathay Connect and Consult will add value for corporates and limited partners, for young entrepreneurs and for our portfolio companies.
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