The Secrets Of The Hidden Champions - CommonWealth ...

What can we learn from the Hidden Champions? What potential danger is threatening Taiwan in the global competition? Thiswebsiteusescookiesandothertechnologiestohelpusprovideyouwithbettercontentandcustomizedservices.Ifyouwanttocontinuetoenjoythiswebsite’scontent,pleaseagreetoouruseofcookies.Formoreinformationoncookiesandtheiruse,pleaseseeourlatestPrivacyPolicy. Accept Home CH/EN AcrosstheStrait Cross-Strait International Asia Americas Europe Africa Oceania Culture Culture History Travel Lifestyle Other Politics&Society Politics&Society Environment Education Investigative Industry Technology Manufacturing Finance Service Entrepreneurship Management TheRundown Insight Op-eds #TaiwanModel Digitalminister.TW ECCTLCIxSDGs g0v Survey TaiwanTop2000 CEOOpinion CityHappiness CSR Surveys DigitalFeatures(ChineseOnly) Video(ChineseOnly) MagazineArchive AboutUs Facebook Twitter CWDailyApp(ChineseOnly) 幻燈片上一頁 幻燈片下一頁 Home Industry Entrepreneurship 2017GurusForumInTaiwan TheSecretsOfTheHiddenChampions Source：CW WhatcanwelearnfromtheHiddenChampions?WhatpotentialdangeristhreateningTaiwanintheglobalcompetition?SeehowprofessorHermannSimon,electedasthemostinfluentialmanagementthinkerafterPeterDrucker,revealsthesecretsoftheHiddenChampionsin2017GurusForuminTaiwan. Views 2805 Share  Share  Tweet  Mail  CopyLink Linkcopiedtotheclipboard TheSecretsOfTheHiddenChampions ByHermannSimon webonly 2017-11-08 前往中文版 調整字體尺寸 Yourbrowserdoesnotsupporttheaudioelement. VideoeditedbySharonTseng. ThisarticleisanextractfromthespeechdeliveredbyProfessorHermannSimonin2017GurusForuminTaipei,Taiwan. (...) TheGlobalia,ortheglobalizedworldofthefuture,willbeanenormousdriverofgrowth.In2030,China,theUS,andtheEUwillformthefirstgloballeague.Inthesecondgloballeague,ASEANandJapanwillbethebiggesteconomies.SowhatisrequiredforsuccessinGlobalia?HereIidentifythreefactors:innovativeness,manufacturingbaseandcostcompetitiveness. SuccessIndicator1:Innovativeness Image:Prof.HermannSimon Forinnovativeness,yousee,Germanyisfarahead.Especially,ifyoudoafaircomparison,youwouldcompareitwiththeotherEuropeancountries.TwiceasmanyasFrance,fourtimesmorethanItalyortheUK.ButJapan,yousee,isalsoveryhighinregisteringEuropeanpatents.KoreaistwiceashighasTaiwan.Soyoucouldseehere,weaknessofTaiwanesecompanieswhenitcomestoprotectingyourintellectualpropertyandyourknow-howinthefuture. Youalsoseeherethat,youcannotexpectanythingfromRussia.China,eachpercapitaincomparisonforChina,isslow.Butoverthedecade,thedevelopmentofChinesepatentsinEuropehasgrowndramatically,asRussiahasbeenflatforthelast10years.Sothisisfor10years.Ialwayshavelong-termperspectives. Youalsoseehere,representedbySpain,thatSouthernEuropehereisveryweak.It’sthesameforGreeceandPortugal,sodon’texpectanythingfromSouthernEurope.AndinEurope,we’rehavinganincreasingdiversionbetweenthenorthandthesouth.TheeconomicpowerwilllieinGerman-speakingcountriesandinScandinavia,butnotinSouthernEurope. SuccessIndicator2:ManufacturingBase Here,Ishowyoutheshareofmanufacturingingrossdomesticproductinpercentage.Thehorizontalaxisshowshowmuchsharecomesfrommanufacturing,whiletheverticalaxissuggeststhetradebalance,whichmeanstheexportsminustheimports.  Image:Prof.HermannSimon Asyoumaysee,thereisan almostlinearcorrelationbetweenshareofmanufacturingandtradebalance. Sothemoreyoumanufacture,thelessyouhavetoimport,andthemoreyoucanexport.  Germanyisveryhigh.Taiwanisalsoveryhigh,almostashighasChina.Otherhighlydevelopedcountries,France,UK,USA,haveonlyhalfthepercentageofGermany.Theyhavelosttheirindustrialbase.AndIthinkitisextremelyimportanttodefendyourmanufacturingbase.Why?  Whenitcomestojobs,manufacturingandservicesareverydifferent.ThinkoftheUS.Theyhaveexcellentservicecompanies,Starbucks,McDonald's,Hilton,Marriott,younamethem.Theygrowandcreatejobs.Butwheredotheycreatejobs?InMumbai,inSaoPaulo,inBeijing,butnotinthewholemarket. Withmanufacturing,youcanstillcreatejobsinthewholemarket,andparticipateinthegrowthofemergingcountriesbyexporting.So,asfarasthecreationandallocationofjobsisconcerned,manufacturingandservicesareverydifferent.  Wepayalotofattentiontodefendandretainourmanufacturingbase.Nevergivingitup.SimilarintheUS,Trumpisnowtryingtorebuildit,butthatisverydifficult.Thatisnotonlyamatterofsettingupaplantbutyouneedawholesocialinfrastructure.Youneedqualifiedworkers.Youneedallocationsystems.Youneedsuppliers.Sorebuildingindustryismorethanjustinvestmentinisolatedplants.Itneedsrestructuringofthesociety.  Youhavebeensofarverysuccessfulinretaininghighmanufacturingbase.ButyouhavetofightitbecauseIseedangerthere.Youarestronginelectronicsofcourse,andmostlycommuneelectronics.Butyourpotentialforrealimprovement,forbreakthroughinnovationsseemstobeexhausted.Lotsoflow-costproductionsgotoChina,orhasalreadygonetoChina.Sodefendingyourmanufacturingbasewillbeveryimportant,challenging,anditrequiresthatmid-sizedandsmallercompaniesplayakeyrolethere.Itisnotconfinedtothebigguys(largeenterprises)inTaiwan.  SuccessIndicator3:CostCompetitiveness Thethirdfactoriscostcompetitiveness.HereIonlyhavecomparabledataforEurope,whichshowsyoutheunitlaborcostsandhowtheyhavedevelopedoverthepast15yearsinEurope. Image:Prof.HermannSimon HereyouseetheexplanationforthesuccessofGermany.Unitlaborcostsmeasureproductivitydividedbywages.Soifyourproductivitygoesup5%butyourwagescannotgoup3-4%,youwouldstillreduceunitlaborcosts.Soit'snotonlywagesbutit'swagesrelativetoproductivity.  GermanyhasbeenfarbelowItalyandFrance.Soevenifyoumakeinnovative,highqualityproducts,youhavetoremaincostcompetitive.InGermany,weareobsessedwithproductivity.BMWsays,forexample,"Wewanttoincreaseourproductivityeveryyearby5%."Weareobsessedbyproductivity.  Now,let'scome tothebusinesslevel.  Businesssuccessoftheseindividualcountriesinglobalcompetitiondoesnotprimarilydependonlargecorporationsbutonmid-sizedworldclassbusinessliketheHiddenChampions. WhatIsAHiddenChampion? Acompanywhichisoneofthetop3initsmarketornumberoneonitscontinent,hasarevenueoflessthan$5billiondollars,andisnotwellknowningeneralpublic.Mostly,theyarestrongmid-sizedcompanieswhocompeteonaglobalscale.   Image:Prof.HermannSimon HereIshowyouthenumberofHiddenChampionspermillioninhabitants.AndhereyouseethatGermanyiswayahead.ThenumberforTaiwanmaynotbecomplete.Butasanorderofmagnitude,itcanbealittlehigher,butnothingcomesclosetoGermany.ThisisthebackboneoftheGermanexportpower,thecompaniesyoudonotknow,unlessyouareaspecialistinyourfield.Sohavingthisstrongmid-sizedsector,ortheseHiddenChampions, isextremelyimportant. WhyAreTheHiddenChampionsSosuccessful?WhatCanWeLearnFromThem? FirstObservation:ExtremelyAmbitiousGoals HiddenChampionssetextremelyambitiousgoalsforthemselves,relatedtogrowthandmarketleadership.Thereisnosubstituteforentrepreneurialambition.Successalwaysbeginswithhighlyambitiousgoals.They striveforgrowthandmarketleadership.Tothem,marketleadershipmeansmorethanmarketshare.Thisisthefuelthatdrivesthemforward. SecondObservation:FocusCombinedWithDepth. Onlyfocusleadstoworldclass.TheHiddenChampionsarehighlyfocusedontheircompetenciesandtheirmarkets.Throughadeepvaluechaintheycreateuniqueproductsandprotecttheirknow-how. ThirdObservation:StrategiesForGlobalization TheHiddenChampionscombinefocusinproductandknow-howwithglobalsellingandmarketing.Globalizationisthegrowthboosterforthem.Theyservethetargetmarketsthroughtheirownsubsidiaries.Thatbringsthemclosetotheircustomers. FourthObservation:Innovation Lookatthechartthatis expressed inpercentageofrevenue. Image:Prof.HermannSimon Youwillnotbecomethemarketleaderbyimitating,butonlybyinnovating,andinnovationstartsfromspendingmoneyonResearch&Development.TheHiddenChampionsspendsaboutasmuchastwicetheaveragecompaniesonR&D.Eventwiceasmuchastheglobaltop1000spenders.  Moreimportant,ofcourse,istheoutcome.Ifwecomparethemwithlargecorporations,theHiddenChampionscoverpatent-intensivesectorsbecauseinsomesectorswedon'thavepatents.  Image:Prof.HermannSimon Behindthisyoumayseeverydifferentinnovationpolicies.Youcouldsay,largecorporationsthrowbigbudgetsatR&Dproblems,whileHiddenChampionsemploysmallteamsofdeepexpertstoR&D.  However,theHiddenChampionsaremassiveinnovators.TheeffectivenessoftheirR&Dactivitiesbeatsthatoflargecompaniesbyafactorof5.Theirinnovationsarebothmarket-andtechnology-driven.TheyareheavilyinvestingintoB2B-digitizationandstrivetobecomethebestintheirniche.Theyholdanddefendstrongcompetitiveadvantages. (...) LastObservation:TheInternalStrength–EmployeesAndLeaders. Fortheemployees, thereshouldbemoreworkthanheads. Ifthere'stoomanypeople,thatcouldbeaproductivity-killer.Nowyouhaveenoughemployees,highperformancecultures,highqualificationandlowturnoverratestowell-trainthemandretainthem,areequallyimportantfactors. Fortheleaders,theyshouldbeauthoritarianintheprinciples,butparticipative,flexibleinthedetails. TheleadersoftheHiddenChampionsoftencomeyoungintopower.Theyalsohavemorewomenintoppositions,andhaveveryhighcontinuity,withtheaverageof20yearsforleadersofHiddenChampions,3timeslongerthantheaveragecontinuityofleadersinlargecorporations. Isummarizedthesefactorsinthreecircles,easytomemorize.Thecoreisstrongleadershipwithambitiousgoals.Theinnerstrength:innovation,depthinwhatwedo,andhighperformanceemployees.Andtotheoutermarket:focusonanarrowmarket,rememberonlyfocusleadstoworldclass,closenesstocustomer,veryimportantforinnovation,clearcompetitiveadvantagesandallthisinaglobalorientation. Image:Prof.HermannSimon   HermannSimonisHonoraryChairmanofSimon-Kucher&Partners.Heisanexpertinstrategy,marketingandpricing.Hehasanextensiveglobalrangeofclients.IntheGermanlanguageareahewasvotedthemostinfluentialmanagementthinkerafterthelatePeterDrucker.  ProfessorSimonhaspublishedover35booksin26languages,includingtheworldwidebestsellersHiddenChampions(Boston1996,coverstoryofBusinessWeekin2004)andPowerPricing(NewYork1997),aswell asManageforProfit,NotforMarketShare(Boston2006). HisbookHiddenChampionsofthe21stCentury,SuccessStrategiesofUnknownWorldMarketLeaders(NewYork2009)investigatesthestrategiesoflittleknownmarketleaders.HisbookConfessionsofthePricingManwaspublishedbySpringer,NewYorkinOctober2015.PriceManagement,theUSversionofhisleadingGermantextbook,willbepublishedin2017. AdditionalReading ♦ 2017GurusForum(Chinese) ♦HiddenChampionsTranscendGloom ♦‘InvisibleChampion’ModelTaiwan’sWayOut ♦'MadeinTaiwan'ScoresOlympicGold ♦InnovationBreathesNewLife ♦CanTaiwanFindanAINiche? Views 2805 Share  Share  Tweet  Mail  CopyLink Linkcopiedtotheclipboard SubscribetoCWENewsletter(everyTuesday) Stayabreastofwhat'shappeninginTaiwanwithourweeklydigest. subscribe Keywords： HermannSimon SteadyGrowth Secret GuruForum HiddenChampions Taiwan Next TheBraveNewWorldofAI AdditionalReading TheRundown:Firstcommercialgeothermalplantgoesonline Extremeweathernowoccursregularly—what'stobedone? 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