/ Published July 28, 2020
Pioneers, Hidden Champion, Changemakers, and Underdogs by Mark J. Greeven, George S. Yip, and Wei Wei. MIT Press, 2019, 205 pp.
Imitation remains the sincerest form of flattery, and successful businesses often seek inspiration by imitating the success of competitors. Pioneers, Hidden Champions, Changemakers, and Underdogs by Mark Greeven, George Yip, and Wei Wei delivers an exhaustive look at how several Chinese innovators seek domestic and global advancement, offering inspiration for those facing similar challenges. The authors assess each of four defined entrepreneurial types for success and present multiple case studies. After categorizing those types, they explore their common trends and document Chinese corporate strategies designed to broaden global market reach. Examining over 30 Chinese companies, many of which have yet to reach the global market, this work contributes a valuable piece to exploring and analyzing China’s economic ambitions.
In exploring China’s top innovators, the book details their practices and how they accomplished their current success and then evaluates their shared traits. The analysis begins from the fertile ground that the Chinese government offers entrepreneurs: a state education system focusing on science, technology, engineering, and mathematics (STEM); government support for research; protection of Chinese intellectual property rights; overall start-up numbers; and financing systems allowing broader access to venture capital. These advantages then link to the authors’ four corporate innovation categories. Some items, such as intellectual property protection, may seem counterintuitive to those familiar with Chinese international digital piracy practices and technology transfer. However, the presented cases suggest the same problems occurring on Chinese soil as many firms spend significant time and finances suing each other for copyright violation. While the text lacks substantial comparisons to non-Chinese firms, the overall thesis suggests that Chinese companies pursue several definable methods to succeed at expanding sales, conducting research and development, and penetrating the global market as leaders.
The first two sections evaluate the pioneers and hidden champions categories. Pioneer companies feature visionaries introducing new products to the Chinese markets. Highly specialized market leaders that have yet to transition from Chinese markets to global ones are termed hidden champions. Each category exhibits certain strengths, with pioneers showing self-reliance, lack of boundaries, digitized deliveries, and an entrepreneurial attitude. Major pioneer companies include Huawei, Lenovo, Alibaba, and Baidu. The authors cite Huawei becoming the world’s largest patent filer since 2013 despite a 2003 lawsuit by Cisco as an example of its entrepreneurial attitude. Similarly, Lenovo’s self-reliance appears through it gaining a personal computer advantage by acting for many years as a distributor for multinationals like Hewlett-Packard and IBM. On the other hand, hidden champion names are less familiar despite 10 to 20 years in the markets. Their strengths include rapid growth, strong research and development capabilities, continuous product innovation, leveraging hidden advantages, and being global innovators. The two strategy sets’ only difference is the hidden champion’s insulation through not yet competing against similar global companies. All other identified features are similar; they both reflect an entrepreneurial spirit though innovation, growth, and research.
The next two categories, underdogs and changemakers, round out the assessment. Underdogs are Chinese companies with revenues under $60M and fewer than 1,000 employees. These elite entrepreneurs fly under the market radar through early international exposure and niche, cutting-edge technology. Twelve underdogs are characterized, with demonstrated innovative technologies including perovskite solar modules, super-thin screens, and green nanotech thermal insulation. Changemakers are less than 10-year-old start-ups valued at over one billion dollars and driven by digitally disruptive innovation with significant venture capital support. These companies are expected to lead the next generation into the market but may be supplanted by the pioneers or hidden champions over time. Seven companies are profiled as changemakers, including Mobike, a disruptive Chinese idea offering a dockless bike-sharing service similar to US companies like Bird but for nonmotorized bikes.
Characteristics common to all innovators are swarm innovation, tinkering for fast learning, customer-focused mindset, quick technology upgrades, centralized decision-making, and a network mindset that recognizes opportunities. None of these features appear unique to China among global digital disruptors, and each involves senior-level commitment to process incorporation. As Chinese innovators expanded globally, an unusual Chinese tendency was outsourcing research and development. Most US companies conduct research domestically and outsource labor internationally while Chinese companies, including giants like Huawei, place research centers in North America and Europe and leave the headquarters domestic.
The authors do an admirable job of distilling unique characteristics from the Chinese innovators, but many of the same transitions are currently ongoing throughout the US. The traits described as key to innovation read the same as modern business movements such as Lean, Agile, DevOps, and Scrum. These movements are all characterized by minimizing work in progress, learning through quick cycles of failure and adaptation, managing small work increments, decentralizing decision-making, and maintaining strict customer focus to improve value streams. Another missed opportunity for me was the lack of any direct comparison between Chinese companies and their US or European counterparts. In the text’s conclusion, the authors compare Chinese innovation to similar models used by the Asian Tigers and Silicon Valley but fail to make the direct corporation-to-corporation comparisons.
Overall, Pioneers, Hidden Champions, Changemakers, and Underdogs presents a vast amount of material through a relatively short work. The authors’ approach to the topic allows for an easily digestible and eminently understandable work. The over 30 business cases excellently introduce the reader to a variety of unfamiliar companies. While this text will likely remain a niche work through a unique presentation within international business topics, I feel the authors add significant value to innovation discussions across the global economy. I would recommend this book to anyone involved in international project management, supply chain security, or business development for larger corporations. At the same time, individuals pursuing their own start-up or business opportunities may want to take the time to learn from others before launching into their own fail fast, learn quick cycle.
Dr. Mark T. Peters II, USAF, Retired
"The views expressed are those of the author(s) and do not reflect the official policy or position of the US government or the Department of Defense."