Collaboration in china paths to profit

Collaboration in China Paths to profit An Economist Intelligence Unit report Sponsored by Cisco Collaboration in China Paths to profit Preface Collaboration in China: Paths to profit is an Economist Intelligence Unit briefing paper, sponsored by the Cisco It is the second in a series of reports focused on management issues in China, including innovation, collaboration and personalisation The Economist Intelligence Unit conducted the analysis and wrote the report The findings and views expressed in the report not necessarily reflect the views of the sponsor The report is based on a survey of 183 senior executives in China, desk research, and in-depth interviews with senior executives from Chinese companies The author was Lina Tornquist and the editor was Katherine Dorr Abreu The Economist Intelligence Unit thanks all those who contributed their time and insight to this project June 2009 © Economist Intelligence Unit Limited 2009 Collaboration in China Paths to profit Introduction China is a jumble of networks The country has emerged as the world’s second largest manufacturer through an intricate system of interconnected enterprises, mostly small and medium sized, each specialised at managing a portion of the giant supply chain that snakes through China and churns out everything from plastic flowers to sophisticated computer chips In manufacturing, new forms of collaboration-based innovation have emerged Loncin, a Chongqingbased motorcycle maker, keeps costs low by managing its suppliers through what is essentially an open-source system The company gives only broad specifications for each component, so suppliers must collaborate to design parts But is China using this powerful tool effectively? To gauge how deeply the concept of collaboration has penetrated companies in China, the Economist Intelligence Unit, sponsored by Cisco, completed a survey Who took the survey? The online survey was fielded in Chinese and was answered by 183 executives in China A total of 26 regions are represented, although most respondents are located in Shanghai (22% of the total), Beijing (20%), Jiangsu (10%) and Guangdong (10%) The survey encompassed a variety of company ownership structures: 43% are from private Chinese concerns; 24% from wholly-owned foreign operations; 18% from state-owned enterprises (SOEs) or those owned by provincial or municipal governments; 10% from joint ventures between Chinese and foreign concerns; and 5% from other types of companies Companies range in size Thirty-one percent have annual revenues of $100 million or less, 27% between $100 million and $500 million, 9% between $500 million and $1 billion, and 33% more than $1 billion They represent a broad range of industries Manufacturing accounts for 37% of respondents, financial services for another 8%, The survey covers a broad range of company size (% respondents) $100m or less 31 $100m to $250m 14 $250m to $500m 13 $500m to $1bn $1bn to $5bn 12 $5bn or more 21 Source: Economist Intelligence Unit survey, January, 2009 and healthcare, pharmaceuticals and biotechnology for 6% Fortyfive percent are C-level executives and the others are executives and managers They have a broad range of roles: 32% are responsible for marketing and sales, 30% for strategy and business development, and 23% for general management For further information, see the appendix at the end of this report © Economist Intelligence Unit Limited 2009 Collaboration in China Paths to profit of 183 executives in that country in January 2009 We found that while executives in China say they value collaboration, the concept is not always applied And there are considerable discrepancies in how the Csuite and other executives view collaboration: the higher up in the chain of command, the more likely the respondent is to believe that collaboration is a common practice within the company To get a better understanding of collaboration in China, we compared the results of the 2009 survey with those of a similar, global survey, conducted in 2007, that culminated in a report, Collaboration: Transforming the way business works Many of the findings of the China survey aligned closely with those of the global survey, which canvassed 350 senior executives worldwide Significant differences are highlighted in the paper © Economist Intelligence Unit Limited 2009 Collaboration in China Paths to profit Where China stands today Two golden rules for successful collaboration? “Don’t create heroes and make sure everyone has the same goal.” Yin Weidong, chief executive officer, Sinovac Biotech The growing interconnectedness of companies worldwide suggests that future success is tied to collaborating across greater distances—physical and cultural—and across organisations In Collaboration: Transforming the way business works, the Economist Intelligence Unit concluded that “the future belongs to those who collaborate” China’s spectacular economic growth since the early 1990s points to a very bright future But survey data indicate that the country is lagging in the global cultural shift that views collaboration as a necessary business tool Although respondents say that collaboration is widespread, the survey also indicates that it is relatively limited across functions and geographies This points to the need for increased collaboration within China’s companies Executives in China spend only about a quarter of their time working alone, no more than executives elsewhere A significant number of respondents in China—67 %—say they collaborate regularly and across a broad range of issues Although less than the 77% who claimed the same degree of collaboration in the 2007 global survey, this response is in line with the overall positive outlook on collaboration of respondents in China Generally, they say that employees trust their colleagues and management; companies promote an open, collaborative culture; and organisations actively encourage collaboration, even more so than in companies surveyed globally While collaboration is viewed positively in China, the survey suggests that managers there still have a tendency to look upwards rather than sideways Only about 40% of the executives surveyed in China collaborate with other functions within their organisations on a daily basis, compared with 55% of those surveyed globally in 2007 And in China, only 13% of respondents have ongoing day-to-day collaboration with co-workers across locations within their own organisation, compared with 35% who so globally Within China, the degree of collaboration varies by company structure Fifty-two percent of Overall outlook on collaboration positive in China (% respondents) ”Strongly agree” and “Agree” Neutral “Strongly disagree” and “Disagree” Our company culture encourages sharing rather than secrecy 74 16 10 Senior management explains the mutual benefits of collaboration among colleagues 74 19 Employees at my company generally trust co-workers and management 68 20 40 60 22 10 Source: Economist Intelligence Unit survey, January, 100 2009 80 © Economist Intelligence Unit Limited 2009 Collaboration in China Paths to profit Daily collaboration less common in China than globally China Global Difference (% respondents who collaborate daily with the following constituencies) Other functions within my organisation 40 55 Other locations within my organisation 13 35 External suppliers 14 14 External customers 23 28 External business partners 10 15 Source: Economist Intelligence Unit survey, January 2009 respondents from joint ventures and subsidiaries of foreign firms say they spend 25% or more of their time collaborating with teams in the same function, compared with only 38% in private Chinese companies And 30% of respondents in joint ventures and wholly owned subsidiaries say they spend that amount of time working with teams in the same location, compared with 21% in private Chinese firms Despite China’s rapid economic expansion and the growing complexity of many Chinese companies, executives are less bullish about collaboration than their global peers, especially across departments and geographies When asked how they expect to spend their time three years from now, 21% of executives in China say they expect to work more independently, compared to 17% who said so globally They are generally less likely to foresee working more collaboratively outside of their function than their global peers were two years ago Michael A Witt and Gordon Redding, specialists in Asian business systems, point to entrenched In future, China’s executives less likely to collaborate outside their own functions than peers globally China Global Difference (Three years from now, which of the following you expect to spend more of your working time doing, compared to today?) Working independently 17 21 Working with teams in the same function 55 34 Working with teams in the different function 40 55 Working with teams in the different locations 29 62 Working with teams at other organisations 25 50 Working with teams in the same location 21 © Economist Intelligence Unit Limited 2009 28 Source: Economist Intelligence Unit survey, January 2009 Collaboration in China Paths to profit hierarchies within Chinese firms as barriers to collaboration In their 2008 book, The Future of Chinese Capitalism, they argue that hierarchies block collaboration between workers and management “If you were to go to any of the millions of small and medium enterprises in China…and asked who in the organisation is responsible for efficiency, learning and adaptiveness,” they write, “the average employee will point upwards and say ‘laoban’,” the boss Such lack of delegation has profound implications for industry, according to the authors With the majority of decision-making pushed up the chain of command, private companies often focus on Vaccine development in China: Collaboration helps Sinovac take the lead Two golden rules for successful collaboration? “Don’t create heroes and make sure everyone has the same goal,” says chief executive officer (CEO) Yin Weidong His company, Sinovac Biotech, is one of China’s leading producers of vaccines and has been at the front of vaccine research since China’s outbreaks of SARS (severe acute respiratory syndrome) in 2003 and avian flu in 2005 Dr Yin started his research on viruses in the 1980s working as a doctor treating infectious diseases in China’s northern Hebei province Each village had several people who were infected with Hepatitis A, a cause of acute liver disease In 1984, Dr Yin was among the first researchers in China to isolate the Hepatitis A virus, a first step to producing a vaccine At the time, immunology in China had “no people, no funds and no facilities”, he says That changed rapidly when the outbreak of SARS paralysed China Driven by a desire to help, researchers across the country set aside their projects to work on mapping the disease After a delay, China’s government rallied behind them, providing funding, longer grants and stronger private-public partnerships Sinovac, still a young company (it was founded in 2000), took the lead in developing a SARS vaccine By emphasising the greater goal—quickly providing a vaccine—Dr Yin trumped traditional hierarchies and took a leadership position that would normally have fallen to the heavy-hitters from the government’s Ministry of Health Dr Yin applies his golden rules—teamwork and focus on a common goal—to his research teams today He says that too often in China, even in science, individuals are made into heroes, and treated with reverence, which strengthens hierarchies, halts dialogue and stifles new ideas Sinovac has been lifted by China’s rising tide of knowledge about infectious diseases Work that took 20 years when he started in 1984—isolating a virus, sequencing the virus and developing a vaccine—now takes only three The company has successfully commercialised a number of vaccines including ones for influenza, Hepatitis A and Hepatitis B Collaboration has been important to Sinovac’s success The firm worked with an international network of institutions and companies researching SARS, for example It now benefits from the increasing sophistication of China’s biopharmaceutical industry There are at least two organisations/companies, started by returning Chinese expatriates, that can sequence proteins in China The company is also being helped through improved collaboration with the public sector Sinovac collaborates actively with several government institutions including China’s Centre for Disease Control and the Ministry of Health But even as China’s government dismantles many of the walls between public and private institutions, the surveys suggest that the country may still have a long way to go in building strong public-private partnerships Internationally, 74% of public sector workers collaborate with private sector workers; in China, only 37% say they so Such a lack of collaboration could mean lost opportunities for reaching common goals, including better vaccines © Economist Intelligence Unit Limited 2009 Collaboration in China Paths to profit industries familiar to the top executive They often diversify into industries that are easy to understand or in which the leaders have personal connections Meanwhile, China’s state sector is full of mid-level managers who act more like conduits of decisions than decision-makers in their own right The challenges affect external collaboration as well According to the China survey, privacy rules (37%), cultural and language barriers (30%) and the reluctance to share information with strangers (27%) are the largest external hindrances to collaboration A lack of “institutional trust” in China’s business system also holds back partnerships, according to Witt and Redding China’s legal infrastructure is not robust enough to ensure adherence to business agreements, they write, and the economy suffers from a severe shortage of information Professionals such as actuaries, accountants and surveyors are all still in short supply, often making it difficult to perform adequate due-diligence and to form business partnerships outside trusted personal ‘guanxi’ networks A networked system of personal relationships can work well in manufacturing, but as China’s companies move up the supply chain to produce high-value, complex goods, processes become more intricate and require more specialised business models The country is grooming a set of Chinese “national champions” to be the global multinationals of tomorrow Developing collaborative skills is an important step for these companies to compete successfully on the world stage © Economist Intelligence Unit Limited 2009 China is grooming a set of “national champions” to be the global multinationals of tomorrow Developing collaborative skills is an important step towards achieving that goal Collaboration in China Paths to profit The disparity between C-suite and other executives A significant obstacle to increased collaboration may be a tendency of C-suite executives to underestimate the barriers to teamwork and overestimate the extent to which management addresses such barriers In China, information hoarding is viewed as a barrier by just 17% of C-suite respondents, compared with 41% of respondents from lower tiers of management Meanwhile, unwillingness to relinquish responsibility to partners and co-workers is considered a major problem by 40% of non-C-suite executives, compared with only 10% of C-suite respondents There are also substantial differences between how C-suite respondents say they are addressing issues of collaboration and how less senior executives regard these efforts For example, 76% of C-suite respondents agree that collaborative technology is available to every employee; only 40% of non-C-suite executives so C-suite and non-C-suite executives not see eye-to-eye on collaboration in China C-suite Other executives Difference (Comparison of percentages of C-suite and non-C-suite repondents who “Strongly agree” with the following statements) My organisation has a formal, transparent and credible process for collaboration 44 12 People who collaborate well are rewarded with greater autonomy within the company 39 Senior management explains the mutual benefits of collaboration among colleagues 47 18 Employees at my company generally trust co-workers and management 46 18 Management publicises examples of successful collaboration 43 15 My organisation has metrics to track collaboration and its benefits 36 Senior management makes sure that collaboration technology is available to employees 41 15 We are interested in partnering with other organisations 44 24 Our company culture encourages sharing rather than secrecy 42 24 Through partnerships, we are able to accomplish tasks that we couldn’t alone 35 47 Source: Economist Intelligence Unit survey, January 2009 © Economist Intelligence Unit Limited 2009 Collaboration in China Paths to profit Stronger, formalised processes to support and assess collaborative efforts, including better planning and feedback mechanisms, are powerful tools to make sure barriers to collaboration are actually addressed In China, where the conflict-averse culture may prevent staff from presenting complaints to their superiors or allowing colleagues to lose face, such mechanisms may be particularly important to improve teamwork To address these types of problems, Lu Wenbing, chief executive officer of Little Sheep, one of China’s largest domestic restaurant franchises, strives to ensure that complaints and ideas for management improvements reach him He publicises his email address so all employees can communicate with him directly Additionally, the restaurant chain allows employees and franchisees to report problems through anonymous channels, an effort Little Sheep hopes will allow more honest feedback Our survey indicates that top management at China’s companies tends to isolate itself and could benefit from an engaged approach Just 38% of respondents in China report that they or their function collaborate regularly with general management, compared with 60% of respondents from the 2007 global survey © Economist Intelligence Unit Limited 2009 Stronger, formalised processes to support and assess collaborative efforts, including better planning and feedback mechanisms, are powerful tools to make sure barriers to collaboration are actually addressed Collaboration in China Paths to profit Making collaboration work If collaboration is important to growth, how can China’s executives make all parts of their organisation work together? One way is to make collaboration worthwhile, and to overcome obstacles to teamwork The survey shows that the biggest barriers to internal collaboration at companies in China include information hoarding (31%), unwillingness to relinquish responsibility to co-workers and partners (27%), lack of buy-in (27%), insufficient resources and excessive workload (25%), and privacy rules and network security (24%) Haier, a diversified white goods and electronics manufacturer located in Shandong Province with 2007 revenues of $16.2bn, has sought to tear down barriers It now connects performance reviews of managers, and by extension their bonuses, to the performance of other divisions within their organisation, by linking, for example, sales and manufacturing targets Ma Yansong, founder of the Beijing-based architecture firm MAD, suggests that space can also play a large role Open-plan offices have been popular in the West since the 1950s, but in China, members of management are often cosseted in closed-off meeting rooms and offices A better solution, he suggests, is creating work spaces that balance the need for privacy with the need for openness and insight, through the use of small, glass-enclosed conference rooms and spaces that create interaction between different teams Nokia, the Finnish mobile handset giant, realised the need for collaboration and re-built its Beijing headquarters in 2008 to house all its operational departments, including regional headquarters, R&D and design centres, and mobile phone production, as well as outside partners, on the same campus It is Biggest internal barriers to collaboration in China (% respondents) Information hoarding (viewing information as a source of power) 31 Unwillingness to relinquish responsibilities or oversight to co-workers or partners 27 Lack of buy-in to benefits of collaboration 27 Insufficient resources/excess workload 25 Privacy rules and network security 24 Reluctance to share information with strangers 20 10 Source: Economist Intelligence Unit survey, January 2009 © Economist Intelligence Unit Limited 2009 Collaboration in China Paths to profit Collaboration is a two-way street Before Nokia launched its new 5800 XpressMusic phone in China in the spring of 2009, the Finnish mobile phone giant disclosed the device’s specific features to local software developers with which it collaborates The 5800 would have a touch screen, a motion sensor and plenty of features geared towards young music lovers, including a memory chip that could hold up to 6,000 music tracks Armed with this information, Simlife, a game developer based in Fujian province, pitched X Dancery, a game that scores players on their ability to tap out a beat to the music from their own music library Nokia, China’s largest mobile phone maker, liked the idea, and included Simlife’s game on its new phone in the country Although Nokia develops all its mobile phones for a global audience, the company depends on local software companies, such as Simlife, to develop content geared to Chinese consumers Gamers in China, Nokia’s largest cell phone market, are often more interested in narrative-driven games and networking, rather than “ball, gun and car” games popular in the West, says Junhong Chen, Simlife’s managing director The pressure to attract consumers through “localised” software applications will only increase, says Dan Wong, Nokia’s China vice- president of software and services He believes that as mobile phones become more commoditised, phone buyers will be less concerned with typical hardware features such as talk-time and design Instead, Nokia will be wooing customers—from farmers interested in grain prices to hipsters looking for better music experiences—through better software Tapping localised knowledge and the bustling creativity of young, local start-ups such as Simlife is a boon for Nokia To make collaboration on software easier, in 2008 Nokia moved Forum Nokia, its division that deals with outside software developers, to its main Beijing headquarters Bringing its partners inside the company was part of Nokia’s overall strategy to increase collaborative efforts between its multiple divisions and partners such as Simlife But much collaboration between Simlife and Nokia also occurs digitally—through electronic forums and emails This allows Beijingbased Nokia to work day-to-day with firms that are located in distant provinces Mr Chen says that collaborating with companies such as Nokia allows his company to work on high-end innovative projects as well as gain access to technical support and Nokia’s massive marketing channel Occasionally, Nokia even covers expenses for Simlife employees to attend corporate forums and conferences where both parties can gain exposure for their collaboration and attract new partnerships betting that physical proximity and spaces specially designed for collaboration will lead to more fruitful relations with partners and across divisions External factors also contribute to collaboration Survey respondents point to partnerships (81%), increased access to collaboration technology (79%) and competition (78%) as the top drivers of collaboration at companies in China Clearly, both friends and rivals can bring about greater teamwork Factors that contribute to collaboration in China (% respondents) Creation of partnerships 81 Implementation of collaboration technology 79 Competition 78 Corporate strategy and policies 73 Attitude of senior management 71 Globalisation of the organisation 68 Source: Economist Intelligence Unit survey, January 2009 © Economist Intelligence Unit Limited 2009 11 Collaboration in China Paths to profit Conclusion Collaboration is often neither easy nor intuitive If the future belongs to those who collaborate, organisations must strive to overcome the obstacles that stand in its way 12 China’s economic star is ascendant, but could it shine even brighter if powered by greater collaboration? Government policies aim to help China’s companies move up the value chain and raise their profile in the international arena Increasing collaboration will be a critical tool for organisations to achieve these goals and help China maintain its momentum Though survey results indicate Chinese executives expect a more collaborative future, there are still cultural and organisational barriers to overcome To make collaboration a reality, C-suite support is essential For collaborations to achieve the best possible outcomes, they require plenty of time and planning Strong C-suite commitment can help guarantee the needed resources Support from the top is not sufficient, however A misalignment in how upper and middle management perceive teamwork within an organisation can create barriers to true collaboration And overcoming institutional silos requires that all teams in a company—from operations to marketing to R&D—work together Physical layout, incentives, collaboration technology and analytical tools can all be brought to bear to encourage teamwork In an increasingly globalised and networked business environment, organisations must reach outside their borders as well Finding the “right” external partners is a critical task By trying to cover too many areas in-house, or by choosing to work only with companies within established guanxi networks, China’s companies run the risk of losing out on opportunities To broaden the pool of potential partners and ensure that the best ones are chosen, a structured, formalised process for selecting collaborative partners is key Collaboration is not a zero-sum game To make sure all parties win, partners should identify opportunities where both benefit Advantages may extend beyond merely monetary gain: they can include added opportunities to work on innovative projects, training or positive PR Collaboration is often neither easy nor intuitive If the future belongs to those who collaborate, organisations must strive to overcome the obstacles that stand in their way © Economist Intelligence Unit Limited 2009 Collaboration in China Paths to profit Appendix Survey results Appendix: Survey results How often you or your team collaborate with the following constituencies? (% respondents) Daily Weekly Monthly Quarterly Yearly Rarely or never Other functions within my organisation 40 40 14 11 Other locations within my organisation 13 34 25 12 14 12 14 External suppliers 14 20 24 16 External customers 23 22 24 11 11 External business partners 10 23 24 17 11 14 How much of your working time you spend doing the following? (% respondents) 0% 50% Working independently 14 26 28 25 Working with teams in the same function 10 16 31 30 13 Working with teams in the same location 14 27 33 17 Working with teams in different functions 29 27 25 10 Working with teams in different locations 11 31 31 17 Working with teams at other organisations 13 34 24 17 Do you collaborate with peers in other functions of your organisation? Three years from now, which of the following you expect to spend more of your working time doing, compared to today? (% respondents) Select all that apply (% respondents) Regularly and across a broad range of issues 67 Working with teams in the same function 55 Irregularly, but across a broad range of issues 19 Working with teams in different functions 40 Only on selected projects or issues 13 Working with teams in different locations 29 I rarely or never collaborate with peers in other functions Working with teams at other organisations 25 Working independently 21 Working with teams in the same location 21 Economist Intelligence Unit 2009 13 Appendix Survey results Collaboration in China Paths to profit Do employees in your function regularly collaborate with employees in other functions? If so, which they collaborate with? Do you work for the private or public sector? Select all that apply (% respondents) Private sector (% respondents) 81 Government/public sector (state-owned enterprises) Finance 13 57 Government/public sector (national) Marketing and sales 56 Government/public sector (state/provincial/regional) Customer or constituent service Government/public sector (local/city) 52 Operations and production Government/public sector (non-profits and other) 48 General management 38 Strategy and business development 36 (Government/public sector respondents only) Which part of the government/public sector you work for? Procurement 34 Information and research (% respondents) 32 Human resources Economic development 31 31 IT Social services 31 21 Legal Education 21 R&D Environmental services 21 Risk management Transportation 16 Other Military Public safety Emergency services Which groups are most likely to be collaborative at your organisation? Select up to three (% respondents) Health care Legal system Other Senior management/executives 21 45 Process owners (people in charge of processes that cut across functions) 28 Marketing 27 Sales 26 Knowledge workers (people producing and analysing information) 26 (Government/public sector respondents only) With which sectors does your organisation collaborate? Select all that apply Note: If you collaborate within your own sector, please check that sector as well (% respondents) Programme or project workers 23 Private sector Finance 37 20 Government/public sector (state-owned enterprises) Business partners 57 16 Government/public sector (national) Service delivery personnel 14 40 Government/public sector (state/provincial/regional) HR 40 13 Government/public sector (local/city) Don’t know 40 Government/public sector (other) 14 14 Economist Intelligence Unit 2009 Collaboration in China Paths to profit What would you say are the most important objectives for your organisation? How has your organisation attempted to measure collaboration? Select up to three (% respondents) Select all that apply (% respondents) Increasing revenue growth 58 Appendix Survey results Map who communicates with whom, and to what extent, inside and outside the company 42 Increasing operational efficiency (eg, process improvements, faster speed to market) Measure the economic value of collaborative efforts 39 35 Measure the level of collaboration among different functions, locations or organisations Increasing productivity 35 39 Improving problem solving Measure the quality of collaborative efforts 29 38 Improving competitive differentiation (eg, better product design, more customer loyalty) Other measurement initiatives, please specify 27 None of the above Lowering costs 27 Extending our global reach to customers and/or partners 20 Communicating more efficiently across the organisation Has your organisation attempted to measure the influence of collaboration on any business objectives? 13 Improving service for customers or constituents (% respondents) 12 Improving knowledge sharing within the organisation Other Yes 54 No 46 Which of the objectives you chose in the previous question would benefit the most from collaboration, in your view? (% respondents) Increasing revenue growth 26 Increasing operational efficiency (eg, process improvements, faster speed to market) 16 Improving problem solving 14 Increasing productivity In which of the following areas has your organisation tried to measure the influence of collaboration? Select all that apply (% respondents) 13 Extending our global reach to customers and/or partners Improving competitive differentiation (eg, better product design, more customer loyalty) Communicating more efficiently across the organisation Lowering costs Improving service for customers or constituents Improving knowledge sharing within the organisation Other Increasing revenue growth 40 Increasing productivity 27 Increasing operational efficiency (eg, process improvements, faster speed to market) 26 Improving problem solving 23 Improving competitive differentiation (eg, better product design, more customer loyalty) 20 Improving service for customers or constituents 16 Lowering costs 14 Communicating more efficiently across the organisation 13 Extending our global reach to customers and/or partners 10 Improving knowledge sharing within the organisation Economist Intelligence Unit 2009 15 Appendix Survey results Collaboration in China Paths to profit Overall, how have the following factors influenced the amount of collaboration internally at your company or externally between your company and outside entities (customers, partners and other organisations)? (% respondents) Has decreased collaboration No effect on collaboration Has increased collaboration Don’t know/Not applicable Globalisation of the organisation 11 12 68 Decentralisation of the organisation 36 16 35 13 Competition 12 78 Cost savings/operational efficiency measures 12 20 58 10 Enhancement of the distribution/supply chain 16 66 15 Creation of partnerships 11 81 Implementation of collaboration technology 10 79 Corporate strategy and policies 16 73 Attitude of senior management 18 71 Please indicate your level of agreement with the following statements (% respondents) Strongly agree Strongly disagree Don’t know Employees at my company generally trust co-workers and management 30 36 21 Our company culture encourages sharing rather than secrecy 32 41 16 We are interested in partnering with other organisations 33 39 18 3 4 3 Through partnerships, we are able to accomplish tasks that we couldn’t alone 40 39 12 Senior management explains the mutual benefits of collaboration among colleagues 31 40 18 Senior management makes sure that collaboration technology is available to employees 27 29 34 Management publicises examples of successful collaboration 28 28 30 3 People who collaborate well are rewarded with greater autonomy within the company 22 31 28 7 My organisation has a formal, transparent and credible process for collaboration 27 29 29 My organisation has metrics to track collaboration and its benefits 20 16 25 28 13 Economist Intelligence Unit 2009 Collaboration in China Paths to profit What are the biggest barriers to collaboration within your organisation or between your organisation and others? Which of these tools you think would be or are most helpful in facilitating collaboration at your organisation? Select up to three barriers for each (% respondents) Select up to three (% respondents) Barriers to internal collaboration Barriers to external collaboration Appendix Survey results E-mail 77 Privacy rules and network security Instant messaging 24 37 Reluctance to share information with strangers 49 Intranets 22 20 27 Web conferencing 27 Online chat/instant messaging 20 Lack of buy-in to benefits of collaboration 14 19 Workflow systems Inability to find potential collaborators 13 22 Online project management systems Information hoarding (viewing information as a source of power) 31 10 Document management tools Unwillingness to accept solutions not developed within the group (“not invented here” attitude) Shared calendars Document collaboration 11 Unwillingness to relinquish responsibilities or oversight to co-workers or partners Discussion forums/ message boards 27 Wikis 14 Insufficient resources/excess workload Blogs 25 14 Collaborative design tools Lack of shared goals 19 16 Other Lack of top-level support 12 11 Legal issues 10 22 Cultural and language barriers 16 30 How broadly has your organisation addressed barriers to collaboration? (% respondents) Throughout organisation In some areas of the organisation Not at all Don’t know Communicated clear and compelling reasons to collaborate 49 36 Marshalled data and publicised success stories to convince sceptics 27 44 20 Engaged in team-building exercises 40 40 15 18 Publicised support for collaboration from senior management 40 37 Measured the amount or depth of collaboration 29 37 26 Measured the results from collaboration 27 41 25 Solicited collaboration champions 23 40 19 18 Set up training programmes to teach collaboration skills 37 33 23 Rewarded individuals and teams who have engaged in successful collaborations 32 Economist Intelligence Unit 2009 33 24 11 17 Appendix Survey results Collaboration in China Paths to profit Which collaboration tools you personally use for professional purposes? What is your primary industry? (% respondents) Select all that apply (% respondents) Manufacturing E-mail Financial services 37 96 Instant messaging Healthcare, pharmaceuticals and biotechnology 67 Intranets with shared online data on employees, clients, vendors and projects Professional services 38 Web conferencing, with live audio and video sent across a computer network Chemicals 36 Document management tools (allowing people to collect, organise, and manage documents in a central location) 33 Online chat/instant messaging (allowing people to exchange simple text messages instantly) 32 Document collaboration (allowing people to collaborate on documents in real time) 32 Workflow systems (allowing people to track progress of a work process) 27 Discussion forums/message boards (allowing people to post messages or questions on a specific topic) 18 Shared calendars (allowing people to post events, meetings, or time-sensitive tasks) 16 Online project management systems (allowing people to schedule and track activities required to complete a project) 13 Blogs (allowing people to publish an online chronological journal) 11 Collaborative tools for designing products Wikis (allowing multiple authors to post and edit articles, building up a body of knowledge) Transportation, travel and tourism Energy and natural resources Logistics and distribution Consumer goods Automotive Education Government/Public sector IT and technology Retailing Entertainment, media and publishing Construction and real estate Telecoms Agriculture and agribusiness Other How would you define your company’s structure? (% respondents) State-owned enterprise 15 Enterprise owned by provincial or municipal government Partially privatised company with significant state ownership Joint venture between Chinese foreign concerns 10 Wholly owned foreign operation 24 Private Chinese concern 43 Other 18 Economist Intelligence Unit 2009 Collaboration in China Paths to profit What are your main functional roles? Appendix Survey results During your career, have you worked in the following types of companies or held government positions? Please choose no more than three functions (% respondents) Select all that apply (% respondents) Marketing and sales 32 Government positions Strategy and business development Mostly state, provincial or municipal enterprises 30 General management 12 Both in government and state-owned enterprise positions 23 Information and research 17 In joint venture between Chinese foreign concerns 16 Customer service 21 In wholly owned foreign operations 15 Operations and production 30 In private Chinese concerns 13 Finance 42 11 IT 10 R&D What are your organisation’s global annual revenues in US dollars? 10 Risk management (% respondents) Human resources Legal Supply-chain management $100m or less 31 $100m to $250m 14 $250m to $500m 13 $500m to $1bn Procurement Other $1bn to $5bn 12 $5bn or more 21 What is your educational background in management? Select all that apply (% respondents) Undergraduate degree in business administration from Chinese university 39 Practical on-the-job training 21 Ongoing education provided by the company 20 Graduate degree in business administration from Chinese university 20 Graduate degree in business administration from foreign university 10 Undergraduate degree in business administration from foreign university Other Which of the following best describes your title? (% respondents) Board member CEO/President/Managing director CFO/Treasurer/Comptroller CIO/Technology director Other C-level executive 23 SVP/VP/Director Head of Business Unit 10 Head of Department 19 Manager 10 Other 10 Economist Intelligence Unit 2009 19 Appendix Survey results Collaboration in China Paths to profit In which region of the Chinese mainland are you personally located? (% respondents) Shanghai 22 Beijing 20 Guangdong 10 Jiangsu 10 Zhejiang Shandong Hubei Fujian Jilin Liaoning Sichuan Anhui Chongqing Hebei Hunan Tianjin Gansu Guangxi Guizhou Jiangxi Neimenggu (Inner Mongolia) Qinghai Shaanxi Shanxi Yunnan Xinjiang Uygur 20 Economist Intelligence Unit 2009 Whilst every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd nor the sponsors of this report can accept any responsibility or liability for reliance by any person on this white paper or any of the information, opinions or conclusions set out in the white paper LONDON 26 Red Lion Square London WC1R 4HQ United Kingdom Tel: (44.20) 7576 8000 Fax: (44.20) 7576 8476 E-mail: london@eiu.com NEW YORK 111 West 57th Street New York NY 10019 United States Tel: (1.212) 554 0600 Fax: (1.212) 586 1181/2 E-mail: newyork@eiu.com HONG KONG 6001, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: hongkong@eiu.com [...].. .Collaboration in China Paths to profit Making collaboration work If collaboration is important to growth, how can China s executives make all parts of their organisation work together? One way is to make collaboration worthwhile, and to overcome obstacles to teamwork The survey shows that the biggest barriers to internal collaboration at companies in China include information hoarding (31%), unwillingness... factors also contribute to collaboration Survey respondents point to partnerships (81%), increased access to collaboration technology (79%) and competition (78%) as the top drivers of collaboration at companies in China Clearly, both friends and rivals can bring about greater teamwork Factors that contribute to collaboration in China (% respondents) Creation of partnerships 81 Implementation of collaboration. .. operations to marketing to R&D—work together Physical layout, incentives, collaboration technology and analytical tools can all be brought to bear to encourage teamwork In an increasingly globalised and networked business environment, organisations must reach outside their borders as well Finding the “right” external partners is a critical task By trying to cover too many areas in- house, or by choosing to. .. policies aim to help China s companies move up the value chain and raise their profile in the international arena Increasing collaboration will be a critical tool for organisations to achieve these goals and help China maintain its momentum Though survey results indicate Chinese executives expect a more collaborative future, there are still cultural and organisational barriers to overcome To make collaboration. .. campus It is Biggest internal barriers to collaboration in China (% respondents) Information hoarding (viewing information as a source of power) 31 Unwillingness to relinquish responsibilities or oversight to co-workers or partners 27 Lack of buy -in to benefits of collaboration 27 Insufficient resources/excess workload 25 Privacy rules and network security 24 Reluctance to share information with strangers... Select up to three barriers for each (% respondents) Select up to three (% respondents) Barriers to internal collaboration Barriers to external collaboration Appendix Survey results E-mail 77 Privacy rules and network security Instant messaging 24 37 Reluctance to share information with strangers 49 Intranets 22 20 27 Web conferencing 27 Online chat/instant messaging 20 Lack of buy -in to benefits of collaboration. .. systems Inability to find potential collaborators 13 9 22 Online project management systems Information hoarding (viewing information as a source of power) 9 31 10 Document management tools 9 Unwillingness to accept solutions not developed within the group (“not invented here” attitude) Shared calendars 7 9 Document collaboration 11 6 Unwillingness to relinquish responsibilities or oversight to co-workers... process for collaboration 27 29 29 7 5 3 My organisation has metrics to track collaboration and its benefits 20 16 25 28 13 6 7 Economist Intelligence Unit 2009 Collaboration in China Paths to profit What are the biggest barriers to collaboration within your organisation or between your organisation and others? Which of these tools do you think would be or are most helpful in facilitating collaboration. .. extend beyond merely monetary gain: they can include added opportunities to work on innovative projects, training or positive PR Collaboration is often neither easy nor intuitive If the future belongs to those who collaborate, organisations must strive to overcome the obstacles that stand in their way © Economist Intelligence Unit Limited 2009 Collaboration in China Paths to profit Appendix Survey results... Extending our global reach to customers and/or partners 10 Improving knowledge sharing within the organisation 5 Economist Intelligence Unit 2009 0 15 Appendix Survey results Collaboration in China Paths to profit Overall, how have the following factors influenced the amount of collaboration internally at your company or externally between your company and outside entities (customers, partners and other ... reaching common goals, including better vaccines © Economist Intelligence Unit Limited 2009 Collaboration in China Paths to profit industries familiar to the top executive They often diversify into.. .Collaboration in China Paths to profit Preface Collaboration in China: Paths to profit is an Economist Intelligence Unit briefing paper, sponsored by the Cisco It is the second in a series... largest external hindrances to collaboration A lack of “institutional trust” in China s business system also holds back partnerships, according to Witt and Redding China s legal infrastructure is