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In China, Every Day Is “Day 1”

Source | LinkedIn : By Joe Ngai

In April, in his annual letter to shareholders, Amazon founder and CEO Jeff Bezos urged his employees to embrace what he calls “Day 1” for as long as possible.

“Fight the idea that ‘Day 2’ has arrived…Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

For Bezos, “Day 2” is when companies start focusing on perfecting processes instead of judging by outcomes. He says Amazon fights “Day 2” thinking by “embracing external trends” (most recently, machine learning and AI) and by promoting “high-velocity decision-making.”

The key to that, he says, is a willingness by both leaders and employees to “disagree and commit.” Trying to get everyone to agree on a course of action is paralyzing; say your part and then go with the plan.

Mr. Bezos makes a powerful point, and it’s one that resonates deeply with me. In China, where I work with a lot of companies, from well-established conglomerates to internet startups, every day is like “Day 1.”

The velocity of change in this market is something my colleagues at McKinsey and I have witnessed in few other markets. The competition is so fierce, profit margins so thin, and the imperative to change and innovate so strong, that “Day 1” is the norm, rather than the exception.

Here are some observations about the forces that are driving the “Day 1” mindset in China today:

1. Good ideas get copied. Fast.

In China, you’ll find some of the toughest competition in the world. If you’ve got a good idea in China, 50 companies will suddenly appear, trying to do the same thing—and they’ll do it cheaper.

Many of our conversations with entrepreneurs in China reveal this: they are not here just to play in the market. They are here to shape the market. When you’re here to shape the market, that’s when you’re in “Day 1” mode.

2. Planning cycles have been compressed.

Business cycles are short in China. Everything changes in just 2-3 years. Companies know that whatever they’ve done that has led to their success over the past five years will not guarantee their success over the next five.

Read On….

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