China’s 7 Lessons for Entrepreneurs ????????
China has become so big and influential that Apple lost 10% of their value in one day, dropping from the largest company to the fourth largest. Apple has lost an estimated 400 million dollars in the last few months in China. Couple that with the uncertainty around the tariffs, a lot of people don’t know how to approach China. So today Patrick is talking about what you can learn as an entrepreneur from China.
Let’s first look at some historical numbers. In 1978 China was number 10 on the list of countries with the highest GDP. Twenty years later they only moved up three spots on that list. But now, another twenty years later, they are number two on that list behind the US. In 1978 the US’s GDP was 15.5 times bigger than China’s. That is quite the David vs. Goliath match up. In 1998 the US was only 8.53 times bigger than China. And in 2018 they closed the gap to 1.42 times.
What changed, Ray Dahlia wrote an article that presented a lot of data to how China closed the gap in forty years. The percentage of people in China living off $1.90 a day was 88.3% of the population. Today that number is only 1.4%. This is the power of promoting capitalism and entrepreneurship within a historically communist country. Life expectancy skyrocketed from 66 years old in 1978 to 76 years old. Infant mortality rates have fallen to only eight out of every thousand. And literacy today has grown from 70% in 1978 to 96% of the population.
So how do China’s improvements relate to you? If you improve your processes and operations your employees make more money just like China’s poverty rate. If you retain good people longer you improve your overall production just like China’s life expectancy. If you train leaders and cultivate a culture of building new leaders, you have a low turnover rate just like China’s decrease in infant mortality.
China looked at the capitalist countries around the world leading the world economy and started putting into practice what they were doing right. They took a look at the potential the market had to offer and the massive population they had and said, “We have the numbers we should be number one in GDP.” Here are what you can learn from China’s monumental shift and stellar growth.
China’s 7 Lessons for Entrepreneurs
- Man Power
Man power matters. China has had the man power for decades, but they did not have the economic growth to show for it. Quality in man power is the difference maker. China’s decision to train their man power is the reason it only took forty years to catch up to the US. You need both to have man power as well as train your man power. You can’t achieve China-sized growth without both.
- Cast a Vision
No matter what industry you are in, you need to cast your vision to your team and to your market. China cast their vision to their nation on how they were going to train, study, and execute and then they took that vision and cast it to the world. Come up with your vision on where you want to be one day, then formulate a plan that will take you there. Cast it out to everyone who will hear you.
You need to be constantly training, educating, and developing your employees. If China did not educate their people, they had no chance of even catching Canada and Spain on the GDP list, let along the US. You need to have a literate population in order to have a prosperous one. How are you training and educating your people and how can you improve that education curriculum?
- Culture – Foster Growth
China went out and began to foster their ideas on growth and change to their people and their people responded by exploding the economy. A big chunk of parent’s income in China goes towards after-school programs and online courses. They are committed to this culture of growing from a very early age. You need to foster growth in your company and you will grow like China.
- Individual & Collective
In America, the individual becomes the hero. Just look at Mark Cuban, Sam Walton, Steve Jobs, or Elon Musk. In addition to their hero status, the tens of millions of their employees also win. China used to fear this idea and focused on the collective more than the individual. They took a chance and allowed for the individual to grow and the result can be seen every day on the world stage. By focusing on individuals, you foster leaders that will drive your company to new wins that you could never achieve if you only focused on collective achievements.
- Make a Statement This is after you cast a vision and start seeing what you can really do with your company and team. China did it with the 2008 Olympics. China leaned on their past wins and gains to show the world what they could do and what they have in store. You need to go out there and make a statement to everybody that you are here to stay, and you have big plans coming down the road.
- Leadership Development
You want to grow your company in whatever industry you’re in. It’s going to come down to leadership development. China started building leaders in different industries and their economy began to grow. Whatever you’re doing right now, you got to sit there and identify your next five leaders. That can be part of the organization that you can take them up if there are six out of ten, but they’re hungry. You can help them become an eight. Foster an environment where a seven can be an eight and a half or nine out of ten. Pour water on these guys like plants. Let them develop into leaders because they’re the ones that are going to take the company to the next level.
Next Steps: Register for the first ever Valuetainment Conference, The Vault 2019. May 1-4 in Dallas Texas. We hope to see you there and remember to tweet your favorite lesson from China to @patrickbetdavid. Don’t forget to read Ray Dalio’s article.
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