news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

If you are "Yao Ming"

"If your goal is pure, your mind is focused, and you do the right thing, time will be the answer."

These are the words on the title page of "Strategy Determines Everything," the new book by Chen Dongsheng, Chairman and CEO of Taikang Insurance Group.

"Use the methods and approaches of the market economy to realize the great ideal of serving the people."

These are the words on the title page of Chen Dongsheng's book "The Age of Longevity". The book was published in August 2021 and was printed for the 20th time as of April this year.

"I founded China Guardian with a lofty ideal and belief, and I regard it as a social responsibility and mission."

This is the first sentence in the afterword of Chen Dongsheng's book "The Final Word: My Story with China Guardian".

The above three sentences mark the strategy and original intention of a person and the company he founded. Importantly, they have all been proven in practice.

In today's China, how can we develop modern service industries, especially pension finance, medical care and health care? How can we build world-class companies that are evergreen and do good? How can we innovate sustainably? After reading all three books, I benefited a lot.

At present, the operating pressure of many companies is increasing. When I communicated with them, I felt that "it's like wading through water, the water is getting deeper and deeper. Many industries have probably reached their chests, and only a few top companies are breathing normally, but it's not as easy as before."

After reading these three books by Chen Dongsheng, a new scene popped up in my mind:If you are Yao Ming, the water may reach the chin for others, but only the waist for you. You can still move forward steadily and well. Of course, the speed will not be as fast as before, but it is inevitable to go from high speed to high quality.

How to become a "Yao Ming-type" eye-catching company? First, the strategic position and positioning should be high; second, the strategic direction should be accurate and the skills should be superb, just like shooting, the hit rate should be high; finally, the chassis should be solid and the company should be upright, otherwise it may be blown down by any gust of wind.

"Yao Ming" is not something that can be achieved overnight. To become Yao Ming, one must have outstanding genes. This gene is what Chen Dongsheng calls pure ideals, original intentions, and goals.

Yao Ming's genes determined that he could grow tall, but whether he could become a great athlete was also inseparable from choosing the right sport for himself, long-term training and competition, and the opportunities and stage provided by the times. A "Yao Ming-type" company is also the result of long-termism and hard work.

It’s fun to share new knowledge. Here I will share what I thought while reading with you who are persevering and moving forward.

The significance of Chen Dongsheng and Taikang

August 22, 2024, is the 120th anniversary of the birth of the great leader Deng Xiaoping. This day is also Taikang’s anniversary.

As we all know, the most important thing Deng Xiaoping did in his later years was his inspection tour of the south in early 1992, where he delivered a series of important speeches, pushing China firmly onto the path of a socialist market economy.

In May 1992, the State Commission for Restructuring the Economic System promulgated the "Opinions on the Regulation of Limited Liability Companies" and the "Opinions on the Regulation of Joint-Stock Companies", which provided institutional guarantees for the establishment of joint-stock companies. A group of intellectuals from government agencies, universities, and research institutes heard the news and went into business, setting off a new round of Chinese entrepreneurship under the modern enterprise system. They were called the "92 generation".

Today, among the entrepreneurs of the "92 Generation", Chen Dongsheng is probably the most representative one.

Before going into business, he was deputy editor-in-chief of Management World, a deputy bureau-level cadre, and initiated the selection of “China’s 500 Largest Enterprises”.

After going into business, he founded China Guardian in 1993, a pioneer in China's auction industry and one of the earliest joint-stock companies. In 1996, he founded Taikang, which became one of the Fortune Global 500 in 2018. From selecting "China's Top 500" to becoming one of the "World's Top 500", it is a good story of the times.

On August 20, 1996, the People's Bank of China approved Taikang's insurance institution legal person license. On August 22, Chen Dongsheng received the license, and this day became the company's anniversary, which was purely coincidental with Deng Xiaoping's birthday.

Deng Xiaoping passed away on February 19, 1997. Six months later, Taikang celebrated its first anniversary. Since then, the company has celebrated its anniversary every year and never forgotten Deng Xiaoping. As Chen Dongsheng said, "Without Comrade Xiaoping, there would be no Taikang. Taikang Insurance Group is a product of reform and opening up."

In Chen Dongsheng's view, strategy is the primary issue that all organizations need to solve. Formulating a strategy is to think about predicting the future and taking corresponding actions to create the future. The essence of reform and opening up is the shift of national strategy to focus on economic construction. "With this fundamental change in strategic direction, there will be a series of subsequent reforms to promote the development and growth of different types of enterprises, especially private enterprises."

Taikang was born in the era, thrived in the market, and changed with the trend and continued to innovate. Compared with the scale of the Fortune 500, its more important value lies in its innovation.

Traditional life insurance is a two-dimensional structure, namely the liability side and the investment side. The law of large numbers, the life table and the balance sheet have constructed an asset-liability matching balance model with solvency adequacy ratio as the core. However, in recent years, like many industries, the life insurance industry has also fallen into trouble: the growth rate of underwriting business has slowed down and investment income has declined.

The reasons behind this include: on the liability side, homogeneous competition among products such as annuity insurance and critical illness insurance has intensified; on the investment side, faced with the uncertainty of "unprecedented changes in a century" and the challenge of declining investment returns, the era of making big money and quick money has ended, and the era of making slow money and long money has begun; in terms of the social environment, the aging of the population is accelerating, the era of longevity is approaching, and health and elderly care have become the biggest challenges.

If the two-dimensional structure of liabilities and investments cannot be fundamentally broken, the predicament of the life insurance industry will be difficult to break. Where is life insurance going? Taikang has proposed a new concept of life insurance, combining physical medical care and health care services with traditional life insurance, introducing the "service end" into life insurance, and creating a new life insurance with "payment + service + investment" three-end collaboration. This innovation extends traditional insurance to the field of physical services, and medical care and health care services that can cover the entire life cycle have become the new main business of the life insurance industry.

Strategic innovation has brought a new pattern. Chen Dongsheng said, "Pension and life insurance are a natural match, truly realizing the 'long slope, wide road and thick snow' in the business model - the long slope refers to the entire life cycle; the wide road refers to the service field being wide enough; the thick snow refers to customers of the middle class and above." Taikang has thus become a pathfinder and leader in the high-quality transformation of the entire industry.

Among the “92 generation” enterprises, why did Guardian and Taikang become industry benchmarks? Why did Taikang become one of the world’s top 500 companies? The answers are inseparable from strategy.

"Strategy Determines Everything" has the following summary:

1. Strategy determines everything. Strategic focus is the greatest efficiency. All areas should revolve around strategy, and all resources should be subject to strategy.

2. Strategy is the value and methodology of long-termism, which means having a pure goal, being focused, doing the right thing, and time is the answer;

3. Entrepreneurs must have a logical framework for overall strategic thinking and a methodology for execution, focusing on seven aspects: positioning, strategy, governance structure, execution, risk, innovation and values, and solving problems at three levels: "clarifying direction, selecting track, setting strategy", promoting strategic implementation, and long-term survival and development.

Chen Dongsheng is an entrepreneur with big-picture thinking and the training of an economist. "Strategy Determines Everything" condenses his summary and thinking based on more than 30 years of entrepreneurial and innovative practice. Its value is extraordinary.

One of the characteristics of the "Chen Strategy": Highly promote ideals and original intentions

The "strategic management" generally referred to in business schools and consulting firms mainly refers to specific corporate development strategies, including strategic outlook, establishing a target system, industry and competition analysis, assessment of own resources and capabilities, establishing competitive advantages, strategic implementation, etc. Chen Dongsheng's "Strategy Determines Everything" covers almost all the key points and keys to corporate survival and development.

Through reading, I feel that the "Chen Strategy" has four significant characteristics. First, it highly promotes ideals and original intentions.

Chen Dongsheng believes that correct positioning is the premise and foundation for formulating strategies. The core of positioning is "what business to do" and "what kind of people to do business with". "What business to do" means choosing a track. You must choose a large industry and a good industry, and the ceiling must be high enough to become a big enterprise.The bigger the company, the greater the social responsibility it can bear.

To build a big business and become a great entrepreneur, one must be driven by ideals. The essence of long-termism is a kind of idealism, which is to strive to solve major problems of human society and satisfy people's yearning for a better life with a sense of family and country and a spirit of selflessness and love.

We should advocate business idealism and abandon business opportunism; we should build brands and careers rather than just one-time deals; we should "stand at an altitude of 10,000 meters and observe the world from a distance of 100 years" in order to have foresight and persistence.

In "The Final Word", Chen Dongsheng once wrote, "In the early 1990s, auctions were a completely new thing in China. Approving the establishment of an auction company was a landmark policy experiment in government decision-making. I was considered an outstanding young cadre of the country to engage in auctions, so I received support from many leaders and cadres of the government departments in charge, and won everyone's recognition and trust. If a private boss from the south did this, I'm afraid it would be difficult to get the same trust." This reflects that he has a conscious sense of responsibility and a lofty standpoint since he started his business. At the opening ceremony of Taikang in 1996, he said in his speech:"Taikang Life comes from society and is determined to serve society wholeheartedly."

In fact, "private bosses from the south" can also do great things, such as Wang Chuanfu, who Chen Dongsheng mentioned many times. "He firmly believed that fossil energy would be ended very early, and he firmly followed the new energy path, which led to the BYD of today. Taikang also saw that aging would definitely happen in China 20 years ago, and firmly worked on the aging path for a long time, and then built a longevity community." The key point expressed by Chen Dongsheng is that the development of an enterprise must be in line with the direction of national, social and human development, in order to have a brilliant and promising future.

The second characteristic of "Chen's Strategy": High emphasis on focus

Focus means investing resources and energy into the most important things. Chen Dongsheng believes that the process of strategy from long-term to immediate, from abstract to concrete, is the process of focusing.

The strategic focus includes four aspects:

First of all, we must stick to our positioning, focus on our core business, and do our best in our own field;

Secondly, we must focus on customers and their needs.

Taikang's first wave of development seized the demand for life insurance after the rise of the middle class, and the second wave seized the trend of an aging population. From the initial vision of "integrating into the lives of the masses in the 21st century" to the current vision of "becoming a part of people's happy lives", Taikang's focus has never left the middle class and their families;

The third is to focus on professionalism and key capabilities.

Instead of moving from place to place after each shot, we are determined to build a professional and high-performing team, firmly build a golden signboard for investment, and focus on creating a closed-loop service system of health, longevity and wealth throughout the life cycle.

Finally, focus on the main contradictions and solve key problems.

Chen Dongsheng said that for an enterprise, three years determine its life or death, five years to lay the foundation, eight years to gain a firm foothold, ten years to establish a small brand, and twenty years to grow into a towering tree. Strategy is not static. At different stages, the most important, critical, and urgent issues faced by enterprises are different. Choosing and formulating strategies is to locate, sort out, and solve these problems in a targeted manner.

The third characteristic of the “Chen Strategy”: attaching great importance to governance structure and risks

The governance structure includes corporate governance and operational governance, which jointly support the formulation and implementation of strategies. The essence of risk management is to make enterprises healthier and better achieve business sustainability by identifying, preventing and managing risks.

Many years ago, Chen Dongsheng called for an era of order and rule of law after the era of land grabbing and barbaric growth. Companies in developed markets have formed mature corporate governance after a century of exploration, while Chinese companies are still in the process of exploration.

A good governance structure is the institutional, organizational and talent guarantee for the strategy.Judging from Taikang’s practice, at the corporate governance level, a stable shareholding structure of “core major shareholders taking the lead, and foreign shareholders, small and medium shareholders and employee shareholding developing together” has been formed; a first-class board of directors has been established, with the decision-making center located in the board of directors, which follows the principles of transparency and sunshine, and effectively constrains major shareholders and CEOs through collective decision-making; a “four-in-one” governance structure model has been established that integrates the four roles of corporate founder, core shareholder, operator and innovation promoter.

Chen Dongsheng realized that in the long run, the "four-in-one" will naturally move towards the separation of ownership and management rights, and some early Chinese companies are gradually moving from the "first generation of founders" to the "second generation of entrepreneurs."

As for Taikang, the team at the time of its founding was mainly composed of cadres from state agencies, outstanding backbones of domestic peers, and international talents from foreign insurance companies. As time went by, the founding team gradually retired, and a group of young people who joined Taikang in the early days of the business became core executives. They can be said to be the leaders of the "first and a half generations" of the company. When they were the "first generation" to control the company, they were influenced by the arduous entrepreneurial spirit. Later, they were trained on multiple stages with the development of the company, especially they all experienced many trainings of "going to the battlefield and fighting hard battles", and gradually became a new generation of managers.

Chen Dongsheng wrote with satisfaction: "Now, Taikang's people, from the group president to the heads of each subsidiary, are basically all born in the 1970s. Liu Tingjun (President) was born in 1972, Xue Zhenwu, President of Taikang Life Insurance, was born in 1977, Qiu Jianwei, CEO of Taikang Home, was born in 1976, and Chen Honghua, CEO of Taikang Baibo Dental, was born in 1978. Du Yanbin, co-CEO of Taikang Technology Operations, and Chen Yulun, deputy general manager of Taikang Asset Management, were even born in the 1980s." Taikang has allowed a large number of young people to grow up, and has quietly completed the generational change of core executives and the rejuvenation, knowledge, specialization and internationalization of management talents.

Chen Dongsheng has a very brilliant point about risk: strategy itself is the biggest risk management. As the saying goes, "If the strategy is right, the road will be wider and wider; if the strategy is wrong, everything will be lost." Therefore, the first principle of risk management is to firmly follow the path of specialization, followed by controlling leverage, maintaining cash flow, building a comprehensive risk management system, adhering to the bottom line of compliance, and entrepreneurs themselves must be self-disciplined, etc.

The fourth characteristic of the “Chen Strategy”: High reliance on professionalism and innovation

Chen Dongsheng believes that the Chinese economy is not only moving towards an era of order and the rule of law, but also towards an era of professionalism and an era of continuous innovation.

As early as when China Guardian Auctions was founded, he adhered to the principles of a world-class auction company, "only acting as a middleman, not buying or selling; being honest to buyers and sellers". China Guardian successfully introduced the expert system and established a consultant system. In various sectors such as calligraphy and painting, porcelain, and furniture, whether items are auctioned or not is decided by experts, not managers or bosses. In this way, China Guardian is "like a huge precision-operated machine, operating under program control".

In terms of innovation, Chen Dongsheng's innovation methodology is "from imitating first to independent innovation". Being the first to imitate international advanced practices in an industry is innovation. Independent innovation is often achieved through hard work and must go through a process of uninterrupted practice, trial and error, thinking, and verification.

The case that touched me the most in "Strategy Determines Everything" is the product innovation of "Happiness Appointment". It is essentially a combination of a long-term annuity product and a retirement community admission letter. It is not complicated, but it has brought disruptive changes to the entire industry.

Taikang entered the elderly care service industry in 2007. Initially, it wanted to learn from the Home Inn hotel chain and take over the unsatisfactory nursing homes run by the society and establish a national chain. In early 2008, it also opened a light-asset elderly care club in Wangjing, Beijing as a trial, but it soon failed. At that time, it did not expect that it would later combine elderly care and insurance products.

After the failure, they returned to the methodology of "innovation is the first to imitate" and started a new round of investigation and study. In a retirement community in the United States, they saw a restaurant, an activity center, a fitness center, and a group of elderly people in their 80s and 90s running, practicing yoga, and learning ballet.

Chen Dongsheng was shocked by this new lifestyle and the mental state of the elderly, and immediately decided to bring this model to China. In 2009, Taikang obtained the industry's first pilot qualification for investment in retirement communities approved by the former China Insurance Regulatory Commission. In 2010, Taikang Home Investment Co., Ltd. was officially established. In 2011, it won the bid for the first flagship community in China in Changping, Beijing. But at this time, it was still unclear how to implement it.

The book truly records this process.

"The project requires large capital investment, low investment returns and a long payback period. If we don't combine our main business with the retirement community, this business model is unsustainable. By 2012, Taikang Home Yanyuan had laid the foundation, but the insurance products connected to the retirement community had not yet been launched. ... One day, I heard that another company was about to launch a retirement community-related product. When I heard this, I got anxious. We were the ones who came up with insurance funds to invest in retirement communities, and we were the first to start it. In the end, their insurance products were the first to succeed. How could we get up early and catch up late? I didn't sleep all night.

“I will always remember the meeting the next day when I told the team that other people’s products had come out and had been reported to the CIRC, so what was wrong with us? Everyone said that they couldn’t get approval even if they reported it, because the retirement community was commercial real estate and there was no way to calculate the reserve. In the end, the CIRC also couldn’t approve it.

“Innovative inspiration is sparked in an instant! I don’t think this is easy. The life insurance company sells an insurance product, and the retirement community issues an admission confirmation letter. Isn’t it easy to solve the problem by breaking it down into parts?

“So innovation is a difficult process. Often, one path doesn’t work, and so does another. Then, after going through countless practices, countless failures, countless struggles, and countless sleepless nights, you will remain committed and persevere until the end, when you finally succeed, and then you will have a moment of sudden enlightenment.”

Before the birth of "Happiness Appointment", where customers see a doctor or where they live after purchasing insurance has nothing to do with the insurance company. "Happiness Appointment" provides customers and their parents with an optional "option" to live in Taikang retirement communities through retirement community admission letters based on the original annuity policy rights, expanding the scope and connotation of insurance products. The insurance company and customers have changed from a visible and intangible contractual relationship to a perceptible and experiential service relationship. With "Happiness Appointment" and Taikang Home as the core, a longevity closed loop of "payment + service" has been created, and a new life insurance business model has been born.

By the end of 2023, Taikang has completed the layout of 39 medical and nursing integrated elderly care communities in 34 cities across the country, 20 of which have been put into operation, and the five major medical centers across the country are also being established. The sales of "Happiness Appointment" policies have increased from 300 in 2012 to 46,000, and the number of customers has exceeded 200,000 from zero. The team of health and wealth planners has exceeded 15,000, which has become a solid foundation for Taikang to cross the traditional life insurance cycle.

Conclusion

I have read dozens of books on strategic management. When I was studying for a doctorate at the School of Management of Sun Yat-sen University in 2001, the textbook was Strategic Management: Concepts and Cases (10th edition), co-authored by two American scholars, Thomson and Stickland. The book was in 16-mo format and more than 1,000 pages thick. It is still on my bookshelf.

But to be honest, I can’t remember any of the cases in the book.

"Strategy is Everything" is a 32-page book with more than 260 pages. Many of the viewpoints are so powerful and many cases are so vivid that I understand once again:The times are the best classroom, and the business innovation practices of strategy-driven entrepreneurs are the best teaching plans.

In June 2024, Chen Dongsheng said at the 2024 graduation ceremony of the National School of Development and the Institute of South-South Cooperation and Development of Peking University that after graduation, it is like throwing a handful of sand into the vast ocean. "But whether this grain of sand can shine with golden light depends on whether you can pursue your ideals, beliefs and dreams in life. I have a saying: People who have ideals but do not work hard for them do not have ideals. They are just fantasies, fantasies and delusions."

He is a lucky man of the times, and he has also devoted his youth, sweat and wisdom to the times. All of this is condensed in his works.

Only with deep thinking and innovation can we truly transcend involution. If I were to use one sentence as my impression after reading this book, it would be this one.

No.5935 Original first article | Author Qin Shuo

Note: "Strategy Determines Everything" and "The Age of Longevity" are published by CITIC Publishing Group, and "The Final Decision: My Twenty Years with China Guardian" was published by Sanlian Bookstore in 2014 and reprinted by CITIC Publishing Group in 2020 with the title "The Final Decision: My Story with China Guardian".

Open whitelist duanyu_H｜Submission & Reader Group tougao99999｜Image Visual China