The Rider

When business seeks ways to improve its performance, or to find pathways to expand, it will often turn its attention to the successful outcomes of other enterprises. However, some profound lessons can sometimes be overlooked because they come from an unexpected quarter. For instance, seeing government policies as a source of inspiration may be dismissed as politics.

But, there may be an exception to that rule. This month, the eyes of the world will be focused on China as the Olympic Games occupy our thoughts and television screens. And China will be hotly contesting Olympic events in a bid to maintain its place in the top 10 on the sporting tree. But, underlying the highly visual sports event is an understanding, on China's part, that it has opened its doors to more than the sports fans.

A spotlight is also shining on the tangible examples of what 20 years of focused economic reform and the resultant steady, uninterrupted growth has delivered to what has become internationally known as 'China Inc'. And not only business, but other countries, would be well advised to heed some of China Inc's strategies.

According to City University of Hong Kong professor of finance and economics Stephen Cheung, for China to economically achieve what it has, and with no signs of its growth prospects abating, requires the steely determination that has now become synonymous with the country. Cheung says that resolve is underpinned by a very clear goal and the unwavering focus to invest in the right areas to achieve a specific outcome and to never lose the will to see it through. But, when people generally observe what China has achieved 'they all see it as a miracle,' he says.

However, 'miracles' are more a case of careful goal setting and planning, even if there is a small element of luck involved along the way. As the Olympics unfold, there is one Chinese competitor who has been singled out by both Chinese and outside media as something of a miracle, and he is being held up as an exemplar of how to reach a specific target and ignore the critics along the way.

At 18, Alex Hua Tian is the youngest Olympic equestrian qualifier in history. While that is enough to give him hero status in a country where equestrian events are largely unknown, and to challenge those nations that have a long and strong history in this sport, what needs to be analysed is how China has put a teenager on a horse in order to enter what is effectively a brand new market. A superficial look at the Tian story would suggest he has bolted out of nowhere and been embraced by China as a medal hope in a somewhat obscure sport.

On the contrary, while he is an undoubted talent in this field, the Chinese had set a clear goal to have an Olympic rider in time for Beijing and have been laying the groundwork since 1998. They haven't enjoyed any headline grabbing success on the international riding stage they've so far chosen to appear on, but when Tian aimed his sights at an Olympic berth, the infrastructure was in place for him to ride against the best opposition the world could produce.

The relevant question here is whether the opposition saw it coming. Cheung draws a parallel between this 'he sneaked up on us while we weren't looking' attitude and China's banking sector and securities markets. These were once dismissed as being haunted by the spectre of non-performing loans and with only a few companies prepared to venture outside China to tap the capital markets. But today, and with very little overt public fanfare, a very different story is emerging. Rather than lose focus over initial teething problems, these sectors are now noted for the evolutionary changes that are seeing them regroup and compete. 'It [the Chinese financial sector] has come a very long way and they have achieved a lot in a very short period of time. We have seen their ups and downs, both politically and economically, but they have been going along in the same focused direction and that's quite an achievement,' Cheung says.

So, what are the attributes that have put Tian in the Olympic ring under the Chinese flag and caused some seriously raised eyebrows? The majority of the Chinese population have never experienced the type of classic equestrian events that are associated with the Europeans, the Australians, New Zealanders and Americans. But, little known outside of China, the Chinese Equestrian Sports Association began working on a specific plan in 1998 to have its first competitor in time for the Beijing Olympics. Part of that plan has been to concentrate on raising the standard of equestrian events in China. This set the course that would ensure a sharp enough competitive edge for eventual world competition. It also focused some domestic attention on an alien sport and one noted for the large amounts of capital required to fund it. The association was effectively creating a 'customer' base, establishing a public face for its 'product' and at the same time, creating the credibility and positive public relations face that has eventually led to the capital injection from private individuals or investors needed to fund Tian's international ride. In fact, it was on one of the equestrian world's most entrenched and strongest stages that Tian first emerged - Europe.

His mother, Sarah Noble, is English and his father Huan Shan, is a Chinese businessman. Tian was born in London, but started riding at the age of four while the family was in Beijing and kept it up when his parents moved to Hong Kong when he was five.

He began his serious riding training at the famous Hong Kong Jockey Club, which is the venue for the Olympic equestrian events. By the age of 10 he was showing such promise that he was sent to England for a true test of his skills. He visited the best leading international event riders, Clayton and Lucinda Fredericks. Clayton Fredericks, who is Australian, was the 2005 World Cup Champion and his wife is ranked among the world's top 12 riders.

The Fredericks were impressed and agreed to stable his horse, an ex-Hong Kong racer named Chance Bid. In riding circles the horse has become known by the nickname 'Monkey King' (from the cult TV show Monkey) after the Chinese hero.

His parents moved to England when Tian was 11 for the sake of his education, and he continued to ride his way to success among the equestrian big guns in a country noted for fierce and long standing participation in the sport. Competing in events such as the Chatsworth and Gatcombe Horse Trials is the pinnacle for riders, and Tian had done both by the age of 17.

He has also tenaciously won placings in national and international two-star competitions. But he was still considered a novice by the established equestrian world and his chances of Olympic selection slim. That is, until his Chinese nationality allowed him to represent China, which he has done over the past few years at the international level. Seeing a Chinese rider in the ring was considered unusual and not necessarily a threat to the established competitors.

In April, Tian achieved the Olympic qualifying standard at a competition in Bialy Bor, Poland, and earned his place in the Chinese team. As host country, China was automatically given six slots in equestrian events, but Chinese riders still needed to satisfy the minimum standards. Even to reach the point where he could try out for Olympic qualifying has called for some special qualities, but even so, Tian was seen as having 'got lucky' or a one-off.

But David Mui, vice-president of Ascot Consulting Group, a strategic management and change consulting firm, says the attributes that saw Tian qualify would stand companies seeking to enter new fields in good stead. Having a clear goal, a muscular focus and the sheer will to succeed in a new field is paramount. Goals are imperative, but should be realistic. 'When you talk about a goal, it should be relatively long-term.' Mui says that many Asian companies tend to take a shorter view of how long a major new venture may take when compared to their American and European counterparts.

China Inc has effectively taken 20 years for its core economic evolution and the equestrian association has waited 10 years for just the chance to compete internationally. 'Asian firms tend to be more flexible. They change their minds quickly. But this can mean they don't put things down as a goal - they don't have a plan,' he says. Another key aspect of the path into new fields is the ability to reassess and revise outcomes along the way.

It is common practice for elite athletes to carefully assess each competitive performance in order to refocus or improve. China Inc has demonstrated this willingness to learn and adapt every step along its economic reform path. Mui says the common pitfalls of entering a new business area also include a company's failure to understand exactly why they want to conquer a new market or introduce a new product. 'The focus should be on learning as much as possible about the product. Is it good enough? How will customers take to it?' It requires a strong stomach and a healthy appetite for risk. 'Companies also have to realise that it (the area they have chosen to compete in) may not be something they can quickly make a fortune out of in six months.' There will be setbacks, but these will need to be addressed as they arise rather than allowing them to dilute the core goal.

Mui says a classic mistake that many businesses make is to enter a new market because the market or product is 'trendy.' Rather than cashing in, many businesses find themselves in a crowded market with fierce competition. 'You need to get the right market intelligence to understand the potential of the market and the customer requirements. Many companies don't and they set themselves up for failure.'

In the case of the 'Tian product', the level of publicity given to the young rider, both inside and outside China, has China's state-run broadcaster predicting a world-record audience for the three-day equestrian event when he competes.

The ability to fund a long-term goal is also paramount. A major obstacle for Tian was that Olympic rules stipulated that both the owner and rider of a horse must come from the same country. This required more than what his parents could afford in order to compete at this level. But the quiet and steady marketing of the Chinese Equestrian Association paid off when a Guangdong businessman saw the potential and stepped in to fund the quest. With sponsorship of 30 million yuan from Jiang Fengcai, Tian could make his mark. His 'brand expansion' has also seen his father set up an office in Beijing to run his son's affairs and field the international interest he has generated.

Robert Bunker, executive director of financial planning and advice firm Bentley Reid, says few companies achieve what China and its Olympic rider have because they become too comfortable with 'a stacked deck' and are loath to 'stick their necks out' and venture into new areas.

For Tian his first Olympic appearance for China isn't so much about whether he ends up with a medal, but about the fact that China has taken the world by surprise with this unforeseen entry. Whatever the result, Tian himself has said his focus will remain fixed on his next goal - entry into Oxford University in the UK. But we wouldn't be surprised to see not only Tian, but other Chinese equestrians at the next Olympics in 2012.

Business lessons from China Inc

• The sheer will to succeed in a new area is imperative. Set a clear target and stay on track. Such a venture requires an appetite for risk.
• Knowledge is power. Focus on learning as much as possible about the product or venture. Research best-practice approaches.
• Goal-setting is imperative, but should be realistic.
• Have a timeframe and prepare for it to be long range.
• Anticipate hurdles along the way and be prepared to adapt and plan around them.
• Ensure enough capital is available and be prepared to pay for the best talent.

Reference: August 2008, volume 78:07, p. 26-29