Wharton@Work

August 2018 | Reading List

Fortune Makers: The Leaders Creating China’s Great Global Companies

In the latter 20th century, the cult of the so-called celebrity CEO took root in American business. From outspoken capitalists like General Electric’s Jack Welsh to tech geniuses like Microsoft’s Bill Gates, it spawned best-selling books and star turns on television’s CNBC. But halfway around the world in China, where a stunning blend of capitalism and state-dominated communism was brewing, the first generation of business leaders had no such role models. They had to invent the Chinese way of business essentially from scratch.

“It wasn’t easy,” Liu Chuanzhi, the billionaire founder of what eventually became the global computer giant Lenovo, told the authors of Fortune Makers: The Leaders Creating China’s Great Global Companies (PublicAffairs, 2017). “The lowest thing you could do in the early ‘80s, as a scientist, was go into business.” Liu and his associates had to learn the fundamentals of marketing and manufacturing products for China’s vast market on the fly, while also navigating the state bureaucracy. “We learned by trial and error, which was very interesting, but also very dangerous.”

Ultimately, Liu’s endeavor was successful beyond anyone’s imagination. Aided by a business culture built around top-down management and an emphasis on learning, Lenovo is today one of the world’s largest sellers of computers and smartphones, employing 60,000 people and doing business in 160 countries. And yet — in an era that canonizes business success — the story of how Liu built up Lenovo is barely known, nor are the tales of other industrialists who’ve made China the world’s fastest-growing economy.

Fortune Makers is an impressive attempt to correct that oversight — to not only gain personal insights from China’s new and growing class of billionaires but to establish that there is indeed a Chinese Way of business — with valuable lessons for executives here in the United States and elsewhere. The authors — Wharton management professors Peter Cappelli, Harbir Singh, and Michael Useem, together with Neng Liang, a management professor at the China Europe International Business School — gained impressive access, interviewing some 72 Chinese business executives, most of them company founders and pioneers in the emergence of Chinese capitalism.

From the stories of trailblazers like Liu and Wang Shi, founder of China’s largest residential development company Vanke, the authors break The China Way into seven defining principles, including a greater zest for learning than in many American companies, a “clan-like” top-down management culture, and a reliance on a “Big Boss” form of leadership even as Western companies increasingly move away from that model.

Another defining feature of modern Chinese capitalism dovetails with the theme of another recent book that shares the co-author Useem — Go Long — which emphasizes long-term strategy over chasing short-term cash. The Chinese long game, they write, places “a greater premium on growth, believing that profitability is an end product of growing a business rather than the primary goal.”

The authors of Fortune Makers show that while Chinese business success may have resulted from improvisation and a radically different political environment, the lessons they learned are far too valuable for executives here in America to ignore.