Learning from China – preparing for the Perfect Storm
WIL Group members X-PM held a conference for multinational executives in Shanghai on June 12, which highlighted the challenges ahead for Western corporates in traditional industry sectors.
China is leading the way in preparing for these challenges, as delegates heard from speaker Dr Michael Schmidt, Head of Innovation and Commercial Services for Covestro Asia Pacific.
The digital threat
Dr Schmidt highlighted how Covestro, a manufacturer of high-tech polymers, is managing the risks presented by new market entrants, digitalisation and the circular economy. He reminded the audience of the devastating effect digital disruptors have had on established industries: from telecommunications, retail and travel to music, mobility and financial services.
Today, he said, innovation is far more than research and development. Companies must now focus to an equal degree on digitalising their business model. That means embracing digital tools to perform daily tasks more efficiently and safely, whether these be in manufacturing, in processing or research and development.
It also means bringing customer experience into the digital age – reflecting the needs of digitally savvy customers and supporting their decision-making across digital touchpoints. Dr Schmidt’s examples included the creation of an online Customer Lounge, a digital product finder, a global e-ordering platform and enabling digital transparency of the supply and delivery process.
In terms of the business model, this must also be digitalised so that the organisational approach is future-proofed and continues to drive customer engagement. It is important to think about the full value chain of the business and how to drive sustainability and performance at every step.
Aligning with world needs
As part of this, businesses must align with the UN Sustainable Development Goals, by examining their supplier relationships, their use of carbon and by reducing their greenhouse gas emissions. They must also bear in mind the major drivers of change in the world today: the need to manage climate change, urbanisation and the growing population, and the importance of improving mobility for global citizens.
For Covestro, that has led to a focus on how its polymers can create more durable and economical wind power plants; and to replace fossil fuels with industrial waste CO2 in producing raw materials such as foam.
Global organisations must consider the same factors in their own business strategies in order to remain relevant to their customers and partners. And, with China now the powerhouse for innovation, they should seek to harness the creative thinking and solution development that is emerging from this part of the world.
More about Dr Schmidt