Time for Chinese firms to adapt to new markets

Learn and adapt

The problem, then, is how to customize.

There is no magic bullet. It's by "learning, learning, learning", Lesser said. And "adapting, adapting, adapting".

Interestingly, more often than not, companies are forced to learn.

"The time to learn comes when the market is challenging, and the competition environment becomes more difficult," he said.

"If you look at the ones with the fastest growing rate, they are probably in the most intense environment where they are forced to learn," he said.

To better illustrate the point, Christoph Nettesheim, managing director of BCG Greater China, who joined the talk over the phone, cited some Chinese examples: "Chinese companies like Huawei and Lenovo have built their global competitive capability. They are the ones that are really putting themselves into areas that are intensely competitive."

On the other end, Nettesheim noted, some State-owned enterprises in sectors like energy and resources, which are highly regulated and shielded from competition, are the companies that have a harder time learning and adapting.

Lesser said that for companies that are really driven to learn, part of BCG's role is to catalyze, to accelerate their learning processes, and to help them figure out what could be done before a crisis and what should be done after it.

He said being collaborative with the clients is of the utmost importance for consultancy.

"The best effect is realized often when they feel they are self-discovering. The role of consulting is the catalyst... because at the end of the day, the organization has to embrace it and really believe in it and has to have the skill to execute it on an ongoing basis," he said.

Another potentially harmful problem for companies is the pressure from shareholders - growth and profitability dominate their thinking. But this mindset often leads them to disregard different priorities for different markets.

"Part of (BCG's) job is to help companies to make the best use of the opportunities, to understand the different parts of the business portfolio, to understand in some markets, growth may be the highest priority while profit is more important in other places; and in other places, building a position and new kind of offerings is most important," Lesser said.

"Part of the sign of sophistication is the ability to look at the portfolio and individual components, and decide different key measurements for different parts of the portfolio," he said.

As enterprises grow larger, mergers and acquisitions become a natural need for companies. But Lessers said although M&As are becoming increasingly frequent for Chinese companies, there are plenty of misunderstandings about them.

"I think right now, many companies think the key issue is who you buy. But our experience over the years is how you integrate them," he said.