STRATEGY
You may ask, ‘What causes such divergence in thinking?’ Imagine that you are sitting in Taiwan and in charge of innovation. All you see are the groundbreaking unicorns emerging from mainland China. Even if you are in the education sector, a sector arguably far more stable than media and retail, everyone will have heard of VIPKid, an online English tutoring company valued at $1.5 billion USD [and of which Cheung Kong Graduate School of Business MBA alumna, Cindy Mi, is the Founder and CEO]. VIPKid follows an Uber-like model and some have described it as a kind of Yelp for Chinese students seeking North American English teachers. During a lesson, the teacher and their student engage in a live video chat. Hired on six-month contracts, VIPKid pays its teachers $14-$22 USD (¥90–130 RMB) per hour, based on performance and consistency. It also provides its teachers with courses to help them better tutor students. It’s a business model that is booming during the global pandemic.
in their digital transformations. What we have discovered are enormous differences in how executives think. These differences are marked by the geographic location of a company’s headquarters. The implication is, if we want to challenge our assumption rigorously, we need to immerse ourselves – even virtually – in other companies outside our timezone. Take the service sector as an example. As shown in the graph below, cost reduction and efficiency improvement are the emphasis of digital transformation among most companies in Switzerland and Sweden. They use digital technologies to improve how things currently work. Their projects aim to eliminate redundancies and reduce waste. This is not the case among Taiwanese companies: 62% of the surveyed service companies in Taiwan were seeking to develop new business models. While the Taiwanese companies also mentioned using digital technologies to improve efficiency, they saw opening new markets as just as important.
COMPARISON OF DIGITAL TRANSFORMATION OBJECTIVES FOR SERVICE COMPANIES IN SWITZERLAND, SWEDEN AND TAIWAN
Switzerland Sweden Taiwan
70%
60%
50%
40%
30%
20%
10%
0%
Develop new business model
Improve efficiency
Open new markets
Reduce costs
Increase profits
Compiled by the authors
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AMBITION | Be in Brilliant Company
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