Over the past three decades, Chinese businesses have developed a distinct management approach shaped by the need to navigate a rapidly changing and turbulent environment. Often characterized as the rigid march of state capitalism, China’s business landscape is, in reality, a dynamic ecosystem where companies must contend with fast-paced growth, economic volatility, massive urbanization, rural market challenges, intense competition, and endemic corruption. While Chinese firms have not yet achieved the same level of radical innovation in management practices as Toyota and others did 50 years ago with concepts like total quality management and just-in-time systems, they excel in teaching the key imperatives of today’s business world: responsiveness, improvisation, flexibility, and speed.
One notable example is BYD, a company that has become one of the most successful Chinese enterprises of the 21st century. Founded in 1995 as a rechargeable battery manufacturer, BYD pivoted to become a global leader in electric vehicles (EVs) and renewable energy solutions. Its success is a testament to the entrepreneurial agility and bold ambition that typifies Chinese businesses. Under the leadership of CEO Wang Chuanfu, a former chemist, BYD has grown to become one of the world’s largest manufacturers of electric cars and buses, continuing its global expansion. In 2023, BYD surpassed Tesla in global electric vehicle sales, underscoring its competitive strength.
The leadership style in Chinese companies also reflects their unique approach to management. Culturally, executives view employees as part of a family, but they demand high loyalty and performance in return. Many of China’s most iconic business leaders—such as Haier’s Zhang Ruimin, ZTE’s Hou Weigui, and Wanxiang’s Lu Guanqiu—rose from modest beginnings, often starting on the factory floor and overcoming state or collectivist management structures to shape their companies. These leaders emphasize continuous growth, forming alliances, and expanding into new business areas. They are comfortable with rapid change and high growth targets.
This intense competition and constant change would likely have intrigued Charles Darwin, who studied how species adapt to their environments. In business terms, China’s transformation from 1991 to the present mirrors a Cambrian explosion of innovation, where many entrepreneurs fail, but those who endure become resilient, resourceful, and formidable competitors. This period of rapid evolution suggests that success in China’s business world may be increasingly defined by the ability to adapt quickly, navigate complexity, and harness emerging talent.
In many Chinese companies, executives tend to make decisions in a highly ad hoc, often micromanaging style. The most valued employees are those who can thrive in this chaotic environment. However, turnover is high, with many of these employees leaving as quickly as they join, resulting in turnover rates exceeding 20% in many private companies. Despite this, many of these firms invest little in talent retention, coaching, or training.
Chinese founder-CEOs often reject the notion of multiple reporting lines to mitigate risks and improve efficiency. Instead, they prioritize rapid growth, favoring organizational structures that support expansion. This often leads to a management style focused on improvisation, speed, and keeping costs low through economies of scale, driving both internal and external disruption.
In terms of goal-setting, Chinese companies take a markedly different approach from their Western counterparts. While many companies set growth targets based on past performance, Chinese companies often begin with a brainstorming session—sometimes held over a weekend—followed by an ambitious goal to double the business within three to five years and break into the Fortune 100, 500, or 1000, depending on the chairman’s aspirations. The planning department then works to figure out how to achieve these numbers.
Though some critics argue that such aggressive goal-setting reflects a lack of professionalism, my experience in China’s companies suggests that these “unrealistic” targets are often the very reason for the remarkable success of many Chinese entrepreneurs. Looking back over the past decade, I’ve been consistently amazed at how many seemingly impossible plans have actually been realized. One chairman shared his approach: “They told me they could increase by 10 to 15 percent. I told them they needed to do 100. In the end, they did 60. That’s still a lot more than 15. By aiming for 100, they moved beyond the mindset of merely targeting 15.”
While not every ambitious goal will succeed—some involve significant risk, large investments, and bold leaps—when these strategies do pay off, they often lead to extraordinary success stories. BYD’s rise is just one example of how Chinese companies are employing aggressive, adaptive management strategies to compete on the global stage and achieve remarkable results.
