Outside of Internet success stories such as Alibaba’s Jack Ma or Baidu’s Robin Li, China has few if any widely internationally known business leaders. Dalian Wanda Group Chairman Wang Jianlin is relatively unknown even though Forbes estimated last month that he had surpassed beverage tycoon Zong Qinghou to become the country’s richest man with a fortune worth $14 billion. I exchanged this week with Ming-Jer Chen, a management and China expert at the University of Virginia, about what’s behind Wang’s business success. Excerpts follow. From a cultural point of view, he has the right values and long-term vision to attract the right team for sustainable success. Wanda’s corporate culture has three key components: a comprehensive organizational structure that allows it to scale up globally; in-depth corporate cultural content; and very rich corporate cultural activities. Its corporate slogan is “International Wanda, Century Enterprise.” Its core value emphasizes “society value” over “enterprise value” or personal value. In other words, Mr. Wang rooted the company in Confucian values, which are lacking in Western society and business. In so doing, he is trying to balance the needs of different stakeholders in his business. Strategically, Mr. Wang transformed his business model from residential real estate development to commercial development in shopping malls and hotels, movie theaters and department stores, and from there to exporting Chinese culture and tourism globally, starting in 2012. This type of transformation requires deep strategic vision and considerable ambition as well as long-term strategic planning, of course.
Geographically, he expanded from the small city market of Dalian (25% market share) to Guangzhou Province and throughout China. After succeeding in China, he is now expanding Wanda into the U.S. and Europe. In September 2012, Mr. Wang acquired the American firm AMC for US$2.6 billion. In June 2013, he announced two investments in the UK totaling 1 billion pounds. Strategically, then, he first built home-town advantages and expanded only after being successful in the local market. (To go from) a 500,000 yuan loan as registered capital in 1992 to 300 billion yuan in assets in 2012 is remarkable by any standard. From an execution point of view, Mr. Wang leverages his military training and discipline to participate personally in all key projects. He attracts very good talent, trains personnel, and holds them accountable for project execution. Employee compensation is commensurate to other Fortune 500 companies globally, which of course is very generous given that China’s GDP per capita is about 20% of its US counterpart. Retirement benefits for employees is the total compensation of the last five years before retiring. This means that if an employee is earning $100,000 a year before retiring, he or she will receive a $500,000 retirement benefit. Therefore, Mr. Wang is able to combine culture, strategy, and execution into action plans because employees are motivated to work for the company for the benefit of society, the company, Mr. Wang, and themselves. It is a win-win strategy for all.