Corrie Dosh
Winning the Wanda Way
Tycoon Wang Jianlin shares the secrets of his success in his best-selling biography
By Corrie Dosh  ·  2016-06-20  ·   Source: | NO. 25 JUNE 23, 2016

One of Asia's richest people, Wang Jianlin, who made a fortune with his giant real estate firm, Dalian Wanda, is now on a course to change the world of entertainment and sports.

Having bought Hollywood film studio Legendary Entertainment, movie theater chain AMC, and a stake in Spanish soccer club Atletico Madrid, Wang is now using his magic touch again and making headlines by capitalizing on China's rapidly growing theme park market to take on Disney.

Making no apologies for his "iron discipline" in the workplace and viewing China as the world leader in culture and innovation, Wang frames the venture as a matter of national pride.

"Chinese culture led the world for 2,000 years," Wang said at the opening of a Wanda theme park in central China in late May. "But, for the last 300 years, we've lacked confidence in our own ability and have fawned over foreign culture."

So, how exactly did Wang build his reputed $40-billion fortune? From a childhood as a soldier's son in Sichuan, to a factory manager and real estate mogul, Wang's journey has been extraordinary and marked by a "Napoleonic ambition," according to The Economist.

So far, Wang has escaped the spotlight of celebrity, maintaining a low media profile. He rarely answers questions from the press and maintains he is too busy to grant interviews. Those hungry for the secret of his success, though, have been gifted with the publication in April of the English edition of The Wanda Way, a collection of public speeches and Q&As which offers an inside look at Wang's managerial philosophy and corporate values.

In its first year of publication, the Chinese edition of The Wanda Way, which debuted in January 2015, sold more than 610,000 copies and was reprinted 15 times, setting a sales record for biographies of Chinese entrepreneurs. And, though Wang warns would-be entrepreneurs, "You cannot simply copy models that have been proved by successful entrepreneurs. Please don't take what I talk about here today as teaching material," it is clear that he has a winning formula and is willing to share it.

"When you look at entrepreneurs like Wang Jianlin, you see that many of the opportunities he transformed into business were there, and many other people passed by without really working on them. An entrepreneur has a special ability to detect potential, but also the capacity to follow up closely, fix mistakes quickly, and stick to a good business plan model," writes Pedro Nueno, President of the China Europe International Business School, in a preface to The Wanda Way.

Secrets of success

Wang was born in 1954 in southwest China's Sichuan Province. His father was a member of the Red Army and took part in the Long March. When he was 15, Wang Jianlin entered the military and became a border guard in north China. He quickly rose through the ranks, becoming the youngest officer among hundreds of thousands of troops before retiring after 17 years of service. The military shaped his approach to business, and he has often likened business to battle strategies.

Enduring freezing-cold marches and physical hardship as a soldier taught Wang how to persevere.

"What kept me going was conviction," Wang recalls in his book. "When I started out, my mother told me, 'You must become an exemplary fighter. Your father also served in the army, and you should strive to surpass him.' … Perseverance lies at the core of the entrepreneurial spirit. First, no innovation, no dream can be achieved without perseverance."

As young Wang scrambled to secure funding and licenses for his fledgling real estate company, he was confronted with countless obstacles. At one point, his company was named as a defendant in 222 lawsuits as it struggled to grow nationally. But, by the end of 2014, Wanda was poised to become a world leader in commercial real estate.

"Don't jump to the conclusion that you are successful simply because you have an innovative idea or rack up some early success," Wang says. "Many of you dream of having your own business and achieving success. Every single one of you has the chance to succeed, and the first key is to understand how you can differentiate yourself from others and be innovative. What is even more important is to be persistent and never yield to failures."

Strong execution

With an unprecedented annual growth of more than 30 percent for eight consecutive years, Wanda prides itself on completing its development properties as promised and never having pushed back scheduled opening dates. Wang says the company's slogan for its commercial clients is to "allow businesses to make money," and the punctual start of operations is a crucial aspect of that commitment. The group also consistently maintains costs below estimates thanks to a culture of discipline.

"At Wanda, I translate the principle into practice and act as a role model who leads by example for my employees. For example, nepotism is disallowed in the group as part of our anti-corruption campaign. I act in strict accordance with the rule and never have any relatives working with the group. … I don't want people to think of Wanda as a family business, where the boss has the final say in all matters and the decision-making process lacks transparency. If Wanda were such a company, it would struggle to become international," Wang says.

To achieve greatness, Wang instills a sense of "nothing is impossible" in his employees and implements a clear system of rewards and penalties. Executives who beat their sales targets are rewarded with financial bonuses and opportunities to mingle with company vice presidents.

Wang details three aspects of Wanda's management model in his book. First, as China's society is in transition, corruption has become a serious problem in the real estate and construction businesses. To prevent corruption, Wang says he has adopted a management system that features highly centralized authority at the headquarters level to downplay the personal authority of general managers on local projects.

Second, Wanda organizes its management vertically, taking over key departments in charge of cost, finance, quality and safety systems. Local companies "are not allowed to meddle in personnel, finance or material matters of the vertical system," according to Wang.

Third, due to the "weak" nature of the human character, Wanda relies on systems, not on loyalty.

"Wanda's corporate management is based on strict rules. Our rules are developed with two features: First, we don't have confidence in anyone. It is from this starting point that we develop our rules. Second, in designing the system, we try to cover as many situations as we can, so as to minimize the number of loopholes and thus the chance of employees making mistakes," Wang says.

Taking risks

"No matter whether you are in a traditional or an emerging industry, as long as you're capable of innovating the existing business model, you can reap super profits," Wang says.

Part of Wanda's winning formula is the ability to differentiate itself in the marketplace and to take risks where others won't, Wang says.

"An old Chinese saying goes, 'Seek wealth in danger,'" says Wang. "If everyone thinks something will be successful, never touch it! Success is when you drive a business to success when only a few people believe that the business is the right thing to do."

When Wanda began, one of the most risky and profitable sectors in China was commercial real estate. Now, the group has turned its attention to the rapidly growing culture and entertainment market.

"Entering the cultural industry was essential to Wanda's transformation and upgrading," Wang says. "In business, no matter the industry, the strategy, or the operations, the ultimate goal is to establish a core competitive advantage and to obtain greater profits."

The company has in recent years made huge investments into a variety of cultural businesses, including a KTV chain, children's entertainment, theme parks and movie studios.

"Wanda hits with combination punches: The greater the combination of factors, the larger the scale, the stronger the power," Wang says.

Giving back

Since Wanda Group was founded in 1988, the company has donated more than 3.7 billion yuan ($590 million) to charitable organizations, making it by far the largest corporate contributor in China. In 1994, Wanda pioneered the first corporate volunteer organization and now has 917 volunteer posts organizing more than 100,000 volunteers. Every company employee is encouraged to participate in volunteering activities and donate to charity.

"We realize that when the corporation donates to charity, if the culture of philanthropy has not been popularized in the corporation, then this matter just becomes a personal activity of the boss; staff members do not understand and support it, and the activity cannot be sustained. So I think what we are after here is allowing the concept of charity to become a common understanding among the vast majority of staff members and to become a kind of culture," he says.

Outstanding corporate volunteers are rewarded with recognition and promotions, and to encourage and inspire its workers, the company publishes a "Wanda story" annually of someone in need helped by the group.

The company also seeks to align itself with the goals of China's development and sees itself as an integral part of the government's strategic economic plans. Wanda made strides in environmental protection before such regulations were issued by the state. The company has launched eco-friendly housing developments in Dalian, northeast China's Liaoning Province, which achieve an energy-saving rate of 65 percent. Wanda is the national leader in "green building" construction and was the first property developer to conduct an environmental impact assessment on its own initiative.

Going global

Since 2004, Wang's protégés have had another subject to tackle: taking a successful company to the next level of world-class competition. In just three-and-a-half years, Wanda Group has invested $15 billion overseas, and its overseas businesses now contribute 15 percent of its overall revenue. The company has set an ambitious target of growing total assets to $200 billion by 2020, with annual revenues of $100 million.

"This fourth transformation is the deepest transformation," Wang says, "from a Chinese company to not only an international company but also a top one. We will try hard to make Wanda a spokesperson for Chinese companies going abroad."

Wang will continue to expand his ambitions and continues to reinvest all of his profits into growing his company. He still works long hours, tirelessly striving to achieve his goals. As he details his vision for Wanda, he could easily be speaking of his own personal life.

"We are not for personal consumption," he says. "My goal is to … use our resources to establish the largest individual charitable fund [in order] to contribute not just to our country, but to all humankind."

The author is a New York-based contributing writer to Beijing Review

Copyedited by Chris Surtees

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