This article comes from public micro-channel number: Sino-foreign magazine management (ID: zwgl1991) , author: Xie Dandan, from the title figure: Figure worm < / p>

The company chooses to be an invisible champion, in fact, it is to choose to be a small fish in a large pond-the invisible champion is a strategic choice, but also a value choice.

“Have you considered why Germany’s economic volume is only one-fourth that of the United States, but its export volume ranks first in the world (1986) span>? Which companies have contributed the most to this? “

Herman Simon, then Dean of the European Marketing Institute, met theodore Levitt, a professor at Harvard Business School, in 1986. Later, Simon began to think seriously about this subject. Eventually, the famous German management scientist found the answer to the question: The real cornerstones of German economy and international trade are not the big and famous companies, but in their respective details Small and medium-sized businesses that work quietly in each market and become global industry leaders. Simon calls it the “Invisible Champion.”


“China will be the most powerful competitor of the German stealth champion.” “Father of the stealth champion” Herman Simon is visiting Such phrases are repeated in various regions of China. In the current China, because of the direct suppression of Huawei by the US government, public opinion is once again on the cusp of “returning to manufacturing” and “saving the country through industry.” Today we are going to discuss the theory of “hidden champion” with Herman Simon, which is of great significance.

1. Three characteristics of Chinese stealth champion compared to German stealth champion

As China plays an increasingly important role in the world economy, Simon began to focus more on China ’s invisible champions. In his latest edition of “Invisible Champions”, he mentioned 92 Chinese invisible champions. Champion company. Compared with the German stealth champion, the Chinese stealth champion presents three distinct characteristics.

One, grow faster.

Although the German invisible champion company is still growing, if it is based on China’s caliber, its growth rate is very slow. Although China’s hidden champions have obviously not developed fast compared to real estate companies, from a global perspective, they are developing rapidly. This has a lot to do with the popular financing methods in the Chinese business community. In China, whether it is a hidden champion company or a company in a large industry, it will begin to pursue the goal of going public in the early stages of corporate development. Once a company goes public, it will expand very quickly. And German companies prefer to keep the business in the hands of the family.

Second, globalization is generally low.

Relatively speaking, the globalization of Chinese hidden champion companies is generally low. Among the German hidden champion companies, many medium-sized companies with only hundreds of employees will also have three or fifty or even hundreds of overseas branches. And they already have a global brand reputation in their own subdivisions, and in this respect the Chinese hidden champions are still relatively weak.

In 2018, China ’s total economy accounted for nearly 16% of the global economy. According to Simon, if a Chinese company only positions itself to serve Chinese customers, it is equivalent to losing half of the global market. Therefore, the next stage of development of the Chinese invisible champion is necessarily globalization.

For globalization, Simon ’s suggestion is: “German companies must become Chinese companies, and Chinese companies must become German companies.” Everyone must look at their industry from the perspective of global competitors and position themselves in the industrial value chain. Role, design strategies to enter each country market.

III. The number of R & D personnel for the Chinese hidden champion is huge.

The number of Chinese stealth champion R & D personnel is huge. For example: Hikvision, the global leader in safety monitoring equipment, is said to have 9,000 R & D personnel. Relatively speaking, the number of R & D personnel in German hidden champion companies is much smaller. One possible reason is that European companies have significantly fewer employees for equivalent sales. This is also related to the cost of talents, and also to the money in the hands of the company. Once the company goes public, it will invest a lot of money. Because shareholders need to look at the report and the R & D investment of the company. Such heavy investment in research and development will definitely affect the output of stealth champion innovation for a long time. Therefore, the Chinese stealth champion will be the most powerful opponent of the German stealth champion in the future.

Another interesting difference about R & D. Although overall, invisible champion companies attach great importance to research and development, the R & D investment of Chinese invisible champion companies is a bit like pepper noodles. They will invest in several sub-sectors of an industry at the same time, and then judge which one has more potential. This may be more conducive to seizing industry opportunities. And German companies generally focus more on a small category, that is, the area where its advantages are. Because only by focusing on one point can a breakthrough be achieved to the greatest extent.

2. Three factors for the success of the invisible champion

For the current China, certain characteristics of the German stealth championship can give Chinese SMEs more inspiration.

First, the goal of the invisible champion is actually very ambitious.

Being an invisible champion is by no means no ambitious goal. On the contrary,In Simon’s view, there is no substitute for entrepreneurial ambitions, and success always starts with some ambitious goals-the invisible champion has been determined from the beginning to become a market leader, leading and setting market standards and rules. Invisible champions need to be prepared, not to rush into the world market.

Second, focus on segmentation and create world-class products.

Hidden champions are focused on their competitive advantages in the market. By deeply participating in the global value chain, they create unique products and value intellectual property protection. This is a very important lesson for Chinese entrepreneurs: so China has a lot of opportunities, so early entrepreneurship is relatively easy to succeed, but after success, entrepreneurs often think of seizing more opportunities rather than existing fields. Be refined and deep.

Simon once used Haier as an example. He believes that Haier’s advantage lies in the field of white goods, such as: the world’s largest sales of washing machines. But many years ago, it started to make mobile phones. Although Haier has a chance in the mobile phone field, this is not its core competitiveness. In the field of mobile phones, Apple, Huawei, and Xiaomi have core competitiveness. Entrepreneurs must focus on their areas of expertise rather than being tempted by opportunities in other areas. “First of all, someone else has done a better job than you; secondly, entering other fields will distract resources and financial resources.” Enterprises may eventually lose their original core competitiveness.

But focus also has disadvantages. After focusing, the market will become very small. If you focus only on the domestic market, the market will be even smaller. One of the solutions to this problem is globalization. Invisible champions can break through the market ceiling by combining their focus on products and expertise with global sales and marketing. Through globalization, local subsidiaries provide their own products to target markets. “Although our core competitiveness is narrow, globalization is wide. This is the combination of Yin and Yang.” Herman Simon said.

Third, continuous innovation,Rather than relying on plagiarism, innovation needs to start with spending money.

According to Simon’s survey, German stealth champion companies account for twice as much R & D expenditure as ordinary companies. The average company’s R & D expenditure is 3% of sales revenue, and the average German stealth champion can reach 6%. Among the German hidden champion companies, the average number of patents per 1,000 employees is 31, and in the Global Top 1000 (the world’s largest 1000 companies) < / span>, this number is only 6. In addition, Germany has the most patents per million people, followed by France and Italy. China ranks very low, but the good news is that the number of Chinese patents registered in Europe has spurted up in recent years, and patent innovation is the key to success.

In Simon ’s view, the innovation of the invisible champion includes both technological innovation and market-oriented innovation. At the same time, he found that in recent years, invisible champions have also begun to use digital to protect their market leader status. Maybe some companies are not good at making consumer products, but they are doing very well in industrial digitalization.

3. What is the real focus of the invisible champion?

As we all know, The most important factor for the success of the invisible champion is focus and focus on the segment. But many companies often fall into a misunderstanding when focusing, thinking that “focusing” is focusing on a specific product. The risk is that the company may be overthrown by a sudden disruptive technology and lose its leadership position.

How should companies interpret “focus” and “focus”?

Simon thinks: Companies should focus on a specific customer demand, because demand will not disappear. With human beings, there are desires and demands,You will need a product to solve some pain points. But if companies focus on specific technologies and products, they are at risk.

Focusing on specific needs is easy and difficult. From 1980-1990, Herman Simon was a member of the board of Kodak Germany. What surprised him was: In fact, Kodak realized the development trend of the digital age in 1983, and invented the world’s first digital camera. At that time Kodak defined itself as “an imaging company” and didn’t care what technology was used to achieve it. Because when people take a photo, the last thing they want is the photo, and they don’t care if the camera is film or digital.

But why did Kodak fail in the end? According to Simon, the fundamental reason for Kodak’s failure is that its internal thousands, even hundreds of thousands of employees, rely on traditional imaging technology to live. “These people are a very powerful force and suddenly told them that you are useless and you are not needed for the next era. In a while, countless people will stand up and resist. They will have several reasons to explain to you: ‘Our camera is better and the imaging quality is better. Digital cameras are just a complementary product’ … “At that time, Kodak also tried to rescue itself through diversification, for example: companies that bought some office printing equipment, but all failed Already.

But for stealth champions, strategic transformation may be easier. For example: the same is the conversion from film imaging to digital imaging, the global leader in the professional camera industry, Germany Alle (ARRI) , This “thrilling leap” was successfully achieved. The best Hollywood blockbusters 30 years ago were shot with Alle’s film camera; The Avengers 4 released in 2019 was shot with Alle’s digital camera Alexa.

Why can the invisible champion accomplish this transformation? “It may be because they are much smaller in the first place.” Simon said. “A team of 1,000 people will make a U-turn, which is easier than a team of 100,000.”

Second, the hidden champion is mainly a family business. All the money belongs to the boss himself. He puts all the eggs in a basket, so the sense of crisis is particularly strong, and he will always Worry: “If this boat overturns, I will lose my means of making a living.”

Again, Hidden champion companies are small in scale, and their relationship with customers is generally closer, and they can always feel the most authentic demands of customers. “Kodak is so high. In such a large company, the decision makers face their own employees, not the response of the front line of the market.”

In this regard, Lou Zhongping, chairman of Shuangtong Straw, recognized it, but at the same time, he also raised another concern: “In the current environment of pursuing short, fast, ‘head harvesting’, and capital-driven environment, what is the Chinese hidden champion Stick to the principle of focus and focus? “

Simon believes that any company implementing a focus strategy must be aware that the overall size of the focus industry determines the size of the company. A fish is no bigger than a pond where it grows. The company chooses to be an invisible champion, it is to choose to be a big fish in a small pond, because the company itself chooses a niche market.

There are only 500 Fortune 500 companies in the world, and they are all very large industries: automotive, finance, retail … As long as the company’s strategic choices remain unchanged, the focus industries remain unchanged, and growth is limited. It has little to do with whether the company has external financing or whether it is an IPO. There is a Chinese saying “Ning is better than chicken,” This is actually a strategic choice.

4. Reasons for the most failures of invisible champions

“The invisible champion company is not a genius company, not to say that it is immune to competition. It also has weaknesses.” Simon said, in fact, the first deadliest weakness is the heritage problem The second is the Iterative reform of the market and technology, which has caused the original market to disappear or shrink.

According to Simon’s statistics, among the German hidden champion companies, 69% are engaged in B2B manufacturing; 20% are C2C manufacturing; and 11% are in service and other fields. The 69% of stealth champion companies have almost survived in the digital age. However, there are relatively many changes in the B2C and service fields, and cross-border impacts faced by enterprises will be great.

Simon said: Generally speaking, from the time of writing the book “Hidden Champion” to tracking the hidden champion companies, about 10% of the hidden champion companies have disappeared.

One example is a company that makes traditional teaching instruments-projectors and slide projectors. In the digital age, it will not survive. On the surface, it is the cause of technological disruption, but the core issue is that no one inherits it. No one in his family has the courage and ability to lead the company through technological change.

Now in China, private SMEs have ushered in the second generation succession. If the issue of inheritance is not solved, a large number of Chinese hidden champions may also disappear because of “no successor”.

“Chinese and Foreign Management” believes that the invisible champion is a strategic choice and a value choice. As Simon said, companies choose to be invisible champions, they are actually choosing to be a small fish in a large pond. The latecomers who can carry forward the invisible champions should be those who have a resonance with this kind of corporate development values.

This article comes from WeChat public account: Chinese and foreign management magazine (ID: zwgl1991) , author: Xie Dandan