Lessons Learned from a Journey of Transformational Change in Mainland China

The journey of The Walt Disney Company in Mainland China offers valuable lessons for organizations seeking to expand into new markets. That’s the premise of a recent essay by David Yudis, Psy.D., MBA, President and Founder of Potential Selves Inc., a leadership development corporation that delivers business growth through the transformation of talent. David’s essay is one of dozens that appear in the book, The Secret Sauce for Leading Transformational Change, for which I am lead author.

According to David, understanding cultural differences, acting swiftly, and prioritizing people are key elements for success. By embracing collaboration, open communication, and adapting leadership styles, businesses can navigate the complexities of operating in foreign environments.

What follows is an overview of David’s essay, including challenges faced, leadership mindset, and cultural considerations experienced by The Walt Disney Company in China during their transformative journey. For a more in-depth exploration of the experiences and lessons learned, please see his full essay in The Secret Sauce.

Context

Prior to the global financial crisis of 2007–2008, numerous large North American brands entered Mainland China, hoping to replicate their successful strategies from other parts of the world. They soon discovered that their approaches were ineffective and failed to resonate with local consumers. Dreams of expansion turned into nightmares as investments led to business closures. Clearly, a deeper understanding of the Chinese marketplace was necessary for sustained success.

Disney's Strategic Move

Around this time, The Walt Disney Company decided to relocate its Chinese headquarters from Hong Kong to Shanghai. Their move reflected a shift in focus towards Mainland China as a key market. Disney aimed to unlock incremental growth while maintaining its existing consumer products business. This required a careful balance of adaptation and continuity.

Not wanting to follow the same ineffective path of other companies, the leadership team at Disney’s consumer products division headquarters decided to take a step back to consider options. At the time, the Chairman of consumer products was Andy Mooney. He was no stranger to entering a market and seeing it from a different lens. At first, he needed someone on the ground to lead the newly relocated, start-up-like, regional headquarters business and take it to the next level.

Leadership Mindset: Collaboration and Communication

To lead the new Shanghai headquarters, Disney appointed Guenther Hake as the senior vice president and general manager of consumer products for Greater China. Hake's open mindset and effective communication skills enabled him to bridge the gap between the global and local teams. His leadership style emphasized collaboration, transparency, and building trust, earning him the nickname "Mr. Transparency."

Culture as the Catalyst for Change

To establish a strong foundation for sustainable growth, Hake focused on building a learning culture within the organization. This included fostering trust, respect, and fun among the team members. Through open communication, Hake discovered the importance of adapting his leadership style to align with the Chinese way of doing things. This shift in approach proved crucial for achieving alignment in actions and driving positive change.

Trusting the Path and “Glocalization”

One of the key enablers of Disney's transformation in Mainland China was the trust placed in local talent and partnerships. The decision to manage a local entertainment property without controlling ownership showcased the organization's commitment to fostering innovation and local collaboration. The catchphrase of "Glocal"—global strategy with local application—became a guiding principle for the team, aligning with Hake's leadership philosophy.

Ultimately, while Hake’s team honored and designed their vision based on the global strategy received from Corporate Headquarters, they sought to execute it based on local norms and requirements.

Thus, achieving transformational change in Mainland China required a deep appreciation for local culture, a commitment to building strong partnerships, and an unwavering focus on people. Through these principles, Disney demonstrated that organizations can turn their dreams of expansion into realities and unlock the immense potential of the Chinese market.

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The Secret Sauce for Leading Transformational Change, from lead author Ian Ziskin and with contributions from dozens of senior business leaders, HR leaders, experts, coaches, and consultants, shares insight, vivid stories, lessons learned, and best practices for what it takes to lead, survive, and thrive in periods of transformational change. Available in hardcover, paperback, ebook, and audiobook formats, you can learn more at https://www.transformationalchangebook.com.