Rebekah Lemm is General Manager, Asia Pacific, for Intralox, an innovative B2B company that consistently ranks within the top 10 companies in it’s industry for patent portfolios. Rebekah and I spoke about how leaders can create a culture to drive innovation, what measures companies can take to address food safety, and how companies can protect themselves from IP infringements in emerging markets. Rebekah is passionate about investing in and developing people and lives by the motto “be kind, be brave and seek truth”.
Q. You work in an industry that supplies to food and beverage manufacturers. What are, what are the challenges that you see in China around food safety and equipment supply?
Food safety in China is an interesting and very important topic right now. China has some of the most stringent laws in the world around food safety but the implementation of those laws and how people are held accountable is where the gap has been. I would say it’s also taken a while for the manufacturing and the processing part of food safety to come to the forefront. While food safety has been very important, there’s actually three areas of food safety.
One is the ingredients side – which is where you’re talking about hormones and antibiotics, things like that. Then there’s the processing side, which is inside a manufacturing plant, and then there’s the cold storage supply chain – getting food products to market or to a location without contamination or other problems. What we’ve seen in China is that for food safety, they’ve worked sort of inwards from both ends of that, and it’s taken quite a while to get to the processing, the manufacturing part of the equation. Now what you’re seeing is that as they’ve improved on the front end and the back end, now this processing matters a great deal. Chinese consumers are much more aware of traceability and aware of where products are being manufactured, what kind of quality standards are being maintained in the manufacturing plants as well.
Food safety is such an important topic, but not much is known about it among key actors in China. As a supplier to food and beverage manufacturers, we’re finding that there’s a lot of education that needs to take place. Not just the academic side, but really the “how-to” in relation to food safety. That’s the gap we’ve been told exists – workers have not yet learned how to clean equipment [to prevent issues]. Things like, “How do I measure [controls]”, “How do I access the risk in the equipment being provided to me?”, “how do I know how safe my process is?”.
As an equipment supplier, you have to do much more than just provide the equipment. You have to work very closely with your customer to help educate them, and educate them throughout their whole process, so their management, their practitioners, everybody in their environment needs to learn what matters, why it matters and how to fix it.
We [Intralox] provide a sanitation essentials training which is a three-day, hands-on course, where we bring in about twenty to 20-25 people per time and they’re able to actually do this in a real world environment and go through both the theory and the practice. We’re finding that each time somebody comes through that process they end up saying, “okay, I want 10 other people from my company to come and learn this because it’s just such a gap”. It’s interesting and so important in China today for food safety.
Q. In a country like China, how do you protect that innovation when you’ve got this notorious “shanzai” copy-cat business practices?
The way I framed it before, I’ve said it’s basically a street fight! If you come to the table, you have to be prepared for the other guy to be very aggressive, to be serious about winning. In our business The base product is plastic belts and so that’s not hard [to copy]. A lot of people in China can mould plastic parts, but fortunately for us, our business model is not based off of moulding the cheapest plastic parts.
The way we address “copycatting” is really two pronged. The first side is proactive, about the strategy and the business model and how do you package things that aren’t able to be imitated around the product that you’re selling.
In our experience, we bring full solutions, expertise, services levels. We maintain the inventories and the capital working process that helps support the service levels that we provide and then we provide the strongest guarantees in the industry. All of that wraps around the product offer and makes it much harder to imitate. If there are manufacturers out there honestly who care more about purchase price than long-term cost of ownership, then they’re actually better off to buy someone else’s products. What we’re focused on is cost of ownership. You have to keep innovating the products as well, but it’s really about the whole strategy.
The second side of this is reactive and that is you have to protect your intellectual property. We legally challenge any competitor that infringes on our patents. We’ve had people misrepresent products, attempt to confuse the market – all types of things. It’s interesting because there are different theories on how to respond – whether it is worth it to pursue legally.
We believe so and we’ve actually won legal cases in the Chinese courts. Sometimes it’s hard to enforce those rulings. That can be a challenge. But we think that ultimately truth prevails and ultimately if you believe in the value of property and intellectual property then you have to hold people accountable. That’s what we do and we think over time if more and more companies do it, it does change the environment.
Q. What are some of the other common misconceptions that foreign companies may have about operating a business in China?
From my perspective there are a couple things that I’ve seen that I would say are mistakes, or even misconceptions that led to mistakes. The first one is assuming that strategies and structures that worked in the West will translate into China. That’s kind of an obvious one but [companies forget that] the scale’s different, the maturity of the market’s different, the experience of the customer’s different. You just have to listen so much more because things are changing so much faster here than they are in other markets.
We have a phrase in our business that we say, it sounds a little odd, but we say “content, content, content”, which basically means challenge assumptions, face facts, understand reality. Make sure you’ve understood the value proposition and when we haven’t done that we’ve failed every time. If we assumed we know the value to the customer then we fail and in China I would say it’s a bigger challenge than most places to get to truth on that.
So that’s probably number one. I think the second is underestimating competition. In a communist country you have this entrepreneurial fighting spirit, that I’ve never seen anywhere else in the world. So if it’s a good market that you’re in, you will have aggressive competition. You can just count on it and so you need to get prepared for it. Hoping to fly under the radar is not gonna work.
And then there was one more thing that is critical – sometimes foreign companies underestimate the importance of developing local talent. We think we can just send in experts. And while that may allow you to break into the China market, it won’t create a sustainable long-term business. You need to get talented local professionals, people who share your organisation’s core values, that are making decisions that are balancing the company’s philosophies, principles, but also the local environment and local nuances.
Q. What do you see or what do you think are the essential components that you need to create an “innovation first” culture?
There are two things you need. One is the right people – that’s number one – and then the second is a strong culture that focuses on continuous improvement. On the people side of that, when you say the word “innovation”, essentially what it means is ideas and one of the things that we have in our workforce is ideas that can only come from people.
So you have to have the right people. People who aren’t satisfied with status quo, who aren’t afraid to make mistakes, who will push the envelope. And then obviously the culture needs to incentivise and reward and create an environment where those kind of people will thrive and will be able to contribute. And of course, we protect our patents too.
We have a phrase that self-managed people are our greatest resource and it really goes to somebody who can think proactively, who’s able to manage their own time, their own work but also bring ideas. Ideas are an important part of that, but we don’t want just people. It’s truly people who are conscientious, who are thinking, who are contributing.
Q. If we look for and think about people who are graduating, either from university or, or high school or tech college, in terms of talent that you might be looking at from the perspective of a hiring executive. What do you see as must haves for those people entering the workforce today?
There are just a few key things and they may not be completely obvious. To me, number one is a learner. We need people coming in who are able to learn because things are changing so fast everywhere and the jobs that exist today, actually won’t exist tomorrow. They’ll be different jobs so the ability to learn is number one. Someone whose able to be objective be an objective thinker. Which may be part of being a learner but it’s a little bit different because that means you let go of your assumptions. A risk-taker, someone whose willing to put themselves out there and be accountable. They take responsibility and really live up to commitment. The other one that over the last few years has really has become quite important, and it’s probably an over-used word actually, is team player. For that what I mean is that they need to be able to really understand their own role, their own skills. They need to be introspective about their own skills and the skills and the abilities of others – appreciate those and work together with other people effectively. We see that nothing is done without a team anymore. The individual star performer is no longer as valuable to us as someone who can work together with others and really create synergy. Finally work ethic is just a basic requirement – people who work hard can get a lot done.
There’s something that I tell my kids actually and that I kind of have on my own wall that I think is really important – be kind, be brave and seek truth – and to me, with those three things, you almost can’t go wrong.