(Yicai) Aug.2 -- For China to sustain its swift growth, every Chinese company must identify and appoint an entrepreneurial chief executive officer, according to Shigeru Sekinada, the new regional chairman of US management consultancy Kearney.

Chinese firms have a lot of entrepreneurial talent, and this type of person is critical to innovation, Sekinada said in a recent interview with Yicai.

“If China wants to continue to grow rapidly, each Chinese company needs to find out the entrepreneur type of CEO,” he said. “It’s a very critical thing.”

Sekinada, who took up his new role in May after managing Kearney Japan since 2020, highlighted the pivotal role of talent, particularly entrepreneurial leaders, in driving innovation across the APAC region and beyond, underscoring the human element in the rapidly changing world of business and digital transformation.

“Chinese companies can create innovation not only for China, but for the entire APAC region,” he said, highlighting the country’s potential to lead regional transformation.

Sekinada sees substantial growth opportunities in the APAC region, particularly in China, and said there is a need for Chicago-based Kearney to allocate resources to both. “APAC has huge growth potential,” he said, noting that APAC markets are projected to account for more than half of the global economy in the future.

But Sekinada cautioned that sustaining high growth rates would require companies across the APAC region to cultivate entrepreneurial and visionary leaders.

Contrasting their leadership styles, Sekinada noted that the CEOs at typical Chinese companies are very quick in making decisions, in stark contrast to their Japanese counterparts who “enjoy very slow business momentum.”

Instead of bringing Japanese expertise to China, Sekinada believes “China already has the consultants with the knowledge and experience. So we already have enough capability at this time in China. That's important to say clearly to the client.”

Despite China's advantages, Sekinada emphasized the need for Chinese businesses to “upgrade their organizational capability.” He pointed out that they may struggle with attracting and keeping talent, pointing to the need to “update these organizational capabilities to cooperate with outside experts, to conduct group hiring from outside companies, to bring the innovation to adapt the market.”

Entrepreneurial thinking is also crucial to addressing the challenges in the supply and value chain reconfiguration faced by APAC companies. “To regenerate the supply chain and value chain for our clients across the country and across the region is a very important topic,” he noted.

The chain regeneration process is complex, involving logistical and management challenges when moving operations between countries, particularly to and from China. Companies must also consider environmental, social, and governance issues, while some are exploring investments in multiple markets like China and India.

"This kind of story is very important for us,” Sekinada said. “Some CEOs and CXOs want to regenerate the supply chain and value chain, with a heavy focus on moving from China to global operations, or reallocating resources, but it's very difficult.” CEOs need to think very seriously about this issue, he added.

‘Winner Takes All’

In the rapidly evolving landscape of global business, the interplay between artificial intelligence and human talent is becoming increasingly critical, Sekinada pointed out. “Almost all companies need to leverage AI," he said. "They need to use these kind of technologies for their business. That's a reality."

Sekinada also noted the global AI divide. “Companies like Microsoft and Tencent need to hire the best class of AI talent or invest in cutting-edge technology," he said, adding that the AI sector is trending towards a "winner takes all" scenario.

This has led to a concentration of AI capabilities in countries such as China, the United States, and Israel, while other nations, including Japan and Southeast Asian countries, lag behind. That brings consultants like Kearney two different types of opportunities: working with cutting-edge technology developers on innovative strategies and guiding traditional sectors toward AI integration, he said.

Sekinada shared a typical client request to illustrate the transformative potential of AI: “We would like to reduce the people in the supply chain from 2,000 to 1,000.” Those 1,000 employees are a very important resource, so the client wants to reallocate them to more creative work that creates new business, he said.

This exemplifies the potential of AI to not only streamline operations, but also to unlock human potential for more value-added activities, he pointed out.

‘Trusted Advisor’

The consultancy sector is growing rapidly, not only in China, Sekinada said, with the pivot toward digital transformation and information technology services, which are very big businesses.

An IT transformation project can be worth  up to 20 times more than  a traditional strategy project, Sekinada noted.

While many large consultancies have expanded their capabilities toward IT consulting, Kearney has taken a different approach. "We need to keep the trusted advisor position," Sekinada said.

Rather than building extensive in-house digital teams, the firm focuses on providing clients with the most suitable external experts for tailored solutions, he said. And maybe a client does not need a digital transformation, he said. “We’re neutral. That’s why we are able to propose the right things.

“Our goal is to become a truly trusted advisor for our clients, providing objective and neutral advice to help them make the right decisions,” he said.

He illustrated this by way of a case study of a supply chain transformation project in Japan, where Kearney outperformed an IT consulting firm due to its broader business and strategic expertise.

Under Sekinada's leadership, Kearney’s strategy in the digital transformation space is not about becoming a massive IT consultants. Instead, the firm leverages its expertise to guide clients through the intricacies of digitalization, proposing tailored solutions with the right experts.

The passion-driven approach extends beyond business strategy to addressing broader societal challenges such as aging and well-being. Sekinada highlighted Kearney's commitment to nurturing passion and purpose among its consultants by citing the example of a Kearney staffer in Japan who was so passionate about the space industry and became a member of Basic Policy Committee under cabinet office.

“That’s why I strive to encourage all APAC people to think about their passion to solve social problems,” Sekinada said. “Our business is a people business,” he noted. “People need to have purpose and passion.”

Editor: Futura Constaglione