ZWC Insight | Prof. Arthur Yeung - Ten Suggestions for Startup in Adversity
February 14, 2020

Prof. Arthur Yeung

Senior Management Advisor, Tencent Holdings

Dean, TencentX University

President, Y-Triangle CEO Alliance


With the outbreak of the novel coronavirus, many startups face the challenges of business continuity and survival, both of which have become urgent issues to be studied and resolved.

Prof. Arthur Yeung, the special partner of ZWC Partners, is deeply concerned with the outbreak’s impact to society and enterprises. As a global management expert in Chinese business affairs and a leading organizational researcher who combined academic research with enterprise practice, he has since undertaken the training and consultation of many large enterprises based in China.

Armed with decades of experience in senior management education, Prof. Arthur Yeung puts forward the following ten valuable suggestions for portfolios of ZWC Partners and other external startups to seek a viable way out the current predicament plaguing our society.


CEO Mindset – Cautious Positiveness

Ⅰ. Prepare for the worst case scenario ensure the survival of your enterprise. Carry out scenario simulation where this epidemic would last for an extended period of time, from 1 to even 6 months, and then think about the following questions: What impact would the epidemic have on the revenue, profit and cash flow of your company?

How severe would your supply chain and logisitical processes be affected? How would you make up for the loss of the business opportunities? How would you reduce fixed costs that impact to your bottom-line? How would adapt to develop new users or gain new sources of income? How would you ensure enough cash to sustain the most difficult of times?

Ⅱ. Prepare to seize the opportunity after the crisis. Will the demand or your products or services change or return to normal after the epidemic? Will there be new types of operational or product demands? How would you accelerate the transformation of your organization and welcome the new profit outcomes brought by digital technology and automation (such as automated production, remote decentralized operation, on-line and off-line products and channels, and cooperative communication methods)? Will there be a chance to make up for the lost orders or returned demand after the crisis? What are the necessary preparations after the crisis?

Ⅲ. Opportunities to obtain cheap assets during the crisis. Opportunities like businesses with cash flow problems (a wave of bankruptcies are expected), laid off talents, or investment opportunities (such as real estate). During SARS or the 2008 financial crisis, I saw many opportunities for enterprises or individuals to invest and reap the rewards of their investments after this economic cycle.


Organizational Management – Accelerating “Digital Decentralized” Management

Ⅳ. For the short-term effects of this epidemic, telecommuting would be necessary for a period of time. Enterprises should take this opportunity to speed up decentralized management and strengthen internal and external communication through collaborative office software and tools. In this way, enterprises can safeguard the health of employees and promote the development of business and work. Enterprises are best advised to disabuse themselves of the Chinese habitual notion/practice that only face-to-face meetings can resolve their business affairs.

Ⅴ. In the medium and long term, the decentralized and self-driven management mode is more in line with the trends of the knowledge economy, because the best work place is where outstanding workers thrive. Collaborative office tools and digital technologies can achieve information synchronization and work collaboration among teams in different work places, cities and even countries. Telecommuting and decentralized management are already entrenched practices among high-tech enterprises in Silicon Valley in the past 20 years.

Ⅵ. The effective operation of decentralized management requires several critical success factors: Self-driven employees, Egalitarian culture (the culture of trusting employees but still holding them accountable), highly transparent information systems, and flat and authorized small team management. In other words, it is more like Netflix’s efficient organizational management, that is “Context, not control; People, not process”.

Ⅶ. The role of the team leader is to set the direction (focus and delegate the team’s short and medium-term goals and tasks), review the team’s phased progress (through on-line or off-line data), and deal with individual subordinates’ doubts in work. Since the work tasks are distributed leaders need to learn to delegate and have more trust in their subordinates. Clear goals and progress reviews are very important to avoid the loss of direction and discipline in the workplace.


Culture and Morale – Culture of Overcoming Difficulties Together

Ⅷ. The enterprise culture can be identified clearly in times of difficulties. Employees will remember clearly how the enterprise treats them at this time. At their moment of need, enterprises need to be more supportive to employees. At the same time, through mutual communication and information sharing, enterprises can reduce uncertainty and overcome difficulties together with employees.

Ⅸ. leaders need to predict the “crisis” and “opportunities” in the first place. Leaders should calm themselves and be mindful that luck would not resolve their problems. On one hand, leaders should encourage employees to proactively face challenges, grasp opportunities, point out the direction for the team, and inspire everyone to work harder and overcome difficulties together. On the other hand, leaders should take this opportunity to improve internal management, reduce unnecessary waste, cut down unnecessary expenses, and simplify levels and business processes.

Ⅹ. Enterprises should actively participate in social welfare activities for disaster relief, fulfill civic duties, and establish positive social images as much as possible.