The School of Hard Knocks

Cheng Yu Tung Chairman, New World Development Co. Ltd.

At the age of 13, Cheng Yu Tung joined Chow Tai Fook as a junior salesman. He has built the company into an empire with outlets all over Hong Kong and the mainland. He is also chairman of New World Development with investments all over the world. He spoke to the Richard Ivey School of Business on leadership, risk taking and rising to the top.

On leadership

“A leader must be able to put a team together with the right people and structure the company in such a way that it will succeed. You must also be able to make decisions. You need to know the strengths of your people and be able to deploy them well. You also need to distinguish contributions from mistakes, be very fair and give recognition when it is due. A leader is like the general of an army. Without the right commanders, you will have a hard time winning the war. It is good for leaders to take a hands-on approach, but it is not possible for one person to do everything. You need to delegate, which is not an easy task. If you don’t learn to let go, you will never be able to do everything that needs to get done. But delegation and trust go hand in hand. You cannot empower someone to make decisions and then interfere with their decisions at the same time. If your staff is not sure about certain decisions, work with them and perhaps make the decision with them jointly.”

On working his way to the top

“This wasn’t really all that hard. I simply tried to learn as much as I could from the people around me. I was never afraid of asking questions. I was observant, analyzing the success and failures of others. A lot of this learning comes from real life experiences – there are lots of things you simply can’t pick up at school. I never tried to pretend I knew everything. What is the use? If you try to fake it others will eventually find you out.”

On his biggest satisfaction

“Although New World Development has business interests spanning the globe in real estate, hotels and infrastructure, my biggest satisfaction still comes from Chow Tai Fook. I have been involved with it since my teenage years, first in the mainland, then in Macau, then in Hong Kong. Seeing it grow has been a great experience. We now have 400 retail shops in the mainland and plan to expand to 1,000 over the next three years. I am no longer involved in the running of the business, but it is still satisfying to hear about how growth has taken place at the monthly meetings I have with management. We have climbed from the 60s to the 50s on the list of China’s Most Valuable Brands. China is a huge country and this is really a big achievement. Many people think that I have been very bold, but I don’t really think so. The decisions I have made as chairman of New World Development were always backed with research. I never acted boldly. I always acted logically.”

On tomorrow’s business leaders

“In my view the next generation of leaders is very privileged – at least, more privileged than we were. They are much better educated. At least they can get the education they want. We didn’t have the chance to study because we went through the War. We couldn’t have gone to school even if we wanted to. If today’s generation combines what they learn at school with their real life experiences, they can be very powerful, indeed!”

Advice for someone just starting out

“Do not take shortcuts or expect quick success. Always be patient. The world has become very fast-moving so it is important to stay ahead of your competitors. But if you keep taking short cuts as a way of getting ahead, you will have to be careful as you might end up failing – rather than succeeding – faster than your competitors. If you take the time to think things through, it might take you longer to make a decision, but you will make fewer mistakes. Even if you do fail, you should take the time to reflect on why things went wrong so that you won’t fall into the same trap in the future. When it comes to education, you should try to live out in real life what you learnt at school. There are many essential skills in life that are not in your regular curriculum.”

Let’s Just Go with It: The Perils of Decision Neglect

Bad decisions are often blamed on unexpected economic hiccups, flawed market research and other internal or external factors. In fact, the decision-making process itself is often the culprit.

Click on www.ivey.com.hk/iveybusinessjournal.html to see what J. Frank Yates, professor of marketing, business administration and psychology at the University of Michigan Business School has to say on decision making.

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