How business school helped Asymchem CEO Hao Hong take a bold step

An executive education programme crystalised the founder’s ideas for a new direction

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Hao Hong is the founder, chairman and chief executive of Asymchem Laboratories group, a pharmaceuticals R&D and manufacturing company. Dr Hong was chosen as one of the first batch of China’s Thousand Talents Plan in May 2009 and serves as one of the distinguished experts on the Recruitment Program of Global Experts. He completed the Global Executive Program at Guanghua School of Management, Peking University.

The idea of applying the most sophisticated chemical technology to practical pharmaceuticals manufacturing first crystallised in my mind during my PhD in medicinal chemistry at the Chinese Academy of Medical Sciences in Beijing in the mid 1980s.

Driven by this idea, and after continuing my training in the US, I founded Asymchem Laboratories in North Carolina in 1995, then returned to China in 1998 to develop the company in the northern city of Tianjin. More recently, in the past decade, Asymchem has grown from a 14-member lab with registered capital of $250,000 to a global commercial pharmaceuticals contract manufacturing organisation (CMO), with more than 1,700 employees worldwide.

The pharmaceuticals business is at a turning point, as a new generation of technology revolutionises the industry. I want Asymchem and its leadership to be ahead of its rivals, fuelled by innovation.

I believe a good manager must first be part of an innovative elite, constantly improving himself or herself, and I think of myself as always a student. Before studying at Guanghua School of Management, I was full of questions. How should we expand production while at the forefront of technology? How best to communicate with customers? How could we increase sales?

There were many possible answers and it was impossible for me to try everything myself. Perhaps, I thought, I could find solutions in predecessors’ experiences. In 2013, two Asymchem executives finished their studies at Guanghua and infused me with many new ideas and methods. Impressed, I decided to follow them to the school.

It was a fruitful experience. The global executive programme not only introduced me to classmates from industrial and technical backgrounds, but also helped me understand the relationship between corporate development and management.

For a long time I had been concerned by one particular question: whether a growing company should follow a market-driven path, as do most traditional industries, designing products to reflect the demands of markets, users and customers and selling them to target markets. The programme introduced me to the case study of Lego, which helped me analyse my problem. When the toymaker’s market-driven approach failed to achieve brilliant performance, it adjusted its strategy, reshaped new customers’ consumption habits with new products and finally staged a comeback.

Inspired by Lego, I believe Asymchem should follow such a “technology-driven track”, which is more sustainable and competitive than a “product-driven track”. Only by building our core technical competencies can we develop original products and build an independent ecosystem. In this industry, sophisticated technology and a strong reputation often unexpectedly attract customers. As a Guanghua professor told me, it is necessary to encourage the development of new consumption habits.

I am lucky that Asymchem’s executives bring deep insight and rich experience to the company. If a business leader wants to further cultivate their executives’ capabilities, some authority and responsibility must be delegated to them and I have paid increasing attention to proper management.

My favourite course at Guanghua was Comparative Study on Anhui and Shanxi Merchants in the Ming and Qing Dynasties, taught by Prof Zhou Li-an. He explained how Shanxi merchants upheld core values of “prioritising ethics and balancing them with profit”.

The “shopkeeper system”, well-established by Shanxi merchants, was a “principal-agent system”, with the shopkeeper acting for the owner. However, in this example it was overlaid with Chinese characteristics such as reasonable and fair definitions of rights and obligations, dividends and responsibilities between the shop owner and the shopkeeper, with the moral authority of the guild fostering integrity and a sense of honour.

Management cannot be standardised. A management model may be effective for one person in a particular case, but be counterproductive in others. When a company grows to a certain stage, management regulation is not enough to maintain the relationship between business owners and managers. Management implies a culture and closer integration of a sense of morality and values. In other words, management implies the “moral principles” embedded in Shanxi merchants’ hearts — “prioritising ethics and balancing them with profit”.

In my opinion, “all for one and one for all” is the most simple management ethic. An honest altruist is bound to gradually unite with other altruists without self-interest, and together accomplish great things. This is how I see Asymchem, a company that we are building to last, where reputation and success are side products.

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