China’s brain trust

A talent-based approach to corporate success

Jiren Liu - Chairman & CEO, Neusoft Corporation

Prof. Jiren Liu, the founder, chairman and CEO of China’s Neusoft Corporation, knows all about talent. Liu returned to China in 1988 after completing a research fellowship at the US National Bureau of Standards, inspired by his experience at the Maryland tech lab to explore new ways in which the world of academia could contribute to China’s as-yet nascent corporate sector. Three years later, in 1991, Liu founded Neusoft in a rundown Northeastern University classroom in Shenyang in the absence of more upscale headquarters.
The fledgling enterprise – which banked total revenue of about US$ 600 million in 2009 – is the largest and most successful IT solutions and services provider in China. Besides the software and services sector, the company is also engaged in medical equipment and services. It recently received the 2010 Frost and Sullivan New Product Innovation Award and can claim to its credit a long list of innovative technology- based medical products. The company has exported its products to more than 60 countries worldwide.

Talent is key

Although “innovation” is a word that came up frequently in our discussion with Liu, the true word behind Neusoft’s dizzying success is “talent”. Throughout the interview, Liu drops hints that the key to the future of China’s IT industry is the gold mine of young entrepreneurial talent both within China and abroad, and that the companies that are smart enough to tap into this wellspring of talent are the ones that will ultimately succeed. Liu recently sat down with Swiss Style to discuss the evolution of the Asian IT scene, the importance of combining software with manufacturing and his company’s talent-based strategy for development.

Innovation and the changing business landscape

In an awards ceremony speech in 2009, Liu claimed that China’s ascent to developed nation status would hinge on the country’s successful transition from a manufacturing-based economy to a knowledge-based one over the next 30 years. “The catchword of the day is ‘Made in China’,” Liu said. “The crucial step now is to replace that with ‘Innovation in China’ or ‘Services in China’.” When asked how he views the evolution of the global IT industry today, Liu expresses hope that the changing IT scene may be just the stimulus needed to spark China’s factory-to-think tank transformation. “I predict Asia will become the next IT centre of the world,” he says. “The IT industry today, particularly the research and development sector, is quickly shifting from developed to
emerging markets.

Today, more and more domestic companies in China, India and other emerging Asian countries are developing e-commerce and learning how to expand their clientele and revenue through the Internet. Today, more and more people in China are making money online. Emerging countries today are taking these IT concepts from the developed countries and localizing them in their own markets.” According to Liu, Asian countries such as China already have a natural advantage as they move forward from the global recession. “While the United States and Europe are relying on large fiscal stimulus packages to recover from the crisis, the emerging countries in Asia are rebounding because of the size of consumer demand in this area,” Liu explains. “However, Asian IT and services companies will need to innovate in order to meet consumer expectations if they are to benefit from the size of the Asian market.

Similar to the way automobile companies expand their market share by developing new car designs, models, colours and features, IT and services companies need to develop truly original products and services in order to capture a significant share of the market.”

Combining software with manufacturing

Liu’s focus on innovation is a strategy that has served Neusoft well. By combining software with manufacturing, the company has engaged in medical equipment and achieved fast growth in the global marketplaces. Medical products, medical IT solutions and services are the firm’s particular specialties. Among Neusoft’s innovations are the NeuViz 16 multi-slice CT scanner, a medical imaging device with optimal resolution and scanning time, and various types of medical CAD systems that produce and analyse images of specific bodily systems using quantitative software.

The company is also responsible for developing Telemedicine, a webbased system that offers remote consultation and diagnostic services to patients via videoconference.

Neusoft’s innovations in the medical arena exemplify the company’s efforts to integrate modern software and IT services into China’s traditional manufacturing sector. “Our mission is to combine software technology with China’s tremendous manufacturing capacity,” says Liu. “China has a large workforce in the manufacturing sector and is producing a lot of hardware. However, the value of this hardware could be improved if combined with the newest software and IT innovations. The importance of developing IT products is thus not the software itself, but the way in which the software could be integrated with existing hardware in order to improve performance.”

This is essentially what the company was trying to do when it launched the large-scale medical informatization project in Hainan Province earlier this year. “Neusoft has recently released a mobile medical device for use in remote villages,” Liu explains. “This intelligent device with multiple sensors can perform basic medical functions such as measuring blood pressure and blood sugar and monitoring a patient’s heart. We then hooked all of these data collected by the devices together through the Internet and produced an extensive online knowledge base. Patients can log on to this information base in order to learn more about their own health-care needs, such as whether their weight is normal and what kind of diet they need if they have high blood pressure.” He adds, “This type of knowledge would have never been available had it not been for the synthesis of conventional medical technology and the IT sector.”

Recruiting talent within and beyond China’s shores

None of Neusoft’s innovation, however, could have been achieved without the company’s innovative strategies to recruit and retain talent over the years. “China today is a hotbed of young engineers and entrepreneurs,” says Liu. “The key strategy now is to figure out how to align this potential talent with the country’s growing IT sector.”

In keeping with its academic roots, the company has established three IT universities in China to cultivate IT talents for Neusoft and its partners, as well as the whole industry. The company also established partnerships with top universities in China to develop the skills of potential employees recruited from these universities. Once the company has successfully wooed China’s most promising young talent, however, careful measures must be taken to retain this talent over the long term.

“We offer our employees comfortable salaries,” says Liu, when asked about Neusoft’s talent retention strategies. “More importantly, however, we try to make the job intellectually rewarding by giving our employees more trust and let them embrace challenges and take risks. Although Neusoft is in fact a giant corporation with about 17,000 employees, it operates more like a group of small, independent start-up enterprises rather than one giant factory. There are many separate business units and divisions within the company, each led by senior managers who build their own teams and oversee their own projects. At Neusoft, employees do not simply take orders from above but actually have an opportunity to develop their own ideas.” Liu claims that this strategy is vital to keeping job satisfaction high.

“Talented employees leave when they feel that they’re just another cog in the machine,” says Liu. “At Neusoft, we try to satisfy our employees’ thirst for independent entrepreneurship. Employees who benefit the company with their innovations are rewarded with even greater autonomy.”

Another key pillar of Neusoft’s talent-based strategy is to recruit leaders and managers from beyond China’s shores. While just a few years ago the vast majority of Neusoft’s employees were Chinese and there were very few foreign employees, the company today is actively recruiting Americans, Japanese, Europeans and Middle Easterners. In January 2010, the company opened its first subsidiary in the Middle East and is now in the process of developing different incentive plans for employees of different backgrounds.

“Neusoft is going to other countries, including developed Western countries, and recruiting their best people to come and work for us,” says Liu. “We are one of what I call the ‘emerging multinationals,’ that is, emerging-nation companies that have gone global and recruited talent from abroad.”

The tables are turned

Like the transition from manufacturing to innovation, multinational recruiting may be one of the signs that China is indeed on the way to developed nation status. “In the past, multinationals in developed countries have capitalized on Chinese talents by recruiting our leaders to work for them,” says Liu.

“Now, Chinese companies like Neusoft have the clout to go to these countries and recruit their talents. In a way, emerging multinationals like us have turned the tables on the developed world.”

Article by Karin Sun