Unveiling the Future: Founder Noah Xie Reveals Kmind's Next-Generation Strategy

Published:  Aug 21, 2024

 Consulting       
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Kmind is a strategy consulting firm based in Shanghai, China, at the heart of the rapidly expanding Asia-Pacific consulting market. We sat down with the firm's founder, Noah Xie, to talk about Kmind's most recent successes and the philosophy that drives the firm's people and work. The following is an edited version of that conversation.

Vault: Kmind ranked No. 1 in Innovation and No. 7 overall in Top Consulting Firms in the Asia-Pacific Region by Vault last year. What do you think are some key feats that have allowed Kmind to achieve these rankings?

Noah Xie: Kmind has successfully helped seven companies—including Bosideng, Feihe, and Yadea—exceed RMB 10 billion in revenue and elevate them to market leaders in just a few years' time. As a China expert, we stick with firms from the strategy formulation stage through implementation and make sure that these firms reap concrete results.

I think we have been innovative in our Next-Generation Strategy. Kmind's Next-Generation Strategy is a combination of East-meets-West philosophies and has helped Kmind's clients achieve substantial results. It is also gaining widespread recognition, not just domestically but also on the international stage. We have not only been featured in foreign publications such as The Wall Street Journal, Forbes, and Harvard Business Review and spoken at MIT, Harvard University, and Harvard Club in Boston to bring our next-generation strategy to the world.

Vault: Can you provide us more insights on Kmind's next generation strategy, such as how to best combine the strengths of Eastern wisdom with Western philosophy in strategy development and execution?

Xie: Kmind Consulting's Next-Generation Strategy is more than just a trendy phrase; it's a thorough method that merges Western strategic rigor and logical frameworks with Eastern emotion and cultural insights. In today's competitive price-war environment, companies can win without fighting by deeply understanding their customers and making decisions on the ground.

The Next-Generation Strategy is also derived from Sun Tzu's The Art of War. There is an important phrase in the book: “All battles are fought conventionally, but they are won mentally, using surprise tactics.”

Under the business context, “Conventional battle” refers to managing the fundamentals of a business, such as its products, distribution channels, day-to-day operations, branding, etc. These represent the direct arrangement of forces and are preparations for battle. It emphasizes the importance of focusing on daily details, foundational work, and routine tasks in business management to build a solid foundation.

"Surprise tactics” refer to achieving victory through unexpected strategies. To secure victory, businesses need to assess their situations, consider external environments and competitors’ strengths and weaknesses, and take the most forceful business actions at the optimal timing.

Vault: Can you share with us some examples of Kmind’s most recent successes?

Xie: Bosideng, a stalwart in China’s down jacket industry since 1976, found itself grappling with brand fatigue and fierce competition, which eroded its market share. Despite consulting with various esteemed firms, Bosideng's attempts to rejuvenate its brand fell short. Kmind started collaborating with them in 2017 and zeroed in on Bosideng’s core strength: down jackets. We streamlined operations, cut non-core product lines, and formulated a monumental strategic direction, “The World’s Best-Selling Down Jacket Expert.” By 2018, the company’s revenue surged past 10 billion yuan (1.4 billion USD). Reinventing itself as “The Global Leader in Down Jackets” in 2021, Bosideng launched innovative products like the down trench coat, quickly capturing significant market share and affirming the efficacy of Kmind’s strategic direction. Currently, Bosideng has been selected again as “Brand Finance Apparel 50” and has been awarded “My Favorite Chinese Brand 2023” by China National Brand Network. Bosideng's revenue increased by 38.4% to over 23.2 billion yuan (3.2 billion USD) for the year ended 31st March 2024.

Another example is Feihe, a Chinese infant formula brand, that faced a crisis in 2008 amid the dairy scandal. Although Feihe maintained high product quality, its sales plummeted. Seeking a solution, Feihe turned to Kmind in 2015. My team and I employed traditional Chinese wisdom, akin to Sun Tzu’s “seeking advantage in momentum.” We identified that Feihe’s products were favored in several provinces due to their “High Adaptability” formula, designed for the unique nutritional needs of Chinese infants, many of whom are lactose intolerant. Kmind repositioned Feihe’s formula as “more suitable for Chinese babies.” This culturally resonant strategy distinguished Feihe from foreign competitors and restored consumer trust. By 2021, Feihe’s annual revenue skyrocketed to 22.8 billion yuan (3.1 billion USD), with a net profit of 6.9 billion yuan (950 million USD), and surpassing 10 billion yuan (1.4 billion USD) in 2018 alone.

Vault: As noted previously, Kmind recently headed to Harvard and MIT University (for the second time) and organized a Harvard Club panel discussion with McKinsey senior partner emeritus Peter Walker and Harvard Business School professor Robert Kaplan. What were some of the most thought-provoking insights from this panel discussion?

Xie: It's always a great pleasure for me to be in Boston, where top minds congregate for robust discussion. I was particularly delighted to converse with Professor Robert S. Kaplan and Peter Walker this time, as I deeply admire them and also find many parallels with them in terms of strategic thinking.

Harvard Business School Professor of Leadership Development Emeritus Robert Kaplan appreciated the integration of science and emotion into strategy formulation, which I am a strong proponent of. He mentioned that my ideas echoed another strategy expert, Professor Clayton Christensen, who stated that companies should focus on creating value for their customers and winning their hearts and minds.

As for Peter Walker, I also liked what he said regarding the underlying concepts of over-investing and understanding your competition: to be counterintuitive and surprise-oriented and to pay attention to your customers. Not in a classic, distant, market research way, but to really dig deeply.

Vault: You were also recently in conversation with strategy expert Professor Henry Mintzberg. How do Professor Mintzberg’s views on strategy resonate with your own views on the subject?

Xie: Professor Mintzberg and I both agreed that consulting managers sometimes miss the obvious, which causes them to miss out on great strategies. There is an iconic Chinese idiom that illustrates this point: "to discern the tip of a fine hair in autumn, but to not see the wagonload of firewood." The idiom demonstrates that it can be hard for us to analyze something obvious, and to gain a deep understanding of it. Hence, consulting managers need to see what others cannot see, the obvious things, and speak up.

Another point that I truly resonate with Professor Mintzberg on is how the top management of a company needs to be able to adjust their strategies in accordance with their customers' thoughts and feelings and "let the frontline call for fire." I like to compare consultants to coaches. An athlete's physical fitness and athletic ability improve according to a predetermined rhythm and pattern, but each athlete's daily condition is different. So, you need to adjust your training plan according to their condition. Similarly, when facing different competitors, the competitive strategies you adopt are not the same. During the strategy implementation process, you must adjust your strategy in a timely manner based on market changes. The direction of this adjustment, as Mr. Mintzberg said, is to listen to the frontline, hear the consumers' voices, and pay attention to frontline innovation. If these innovations align with your main axis and core objectives, they are effective innovations. In fact, many times, innovations emerge from the bottom up. Sometimes, the voices from the frontline are much more important than the thoughts and opinions formed by those at the top.

Vault: According to a recent PwC report, China is expected to become the world's top buyer by 2025, surpassing both the U.S. and Europe. What advice do you have for organizations looking to grow in China?

Xie: Firstly, companies should not set policies in their headquarters and ask their Chinese regional offices to implement these policies. It is important to make decisions at the front line.

Secondly, firms should understand that today’s market environment in China is different from the past. In the past, there was a period of explosive growth where demand outstripped supply. In today’s more competitive era, companies must pay attention to the maneuvers that win the hearts and minds of consumers and defeat their competitors.

Thirdly, firms must recognize that strategy is a combination of science and art. Companies should not only rely on a one-dimensional approach, such as mathematical models or Big Data. They should also deploy moves based on art and sensibility and absorb wisdom from Sun Tzu’s The Art of War. Companies that can survive competition and thrive in the Chinese market are vigorous and resilient. This helps them increase their market share and strengthen their global competitiveness.

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