Stop improving, and start destroying

WHEN AlphaGo became the first computer programme to defeat a world champion at the ancient Chinese game of Go in 2016, the world was bowled over.

Its 4-1 victory against the legendary Lee Sedol - who has 18 world titles under his belt and is widely considered to be the greatest Go player of the last decade - was the result of an artificial intelligence (AI) learning approach based on thousands of human amateur and professional games. It was unprecedented.

And you can trust AI to outdo itself.

Late last year, AlphaGo was overtaken by an improved version of itself, AlphaGo Zero, in a match that ended in a staggering 100-0. AlphaGo Zero had taken just three days to master the game of Go, with no human help - it simply learnt to play the game by playing against itself, starting from completely random moves. It became arguably the strongest Go player of all time.

The lesson here is simple: The only way to outdo the immense achievements of AlphaGo was to “destroy” the work behind the programme, and build something even better.

It is this same approach that companies should take. Instead of pushing for incremental upgrades, corporates should take that bold step to wipe out the old, and start over on a clean, fresh slate. Obliterate any trace of entrenched ways of thinking and start re-creating.

The result could well be revolutionary.

Look at Elon Musk’s pioneer electric car maker Tesla. It is exactly a pioneer because it has built an entirely new electric, autonomous vehicle that is vastly different from the fossil-fuel cars that have dominated the automotive market for decades.

Consulting firm McKinsey concluded in a recent report that electric cars designed from scratch are much better - in terms of range and interior room, for instance - than those modified from petrol-powered cars and still made on existing production lines. They are also more profitable.

The same goes for Musk’s other company, SpaceX, which designs, manufactures and launches advanced rockets and spacecraft, with a great deal of the work done in-house. Its Falcon Heavy rocket took the spot as the world’s most powerful operational rocket when it launched earlier this month (March), topping those from Nasa.

And then there is China’s mobile payments system, dominated by apps Alipay and WeChat. The country’s mobile payments landscape has completely leapfrogged the use of credit cards and, in turn, the developed world - due in part to a less developed financial system, but more so because the tech giants were able to start something completely new.

All of this “destroying and re-doing” is much easier to do today, thanks to the speed of technology. But more than that, it has also become critical. In today’s new world order - where China is not to be ignored politically or economically - companies cannot simply adhere to their old textbook ways of doing business if they want a piece of the China market.

The global merger and acquisition market today is flooded with Chinese involvement. But when foreign companies try to do business or invest in China, more often than not, they make the mistake of clinging on to a Westernised mindset.

They struggle with how easy-going the Chinese are with business contracts, in particular, as opposed to what they are used to - poring over the terms and conditions before giving the final sign-off. And when they ask for a list of specific conditions and requirements, this leads the Chinese firms to second-guess their intentions - not a good sign in any kind of deal-making.

In China, business is done in a way that is vastly different from that in the West. What was agreed verbally or even written in black and white can always be re-negotiated, for instance. The key here is to think out of the box.

Demolish conventional methods of deal-making as it is done in the West, and start over by doing things differently. Leave the ego at the door. Add a local touch to your negotiation process, and keep things open-ended.

Rebuilding a business psyche from zero is going to be faster and much more effective than inheriting and trying to change one that is less applicable in today’s economic environment.

Central to all of this should be the main objective of the deal - remember what you are here for. Being able to successfully cut a deal in China will allow you to add a big and important dimension to the business, while overcoming a strong competitor.

It means being able to enter into the world’s largest consumer market and obtaining valuable insights into consumer trends. It also means getting access to the Chinese manufacturing cost structure and acquiring a more nimble, local technology team with faster response time and arguably more creativity than its Western peers.

The AlphaGo/AlphaGo Zero example encapsulates perfectly how spending time and effort trying to improve something is but a method that is becoming outdated in today’s high-speed world. And its success - built on the breaking down of old ways of thinking - is only the beginning of a whole new era of possibilities.