by Jin Zhiguo 
published in Harvard Business Review, 2012
Ref R1204A
 

In 1995 Jin Zhiguo was put in charge of the Hans Brewery, a fresh Tsingtao acquisition. On his first day there, he found a financial statement on his desk that said, 'Daily production: 1,000.' Not bad, he thought. But then he learned that the number referred to bottles, not cases - and this at a company employing more than 1,000 people.

Although it was a moment of 'great disbelief,' Jin says that such underperformance wasn't unusual then for Chinese businesses: The government determined production plans, and few managers paid attention to customer needs or traditional marketing. He set out to revolutionize the brewery's culture over the next five years, partly in response to aggressive market competition from Western brands.

One of the first things he did was to start sitting in restaurants and talking with customers about beer. What he learned led to a more popular product and better distribution, and within a year production had risen to 790,000 bottles a day.

The company had gone from annual losses of 25 million yuan to revenues of 10 million yuan. By 1999, annual revenues had reached 50 million yuan, and Hans had become Tsingtao's best-performing brewery. Jin assumed the presidency of Tsingtao in 2001 and helped the company adapt to being market driven. Among his many leadership imperatives was a continuing emphasis on employees' spending time listening to customers.

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About the authors

Jin Zhiguo is the chairman of Tsingtao Brewery.

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