This post previously appeared on News@Northeastern. It was written by Ian Thomsen.
Spencer Fung had been working to modernize his 113-year-old family business, Li & Fung, a Hong Kong-based supply chain manager that serves 1 billion people around the world. Then COVID-19 struck.
“The word crisis in Chinese is made up of two characters: One is ‘danger,' and the second is ‘opportunity,'” said Fung, a member of Northeastern's Board of Trustees and group chief executive officer of Li & Fung. “In every crisis, there's a negative thought, which is danger; but there's always a positive part, which is opportunity.”
As a result of the pandemic, Fung said, he and his managers are communicating more often (via Zoom and other platforms) while hastening their efforts to create the supply chain of the future.
Fung offered his visions for commerce on Tuesday during “Business in the Age of Global Change,” a wide-ranging Facebook Live discussion with Joseph E. Aoun, president of Northeastern.
Li & Fung had been focused on modernizing long before the pandemic, Fung told Aoun.
“A couple of years ago, when we started building the supply chain of the future, we had no idea—we just knew we weren't the future,” Fung said. “We were trying to skate to where the puck was going to be. And after three years, we actually have a pretty good idea.”
The endgame, Fung said, is to fully digitize his company. The next-generation supply chain will operate 10 times faster by relying on automation and high-tech tools like 3D design, which delivers realistic renderings of products to customers online. The transformation is being accelerated by COVID-19 as businesses around the world have been forced to adapt to the new realities of physical distancing.
“Every time you change your habits for more than 21 days—that's the magic time frame—you end up changing for a long time,” Fung said. “I think a lot of buying habits of our customers have changed basically forever.”
Fung predicted that apparel manufacturing will be automated over the next decade.
“Every week it's taking a different turn,” Fung said of the pandemic's influence on his business. “We manage it like a crisis-management team would do. We get our global team together, we get on daily calls, and we self-correct every day with new information. You have to stay nimble, you have to stay flexible; you also have to stay optimistic. I tend to be a glass half-full kind of person.”
Fung was drawn into his family's business while working a summer job two decades ago. He recently took Li & Fung private, which has liberated the company to invest in its long-term digitization plans without the burden of shareholders' short-term expectations.
Aoun was interested in Fung's philosophy of “regret planning,” in which he has spent the past two decades asking more experienced people about the investments they wish they had made.
“A lot of older friends told me that they regretted not taking accounting in school,” said Fung, who earned his master's in accounting and MBA from Northeastern. “That's why I went to the graduate school of professional accounting at Northeastern. And it turns out to be the best thing that I've done, because to run any business you have to learn accounting.”
But nothing could have prepared him for the responsibilities of chief executive, Fung added.
“Being a CEO of a company is like an Olympic sport—especially during a crisis, because it's relentless every day,” Fung said. “You have to wake up full of energy to deal with challenge after challenge after challenge in this day and age, with all the changes that are happening around the world, especially with COVID. So it's a physically demanding job. You have to have a vision, and you have to keep pushing.”
Fung said that the next great disrupter of his industry will be a business that is not currently viewed as a competitor.
“The definition of being disrupted means you were surprised,” Fung said. “Usually it does not come from your existing competitors. If you can see these companies, they're not your disruptors. It's the companies that you don't see, the companies that come from the left field, from a different angle, from a different industry. That's what keeps me up at night.”
Because people are resistant to change, he has been searching for employees who have the grit and tenacity to stick with the challenging mission of transforming his global company. He has also been focused on piecing together a series of small steps of change.
“Have a vision, have a very grand plan, but don't try to do it all at once,” Fung said. “People don't like to take large changes all at once because this shock is too much for the system.”
“The best way that I have actually been able to change the company is to take a start-up approach. Focus on a small problem, move very fast—on a daily or weekly basis—and show results. Because when we do big changes, and we talk about it, and then nothing changes, people lose interest. But when people can see progress every day, then they change faster and faster.”
Aoun ended the conversation by asking for regret-planning advice on behalf of young people who were watching.
“The world will continue to change very rapidly,” Fung told them. “Whatever you're studying today might become obsolete in five to 10 years, so you always have to have that open mind and the desire to continuously learn on the job.”
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