It’s easy for business leaders to forget that they’ve got more to worry about than advancing technology, regulation, the election, and the war for talent. There’s still China. Though it’s growing slower than it used to be and slower than the official statistics say, it’s still growing faster than most economies and way faster than any economy near its size. So yes, you still have to be there, and it still isn’t easy. That’s one reason I recommend you read this new article, published this morning, by Fortune’s Scott Cendrowski. It’s called “How the PGA Tour Sells Golf to China,” and it’s a valuable tale for any organization facing massive opportunities and challenges in the world’s No. 2 economy.
As Scott shows, “In terms of golf’s potential, the PGA’s timing in China couldn’t have been better; in terms of the country’s politics, it couldn’t have been worse.” Golf in the U.S. is declining, with the number of courses shrinking every year. China is the obvious potential savior, with a fast-growing middle class that could get hooked on the prestige of playing and watching a sport that for now is restricted to China’s richest people. The process is underway. “Already, golf teachers have flocked here from Europe and the U.S., charging $600 a lesson, and driving ranges are crowded with first-time players,” Scott reports. This is not an abstract topic for Scott, an ace golfer who lives in Beijing and plays the country’s courses.
The PGA Tour’s goal is to build a tournament schedule that attracts foreign as well as Chinese golfers and that develops Chinese golfers into world-class competitors who play at the highest levels in Europe and the U.S. as well as in China. Such golfers are on the horizon. You’ll meet 19-year-old Marty Dou, who finished higher than PGA Tour stars Adam Scott and Hideki Matsuyama at a tournament in Shanghai last year.
But there’s a big problem: Chinese president Xi Jinping has been waging war on golf as part of his anti-corruption campaign; memberships in expensive private golf clubs have been a favorite form of graft for top officials. Officially, the government has softened its anti-golf stance and has declared golf an approved middle-class sport, but unenthusiastically. As Scott notes, “In the five-year plan, it was listed between table tennis and billiards.”
In short, the PGA Tour is confronting many of the issues facing every business enthralled by imagining what would happen “if only 2% of the Chinese population bought our product….” You’ll not only be entertained by Scott’s skillful telling of this story, you’ll also get a useful new perspective on issues you’re dealing with or will be.
Correction: In yesterday’s Power Sheet we misidentified the source of data about Time Warner’s economic profit. The correct source is the EVA Dimensions consulting firm.
You can share Power Sheet with friends and followers here.
What We're Reading Today
Another exploding Samsung phone reported
And it's not a discontinued Galaxy Note 7, but a Galaxy S7 Edge. The user claims to have exchanged a Note 7 for the Edge only two weeks ago. For Oh-Hyun Kwon's company, it's a potential worsening of a problem that's already disastrous. Fortune
Self-driving truck delivers Budweiser
Last week, a self driving truck running with technology from Otto, a startup recently bought by Travis Kalanick's Uber, delivered 45,000 cans of Budweiser to a warehouse 120 miles away without the intervention of a driver on the highway. A driver did take the wheel while the vehicle moved on and off the highway. Otto co-founder Lior Ron says it was the first revenue-generating shipment via an autonomous truck. Reuters
Red states could turn blue
Republican presidential candidates have carried Texas for nine straight elections, but some polling now finds that Donald Trump's lead in the state falls within the margin of error. Colorado, a long-time swing state, appears firmly in favor of Hillary Clinton. A new electoral map may be in the making. CNN
Twitter plans more job cuts
Layoffs could come as early as this week, as Jack Dorsey's company struggles with low growth. Cuts will likely amount to some 8%, or 300 jobs, which is the same amount Dorsey cut when he re-took Twitter's reigns last year. The number of layoffs could still change. Bloomberg
Building a Better Leader
If a great employee resigns...
...don't try to win him or her back with a dream promotion. The underlying issues likely won't change, and you'll be having a similar conversation a few months later. Inc.
13 jobs with the biggest pay raises
Communications managers' pay rose 5% on average over the past year, while an implementation consultant's salary increased 7%. But that doesn't come close to certified nursing assistants' pay growth. Fortune
If you get a flyer from your bosses suggesting you vote for...
...Hillary Clinton or Donald Trump because it's better for the company, then they're probably within their rights. But be careful; some election-related topics don't receive First Amendment support within the office. Washington Post
Netflix is comfortable with the AT&T-Time Warner deal
CEO Reed Hastings said that as long as the combined firm treats Netflix the same as it does HBO's streaming content, then he's fine with it. If AT&T begins to favor HBO content, then Hastings says it would become a problem for his company and the consumer. Fortune
ChemChina willing to talk concessions for Syngenta
The largest foreign acquisition by a Chinese firm has hit a snag in the European Union, where regulators want more documents and analysis before approving it. A final decision won't come until next year's first quarter. Ren Jianxin's ChemChina provided a list of assets worth $20 million that it would divest, but regulators have demanded more. ChemChina said it will consider deeper cuts to close the deal. Reuters
Satya Nadella seeks to change Microsoft's culture
The CEO said he wants his employees to shift from a "know-it-all culture" to a "learn-it-all" one. Nadella blames Microsoft's slow reaction to the mobile trend on the old mindset. WSJ
Up or Out
Nordstrom CFO Mike Koppel will retire next spring. Seattle Times
MTV President Sean Atkins has resigned. Business Insider
Fortune Reads and Videos
Wells Fargo could lose $8 billion in revenue...
...over the next year and a half from effects of the fake-accounts scandal, says a consulting firm cg42. Fortune
Companies that could cash in on golf's growth in China
Nike is exiting the golf equipment business but still sells shirts, shoes, and other apparel in the country. Fortune
Lyft tests bulk pricing...
...for customers of its carpool service. It's a way customers can avoid Prime Time pricing, which boosts the cost of the ride during peak hours. Fortune
Best Buy brings back free shipping...
...of any item during the holidays for the second year in a row. Fortune
Quote of the Day
"High order, as long as HBO’s bits and Netflix’s bits are treated the same, that would be the starting place...We really want to make sure that to the consumer, to the system, that basically it doesn’t give an unfair advantage to HBO over Netflix. If it’s open competition, we love that." -- Netflix CEO Reed Hastings discussing the AT&T merger with Time Warner. Fortune
|Produced by Ryan Derousseau|
Share Today's Power Sheet: