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China: Proceed With Caution & Consideration China presents a huge business opportunity; however, challenges require that companies proceed with caution and careful consideration. In 1986, my first visit to China was a 17-day trip to lecture to nearly 200 business executives on logistics. During my visit, I interacted with Chinese government officials and a wide variety of business executives and professors. My wife and I toured the country with the guidance of the Chinese government, and we met a very broad cross-section of people. Since this was the “old” China as opposed to today’s “modern” China, it was very easy for me to realize that I did not fully understand the culture. Everything about the country was different, and to try to fully comprehend China from my Western paradigm was not possible. But this early exposure has since paid me substantial dividends. The truth is that China today can be as difficult for Westerners to understand as it was for me in the year 1986. In some ways, it is tougher to grasp, because China has been modernized and still remains a very different place. Although we have done extensive work throughout North and South America, Europe and Africa, we cannot place our world view onto China. Rather, we must “Chinaify” business strategies, products and practices, as well as our understanding and reactions, because not doing so will result in major misunderstandings. Beware of Folklore & Naive Views Here are two stories to illustrate how China is a very different place and how informed caution is essential. Story #1 An executive from Europe recently told me that he never hires managers who are Chinese for his business in China due to the language only having 5,000 characters. The truth: the Chinese language has about 50,000 characters, 5,000 of which are commonly used. He also told me that these managers lack the robustness to handle key performance indicators (KPIs). But in fact, this naive view is a bit of old Chinese folklore spread by us Westerners and is completely incorrect. My recent experiences in the country – plus trusted information from Tompkins International staff in Shanghai – suggest that the number of characters in the Chinese language has nothing to do with how managers perform. It is more about the fact that the Chinese language is hieroglyphic, and that their thought patterns tend to be more visual rather than based on abstract words. For instance, I am told by my Chinese staff members that they tend to be more imaginative and less analytic (just consider the shape of the characters in the Chinese language). One word of a sentence may have many different interpretations and understandings, depending on who is saying it and in what context. In addition, an expert or authority figure is often the one to have the final say on the word's interpretation. I have also heard arguments that Chinese children are smarter because they have to learn a complex written language. This written language challenge generates from the typical Chinese manager having excellent organizational skills. This then impacts the way they approach things, whether it be rigid, structural, or hierarchical. However, education is still a system that rewards learning, memorization, and testing with little creativity or individual thought. The Chinese language has little to no impact on a Chinese manager’s ability to manage or express views on KPIs. The reason why some Chinese managers struggle with KPIs is more appropriately attributed to cultural differences such as:
Chinese managers can be very different than Western managers. But Chinese management skills have little to do with the Chinese language and more to do with the cultural pace, perspectives and education in China. It is wise to ensure that Chinese managers are not weak due to language just as it is wise to ensure that Western managers whose first language is not Chinese are not weak due to language barriers. It works both ways. There is No Patent on Innovation Story #2 A US executive recently told me during a discussion that intellectual theft in China is not a serious problem. At his company, he said that they plan on innovating new products “quicker than the Chinese can steal the old ones.” An interesting argument, given the points I made in the first story about the flaws of the Chinese education system, but once again, this is folklore. The reality is that the Chinese who are coming up with innovations did attend Chinese schools for their basic education, but then attended Western schools for their university and graduate studies. Moreover, innovation is not new in the country, as the Chinese people are often more imaginative and less analytic and excel in looking at the big picture. Guanxi (loosely translated as relationships) has much do to do with innovation in China business as well, since experts who know each other well and respect each others’ opinions can present a powerful force for creativity. The Chinese today are making huge gains on the rest of the world with respect to innovation, so we need not be so cavalier about the West’s innovation edge. In fact, it is not about Chinese versus Western innovation as much as it is about understanding that China is simply a very different place with a unique culture. The challenge of doing business with Chinese managers and executives and of doing business in Asia in general is not easily explained by language, education, innovation or any other simplistic issue. The real key is grasping the idea that culture, history, values, practices and pace of life in China is all very distinctive. And any attempt to view it through our Western paradigm creates confusion and leads to spreading myths and making mistakes. The best strategy is to translate our views into Chinese views so that we can achieve success in this very different, promising place.
Jim Tompkins CEO & President, Tompkins International More resources The Top Nine Trends in China for 2012 Learn More About Asia Supply Chain Excellence The China Business Blog and Podcast from Technomic Asia Leveraging Asia Supply Chains for Increased Value China is Changing Supply Chains Around the World: Facts and Trends See previous issues of the Asia Supply Chain Excellence Report. |
Tompkins International transforms supply chains for profitable growth. For more information about our company and services, visit www.tompkinsinc.com or e-mail us.
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