China and the West have profoundly different ways of looking at the world. When American and Chinese Presidents meet, according to a US official quoted in the Financial Times, ‘They are like computers running on different operating systems’.
Doing business in China is different too. It has an ancient culture rooted in relationships and social cohesion that persists behind the major upheavals of the last century and the prodigious economic and political changes of recent years. To be successful westerners need to be attuned to the culture and to learn to think and operate differently.
Lessons from the front line
Andrew Sharratt, an experienced interim manager and one of Jo Ouston’s earliest clients, met recently with Gillian Hughes, another of Jo’s early clients, to talk about the experience of working in China. Over the last five years Andrew has run three projects in China, as the “man on the ground” working for three European companies developing Chinese business initiatives: in Hong Kong, in remote Gansu province and in Shanghai.
The first important point, he says, is to recognize that there is no uniform Chinese business culture; the reality is far more nuanced.
Finding common ground by focusing on solving the issue
Andrew’s first interim role was to recover a complex logistics project that had gone badly wrong. Based in Hong Kong, it was being run by a Danish company for a global leader in post and parcel handling systems. The project team, reflecting Hong Kong’s history as a trading centre, was made up primarily of Chinese, Hong Kong Chinese together with around 15 nationalities of expats.
As Programme Director, Andrew was expected to face the client group at regular progress meetings and in particular his local Chinese counterpart. She was not interested in fixing the project’s problems or any adjustments to the contracted solution, even for an improved outcome. She wanted delivery of exactly what was defined in the contract (which was proving very difficult to deliver). Andrew recognized that he needed to find a way around this.
It was apparent that the meetings had ceased to aid progress. Progress meant finding another way that might not match the contract as written. Andrew concluded that despite the potential consequences it was more important to focus with the project team on solving the critical issues on the equipment installation, commissioning and trials rather than attending yet another meeting. Focus had to be intense, absence had to demonstrate progress.
On one occasion, for example, a complex problem was resolved working with a Chinese technician who spoke no English and with no interpreter available. They worked through in turn the mathematical equations driving the issue, puzzling it out with pencil and paper, and using sign language. Together they identified a glitch in the flow line set up which, once understood, was easily fixed.
One Sunday, Andrew was on the shop floor, working through issues when he spoke with some visitors. They asked questions on the project and how the considerable time and performance issues were being progressed and then left. Early the next week, he had a call from his inflexible Chinese counterpart, asking what resources or help he needed.
It was only much later, that Andrew learned that these visitors had been a senior management team from the regional headquarters. He observed they had concluded that cooperation was needed to recover the project. Once that management decision had been given, the local Chinese management worked ceaselessly to deliver it. The project would not have been recovered without this change.
Be honest, clear and consistent in your intentions and in pursuing the task you need to get done: this helps build trust and momentum for change.
The second project, based in the remote Gansu province in northwest China, involved working alongside a German design authority. Andrew’s role was to set up a new wind turbine assembly facility within a government stock company (essentially an independent business owned by but arm’s length from the State). This was a traditional heavy industrial environment, with dormitories and housing provided in the local town for the workers along with schools and a hospital; a complete support infrastructure. People were not used to introducing new products or modifications to existing designs and had a different take on safety procedures.
Meetings with the MD would involve a minimum of ten people but with very little discussion. Alongside the MD, there sat a senior Party official director. In some ways this worked well (in the local environment) but this overall combination made introducing change difficult. Andrew said, “I knew what needed to be done and just had to get on with it”.
After a number of difficult conversations (through translators) involving the Chinese MD, Andrew and the German chief engineer, it was agreed that the German company would take over managing one wing of the factory and set up the new facility as an implant with different rules of operation.
Once the decision was made, it was adhered to. The MD left Andrew to get on with it but responded rapidly when specific resources were needed. Andrew worked directly with the shop floor to introduce new team structures, processes and methods appropriate to quickly evolving new products, operational procedures and a new focus on safety. This plant within the plant became a powerful demonstrator of a different way of working.
Never forget the social contract in China between the State and the individual: the underlying belief that if you obey the rules, written and unwritten, you will prosper.
The third project was to get a new factory design approved near Shanghai for a British company. Shanghai, like Hong Kong is a very international environment. Working with a Chinese law firm was very similar to working with a global law firm in London.
Lawyers had predicted a delay of months to achieve the business licence for the new factory. However, working with a local partner and the state authorities this was achieved in a matter of weeks. This required understanding and adaptation to the established processes whilst still sticking to aggressive targets and deadlines. The complex “chop” process for getting business documents authorised had to be followed to the letter. It became clear that the bureaucrats wanted to make the process work, as long as process compliance was in place. With some brinkmanship the final approvals were done in time for formal completion celebrations to happen with local dignitaries.
How would Andrew sum up the lessons he takes from all these experiences?
- You need to respect the culture and recognize it is there. Sometimes I had to change the way I was trying to do something, but as long as we reached the same end point that was fine. Stick to your goal but realize that there might be another (or better) way of achieving it.
- Keeping face is important, but confrontation can work, as in the case of the MD in Gansu.
- There are big generational differences. The younger generation are very ambitious, they did not live through the era where disagreeing or expressing a different opinion could result in imprisonment, even death. However, reluctance to express an opinion or agreeing unconditionally persists in all generations (albeit inconsistently) and can be very frustrating.
- Given direction and management, good Chinese workers can be incredibly hard working. Once approvals are given or decisions are taken, they will work tirelessly to deliver.
Our thanks to Gillian Hughes for preparing this article based on her recent discussion with Andrew Sharratt.