The Changing Impact of Western Culture | DOING BUSINESS IN CHINA

Doing Business In China with Dan Paulson

In order to be successful, Western approaches to management in China will need to change.

I recently read an article published by McKinsey Quarterly that discussed the impact of expatriate managers in China (Beyond expats: Better managers for emerging markets). Multi-national companies face specific cultural challenges when bringing in an expat. Not to mention that local talent will look elsewhere for opportunities to take a greater leadership role. In other words, as you seek to grow your business in China, it is more important than ever that you find ways to tap into the local talent pool.

As a business that helps companies expand into China, I believe there is a collaborative approach that needs to be taken. We need to show our willingness to give local leadership a chance to grow within our organization and we also need to transfer a little of our own cultural values as part of the process. For that reason the duties of an expat leader may change.

It's been no secret that keeping talent in China can be tricky. A recent study claimed that as many as 50% of the expatriates that come to china leave within the first year. That's one out of every two people who are not fulfilling their commitments! Think of the costs associated with hiring, relocating, establishing, and training someone to fill what is often a minimum two year commitment. Not to mention that many times these people come back early knowing they are unemployed. It is common practice to build a dis-incentive that if you return early, you give up any employment with the organization you work for.

So what might be a better approach. Here is where we need to find balance, understanding and good communication. The balance comes from having just the right amount of Western interaction with the foreign leadership and the Chinese leadership. We see similar things going on in our own country. Many foreign companies understand the value of hiring local talent instead of importing management from abroad. When tapping into the local pool, you don't necessarily have to worry about culture shock for a new candidate coming in. Here it may be easier to bring in talent for extended stays, but not for a two or three year window where you risk losing good talent.

For me, it is always important to graft in a piece of your corporate culture. In China, it's a matter of adapting. The Chinese have a very powerful cultural presence. You aren't going to change it. However, to some degree you need to be able to carry over your Vision and corporate values. This is why I believe it is important to create a strong interrelationship with local and Western management. Any staff that travels abroad needs a thorough education of the culture and how business is handled. In addition, each expat should have a solid understanding of customs and behaviors so they are able to find ways to adapt while they are on site.

Finally, communication is essential. Without good communication, it's hard to build trust. It is also difficult to deliver the quality and service you are known for. This is closely tied to understanding the culture. Remember, what you believe is important may not be the same in a foreign market. You really need to share what you place value on.

Any organization seeking to do business in China could have a great opportunity. That opportunity will be weighed against their willingness to adapt to a new market they may not fully understand. Educate yourself and understand how you can collaborate for success. The potential to grow your business can be great!

www.invisionbusinessdevelopment.com

For more information, please visit Dan's TNNWC Bio.

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The Changing Impact of Western Culture | DOING BUSINESS IN CHINA

DOING BUSINESS IN CHINA: Opportunities are Everywhere. Just Make Sure They are the Right Ones.

Doing Business In China with Dan Paulson

Many companies are looking to expand globally. While this could create new sources of revenue, it is important to understand what you are getting into first.

Over the past few years I have met with several business leaders who either have expanded internationally or are seeking to. Some have been very successful in making the move and others struggled spending valuable time and money with no results.

A few months ago a colleague of mine contacted me about formulating business in China. As it turns out, they were actually contacted by a Chinese company and asked to collaborate on several projects coming up in the near future. This Chinese “partner” even paid to fly a delegation from the US company to meet and discuss these plans.

The company I am talking about has a very unique set of talents in their industry. In some cases they were pioneers for what they did and opened up a whole new market for their service in the US. Now they got the attention of a company in China and it seemed like a match made in heaven. The Chinese told them how great they were and how they needed their expertise. They conducted several meetings where a lot of questions were asked ideas were discussed and concepts were shared. After a few months, my American colleagues made their way over to China for the signing ceremony and the deal was inked making for a storybook ending… Or so they thought.

The executives returned from the signing ceremony excited to start on this new venture, which looked to be profitable. Their initial investment of time was going to pay off. After all, this Chinese company sought them. Days went by. Then a few weeks after not hearing anything, the US company reached out. The response they got was shocking. They were told that the Chinese company chose a different direction and they would not need the Americans’ service. What?!? Just a few weeks ago everything was a go. Now all their efforts were wasted.

We often hear about stories of deals in China going bad. Many times this happens because of a failed understanding of how to do business in China. The good news is there are ways to prevent you from getting burned. What it takes is a better understanding of the culture and how you approach business there. After all, we only seem to hear about the times where the venture doesn’t work. We fail to find out all the times that the deal does close without issue.

First let’s look at our scenario above. There are some critical things to watch for here. First off, why the sudden change? One reason is being over-zealous to share information. In this situation, an outsider reaching out to do business flattered the American company. In the US, we wouldn’t think much of it. If we are perceived as the experts, we can often readily share information and it actually helps close the deal. In China, until a trusting relationship is established, you may just be a source of information. That’s what this US company was. They were wined and dined to get information. The Americans had no skin in the game and once they shared their knowledge, they were left out of the picture. Knowing who you're doing business with is very important, and it is often necessary to move slower than you may want to in order to be successful.

Here are some tips to be aware of if you wish to have success in China:

· Have a very clear plan – Strategy is key anytime you expand internationally. China is no exception. Know your moves and what relationships you will have to build before getting started.

· Begin building relationships – Get to know the business climate. Do more than just research online; actually visit the country you are looking to do business in. China is very much a relationship culture. Build those relationships early. Find people who can help connect you.

· Know your investment and milestones – Have a budget and timeline (back to strategy). Have steps along the way where you can stop and re-evaluate each investment point.

· Seek out resources – Companies like mine are structured to help you increase your chances of success in China. Meet with other trade groups and organizations as well to learn about their experiences.

· Keep the interest – When working in China, you need to bring value. Avoid sharing too much. Peak their interest. Let them know what you bring to the table but maintain your value position. If you share too much, your connection may try to copy your work and remove you from the deal.

· Understand Intellectual Property – If it is an issue, know what you need to do to protect yourself. IP is a challenge, but not impossible to overcome. Work with an experienced legal team to protect your rights.

· Be willing to travel – If you are going to have an international operation, make sure you are willing to spend some time on a plane. Remote management is possible, but travel will be necessary periodically to keep up on the operations. Having talented people in China (and the right people) will also avoid some headaches.

· Be willing to walk away – If the deal doesn’t seem right, be willing to walk away. Especially if you do not have an advocate working on your behalf and assisting you. The costs of going through with a bad deal could be much greater than if you get out when you can.

· Get good talent – Besides lawyers, you should have a good accountant, logistics, or other third party advocates that will work on your behalf.

· Learn all sides – What I mean here is get all the information. Popular media will share all the horror stories. Those things do happen, but there are still many companies that can tell you about the successes. Seek to learn and seek to understand.

Remember, growing internationally can be a wonderful experience. It is just a matter of you taking the right steps. Now go out, grow and prosper!

http://www.growinchina.com/

For more information, please visit Dan's TNNWC Bio.

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DOING BUSINESS IN CHINA: Opportunities are Everywhere. Just Make Sure They are the Right Ones.

DOING BUSINESS IN CHINA: Travel Abroad: Becoming a Seasoned Travel Veteran Can Expand Your Reach Globally

Doing Business In China with Dan Paulson

When planning travel abroad, follow these steps to make your trip more enjoyable and successful.

The world is becoming a much smaller place these days. The opportunities to expand your business are endless. Though many of us don’t see ourselves as road warriors, it will be important to make those trips overseas if you wish to expand your business internationally.

Travel is about more than hopping on a plane to get to where you need to go these days. There are passports, visas, and cultural issues that you need to be prepared for when the meeting takes place in another country. Often there are misconceptions about foreign travel. What was true years ago may not be so today.

We have all heard the travel horror stories. I was recently speaking with someone about travel to China. He shared his experience of his trip in the early 90’s to a city in the southern part of the country. By the sounds of it nothing went right. The airline had lost his luggage, he got sick from the food, couldn’t drink the water, the hotel was a flea trap, etc. This has been nothing like my experience.

China, as well as many other countries, has changed in recent years. Old hotels, poor water quality, and a general concern for safety has diminished significantly in recent years. During my last visit, I navigated my way between Beijing and Tianjin with only a few cards telling the drivers where to take me. Even for large cities, I felt safe. And trust me, a Midwestern boy in the middle of China sticks out like a sore thumb. I found the food was great, the water was fine, and the hospitality of the people was wonderful. That should not discount the fact that traveling to ANY new environment requires taking certain precautions.

The rules of seasoned travelers:

Visas and Passports – Today any travel abroad requires a passport. The need for a visa depends on the country, length of stay, and nature of the trip. For China, a visa is required for entry. In fact, you will not be allowed to board the airliner without first letting the flight attendants make sure your visa is current. Trust me, you don’t want to fly on a plane for thirteen hours only to have to immediately fly back. Whenever you have questions about international travel, defer to your government. In the US, travel.state.gov is the site to visit.

Be informed – The US has the Smart Traveler Enrollment Program (STEP) which will help you with your trip. This can help you stay connected with the consulars and embassies in the country you are traveling to. They will also notify you of any warnings or alerts.

Flying – Airlines are notorious for losing luggage. About 25 million items of luggage are lost each year. This equates to about a one in a hundred chance that you will lose an item each time you fly. (Source: Airport Transport Industry (ATI) baggage report) Make sure your bags are labeled well and any old destination tags are removed. You will want to keep any essentials with you to get you by should something happen. Also, there is less of a chance to lose your luggage if you have fewer transfer flights. It’s always best to take the most direct flight possible. Finally, if you are taking a short trip, pack a carry on.

Know the region – Traveling to the interior of China is much different than traveling to a large city such as Beijing. Know where you will be staying and what’s around you. During my last trip, I stayed in downtown Tianjin. The hotel I stayed at was inexpensive and clean. The amenities weren’t the same as a four star hotel, but they served my purpose. There were several quality restaurants in the area as well as chains such as McDonalds and KFC. Though densely populated, the area was safe and modern. I walked the streets alone in the evening and encountered no problems.

Know your surroundings – This should be true whether you are in a city in the US or abroad. Dangers occur when people do not pay attention to what’s going on around them. Pay attention to who is around you and what is happening. Not only will this allow you to enjoy your environment more, it will help you avoid problems or dangers.

Food and water – Anytime you don’t prepare food yourself, you are entrusting another person to do it correctly to avoid food borne illness. While many of us have experienced poorly prepared food, we can take precautions to help minimize the chances of getting sick. First inspect as much of the area as you can. The smaller the food joint, the easier it is to see how they prepare their food. When in doubt, trust your gut (yes, pun intended here) and avoid eating at that establishment. Ask the locals where they recommend. Many times hotel staff, or business connections can make recommendations on where to go for a good meal. As for water, most newer hotels and restaurants have their own filtration. If you are unsure, use bottled water to be safe.

Culture – No matter what country you are from, not paying attention to local custom and culture will make you look like a poor traveler. Understand where you are going and who you are going to meet with. How do they like to be addressed, what are the customs for greeting? For example, in China, a handshake is customary in initial greetings where in other parts of Asia bowing is the norm. Learn enough of the local language to cover some basic needs like finding a bathroom, getting water, or getting food. Most importantly, know what’s offensive. Things we take for granted here can be highly offensive somewhere else. I find people are more than willing to help if you make an attempt to first communicate at their level.

Enjoy it! – Too few people take the opportunity to soak up a new cultural experience. Be open to the new world around you and seek out ways to make the trip enjoyable for you and for others. Experiencing the world on a global scale helps create understanding. Understanding breaks down misconceptions and stereotypes. Your appreciation of others can be a key to being successful as you conduct your business trip.

For more information, please visit Dan's TNNWC Bio.

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Capital, Traffic Building, International Customers and unique SERVICES.
The National Networker Publications™ produced by TNNWC Group, LLC
Resources for Business Planning, Development, Capital and Growth

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DOING BUSINESS IN CHINA: Travel Abroad: Becoming a Seasoned Travel Veteran Can Expand Your Reach Globally