Management Lessons for China Bosses from Mitt Romney, The American CEO

Doing business in China doesn’t seem to have much in common with running for President of the United States, but we can learn some valuable lessons that apply to Chinese management situations. Mitt Romney certainly looks like everything his market – the American voter – looks for in a candidate. He seemed to be the ideal candidate – on paper. But his recent campaign stumbles reveal some self-inflicted blunders that western managers in China can learn from.

Mitt Romney is making many of the same mistakes that international managers make in China. How many of these are going on in your outfit?

    Not all success is transferable
    The skills that enabled him to win big on Wall Street are failing him in his new challenge. International managers in China need to be very sensitive to this mistake, because it’s one we make all too frequently. Not only products and services have to be redesigned for a new market – so do management styles and procedures. Don’t assume that your Chinese customers, suppliers or staff have the same priorities or values as the ones back home.

    Attempting to fit the facts to preconceived notions.
    Americans are his market, and he needs to understand the reality on the ground. Mr. Romney has repeatedly failed to separate his own brand message from the needs of his “customers”. Likewise, international managers often try to fit data-points together to support their own business plans. Strategy is vital for a successful China business, but it has to evolve and progress. Being able to collect and process relevant data is one of your main challenges in China. You need to recognize trends and plot a new course when necessary.

    Picked his team based on what he likes, not what he needs.
    A manager’s main job and responsibility is to pick the right people. Mr. Romney has clearly surrounded himself with a team that is telling him what he wants to hear – not what he needs to know. There is no surer path to failure in China than to surround yourself with “yes men”. Chinese managers can be forthright and blunt, or they can be disingenuous flatterers. It’s up to the boss to determine which he hires and what characteristics he values. If you can’t handle bad news then you can’t succeed in China.

    Lack of preparation – market research and competitive analysis.
    It is a manager’s responsibility to get in touch with his market. Mr. Romney is a wealthy ex-banker in a nation increasingly fearful about its economic future. Unemployment and underemployment are major concerns. Shouting at protestors that they need to “get a job” and referring to his annual income from book sales of over $300,000 as “not much money” sends the message that his “foreignness” outweighs his connection to the customer. As an international manager, you have to overcome your own foreignness and find ways to genuinely connect with your staff, partners and most of all, your market.

    Let the other side set the agenda.
    Mr. Romney is engaged in an all-or-nothing competition. So are you. Many international managers in China make the same mistake as Mr. Romney when they fail to take the initiative and set the agenda in negotiations. Being reactive and waiting for the other side to make a mistake mitigates risk, but it also gives up control of the discussion. In negotiation you have to ask for what you want, or you settle for what the other side is willing to give up.

Another lesson that western managers should take away from the Romney campaign is that it isn’t over until you quit. He still has time to turn things around, and he is very much in the race. The moment he quits, however, his political career will be over. International businesses that bail out of the China market too soon will probably not get a second chance, so make sure you have a Plan B in case your primary strategy hits the rocks.

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