Two of the most frightening trends facing up-and-coming business leaders in today’s economy are the rise of China as a competitive force and the unstable job market. Smart professionals know how to turn weaknesses into strength and vulnerability into opportunity. One way to do that is to become an expert in managing their firm’s China opportunity. They will become the “New China Hands.”
Where are the New China Hands coming from?
According to Janet Carmosky, head of TheChinaBusinessNetwork, the new class of China-ready US managers are already on the scene – even if they aren’t aware of it. To be China-competent, a manager must be able to manage the needs of a US-based HQ – complete with shareholder demand and organizational procedures – but still understand China. The days of the “loud & proud American” forcing his customs on the Chinese subcontractor are long gone – but so are the “China pundits” whose main job skill was teaching American managers to be less annoying and more “harmonious” to Chinese cadres. The New China Hand knows how to work the system to help his team achieve their goals – and position himself to move up the ladder.
The China Job Function
The New China Hand may not be high profile, but plays a crucial role in guiding his team. The role of the modern China expert is to support, diagnose, and potentially rescue China projects. But he or she also has to develop proposals and cultivate relationships. American executives are notorious in China for letting potentially productive partnerships die of neglect. Some of the job responsibilities of the in-house China expert will be:
- Support the strategy-development function. American firms are still operating with incomplete knowledge and unrealistic goals in China. The in-house China expert will play a key role in promoting appropriate initiatives, and rehabilitating poorly considered plans.
- Navigate Chinese – and US – bureaucracy.
- Diagnose existing bottlenecks and troubled projects to deliver actionable
- Develop markets in China – both the luxury brands in the wealthy Tier 1 and 2 and a new range of products and services in the less affluent areas.
- Manage relationships with China partners – both old and new.
Out with the Old China Hand?
How does the new breed differ from his predecessor – the famously quirky Old China Hand? Well both know the ins and outs of Chinese culture – but that’s about where the similarity ends. The irony is that while the Old Hand springs from solid Anglo-American roots, the multi-cultural New China Hand may actually have better communication and networking skills back home in HQ. The Old Hand earned his pay by being “our man in China.” He was often the company’s sole representative in the country, and after an extended posting he tended to identify more closely with his local counterparts than with the colleagues he left back home. The Old China Hand saw the world through the lens of Chinese exceptionalism – everything about business in China was unique and required the deft touch of an expert.
While organizations still value the expertise and perspective of this viewpoint, the New China Hand will be required to take a more universal view. China needs to be part of an integrated global strategy. This up and coming class of manager will ensure that their companies maintain unique China product portfolios that still mesh with the larger global corporate strategy. Firms can’t ignore the special needs and preferences of the China market – but neither can they decide to opt-out of China because the government is difficult or the competition too intense.
Both the old and the new China hand still has a role to play, but certain traits and tendencies of the China establishment within MNCs have clearly outlived their usefulness.
Outdated China roles:
• China cheerleader. No more stories about Chinese skyscrapers or burgeoning middle class. It’s an economic miracle. We got it. Now what’s our profit margin?
• Blue sky optimist. Enough Pollyanna projections about 1.3 billion customers. Data, facts and reality, please.
• Guanxi connector. American companies have been burned by guanxi-gone-bad. Relationships are important in China, but MNCs have to learn how to apply tough-love in the Middle Kingdom.
• Marco Polo – the intrepid explorer. No more solo acts in China. Negotiating China deals is a team activity.
• China cheapskate. Cheap China just isn’t a reality anymore. The race to the bottom is over. We all lost. Talk about market potential or supply chain efficiencies – not extruded plastic parts.
Is China a Hardship Post Again?
China has turned out to be one of the toughest management posts in modern business. 2013 looks like it will be even tougher – the new administration in Beijing is an all-princeling lineup that will look to entrenched SOE’s to steer the nation’s business path. Washington will be pre-occupied with domestic budget affairs and feisty about protecting trade rights & projecting national power. The China market has never been more competitive, and Westerners are hobbled by unfair regulations and a nervous Chinese middle class market.
Management Prescription for a Tougher China
The response to a more competitive, hostile – and often unfair environment – is not trade war or government intervention. Western companies have to leverage off their existing competitive advantages and competencies. For most companies that means superior management, sophisticated marketing, and the best new product development. To make those strengths pay off in China, the C-suite has to give the China market its proper due in terms of marketing and management. The only way to unlock the true potential of the China market is to foster the development of the next wave of Chinese professionals. Managers who understand that while China may present unique challenges, it is still part of a global opportunity.
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