Doing business in China was once characterized by low costs, steep learning curves and a lack of best practices. No more. Nowadays, China is expensive in terms of funds, personnel AND opportunity cost. Still, if your business requires a global marketing footprint or relies on supply-chain efficiency, you may need to have some kind of China presence.
If you are going to China to negotiate a deal, then you occupy three distinct roles.
First, you are the point man on the field that must represent the home office and execute in its best interests.
Second, you are responsible for gathering pertinent information and moving it through your organization to maximum advantage. This involves a great deal of internal negotiation, which must be done well before you start negotiating in China. If you try to start changing your firm’s global policy, or acting on emerging opportunities (or newly discovered dangers) without first doing the necessary groundwork, you are going to face bottlenecks, conflicts, and unpredictable outcomes.
Third, you are the relationship builder. This is a delicate role under the best of circumstances and it is particularly challenging if someone back in HQ thinks that he has already established all the key personal relationships when he banqueted his way through Shanghai 18 months ago. If you are running point, you have to make sure everyone on your team—from the big bosses back home to the local staff supporting you—are all working off the same playbook.
HQ Bosses — Same Goals, Different Methods
If, on the other hand, you’re a top-down senior strategist based in HQ then you have to understand the mechanics of business in China. China deals terms are never “set and forget”—you cannot use US or European operating systems as a template for a new China business. We admire those senior managers who set bold strategies for entering the China market, just so long as they remember that for every self-congratulatory press release there will be 10,000 ground-level micro-decisions that must be executed properly. If you aren’t actively supporting your own people in the field then you are undermining them, and yourself.
The biggest source of IP loss in China isn’t hackers or sophisticated espionage. It’s an overhead projector, a whiteboard, and some well-meaning nerd from your own operation who has been left alone with your Chinese counterparty.