PEOPLE MANAGEMENT : Chinese Connections – Can Kiwis bridge the cultural gaps?

Local executives who fret over managing staff in New Zealand should try running business in China where complex bundle of cultural and linguistic differences make challenges here look like stroll in the park. Add to that some fundamentally divergent thoughts on what constitutes normal business practices and principles, and fast evolving legislative backdrop against which to do business.
Then there are the ‘connections’ in China without which very little gets done and for which most offshore enterprises are the best part of 5000 years behind the start line.
Pity, then, those international managers who can see the prize of engagement in the vast Chinese market without an inkling of how to attain it.
For while the Great Wall of China could be wallpapered with all the written advice on the People’s Republic’s re-emergence as world player and its trade potential, when push comes to shove it’s people who will make or break an offshore company’s entrée into, and continued existence in, the burgeoning market.
That message comes through loud and clear from the 20 international business leaders interviewed for new book China CEO by American writers Juan Antonio Fernandez and Laurie Underwood (see our review in last December’s Management magazine). We’re talking big business here: the likes of British Petroleum, Coca-Cola, Philips and Du Pont. Many of these highly experienced China hands ranked people issues as their number-one headache.
How best to harness people power in the People’s Republic was also connecting thread woven through the many presentations and private conversations at high-powered China Business Forum held in Auckland last November. Amid the usual predictions of ongoing rapid economic growth (expect to see the thick end of nine percent for some years to come) and key business opportunities (expect big spike in business if and when the Free Trade Agreement goes ahead) speakers shared their HR challenges, frustrations and successes.
In what circumstances, they considered, is it best to employ an overseas or local Chinese manager to head up or front an international organisation in China? What are the key credentials? To what extent can people management skills honed in countries such as New Zealand be transferred directly into the Chinese business arena? What should be adapted, refined or dumped? How well does the Kiwi way of doing business, our entrepreneurial spirit, relaxed style and lower power distance culture jibe with Chinese style?
More to the point, to what extent is the skills gap problem and how best to attract and retain staff?
For the 20 respondents in China CEO, having the right stuff at senior management level in China means appointing king hitters who can front up with polished portfolio of both professional and personal qualities and credentials. Those who succeed take to the Chinese market proven technical and/or company expertise, international experience, multicultural mindset and commitment to learn. On the personal front, it helps if they have humility and strength, patience and speed, and nose and heart for “Guanxi” building – or Chinese-style networking.
Clearly, our pocket-sized Kiwi businesses in China are no British Petroleums or Coca-Colas. Ever since Victor Percival – one of New Zealand’s most experienced players in China – led our first trade mission there back in 1956, smart operators have known their best chances lay in playing to their strengths. That rules out any misconceptions about muscle but rules in forging genuine links between people. “Find blind man’s stick,” as ANZ China’s president Andrew (Jock) McGregor puts it. “Find people who will act as bridge for you, communicating both culturally and linguistically.”
For ANZ, which recently celebrated 20 years of operations in China, the lesson learnt has been the need to localise as much as possible. In practical terms, says McGregor, that means that just two of the 120 staff spread throughout the bank’s Beijing, Shanghai and Guangzhou offices are ex-pats. The vast majority of staff are locally engaged Chinese. handful are Chinese nationals who have returned to China after stints overseas.
Despite its long track record, and along with many other overseas organisations, ANZ is now being drawn into fierce competition for staff as the depth of the talent pool diminishes. That is being fuelled further as private enterprise takes off in the local sector and foreign companies set up camp in droves.
For if organisations such as ANZ would like to employ bunch of well-educated people with fluent Mandarin and English, well-honed business acumen, and both international and local experience, so does everyone else.
Adding further fuel to the fire is the prodigious ambition of many Chinese workers for whom career advancement is an urgent and top priority. Those companies that cannot fulfil this need will haemorrhage staff fast.
Nick Tuck, general manager strategic sourcing for The Warehouse Group, recalls talk in Shanghai of Chinese workers uprooting themselves for as little as NZ$200 more per year. Salaries in certain sectors and geographic locations are set to ratchet up.
Unwilling to fight off offshore predators by throwing buckets of dollars at staff to stay, ANZ has set up raft of initiatives to provide meaningful career paths to existing workers. ANZ’s retention strategy builds on its network of offices throughout Australasia to offer staff series of international career stepping stones.
Other programmes help engender sense of community and belonging through building connections with local orphanages and state schools. Tellingly, when asked how staff would like to be rewarded for excellent performance, the bank’s leadership group came back with the notion of company trip to see the pandas and other attractions at Chengdu. “They are,” says McGregor, “absolutely over the moon about it.”
If our nation’s largest bank has to think this fast on its feet to fend off international rivals for talent in China, what chance do smaller Kiwi players have?
They may, it seems, be on to winner. For embedded deep in the business DNA of Kiwi firms are number of attributes that sit well with Chinese cultural mores.
Nick Tuck may still be based in New Zealand but every month for the past two-and-a-half years he has winged his way to China to check out The Warehouse’s Shanghai-based business.
Once there, he says, his morning protocol is exactly the same as it would be in New Zealand: he walks through the office greeting everyone by name. Successes and personal milestones are celebrated in much the same way they would be here, with cakes, morning teas and other low-key get-togethers. The comfortable, open and family-friendly culture chimes particularly well with traditional Chinese values.
Such an approach can also cement loyalties of considerable strength.
“The Chinese,” says ANZ’s McGregor, “see both Australians and New Zealanders not as weak but as warm and friendly.” Contrast that to the Americans whom they view with suspicion more appropriately reserved for “a 800-pound gorilla that could do them some damage”.
While it is true that big offshore companies often have head start in attracting top Chinese talent, their vast scale and autocratic remoteness can act as turn-off even for the most ambitious of Chinese careerists.
There are now growing signs of people enticed away from New Zealand’s Chinese enterprises returning to our more friendly, albeit less lucrative, climes.
In China, as in New Zealand, the message coming through may be that those companies that treat their employees as individuals can foot it among the big boys too.