Bob walks into his boss’ office to discuss compensation. Boss turns conversation into an impromptu performance evaluation and an on-the-spot change of job description. Tensions ensue and escalate. Bob quits. Cost to keep Bob? A bump of rmb 3,000 and 2 extra days off a month. Cost to replace Bob? We’ll let you know when they finally find someone.

Some things in life require bold, spontaneous action. For everything else, there is negotiation training.

Managing smart means taking advantage of every opportunity to boost productivity and build a more efficient team. Old school management platitudes like “raises come faster to those who don’t ask for them” or “show me what you can do – then I’ll think about promoting you” make a lot more sense back home in the US then in Shanghai. Remember – you are fighting two HR trends simultaneously. On the one hand, you want to retain good people so that they can help you grow your operation. On the other hand, you need to control costs. Good managers will treat every negotiation as an opportunity to strike a balance between these two competing goals.

Five useful tactics for internal negotiation:

1) Listen
I know – this may be a radical departure from the norm for some of you out there, but this can really save you money, time and bad feelings. Just because the guy across the table is talking about money or compensation doesn’t necessarily mean he is jumping ship or demanding a 50% pay raise. It might be that – but you shouldn’t jump to conclusions. Sometimes people just want to talk, other times they want reassurance or have legitimate questions. What is his goal? Until you know, you aren’t negotiating – you’re just arguing.

2) Choose your battles
This is one of those great rules that make complete sense after it’s already too late. Over-scheduled senior managers try to take care of many outstanding issues at one time. Middle managers might introduce their request for a raise or promotion with a laundry list of organizational problems or extra work they have had to do to correct them. If you turn this into a point-by-point debate, then you should expect your conversation to be long, painful and hostile.

3) Linkages get messy
The guy asking for a raise or a promotion has come in late twice in the last quarter and completely blew what you though was going to be an easy sale back in June. Now you’re feeling clever by delaying action until you see progress in those areas. The good news is that you’ll succeed in delaying the raise. The bad news is that you have turned the process into a disciplinary hearing and not an opportunity to set goals or discuss the future. You should also not be surprised if this tack results in mutual accusations, fault-finding and retribution.

4) Watch the power imbalance
You say “honest and constructive dialogue”. He says, “arrogant bullying”. This is particularly important when managing cross-cultural negotiations – especially when an American boss is negotiating with a Chinese. Europeans can also be sensitive to this. And Canadians. Come to think of it, this warning applies to just about everyone but New Yorkers. You may see yourself as the “cool, with-it team leader”, but your team might see you as “cruel, wicked Dear Leader” – at least some of the time. Negotiations tend to be one of those times. This is a perfect opportunity it try out some of that ’sensitivity’ nonsense that you’re always hearing about.

5) Have a goal.
That goal probably shouldn’t be getting your employees to feel sorry for you for working so hard. First question – what do you want to do with the guy across the table ? Do you want to expand his role, maintain the status quo, or ease him out of the picture? Decide carefully. It’s ok to schedule another meeting – but be clear on your own goals for the meeting. Hint: thwarting his request is a pretty weak goal.

Your China HR budget is going to be severely stretched whether the China business environment is good or bad. HR spending in China has gone through the roof, and you are going to have to start worrying about retention and turn-over more and more.

Until now, you’ve probably been looking at controlling turnover and maximizing what little you have to spend on training as two completely separate problems. In China we have a strange situation where training - particularly outside training — is highly desired and sought-after. But the problem is that by the time your expensive training programs bear fruit your bright young manager may already be working for the competition.

Take a look at SmartChinaOrg.com ( www.smartchinaorg.com ) for an interesting take on ROI and training in China. It turns out that training’s true role in the organization may be more complicated than just skills & processes. In China training can be an important and cost effective tool for retaining key employees.

Here are a few ideas to maximize your training ROI — as a retention tool

1) Have a regular schedule. One cool training session 14 months ago stands out in your mind, but your team has forgotten it ever took place. Plan a regular schedule — which should include major multi-day events and smaller, less formal events.

2) Use for team building. Your Chinese HR manager may still think that packing a room full of unrelated employees is a great way to spread costs, but it kills one of the most important potential benefits — the team build. 6 - 8 in a group is best, anything under 20 can still work. Over 25 in the room and you are in danger of it turning into a lecture.

3) Outside is better than inside. Professionals are better than colleagues. Anyone is better than the boss. Make the training a break from routine. Let them get out of the office and go to an event at a hotel or conference. Put someone on a plane to HK or Beijing. This is a great, moderately priced way to recognize performance or smooth over a rough patch.

4) Chunk it. They aren’t going to learn the art and science of sales in a 3 hour seminar, so don’t waste their time and your money - unless you are getting another kind of benefit (fun, cheap, etc). Instead, focus on skill that will be beneficial to the company right away. In the case of sales, I’d work on phone skills with your locals and younger guys and closing techniques or sales management with your more experienced people.

5) Follow up immediately. This should include something real. A budget, a project, a promotion, a new office, an assistant, a raise - something. This is all cheap (relatively) and HIGHLY TARGETED. You can use it when and with whom you want — but it works much better as a preventative than as a cure. If they’re already talking to someone else, a 2 day workshop on time management ain’t gonna save it.

As with any kind of spending, follow up systematically and choose your metric carefully. I recommend months on the job be one of them.

The New Year is upon us. Happy Year of the Rat. Now let’s all get settled back in and back to work, thank you. The commission-earning segment of the Chinese economy is ready to get back to business.

In the world of Academia it’s the start of a different kind of year. A new semester is beginning – bringing a new class of international scholars to learn about the joys of China.

Welcome NYU Spring 2008 interns. Don’t worry. It gets warmer.

A couple of fresh-faced interns running around your shop can be a great morale booster. They’re young, clever and amusing as hell – if they’re happy. And they can generally be counted on to do a lot of the more mundane, monotonous and awkward tasks.

Unless you’re in the fashion industry, you can pretty much forget about sending them out for coffee and running errands. You can both do better. It all comes down to finding the right jobs to delegate to them - but that can be tricky. Aim too high and you’re sure to end up disappointed. Aim too low and they’ll lose interest and drift off.

5 Rules for a positive intern experience.

1) Projects are good — especially those involving research. I like having them help with things like competitive analysis and collecting data on potential new markets. Make the projects chunky – break them down into 2 or 3 week segments. You might be surprised at the quality of their work.

2) Explain the big picture. Teach them about your industry – and China business. They are here to learn and they may be very into hearing what you have to say. Or then again, they may not. If your firm has a standard orientation presentation, then by all means use it.

3) Keep expectations reasonable. Yes, they have high IQs. And I agree that they really are sharp as tacks. But they have absolutely no experience. They’re like 20 years old or something. They don’t want responsibility, and you don’t want to give it to them.

4) Interns love marketing. It’s immediate and quick and exciting. They get to go online a lot — and that’s what they do and how they live. If you need any market research or data collected, this is your chance. They’re also great at updating PPTs, orientation & sales presentations and anything else media related. And they make great impromptu focus groups or for on-the-street-pollers.

5) Their schedules are likely to be very flexible. Extremely flexible. They have homework and field trips. Plan accordingly.

I just found a great potential hire – in my assistant’s trash file. It’s not completely her fault, however. Someone applied for a sales position though a “send me information about your product” advertising button on one of my websites. Ironically, this is just the kind of person we always say we are looking for – an aggressive, self-motivated, out-of-the-box thinker. He found a creative way of reaching potential decision-makers, but only an equally creative, flexible, heads-up organization would be able to react.

I asked the receptionist and sales assistant how many emails like this one we receive in an average week. Though I never did get a straight answer, I get the feeling it is a significant number. My staff now knows what to do with unsolicited hiring inquiries. Does yours?

Business leaders have to be careful to make sure that the priorities of their team dovetail with senior managements’ priorities. Since most expat managers are constantly on the look-out for new staff, they sometimes assume that everyone else in the company is doing the same.

Tips for making your organization more recruitment-friendly:

1) Pay for the behaviors you want. Pay a significant bonus when ANY staffer on your team recruits a new colleague who stays with the company for 3 months. Your best workers make the best recruiters. Just plant the idea in their minds.

2) The HR department isn’t the only one with recruitment responsibility. If you are looking for college grads to fill a management trainee post or for senior managers, then you HR team is the only one who can help you. But if you want front line sales, marketing, artists & designers or engineering types, then your best bet is to get your existing team to recruit your friends. Make sure your HR managers are onboard with the plan.

3) Have a place for applicants to apply on your website, newsletters and other online publications. It costs next to nothing and reaches your widest possible readership.

4) Good, up to date contact information on your site. How would I reach you from your site? If I hit the “contact us” or “send email” button, where does that message go? I bet if you took a look, you’d find plenty of job inquiries along with the spam, advertising and bona-fide marketing inquiries.

5) Spread the word in-house. Make sure that ALL your people know that employment inquiries should be referred up the chain of command – either to you, your HR department or the relevant line manager.

China businesses have advanced quickly, and the set-up and logistics nightmares of a few years ago are already fading into memory. The new challenges are higher up on the org chart – how to hold on to the heavy lifting managers who keep your departments operating. There also needs to be a way of engaging your younger class of high-potential new super-stars who have recently joined your team.

You are familiar with key accounts and key suppliers. Time to apply the same principal of unfairly-excellent service inside your own shop.

Retention plans can be broad or narrowly focused. China managers and owners are familiar with the scattergun approach, but should now start introducing a more selective tack as well.

1) Tell them that they are on your radar.

This has a number of great results. First, it gives them some hint as to your thinking. Your new superstar may have no idea you think he has potential. This also gives you an opportunity to test the waters and find out if this person is worth the investment. Are they planning on running their family business in a few years? Or going back to business school? Have an honest dialogue with any high-potential young manager and find out how they feel about being fast-tracked for a higher management role?

2) It’s not supposed to be fair.

You know this – now they have to. You will be treating some members of your staff differently. They will get better compensation, better opportunities and more responsibility. Some of your young managers may find this stressful. Others will become power-crazed monsters. You will need to manage both,

3) Get them more involved.

One of the most frustrating periods for an up & coming manager is being told he’s being groomed for great things while he’s still sitting in a cubicle. Don’t send mixed messages. Development means activity. Get him involved in training & supervising others. Look for ways to increase his customer contact. Encourage input on strategy issues.

4) Better perks.

Senior management looks like a club from the outside, so use that to your advantage. Start paying for things like training and education outside the office – or maybe even in another city. Travel to trade shows and exhibitions can be win-win, since he’s doing something exciting – and you don’t have to go yourself. Give him a little discretionary spending and a wider range of decision-making authority.

5) Make them part of the family.

Or better yet – make their families part of the family. Get involved in the kids’ education or family healthcare plans. Financial planning is pricey, but nothing keeps your guy’s head in the game like a stable, healthy household. Once you have the wives and children on your side, the retention battle starts to look winnable.

China ex-pat managers: You shouldn’t be directly managing more than one layer of your organization’s stucture – at least in your sales / marketing department. If you aren’t tagging your older guys to do the worst, most difficult management tasks, then you are passing up a great training/development opportunity – and depriving yourself of some hilarious hi-jinks. But the mistakes they learn from while you’re watching are a lot cheaper then the ones they make when they are on the road seeing a huge potential account.

How do you turn senior salesmen into sales managers and supervisors? 5 Steps

Make them trainers.

Orientation programs. Have them help write it if you don’t have one yet, and implement it if you do. Nothing helps a new hire get off on the right foot like a decent, relevant orientation training that explains why the company exists, what it wants to do and how it tries to operate. You’ll do the hardcore skills training next.

Skills training. Mediocre training instructs about procedures and instructions. Good training replicates experience. Invest in a Train-the-Trainer program, and have your guys do a better job delivering solid training to all new hires.

Make them supervisors.

The heart of sales management is numbers. Goals, closes, number of meetings, number of calls. Get your older salesmen into a management mind mode by focusing on goal setting and data collection. You can work together to decide on remedial action.

Make them bankers

Give them SMALL amounts of money to dole out. Rmb 500 – 1000 per month range. Enough for pizzas, lunches, networking events, etc. Gives them god-like power in the eyes of their team – and in their own.

Make them HR managers

Have them do appraisals of the team after 3 or 6 months. Some bosses like to get sales managers involved in staffing and hiring decisions – but that’s a tough call. HR is tricky, and I’ve always liked to make it a specialty. Training and supervising are everyone’s jobs, though.

Make them leaders

Have them help someone do better. Get closely involved.

Have them fire someone. This is hard, and not for every management candidate. But for young managers in a big US firm, this could be an important experience.

Knowing where customers are coming from is a senior management responsibility – and it is strategic to your business. Many China-based international managers are delegating too much client contact to front-line staffers who tend to be paid little, trained less and leave quickly.

Do you have a thorough demographic profile of your own target market?

Analyze & Profile
Analyze your end users. Knowing who they are and being able to build a reasonably accurate profile is basic. Profiling works best after you have analyzed your existing client base – at least for ongoing businesses. In other words – don’t decide you want the high end professional international market and ignore the fact that your main market is actually local middle-aged housewives. Look at your existing or recent client list and see what patterns emerge. Are all of your clients from a similar background or work in related industries? Once you know who your real market is, then you can be more proactive about going after different target demographics.

Clients & End Users
Don’t confuse clients with end-users. When I do consulting & sales training, my client is the HR manager or MD, and my end-users are usually either Chinese managers or European salesmen. The decision-maker is the one I have to convince – but I can’t ignore the End Users. End users tend to have stronger negative, or veto power but very little positive or selection power.

DIY or Designate
Do it yourself or designate a senior account manager who can represent you at a high level. The key here is language and culture. If you don’t speak good Mandarin or the local business language, your big client relations strategy is probably closing your eyes and hoping for the best. Designate someone of weight and substance to handle client relationships – even if they aren’t officially in sales & marketing. Debrief regularly and systematically.

Use the Tools
Tool-use is what separates us from the lower animals. The tools you care about are cookie-cutter processes backed up by software (i.e.: Automated Sales Processes, Customer Resource Management) and standardized, regular measurement tests (i.e.: psychometric assessment). The more tools that you use well, the better your results. The right IT can help when you have high turnover or inconsistent skill levels.

Sometimes the most basic concepts are the hardest to explain. Fortunately you usually don’t have to worry about explaining the obvious – unless you have decided to manage in China. Then you’ll need to figure out how to explain big-picture issues that seem obvious and “common sense”. One of the things you’ll have to explain is, “What is the point of this business?”

If you’re smart, you’ll tackle that question in the Orientation phase of the employee’s career – not in the exit interview.

Orientation program
Orientation programs are where your new hires learn about your company values, corporate culture and how to fill in the government insurance forms. In some companies, a five-minute confab between the new hire and an HR manager about payroll and benefits is the ENTIRE orientation program – and that causes problems.

An orientation program should help the new hire come to a deeper understanding about his role in the company and his company’s role in the universe.

There are two directions from which you can attack this issue. Top-down or Bottom –up. Whether you are wrestling with an existentialist dilemma or trying to improve employee retention, this will help.

Top Down Orientation.
This approach helps the new hire get a truly “big picture” understanding of your business’ scope and expansion plans. If your guy is managing or working with people in different offices or a geographically dispersed market, you’ll definitely want to examine this type of explanation. You shouldn’t have to spend to much time explaining about the top few entries, but once you get to such “obvious” basics as Market, Industry and Specialty – be prepared to do some serious coaching. Your new guy may have only the vaguest notion about what your firm really does or how it integrates with the larger economy.

World
Economy
Nation
Market
Industry
Specialty
Company
Department
Employee

Bottom Up Orientation
Bottom-up analysis starts at the very basic level. If you are selling stuff, then Bottom Up conversations will start with the end user, then work up to the buyer, then the retailer, the distributor, and so on right back up the new trainee and his department. If your activities are more on the manufacturing or service side of the equation, you might start your BU orientation at the raw material or “Greenfield” level.

User
Customer
Employee
Department
Company

Which one should you base your program on? The best companies integrate both approaches to give their new hires a true global view of their new jobs. But companies that don’t take either approach might find that the first time they discuss company vision with employees is after they have already quit their job.

Just saying Sales HR is strategic to your China business is not enough. You have to step up and act it. That means getting engaged with a wide range of people and problems at every level of your sales department. I love watching managers and owners pass responsibility down the line – but there is an unfortunate tendency to treat delegation like a “job finished” check mark on a to-do list. Delegating is good for your operation – but it isn’t a time saver for YOU until much later. First you have to make sure that you delegatee is solving problems and not just finding effective ways to hide them.

How should you make sure you sales managers are doing the right job in the right way? Here are 5 key areas to check on:

1) Are you recruiting well?
Have a manpower plan that means something. Update it and make sure it integrates with the rest of your business model. If you want to double the size of your sales staff in 2008, are you going to hire ore supervisors? Assistants?
Where will you put them all? Who will train them?

Consider the pros and cons of hiring experienced workers. Are you figuring on a training plan for the experienced managers? How will you get your new grads up to speed in a hurry?

Many sales organizations churn through new hires. Make sure yours is getting the results you need. You need to build a system that will train new managers in addition to competent line workers.

2) Are you training well?
To train well, you need an integrated plan with clear-cut goals, milestones and deliverables. Don’t delegate this one down the HR rabbit-hole and hope for the best. Training and staff development is strategic – it requires multi-year planning and close monitoring. Many HR teams are hiring friends and acquaintances in a series of one-off beauty contests. Senior management needs to get involved in training and development.

3) Promote better
Commit to a structure and a chain-of-command, and then staff up accordingly. I’m sick of looking at fictional org charts and then hearing stories about how Sunshine is sort of in charge of customer service because she was doing that when the company was bought in 2004. Decide on each job’s target profile and then train from within or recruit from the outside to build the machine you want

Once you’ve promoted, make sure that your new managers are managing – not just selling at a higher level. If your sales managers aren’t training, supervising and building the business, you have to bring in other manages to do it. Don’t live the lie that your new recruits are “learning on the job”. They are learning to find new jobs.
Teach leadership. American managers feel that this is wrong – and maybe in NY and Chicago it is. In China you have to send them to courses or bring someone in. There are lots of good trainers doing this kind of work in the big business centers.

4) Orient the new employees.
Have an orientation program. Test it, update it, go through it yourself. One of the most overlooked and undervalued of all management activities is orientation training. It is your first – and may be your only – chance to set the tone of your company’s culture, expectations and values. This stuff matters.

5) Measure what you can
As your company grows, your ability to measure objectively and analyze the data is going to determine your success or failure. Use off-the-shelf software and technology to build a reliable battery of standardized tests and feedback systems. Develop a profile of your ideal candidate for hiring, test and appraise during the selection process, and test to make sure your new assets are operating effectively. Most important of all, have all data immediately flow back to senior managers at HQ. Developing a good system of checks and measurements – and knowing what to do with the data you collect – is going to be another crucial factor to your long-term success.

Sales management in China has two aspects: operational and leadership. Good sales-managers are usually the best sellers that the company can lay its hands on. But they also usually have to lead a team that is probably quite management-intensive and is prone to personality and relationship issues.

Maybe it’s a “harmony” thing, but many Chinese sales teams are being run by people who consider themselves just one of the people. They like the title and the pay, but they tend to avoid jobs that make them hated by their co-workers and colleagues.

Tacit authority to do a job they don’t know how to do – and find extremely unpleasant – makes for neglect.

If you are promoting salesmen to management positions – or already have – pay attention to these areas:

1) Be Explicit. Don’t assume you are on the same page.
Have you spelled out your sales manager’s ideal job description in terms of leadership? In China we have to be more careful of “implied” or “assumed”. Many newly-appointed sales managers are reluctant to take a strong leadership role when they still consider “friendship” to be the prevailing form of relationship. You have to play a larger role here – but subtly.

2) Train. Give your guys the skills to lead.
Throwing a new manager into a leadership role without some form of preparation is asking for trouble. Your guy will need train the trainer, leadership, presentation and negotiation skills training. I know – you gave him a book and a CD with a seminar on it. Now you have to know – he didn’t read it. Arrange for a real trainer.

3) Compensate.
Your guys may not be too timid to lead – you might be too cheap to pay them for it. Sales managers are often brighter than they seem to be. They figure things out. You arranged a compensation plan that is supposed to encourage your sales manager to lead. He may have figured out that selling as a high-powered lone wolf is more profitable. Check your compensation plan.

Most young managers learn to lead from examples around them – and that may mean you. Before you come down too hard on newly promoted managers for weak leadership or interpersonal skills, take a quick look at your own.