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Personal Data Name: Steven Dickinson |
"'The most successful international players in China do formal, comprehensive, front-end preparation & planning -- and they expect to be here for the long term.'" | |||
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Experienced China Lawyers. Fluent in Chinese Language and Culture.
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One mistake that SMEs make is to underestimate the amount of time that Senior Managers have to devote to China. They don’t have a team of lower-level executives. It’s basically the owner and staff. Many SME owners they can come here and hire a brilliant local staff person to run the show and they’ll never have to come back. Companies like that don’t make money – they either go out of business very quickly or the local staff they hire starts doing the business for themselves. More commonly, the company finds out that their senior people have to spend 6 months in China, and they can’t afford it. Staff people can’t do it. Some small companies that I know of are successful in China, but the senior managers end up spending much of their time in China.
Length of time things take in China.
I’m a typical American, and I like to get things done fast. All Americans like to get things done fast. It takes a long time to get things done. You have to back off and let things happen the right way. One reason for this is that many Chinese counter-parties have motivations that aren’t economic efficiency. They have other motivations. Their reason may be employment for the local community. Their reason may be they need to fill a quota. Their reason may be that they want their son to go to the United States. They also are not motivated by efficiency because in China, people aren’t punished for being late as in the U.S. Another related problem is that deals disappear. You’re working with someone for a long time, and you think you’re developing a close relationship and that you’re making progress. The signing ceremony is going to happen in 3 days, and you get a message “don’t come”. It’s not because they’ve decided not to do the deal, but rather because they’ve decided to do the deal with someone else. Chinese negotiate with multiple parties all the time. It’s very possible that they’ve picked some other partner NOT based on economic efficiency. You may think that you’ve got guanxi, but in reality you have NO guanxi whatsoever. Foreigners don’t and can’t have guanxi. Political connections or other connections can trump your economically motivated deal. Another reason deals disappear is that the person in charge of the deal may be transferred at any time to another project or another post. When that happens, your deal is dead because there is no institutional commitment to the deal, only personal commitment. Political connections or other connections can trump your economically motivated deal.
Finding people who you can trust and rely on.
Chinese professionals today don’t understand what American companies need. This might change over time, but right now they don’t understand the level of detail, the idea of thoroughness, the standards and the expectations. They often won’t provide you with anything that you can use. Chinese professionals tend to be reactive. Chinese managers have a tendency to follow directions, even when they are aware that the method being employed is ineffective or counter-productive. 6 months later when it turns out that this was the wrong thing to do, and the Chinese will tell you that they knew all along – but that they were following your orders. "You're the boss, and you said to do it so I did it", is the common reaction. It is therefore necessary to search diligently to provide professionals who will provide you with advice and information that you can really use.
The most important thing I did was to learn to read and write Chinese well before I became a professional. It is almost impossible to do this after you have a full-time professional job. The key to my ability to deal with China is my skills in both spoken and, more important, written Chinese.
As a result, I can do two things that non-Chinese speaking/reading lawyers can’t do:
1. I can tell you the real state of the laws and the regulatory environment in the area you’re working in. You can not just make a phone call and rely on what government officials tell you – they all have different opinions and perspectives on what’s going on. You have to read the laws, the reports and the textbooks yourself to really understand what’s happening.2. I can get things done on a local level outside of Shanghai. I can speak with local people to actually get things done. If needed, often I can make the locals do what they’re supposed to do. Moreover, I can do it based on the relevant documents. For example, I can demand to see the Chinese language balance sheets and tax reports. Sometimes, however, I have to report back and tell owners that things aren’t getting done and that they aren’t going to get done. That’s a big part of my value-- to tell people when they’re being taken for a ride; I can make that determination and will present the real facts to western owners. It’s often not what people want to hear, but it is much more valuable than listening to a load of excuses and lies.
Prepare in advance. Many people tend to come to China on a “learn as I go” basis. They think they can dispense with front-end planning. This is particularly true for Americans, Europeans and South Americans. China requires much more advance planning than most other places, and you really have to devote time and money to front end planning. You need to find experts – you can’t really figure it out by yourself. You have to prepare a comprehensive business plan. People come to me and say “I want to form a company in China – what’s the lease rate for office space?” That’s simply the wrong approach. You have to do a comprehensive analysis of the whole business in advance – with lease rates being just one of many variables. You have to find something about China that you like that’s not business oriented. You’ll have to be here more than 6 months, and if all you have in your life is your work it will be very hard on you. It can be anything – tea, art, food, ANYTHING. It’s very hard to survive China with only ex-pat friends and an ex-pat lifestyle. You can live in an ex-pat community and deal only with other ex-pats, but then you’re not really in China—you could be anywhere. There’s no point in coming to China if you are going to live that way. China can be frustrating, and there will be a lot of things about China that you won’t like. But if you find something that do like about this place – and there are plenty of choices – then that can keep you going when things get difficult.
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