Breaking Out
July 20th, 2009
I write about the Discontent of General Managers in China in my column for the August issue of EuroBiz Magazine. From the beginning of the year through Spring of this year I had talked with a number of high-level managers of foreign-invested companies in China who felt their Headquarters back in the West no longer appreciated the managers’ capabilities, energy and commitment in getting the China operations up and running and smoothly operating. The managers were exploring options beyond the company, having felt they had exhausted avenues for greater opportunity inside their companies. Further, they felt the extraordinary efforts they had put in their companies were not appreciated. Instead, as one senior British manager put it to me, “The guys back in Headquarters believe the effort and the success [in getting China operations up and running] was all theirs.” Not much for expats to dine on after that.
Interestingly, the summer has seen younger people join the trend toward starting their own ventures. Western and Chinese men and women in their mid-twenties through early thirties have been inviting me out for lunch and espresso (mmm…espresso) to ask my thinking about business models they have in mind.
The contexts from which the young entrepreneurs are coming has broadened since the beginning of the year, as well: not just Western guys with knuckle-head HQs, but young Chinese women whose companies are foreign-owned in China have also felt the need to break out. Actually, whether Western or Chinese, male or female, they all seem to me to be realizing something the self-styled Western geniuses in their foreign companies have overlooked: the Chinese domestic market is expanding at the rate of the Big Bang, while international markets are shrinking and will continue to do so for the foreseeable future.
In every instance in which the Bright Young Things – whether Western or Chinese – have asked my thoughts I’ve answered the same: shed any of the boxed-in thinking you absorbed from your Western bosses at your previous job, identify your strengths – hire to fill out your weaknesses – and find the market that could use those unique capabilities that has the least amount of competition in the Yangtze River Delta, with the most amount of potential for eye-popping sales. Use only what’s useful, I tell them, and forget the tiny boxes your bosses had you in during your years of service to shareholders.
China is open for business. And don’t look back!
July 21st, 2009 at 12:06 pm
Bill
Another excellent column… I’m not thinking of leaving my current employer and there is much I like about the autonomy, but the frustrations of expat General Managers on overseas HQ’s lack of understanding or misguided expectations about China more than understood.
All too often HQ fails to grasp the difficulties of operating legally compliant, profitable local operations that are sustainable and able to grow in the most competitive market in the world. Their obsession with ‘headcount’, outsourcing and their failure to fund growth, places strong businesses is weak positions vs strong local competitors.
You mention local talent and it amazes me just how good some candidates are each time we run an employment process. I take great pleasure in meeting some of very savvy and talented local candidates and learn a great deal about local business from each interview. The opportunties for building great teams in the local market who will build great businesses really encouraging.
I’m not so sure that boom conditions exist in China right at the moment, especially in consumer markets and I’m sceptical about the statistics on growth in consumer spending. Too much credit-bubble asset price inflation (real estate and stocks) and too little direct consumer spending. Nonetheless, you are right that the future is very bright for those with a solid business model, funding and the strength to see a business through the development process (which is tough anywhere in the world). The opportunities and challenges are great and there is much real growth in the consumer sector in years ahead.
July 21st, 2009 at 12:42 pm
In the company I work for, China is simply one of the last priorities on most people’s minds (a few exceptions, at very high levels), even though it’s a major market for us AND it is the biggest potential market as well.
China is such a mystery to most westerners, who’s only experience is from history class in grade school and a few Discovery channel specials. Blogs like this really need to be promoted and made more readily accessible to more people. Without awareness, there will be a few more General Motors in America, except the next time, the Chinese competitors are the ones driving them out of business instead of Japanese or Korean.
I don’t think that day is as far away as we like to think it is.
July 21st, 2009 at 4:27 pm
Good post. Entrepreneurship is getting more and more popular these days!
July 22nd, 2009 at 6:35 am
Chris;
I agree with your assessment of China’s economy, and what it will take for many of these fledgling entrepreneur’s to succeed with the least number of “war” wounds. Still, there does seem to be an extraordinary pressure building from these Bright Young Things in China that seems inexorable. Nothing seems to be dissuading them from taking the Leap.