from Eurobiz Magazine

March 2010 issue

by Bill Dodson

Michael, a British engineering manager at a foreign-invested “green industry” factory in China recently lamented to me, “They [my staff] won’t think outside the channel. I keep hearing, “it’s not in my job description!” It’s a common complaint in Western companies that are trying to get their local employees to think creatively about how to improve business and production processes, and even product design. Building innovation cultures in Western-invested companies is proving a challenging prospect.

The Chinese rocket scientist Qian Xuesan once asked, “Why does China produce so many clever people, but so few geniuses?” He died last year at the age of 97,with the question gone unanswered. Westerners and Chinese alike point the finger at the education system, which values rote-study and regurgitation of facts over exploration, discovery and dialogue. One Chinese university student told me, “Professors don’t have office hours [in which students can ask help with difficult subject matter]. If you ask the professor a question, he tells you in front of others you are stupid.” For all that, many university students simply show up for examinations, having spent days and nights memorizing cardboard cut-out questions to pre-figured answers. Another barrier that discourages learning innovation from early on is family- and peer-pressure that molds the value of Face in the society. Making mistakes or even minor failure is disgraceful.

So, many Chinese nationals simply do not know how to play with ideas, try them on, discard them or improve on them or simply let them go if there seems no way to make them work in the real world. The Western CEO of a services firm in Shanghai intended to help Chinese children with social skills through play told me he has his local staff literally play with the products his company imports from the West so the staff can effectively market, sell and support the service. How else, he surmised, would he be able to get his Chinese marketing staff to effectively market a playful approach to learning if all they did as children was study?

Another British manager, named Peter, suggested to me that his staff did not have “application knowledge” when he first started up the factory ten years ago. His factory makes DIY tools. He posed the question to me, “How can engineers extend a tool or create a new one if they’ve never used tools before?” He recalled an instance in the early days of his company in which engineers had been assigned to modify an appliance for the local market. The staff returned several weeks later with a range of colored, detachable ears consumers could fix to the appliance. “My engineers would come to me with ideas I already knew were not workable,” Peter said. “So, to encourage their creativity and also bring them down to earth, I would tell them, ‘OK, there’s the machining equipment – bring me back a prototype in a couple days. At the beginning, they would always come back and admit their idea was not workable. After time and experience handling and working with the tools, they eventually succeeded in producing some real changes for the product. Eventually, I made these innovators responsible for guiding someone more junior in their own department in the same way.”

Product innovation, of course, differs from process innovation to the extent that product innovation is punctuated: process improvement should be a continuous activity, built into the character of the organization; product innovation may actually just be confined to a department. The Chinese HR director of Western plant near Shanghai explained to me his company has had a rewards system in place for four or five years now in which any and all employees are awarded with and recognition for making genuinely innovative changes in their production processes. During the economic downturn, the company began hiring engineers for an R&D department it decided to build. A year on, in January 2010, the company had already hired 13 engineers; they intended to double the size of the staff by summer of the same year. The department is responsible for localizing products its Western counterparts design.

Chinese professionals whose experience has solely been in Asian companies are not accustomed to voicing their ideas or fleshing out their flashes of intuition. “Most Chinese companies are extremely hierarchical,” Peter told me. He has spent a great deal of time personally working with Chinese suppliers to improve the quality of their components and to meet international standards. “Most of the companies are run by a ‘big boss’. Everyone hangs on his every word for a decision on matters. And no one dares make a mistake. So, everyone pretty much keeps their head down.”

Both product and process innovation require “flatter” organizations in which management encourages the exchange of information and ideas, and rewards thinking that may even be outside an employee’s immediate job description. Mistakes or dead ends that do not disrupt regular company operations should also be encouraged, as deep innovation – especially the disruptive kind that creates new product categories and even new industries – cannot be scripted.

Copyright ©William R. Dodson, 2010