The Discontented

from EuroBiz Magazine

July 2008

by Bill Dodson

The last half year I’ve been meeting basically two kinds of expat General Managers: those who are contented with their role in China, and those who are not. For the most part, those who are feeling discontented are not discontented because of China, but because they are uncertain about their future roles in their companies in general. And it’s not the expat managers who have recently come here at the behest of their companies as advisers or troubleshooters; it’s those who came here with a mandate from their headquarters with to establish a China operation from scratch; so, they’ve been here in China on average three or four years. The kind of people with the skill sets and temperaments to succeed at such undertakings were chosen specifically because the efforts involved were Herculean and required an uncommon collection of experiences, attitudes and training. Now, some of those who either put their lives – and possibly the lives of their families – on hold in their home countries have a sense that their efforts have gone under-appreciated and their insights and experiences in China no longer have much value to their employers.

Arnold is just such a General Manager. Sent by his UK-based company to set up an operation to manage supplier networks in China, he achieved his goal within a year and was able to successfully ship back to the UK market a profitable product within another year of establishment. At the start of the economic downturn, in the late Spring of 2008, come time for performance reviews, he listed the achievements of the small China operation with its big results. Arnold believed he should have a raise as well as an equity stake in the China company, which had surpassed everyone’s expectations in terms of delivery times and quality of product. The response from the British principals of the company was, “Well, you know we’ve got a downturn in the economy, let’s delay that discussion for a bit.” The discussion, more than a year later, is still on hold. Meanwhile, Arnold stews about the perquisites the principals give themselves back in the UK – cars, bonuses and the like.

The problem with self-starters is they’re very poor at sitting still and leaving their fates in the hands of others – that’s why companies send them to the four corners of the earth. So Arnold started his own operation in China, working nights and weekends with family members back in the UK. He’s still got his current management role, but he’s uncertain whether he has a job to return to in the UK; whether he’ll be adequately compensated for the string of successes of the operation in China; and whether they will even keep the operation going in China. After all, he’s seen a number of companies that had set up operations in China close them down because the export markets are weak.

It’s no coincidence that Dan has found himself in the same situation with his American company. Dan had found a way to revitalize his interest in the company after four years managing its operations in China: he had drawn up a detailed business plan that took the core competencies of the China operation and offered specialized services to foreign-invested manufacturers in the Yangtze River Delta. In the Summer of 2008 he had been able to convince the principal of the company to afford him a small budget to pilot the new offering. Initial responses from prospective clients were promising. But by the beginning of Spring 2009 the founder of the company lost interest in the initiative. At least realizing he would lose a key employee he trusted, he sent Dan off to the company’s European operations to “advise” them on their operations. Dan said the British staff, bewildered by his sudden appearance, asked him what he was doing at their doorstep, while the staff in Germany was gracious and warm in welcoming him, and proud of what they had achieved in their operations. However, before he had even taken the European tour Dan knew his future at the company had been essentially curtailed. “Without a new project,” he told me, “there’s nothing much more to keep my interest.”

Mads, the former GM of a Danish sales and design office in China, had started lobbying for a new post a year before his contract had come due for renewal. The China operation he had established had surpassed its sales goals and was actually one of the bright spots in the company’s balance sheet, even after the economic downturn had taken its toll on the EU economy. After the Board of Directors in Denmark replaced the CEO with whom Mads had been dealing with another individual – who subsequently replaced top management with his own people – Mads realized he may actually lose his own job in the company, despite returning stellar results. Active lobbying to keep the issue of his next role in the company resulted in, at best, a “global advisory” position – code words for he’ll have a job with the company for another six months so he’d better start looking for a new employer.

But all is not doom and gloom with expat GM’s; and therein lies the key to re-enchanting the disenchanted China leader. Martin, another Danish GM, is absolutely thrilled at how his operation is doing in China and the strategic role it will be playing in the quantum development of the company globally. As a major shareholder in the China operation, he knows what the leadership in the home office is planning for the China operation and how they will be doing it because the CEO of the company personally came to China for a week to meet customers and to discuss the overall company plan with Martin. Afterward, they hit the Shanghai nightlife together for an evening neither could remember.

And why not? A talented leader able to operate effectively in foreign climes is a terrible asset to waste.

Copyright ©William R. Dodson, 2009