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Jon Geldart on the key messages from his new book
I have spent a lot of time in China over recent years. It is an amazing country which fascinates and surprises me every time I return, but perhaps no more so than over the past few months when I have been lucky enough to interview the chairmen of some of its most dynamic companies.
The result is a book entitled The Thoughts of Chairmen Now, a ground-breaking study of how business is done in China, not as a Westerner looking in, but standing in the shoes of senior Chinese executives. This fresh approach allowed me to dispel a number of common misconceptions about doing business in China. I would encourage anyone doing (or interested in doing) business in China to read the book, but below I explore some of the key insights.
The economic slowdown is welcome: chairmen are not concerned that the target rate of economic growth has slowed. The slowdown has provided a welcome opportunity to review their operations, offering a chance to focus on profit and operational risk management rather than the constant rapid fire response required to keep up with double-digit growth.
A Western management style is not the goal: chairmen are listening carefully to management techniques and approaches coming out of the West but they are looking to blend these into the ‘Chinese Way’ rather than copying and replacing. The goal is a ‘best of the best’ approach to adapt to the ever-changing dynamics of the Chinese marketplace.
Grey is good: managing ambiguity is essential to doing business successfully in China. Westerners need to accept that things are often not as they first seem in China; the more ‘clear cut’ culture they might be used to is more nuanced. Working in ‘grey’ requires real insights and lateral thinking.
Mobility and dynamism abound: the chairmen talked about this in terms of promotion, location and society. A hierarchy exists but younger managers are given much more responsibility than in the West, bringing complexity but also progression opportunities. Businesses are moving away from traditional coastal areas of low cost production towards the interior where major infrastructure projects are changing long-term migration patterns. And the increased spending power of the burgeoning middle classes is spreading across a wider geographic area, generating demand for affordable quality goods and services.
Decision-making taps into reason and instinct: the importance and intensity of EQ alongside IQ is typical of Chinese. The chairmen use both their head and their heart: decisions are ruled by both instinct, which is based around philosophical convictions, as well as reason, pure numerical and analytical business rationales. Understanding this demands a certain level of cultural intelligence (or CQ), but the potential rewards for getting it right are enormous.
Importance of the individual increasing: the traditional view that the collective is the more important than the individual is slowly evolving. The chairmen spoke of the importance of building high performance teams built around strong individuals, with activities that would be regarded as CSR in the West to the fore.
Businesses want creative, lateral thinkers: the traditional method of rote learning is changing. The chairmen are avid readers of philosophy and management books and they want to see an education system that encourages creative and lateral thinking, increased openness to experimentation, curiosity and questioning.
China is digital: the explosion of the internet in China, including e-commerce and mobile technology, is well documented but the clever use of big data is being exploited in amazing ways to analyse consumer behaviour and better tailor business approaches.
Brand is everything: this was much higher on the agenda than we expected. The chairmen recognise the challenges of operating under the auspices of ‘Brand China’ but are focused on building trust and loyalty in their good and services. The sense I got was that creating strong, global brands had leapfrogged the marketing department and is being championed by the chairmen at board level.
Watch Jon and David discuss the highlights from the research here.
Jon Geldart is the Executive director - markets development at Grant Thornton.
- Chile is world's second most dynamic economy