BOOK REVIEW
Bulls in the China shop China CEO by Juan Antonio Fernandez and Laurie Underwood
Reviewed by Gary LaMoshi
The saying goes that when you've been in China a week, you can write a book.
When you've been there a month, you can write an article. When you're been
there a year or more, you know better and just shut up.
Too much writing about business in China seems to follow that
pattern. The more that's written, the less we seem to know, even
though it's the biggest story in Asia. That makes China CEO: Voices of
Experience from 20 International Business Leaders as refreshing as it
is abundantly helpful.
Based on interviews with executives from 20 leading multinational companies in
China, plus bonus insights from eight consultants on the ground, China CEO
is a straightforward guidebook. It maps
out China's business landscape, marking the hot spots for danger and
opportunity in China. Its advice - from business etiquette to government
relations to expatriate lifestyle options - is comprehensive and up to date.
The book owes much of its usefulness to the fact that the authors paid
attention to their business-school reading lists - Juan Antonio Fernandez is a
business-school professor and Laurie Underwood is director of communications
with the American Chamber of Commerce in Shanghai and has a master's degree in
business administration. Fortunately, neither of them went to journalism
school. If they'd been journalism students, then we would have gotten the full
texts of their interviews with 20 executives of leading multinationals in
China. Such interviews, a staple of publications from the likes of consultant
McKinsey & Co, help maintain the mystery of China, mixing rote repetition
of local and international business axioms with consultant verbiage. Any wisdom
that escapes the process is well buried in the puffery.
China CEO breaks the mold by mining the leaders' responses for the gems,
and then putting them in context. The only complaint about the book is that its
pursuit of user-friendliness may cross the line to idiot-proofing. Main points
are highlighted in the text and in marginal notes. Those main points are then
repeated at the end of each chapter. In case you missed it, or can't be
bothered reading it all, there's a 30-page concluding summary that reiterates
it all at the end.
The 20 executives interviewed - 12 from European companies, seven from the
United States and one from Japan - represent 105 operating years of experience
in China, which makes them old China hands, particularly since in these rapidly
changing times, China years count as dog years. All certainly qualify as China
bulls, although they don't gloss over the pitfalls in their charge to success.
The book avoids empty cheerleading and hardboiled skepticism to present
practical advice.
The book is written from the standpoint of multinationals, and particularly
targets people considering assignments in China and the executives who make
those decisions. The most corporate chapter on dealing with company
headquarters nevertheless contains widely applicable lessons on managing
expectations and structuring operations. Even if you don't anticipate having
Chinese employees or business partners, these chapters contain valuable
insights into Chinese culture and the views of Westerners. Managers with those
duties get tips on managing those relationships right down to specifics on hot
issues such as employee retention and intellectual-property protection.
Throughout the book, there are reminders of the amazing changes a 45-year-old
Chinese citizen has lived through.
The book examines the key concept of guanxi on both the business and
individual levels. Guanxi is the system of mutual favors and favoritism
that helps get things done in China, nicely described as: "If I make things
hard for you, I make things hard for me; if I make things easy for you, I make
things easy for me." The trick is to establish this kind of relationship and
mutual interest without violating company policies and, in the case of US
companies, federal law. But relationships are important in business everywhere.
The underlying lesson is that the lines between business and personal life are
drawn differently in China, and you have to understand that to succeed.
Similarly, lessons learned while living and working elsewhere overseas will
help in China, but they're not enough. Westerners will find that the culture
and political system have built-in biases against confrontation and
disagreement, which makes it hard to get people to express their opinions or
give straight answers to questions. They'll also learn that experience
elsewhere in Asia, even in Hong Kong, doesn't automatically qualify managers
for dealing with mainland China. After explaining how difficult it is for
Westerners to adjust to Chinese indirectness and discretion, the authors point
out that Sony's Japanese executives find China difficult because people are so
much more direct and less adherent to hierarchical constraints.
While these executives are extraordinarily forthright on cultural issues, they
reveal some blind spots. They offer excellent advice on dealing with government
- for example, the central government and your local unit are the ones that
really matter - but they are uniformly upbeat on the government's role as a
partner to foreign businesses, rather than an impediment as in the bad old
days. That ignores the slow and selective nature in which China is living up to
World Trade Organization commitments, which remains a source of friction. Their
best advice on overcoming government favoritism toward state enterprises is to
get some favoritism of your own.
There is near-uniformity on the elusive goal of producing for the China market
as well as for export. But the experiences outlined in the book show little
scope for success beyond branded specialty niches. Assuming a foreign company
can come in and beat the pants off local competitors is silly in any market,
especially in China, a low-price, high-volume market with numerous quirks,
where the government can tilt the playing field as it sees fit.
Still, you will know a lot more about the art and science of doing business in
China after reading China CEO than you did before. One key skill is
reading between the lines.
China CEO: Voices of Experience from 20 International Business Leadersby
Juan Antonio Fernandez and Laurie Underwood. John Wiley & Sons (Asia):
Singapore, 2006. ISBN 0-470-82192-2. Price: US$23, 302 pages.
Gary LaMoshi has worked as a broadcast producer and print writer and
editor in the US and Asia. Longtime editor of investor rights advocate
eRaider.com, he's also a contributor to Slate and Salon.com, and a counselor
for Writing Camp (www.writingcamp.net).
out China's business landscape, marking the hot spots for danger and
opportunity in China. Its advice - from business etiquette to government
relations to expatriate lifestyle options - is comprehensive and up to date.
