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In China, you can feel “The Hand of the Party”. Whether it’s having your hotel commandeered for visiting state leaders, or being told what can and cannot be said in certain places – when you are in mainland China, you can certainly feel the power of the Chinese Government and Communist Party. They are involved in almost every aspect of business and are a formidable force in every business model. I say this not in a derogatory way, as you cannot argue with their growth and global business impact…but it certainly isn’t for everyone. I remember when we were opening our restaurant in Africa, we kept using the term T.I.A. (This is Africa). It was a response to the random lack of organization that you typically see in developing countries. It was also a way of not letting what might otherwise be frustrating get in the way of productivity and the optimism you need when opening any new business. When in Shanghai, we heard some consultants and lawyers speak about doing business in China, and repeatedly I heard “This is China”… used in exactly the same way.
When you escape the developed world and go to doing business in the developing world – so many things change – particularly reliable planning, organization, and anything going like you think it will. In China, there are fascinating contradictions all around you. Although Shanghai looks and seems like 7 New York Cities mushed together, beyond the immediate field of skyscrapers you are in every way in a developing country. If you forget that, you are toast. On top of being a developing country, it’s a communist country focused on their version capitalism. Now if that doesn’t sound like a burger made with metal and mayo, I don’t know what does. Some things are just not a good natural fit, but in this case, elements of it are working (depending on how you define "working"). In China, the party rules, not the people… but if you can navigate that environment, and find a way to do business there, an ocean of opportunity awaits you…
On my recent trip to China, the CEO of the 3rd largest Coca-Cola bottler in the world, said, “If you don’t like big, don’t come to China”. He was discussing the massive population, business growth, revenue and profit growth and commensurately large challenges that come along with doing business in China. When the average person thinks about business in China, they think about the tag, “Made in China”. These days, much of what is made in China stays in China – supporting their own market is enough business on its own. The opportunity for business there is insane… not just big, it’s absolutely nuts. There are 26 million people in Shanghai alone! It’s not just big business that has a huge opportunity; it’s all the little businesses that support big business. Think about supply chain opportunities, waste management, marketing, and of course, human resources. After having the chance to meet with leaders of companies like 3M, Coca-Cola Asia, UPS and some manufacturing organizations, I was surprised at the common thread between all of their competitive strategies…. People. I would have easily guessed IP protection, struggling with how capitalism interacts with communism, or even global trade changes…but no… it’s people. Now certainly I focus on the people side of the business…but even I wasn’t prepared for that to be their number one competitive strategy - People first. But upon further learning, and beyond what is already known about the importance of an "employee first culture" it became obvious why it is so for them. With that size and growth of population and the related growth of business, they don’t have trouble finding people…. it’s keeping the talent they train that is the tough part. Each C level leader talked about their “Leadership Academies”, “Management Development Programs”, “Talent Retention Initiatives” and more. Unfortunately, there was an obvious contrast to me, as over the last 2 years, the contraction of the US economy has made many companies loose their focus on HR in lieu of a greater focus on running as lean as possible to weather the storm. Another interesting observation was that they each commented how they were focused on getting more women in top jobs. Diversity is a major focus in China in addition to talent retention.
So, if you’re picturing a land of retail factories where they stamp “made in China” when you think of business in China – go ahead and change your thinking to recognize they are becoming (if not already are) leaders in Human Resource and Talent Retention tactics by way of necessity. There are great businesses and leaders in the US that have mastered the art of talent acquisition and retention to be competitive, but there are many others that could learn a thing or two from the multi-national businesses being run out of China.
