HR Advice: What executives need to know to succeed in China
US-based executives planning to take on an assignment in China need to understand the differences they will encounter—and what the Chinese will expect of them.
By David Dan, President, D Square Transformation Consulting — Electronic Business, 6/8/2007

China and India are two hot targets for young professionals and middle managers who are waiting in line for promotions. Here I’ll share my strategies that are aimed at the corporate executive as he/she goes for the “expatriate assignment to China as a business mission.”

Know what to expect—and what will be expected of you

The Chinese market is going to be more complex than you would expect. A high level of professionalism, globalization knowledge and adaptability are essential basic requirements. The best candidates are those who have a spouse who appreciates Chinese culture. If they are eager to learn the culture and embrace it during their assignment in China, then they will enjoy their life in China. In the meantime, they will become well connected to the local society, which will work to the employee’s benefit when it comes to winning respect and building a sense of leadership within the company.

I am seeing more companies in the US that are home-growing “US citizen Chinese” employees in their headquarters and then sending them back to China to take a leading role there. This is the most popular and secured strategy that has worked well for companies such as Intel, Microsoft, and Google. This model can be duplicated to other emerging markets such as India.

I don’t think that using China as the training ground for junior expatriates is a good idea. If you send them without any proper training with local managers, I think this will create a high level of frustration for the team in China.

Relationship development—or Guanxi—is critical

There are several levels of relationship development: people who know each other; business friends; business friends who have become personal friends; business friends who have become your family friends.

The Guanxi in China are specifically focused on the business friends who have become personal friends and the business friends who have become family friends. The friendships are based on “emotional social connections” that embody a spiritual and emotional component. You must be sensitive to fulfill what you said casually to your friends so that you can build up your Guanxi foundation on a daily basis.

Chinese socialism

Is China going to become a “Western market-driven nation”? The answer is no. China is building a so-called “Chinese socialism,”which means that you need to learn three major operating systems to survive and succeed in China’s business environment:Chinese business culture, communism management, and western management.

Connect to the roots closely, not remotely

Many foreign Chinese professionals or managers live outside China, such as Hong Kong or Singapore, for the sake of family and living environment. I would not recommend this. A successful executive in China has to be deeply rooted by working with employees, channel partners, suppliers, government, and the media. They need to read the local news and dig into the details on critical issues and be able to respond quickly.

“Made in China” transformed

China has transformed its strategy from “exchange investment for market access” to “technology for market access.””Innovation” is highlighted in the country’s “115” strategic five-year plan from 2005 through 2010. China’s R&D expenditure has increased to US$136 billion. China’s advancement strategy is to transform “made in China” to “designed and made in China.”

David Dan is president and founder of D Square Transformation Consulting Inc. in San Diego. A computing industry veteran, he started up the Taiwan office for Intel and led Intel China in its startup stage in 1994.