For those executives who are embarking on a senior leadership role in Asia, it’s time to pay closer attention to culture, relationships and personal networks. Without addressing those elements, a person may easily and unnecessarily become cast adrift and feel disempowered in a highly confusing environment.
Mark Wilson, Managing Director of BoTian and Chairman of BoCheng, two of AB Sugar’s businesses in North China, explains: “Having lived and worked [here] for five years, I’ve certainly had to adapt my leadership style. In China, western norms and logic don’t apply and you must be flexible at all times even when you think an agreement has been reached.”
Brian Stevenson, Non-executive Director of the Agricultural Bank of China, says: “Be flexible in your judgments, especially early-on in your learning experience. The western ways often don't work in Asia and adaptations to your established management style will be required.”
There’s no way of rushing the process of adaptation. Chris Merry, CEO of professional services firm RSM Tenon, who worked in Shanghai for three years, says: “The key thing is just not to get frustrated by the differences but be very patient to see how those differences work out and see how you can work within the culture rather than against it.”
It’s a case of possessing the self-discipline to understand that process and execution will not necessarily be what you’re used to. Gary Kildare, Vice President of HR, Americas, Europe & Asia Pacific for IBM, adds: “It comes down to getting an understanding of how people think; being sensitive to the way people are and the backgrounds they have.”
Without that awareness, you're pretty much setting yourself up to fail. David Harding, Deputy Chairman at Magnum Berhad, Malaysia’s largest fixed odds lottery, recalls his surprise at the business motives in his adopted country: “Disposing of core assets proved the hardest task, mainly because there was status associated in ownership. Pride or saving face are as important, and maybe even more important, than financial remuneration, in securing engagement and focus from people.
“The collective is far more important than the individual, and performance management, including the confrontation of underperformance, needs a collective rather than individual focus here.”
Assuming that ‘you know best’ can have calamitous results. Mark says: “Newly arriving expats mustn’t fall into cultural stereotyping; China is a huge country made up of many different ethnic groups and regions, each with its own characteristics and business styles. Think of China more like the EU: one common trade block made up of many different countries, each with their own languages, dialects, customs and ways of doing business so you need to adapt your approach and strategies accordingly.
“Likewise, differences between the generations are pronounced due to the pace of economic and social change during the last 60 years. Senior managers often don’t understand their juniors’ expectations and vice versa; this can make expats good mediators.”
Where many organisation fall short is by trying to impose the group strategy in such a dogmatic fashion that individuals on the ground aren’t given enough autonomy to bridge that cultural divide at a local level. Gary says: “Successful businesses are the ones that are going to work effectively at integrating across borders,” he maintains. “There's a kind of natural conflict that exists out there; the conflict of a country's culture and traditions versus corporate success, as these things are not always in perfect harmony.”
Ian Durant, Chairman of investment and development concern Capital & Counties Properties, explains: “Business is personal. The role of family and the role of the corporation is something different in Asian cultures, so there's often a reluctance by individuals you’re working with to acknowledge publicly they don’t know an answer or to give you any push-back on something they don’t agree with. You might think you’ve briefed everybody and they’ve all said ‘yes, we understand,' and that they're happy with the objective but you might go away and find they’re not at all happy but didn’t want to admit it in public.
“You need to be patient and receptive to body language and other signs. After a while you begin to read the signs and you talk to people one-on-one and you get them to play back to you what it is they’re committing to.”
It's something that comes from having proper experience of working and living abroad. Matt Crosby, Associate Director at management consultancy Hay Group, says: “It is dangerous to assume that the high performers in the mature markets are going to be high performers in the emerging markets... in the West you often have quite mature business processes that provide a degree of infrastructure, support and logic that you don’t have in the fast growth businesses typical of the Far East.
“Your best people will cope, but unless these individuals are used to moving around, they may not have developed the more latent abilities around being able to cope with different environments, such as being more culturally sensitive, working with a bit less information and being comfortable making decisions based less on process and data and more on what they feel is right and that they think will work.”
Top of the class
In terms of desired leadership skills, those who know how to manage fast growth and the challenges this presents are in high demand. Howard Thomas, a Criticaleye Thought Leader and Dean of Lee Kong Chian School of Business in Singapore, says: “If I had to pick skills and competencies that are emphasised here, it would be growth and the questions around entrepreneurship and innovation, and the need for a complete understanding of the different laws and regulations... There is also the need to build talent in markets where there is a clear shortage and then the appropriate use of strategic human capital.
“Beyond that, there is also the fact of understanding the role of government in the growth of Asian economies. Certainly, in China and Singapore and in a number of other countries, the government has a very strong role.”
Bob Garratt, a Criticaleye Associate and one of the founders of the China-EEC Management Programme in Beijing in 1983 (the first Chinese MBA programme), observes that there still exists a huge amount of naivety among business people when it comes to understanding the role of the government as a lever for getting things done.
According to Bob, discussing different leadership styles is by-and-large an irrelevance. “You can’t even start there, it just doesn’t work,” he comments. “You have to begin by understanding that the Communist Party of China, despite all the rhetoric, is still in total charge. Most business people don’t see this; don’t understand how it works and don’t realise what occurs.”
It’s here where building the right kind of relationships can be the dividing line between success or failure. Nandani Lynton, Adjunct Professor of Management at the China Europe International Business School in Shanghai, says: “When westerners move to Asia, they’re not at all used to how the personal network is the core of business relationships as opposed to being something that is just an additional nice-to-have.”
For me, as CEO of Criticaleye, it’s clear that unless senior executives understand this there is a danger that they can become isolated from both their support network and local market, which is why you need to harness contacts and make new ones to further your appreciation and grasp of local culture and remain grounded to western governance and leadership standards (sadly, playing rounds of golf won’t be enough).
Nandani continues: “It's about how you decide who you need in your network and how you go about building those relationships, because you have to build them before you need something... It’s also about understanding that, especially in China but in much of Asia too, everything is political.
“Something that looks to you like a pure business decision probably isn’t; your customer knows they’re making a political statement by choosing you as opposed to your competitor. The way that you phrase a marketing campaign may need to use particular buzzwords that are in line with the government at the moment. Things like that that we simply don’t think about in Europe.”
It can take years to digest this and some evidently never do. Brian says: “The 'region' is a complex mix of cultures, religions and history. It is in no way a whole, even less so than Europe for example. There is no economic, political or social cohesion [between different countries] in place or planned so it should not be treated in any uniform way. Looking at Asia from afar it is surprising how many people forget this.”
Please get in touch if you have any comments about the issues raised here.
I hope to see you soon.