The Next Hurdle: the Talent Aspect of Entering China
Many small and medium enterprises are currently devising their best-laid plans to move into the China market. They’ve studied the market, peering deeper than the if-we-can-get-X%-of-1.3-billion-Chinese-people-to-use-our-product frame of mind. They’ve talked to lawyers about the legal obstacles of registering an entity, and these growing companies know how to get capital in and out of China. After these important issues are addressed, US companies face one of the most nagging and systemic problems to success- selecting and/or developing employees who will keep pace with the demands of business.
In fact, talent development remains one of the most persistent and pressing concerns of business leaders operating in China, as attested by both the US-China Business Council and the American Chamber of Commerce in Shanghai.
So, before you dive into the foaming waters of China business, talk with HR and other strategic leaders on how your business will address these talent development issues:
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Best Practices and Organizational Learning- when you bring in your best practices, talk with your Chinese staff about how and why these practices delivered business results. Throughout this conversation, you will need culturally literate people who can discern differences between Chinese and international business environments. Your Chinese team will be called upon to exercise their critical thinking skills to recommend modifications, and the inter-cultural savvy to communicate the changes while determining tolerable levels of risk. I can personally attest to seeing mid-level Chinese managers who were tasked with implementing a foreign-developed best practice that they knew would not work in China. These managers were not able to persuade foreign leaders to modify the practice, the Chinese managers were left frustrated because their performance was then judged by their ability to execute a seriously flawed plan.
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Market Intelligence- In order to respond to current and new customer segments, your Chinese team requires general business acumen to separate the chaff from the wheat of profitable opportunities. Business acumen includes an understanding of aspects like: operating costs, profit margins, and key customer preferences. Ideally, these topics form part of the common language of all employees. When employees do uncover a new business opportunity, they will be in a better position to articulate its value.
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Industry intelligence- Chinese staff will have greater access to informal channels for recognizing subtle but significant changes in the business environment and monitoring competitor activities. Although traditional Chinese culture values “guan xi,” don’t assume that your younger staff practice the most effective relationship-building skills. Powerful guan xi relationships come from a sense of interdependency and connection to a networked community. Although many Chinese maintain contact with former colleagues and classmates, younger (around age 30) employees from single-child families are less likely to have adopted the requisite communal mindset and networking skills.
Without even mentioning the demand for technically skilled employees (like engineers and software developers), China poses talent development challenges that, if unanswered, create sluggish new operations that fails to adequately compete. Therefore, entering China means executing a crafted plan for acquiring the best talent you can find, retaining your Chinese team, and developing talent that will deliver the fastest return on investment.
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