Up your guanxi in China

February 1, 2019

It’s critical to doing business there. And be mindful of Chabuduo – or you might not be happy with the results you get.

It’s a Small World

Not all of us are lucky enough to travel internationally for business. If you are, you know that each country has its own unique blend of traditions, etiquette, greetings, beliefs, and protocols – all of which are key ingredients to their way of life. I find it fascinating! I literally can get on a plane in one “world” and land in a completely different one. Amazing, really, if you think about it. When on holiday, you can go with the flow and have fun exploring a new culture. However, business is another matter. Especially in China. You really need to understand the Chinese mindset to position yourself for successful ventures in this complex and ever-growing country. 

 

Since Idea Planet has an office in Shenzhen, and since I’m there regularly, I thought I’d share some insights from my perspective. BTW, I do not profess to be an expert on the Chinese culture, but I can speak from first-hand experience as a Baltimore native (yes, I love crab – see my October blog), turned Texan. So, let’s get started

A Cultural Oops

Several years ago, before the launch of Idea Planet, I was fortunate enough to participate in the promotional launch of Star Wars Episode I – The Phantom Menace. We created very cool, life-size replicas of Darth Maul which, in partnership with Pepsi, were placed in KFCs throughout Asia. (Interject Obi-Wan: “I’ve got a bad feeling about this.”)

 

Soon after, we received reports from Thailand that multiple statues of Darth Maul in restaurants there were attacked and destroyed! No, I did not see that coming! Apparently, the local people believed he represented a satanical figure within their culture. This was my first introduction to societal idiosyncrasies and how important it is to be educated and mindful of these nuances to be successful in international business.

 

We’ll start with the basics.

 

What’s Guanxi?

Society in China runs by virtue of guanxi, which is a term representing the accumulation of advantageous “networks” or “connections” where the people you know are obligated to help you (and vice versa) by providing favors that must be reciprocated. Someone with more guanxi (pronounced GWAN-shee) is better able to get business done.

 

Cultivating guanxi is considered the most important thing needed to get ahead in life in China. It’s so prevalent that calling upon one’s connections is the norm to make things happen – even very basic things. At its core, guanxi is a never-ending cycle of obligatory favors and relationship building, many times used to shortcut or circumvent conventional processes. To help you understand, I’ll use it in a few sentences:

 

"I used my guanxi with the arena manager to get backstage passes for the concert, but I have to help clean up after it’s over."

"Wow! You must have great guanxi to get us 50-yard-line tickets at the football playoff game! "

 

Building these dependent relationships actually brings people closer together in tightly-knit groups. For business purposes, it’s helpful to understand how the system works, and who has guanxi with whom. Think of it as, “it’s not what you know but who you know (and the strength of your relationship) that’s important.”

 

Make Friends

So, it goes without saying that your business relationships in China often become social relationships. You’ll find that significant time is spent discussing matters outside of business and sharing stories about family, personal interests and experiences. While this conversation might seem trivial, the Chinese often use it to assess your character and worthiness as a professional partner.

 

Take time to get to know your Chinese counterparts – I’ve met some terrific people there during my career. In fact, this past year, my family was very honored to be invited to the wedding of a manufacturing partner’s daughter. We participated in their celebration and cultural traditions – it was absolutely amazing and an experience I’ll never forget. Take a personal interest in the people you meet – you won’t regret it. And the icing on the cake is that you’ll find conducting business with your overseas friends more to your advantage.

 

When A Pint Is Not A Pint

Even with strong relationships, misinterpretation in communication is not uncommon. I recall a project where our goal was to create a vessel that would hold a pint of liquid. Despite our rigorous specs document, the factory created a sample that held much more than a pint! Why?  Because in Hong Kong, they only know British pints – which apparently hold 20 fluid ounces instead of 16. Who knew? Although I was quite happy to drink more beer, the size, sadly, had to be fixed.

 

Break it down

I’ve come to learn that the Chinese in the manufacturing sector are extremely literal. Our written explanations, no matter how elaborate, do not translate well in paragraph form. Often, only the first sentence is truly understood, and the overall intent of the paragraph is lost. It’s far better to break out information into subject buckets and itemize key sub-points as separate bullets that can each be interpreted and digested individually. This razor-focused approach results in greater clarity because it minimizes the need for interpretative guessing on both sides of the pond. And that means greater accuracy and quality before problems occur. Who doesn’t want that?

 

 

Communication Is More Complex

In order to address the pint size problem (pun intended), we had to take into account the Chinese approach to communication. To them, it’s not simply an exchange of words – it’s more about establishing harmony and building relationships. When communicating, they simultaneously consider how to maintain existing relationships, emphasize & adhere to hierarchal status and role differences, and preserve harmony within the group. Whew! Because community and inclusion are so important, the Chinese business approach is to avoid conflict at all costs.

 

 

To really understand where they’re coming from, you have to go back to the influence of Confucius. Based on his philosophies, the Chinese culture is more reserved and less expressive, with a slower, less aggressive approach that advocates peace and collectiveness. In fact, it’s likely that a Chinese partner, so as not to upset anyone, may positively nod his head to a comment – even if he does not agree. His intent is to honor and respect your opinion. You really have to read between the lines to interpret what is being implied and put the conversation in context of this overarching mindset.

 

Feet on the ground

So, you can begin to see why Idea Planet has an office in Shenzhen. Having a China presence and being able to communicate with the factory face to face is the most productive and effective way to run projects and solve problems. Even so, you must still “get it right.”  

For over 3,000 years, Chinese culture and communication was based on intricate storytelling, proverbs, images and writings. The same holds true today. Hence, a company translator is critical and often is the difference between success or failure in communicating your position to a factory. On cue, let me introduce Sue, who has this important role at Idea Planet.

 

Sue has mastered the art of Mandarin “storytelling” – she takes my comments and rephrases them to be meaningful to our factory counterparts. Interestingly, one sentence of mine may translate to 5 minutes of explanation on her part (if this strikes you as odd, please refer back to the Communication is More Complex section above). The point is, you need a Sue in your life.

 

The Doctrine of the Mean

One other cultural difference of note is the mindset of Chabuduo, rooted in Confucius’ Doctrine of the Mean, which emphasizes balance and harmony by directing the mind to a state of constant equilibrium. If you’re not in Zen mode, this basically means one should be understanding and tolerant – and not overly concerned with strict rules or standards. Chabuduo is the evolution of this belief system and signifies “nearly” or “almost the same” or “should be good enough.” More specifically, Chabuduo suggests that putting any more time or effort into a piece of work would be foolish. At its heart, it’s an admirable, pragmatic goal that can save time and money, but in a factory setting where quality is critical, it can become problematic. Thus, attention to detail and consistency of standards become the burden of the management team overseeing the production. In my many years of China manufacturing, I have come across the Chabuduo mindset, but I’m pleased to say that the majority of our factory partners work closely with our Quality Control team and help create exceptional product. Just be aware and be savvy.

 

 

Another Word of Caution

Mei wenti – “No problem.” If you hear mei wenti in the context of a factory discussion, alarm bells should be going off in your head. The reality is that Chinese manufacturers want to please. They want to make everything okay and say what is necessary to settle a situation (avoid conflict & achieve harmony, remember?), but sometimes they do so without an implementation plan. Therefore, it’s essential to pursue and ensure plans are put into place that will achieve the stated goals. As Ronald Reagan famously noted, “Trust, but verify.” Process controls, proven compliance, and pre-shipment inspections will become some of your best friends along the way.

 

 

Partners vs. Vendors

My dad, Harold, owned and operated a corrugated manufacturing plant outside of Baltimore for over 30 years – Here he is pointing to his new folding / gluing machine! While I feel fortunate to have worked with him, I feel even more privileged to have learned from him the essentials of manufacturing philosophy and work ethic.  Immersed in a factory environment growing up exposed me to the “back of the house,” so to speak. This experience gave me perspective that I’ve used throughout my career with all manufacturing constituents: factory, client and project management.

 

One of the best pieces of advice he gave me was, “Your supply partners and factories are as important, if not more so, than your customers” because without a trusted partner to execute your vision, you may not get a second chance. Now imagine your partner is 8,000 miles away – I have to multiply this philosophy x10 every single day.

 

So, as you set certain standards, demands and requirements for product you produce in China, the true approach to success is a mutual understanding of the end goal, the challenges that will arise and implementation of corrective actions – all as a collaborative partner vs. an adversary.

 

Chinese New Year

Fortuitously, this blog coincides with the onset of Chinese New Year, the country’s most important holiday – it’s an amazing celebration complete with festivities, family time and shared blessings with loved ones. Now a global phenomenon, Chinese New Year casts a worldwide beacon on the unique culture of this country. I’m honored to have a more intimate understanding of these wonderful people, many of whom I work with and have become dear friends.

 

To my family, friends and blog followers, Happy Lunar New Year, the Year of the Pig! 

 

Kung Hei Fat Choy & Gong Xi Fa Cai

 

All my best for a prosperous, happy, healthy – and successful – new year.

 

Cheers!

Mike Flecker

 

 

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