At the National Manufacturing Week conference held last week in Chicago, Jack Perkowski, CEO, ASIMCO Technologies spoke on "China: Opportunities and Challenges."
Here are some excerpts from his comments:
Advice On Doing Business In China:
- China is not something you want to delegate. Find the most senior person you can to go to China and figure it out. You want the decision makers on the ground -- people who are there, not just flying in for a week, who can negotiate and make decisions. It's a different market than the U.S. -- things work differently. Don't let the people in the U.S. second-guess your senior person in China on what needs to be done. Put someone there with credibility who can make decisions.
- Localize your management team. Pull in people who are mainland Chinese, who understand the area and have management experience.
Major Differences In Doing Business In China:
- Chinese look at money differently than Americans -- you want managers that have the same cost perspective as customers.
- The legal system is very different. If you have a problem, the U.S. manager will pull out the contract and call a lawyer to force the solution. A Chinese manager doesn't go near the contract but starts thinking about who they're going to talk to, to fix the problem.
- It's a myth that the Chinese can copy but they can't create. In 2001, China entered the World Trade Organization (WTO) , which sparked the auto industry. They went from 2 million vehicles to 6 million vehicles in 3-4 years. They are now the third largest auto market in the world and by 202 will be the same size as the U.S. Eventually they will be the biggest.
Building A Chinese Management Team
- Is it possible to build a great Chinese management team? Absolutely, but it's not easy.
The Chinese are very entrepreneurial -- there are no capital markets or legal system to restrain them.
I went out and looked for people that were "new China." Mainland Chinese, open-minded with management training who had worked for a multinational.
I added all the modern management tools like Six Sigma, etc. But you can't start with that -- you've go to get the right people.