International apparel manufacturing and sourcing. If we don't make it, we can find it.

Archive for August, 2010

Eavesdropping: An Effective Business Skill

Tanya Crossman

Tanya Crossman

An effective on-the-job skill I’ve learned in China is summed up in one word: eavesdropping.

I listen to my colleagues across the room while they talk with each other or make business calls. Eavesdropping has increased my Chinese language skills and helped me better understand Chinese business culture.

Language

I came to China 6 years ago already able to read and write Chinese. My speaking and listening comprehension improved a lot through full time study and years of talking to taxi drivers, landlords, and shop assistants. It was eavesdropping, however, that polished my language skills to the point that, on the phone, most Chinese cannot tell that I am a foreigner.

When I am engaged in conversation, my brain is busy trying to understand what is said to me and formulate correct responses. When I eavesdrop, however, I can focus my attention on learning the patterns of speech my colleagues use – how they express things, what tone of voice they use, how their phrases flow. Mimicking these details makes my speech more natural, less like stilted textbook language.

Culture

Listening to one side of a conversation can tell you a lot. Often it’s quite clear what the party on the other end of the line is saying. By listening in when my co-workers are on the phone, I have learned a lot about the way they manage suppliers and contractors.

Listening in has taught me a lot about when they push, when they back pedal, and when they sweet talk. I’ve also learned a lot about the cadence of their conversations – the amount of general chitchat that happens, and when they get straight to business.

This has helped me even outside work – I find it much easier to negotiate in other areas, whether with rental contracts or just buying a pair of jeans. I have learned something of the game and how it’s played, and no longer take it personally.

Eavesdropping in this manner is effective because it is about listening. Listening to others builds understanding. Listening to my colleagues’ language, phone manner, and negotiation techniques – with the goal of understanding – has taught me valuable lessons about doing business in China.

Face and Business Relationships in China

Tanya Crossman

Tanya Crossman

David Dayton at Silk Road International recently posted a great discussion on the concept of “Face”.

I’ve heard some people simplify dealing with face into “just be polite and you’ll be fine.”  This is certainly part of it, but has nothing to do with things that you can’t say in Chinese that are perfectly acceptable to say in America.  And how do you politely and professional discuss lies, broken contracts, sub-standard samples, non-disclosed changes in production and unapproved production locations (sub suppliers)?…Face is not just being polite, it’s more than that.  It’s complicated.

Complicated is right! “Face” goes hand in hand with “guanxi” (relationship). Both look to a long-term relationship – that words and actions are about building the future, not just aiming for the best deal (personally or professionally) right now.

One of the tricks to working in a very face-conscious culture is to let others know that you know their lying without actually saying as much.  You have to show that you know more than they realized without publicly pointing fingers.

This is a good point. Pointing directly to a known lie will damage a relationship. Alluding to it subtly allows the other party to change tack without a confrontation. While the western sense of “justice” often demands that deliberate lies be outed and apologies made, insisting on this in the context of China will damage the relationship.

I have learned to say things like “how strange, I was told this document is no longer required, perhaps the rule changed recently” or “Miss Li told me it should only cost this much. I think the price might be different because we are hiring the whole building”. Such a sentence doesn’t reference the person I am dealing with at all – it shifts the reason for the discrepancy between what we are each saying to something outside our direct interaction.

Even when you’re in the right, you have to give them a way out and you have to keep your cool.  It’s a VERY tall order.

Create an opening for the other person to put responsibility for the problem elsewhere, so they can move on to a solution. It can be hard to maintain the calm required to apply the concepts of “face,” however, when such grace is not extended to you in return. I have lost my cool many times, but I have found it more effective to avoid these confrontations. Sometimes yelling will get things done faster, but it damages my relationship with the individual involved, and, worse, colors their opinion of foreigners in general. Someone down the track may be treated more harshly because of a confrontation I instigated for my own personal gain.

David uses an example from his experiences with a Chinese factory, and resolving problems with the boss.

I then outlined the mistakes and problems in the sample process that he was responsible for.  Of course, being the boss, he had no clue what had actually gone on in the trenches during the 6 months of samples—he’s only been shown the bills and been told that we were locked in due to the testing we’d done. But instead of helping, my phone calls and emails that pointed out all the details about his employee’s mistakes made him lose face.

In this case, the two sides of the dispute are working from different information. This distance from big boss to factory line is not uncommon and can have unintended consequences – the boss may honestly be unaware of problems created on the factory floor. (This is one reason we like to work with smaller factories, where the owner has a more hands-on role).

While everyone is polite now, and we still have the same price as agreed, my professional issues with the processes were never addressed.  Of course, a factory employee has probably been dressed-down, but how do I know that anything has been taken care of?!  And worse case scenario, what if the anger has just been transferred to the employee who will now sabotage things later?  This is where having a savvy and trusted Chinese employee is invaluable.

No matter how long a foreigner lives and works in China, he will never understand “face” as completely and naturally as a native Chinese. The advice and perspective of “a savvy and trusted Chinese employee” can be invaluable. If we have trouble with a supplier, input from our Chinese managers on how to best resolve the tension in the relationship is invaluable. There can be benefit in leveraging both direct pressure from the American boss and softer persuasion from understanding Chinese employees. One person can point out quality problems, while another can smooth ruffled feathers.

Face is public, but retaliation is private and discrete.  Problem solving “western-style” is completely unacceptable in Asia—confrontations, “open” discussions about the merits of various plans, brainstorming, finger pointing for problems and praising individuals for success, email trails with names and dates, etc.  In short, personal accountability in a collective face-conscious society is not something you should expect to encounter.

This is not to say that face means no one takes responsibility for mistakes. The important thing to understand is that accountability and responsibility look different in a Chinese concept. Looking at a situation from a western mindset and insisting on behaving accordingly is an inefficient way of settling disputes. Even when a short term solution is created, there will be long term repercussions.

The Lens of Learning – how to view problems within your company

Jill Coyle

Jill Coyle

A wise friend and mentor once told me that although my circumstances may not change—and I may have little power over my circumstances—one thing I can control is how I view the problem.

Determine your own perspective.

People cope in a healthier manner when they can face issues and determine their own perspective (versus having perspective dictated to them). When facing problems in this manner, one can view the problem as an opportunity to learn rather than as a crisis.

According to leading psychologists, semantics carry an enormous weight in reality. Just as changing seats in an auditorium changes your perspective of the people on the stage, so also changing my position to a problem changes my perspective.

Changing my position can be as simple as saying, “This isn’t a problem – it’s a learning opportunity,” thereby externalizing the problem and giving me power to respond appropriately. This distance from the problem can also help give “thinking space” in order to solve the problem.

So how has this really worked as a business owner and manager?

We sometimes face situations that, no matter how hard we push, we cannot change. We’ve faced this many times with suppliers who just decide they won’t make samples for us (even though they’ve been our supplier for years) or people who renege on contracts (and then we find out they have major guanxi – a topic for a whole other article) or suppliers who suddenly hold the last half of our shipment until we pay in full (even though that wasn’t the agreement).

In these situations, it is easy to feel powerless and to wonder what in the world you’re doing. A change in perspective can help not only give you the hope you need – but also give you some thinking-space to figure the problem out. For me, one who loves problem-solving and learning, applying the “lens of learning” helps me to look at even the most distasteful problems with a new command and respect; it also gives me the distance I need to not make an emotional decision.

Some practical ways to change perspective

1) Tell yourself: In 6 months time, I will have figured this problem out and life will have moved on.

2) Talk to trusted friends or business associates – maybe they’ve faced this same thing before.

3) Remind yourself of all the other problems you’ve conquered.

4) Learn all you can from the situation – so you don’t make the same mistakes (get tighter contracts, sign NDAs, etc)

5) Explore your options – Is this the only person with control? Can I use someone else? Who has expertise to get me out of this problem?

6) Remember that you are learning valuable lessons in the midst of your problems – how to be a better manager, for example.

7) Examine what you’ve learned (blog, write it down, talk about it) – for next time!

How about you?

Has changing perspective given you the strength to get through a particular problem at your company? Why do you think it works?

Does Negotiating Low Prices lead to Lower Product Quality?

Danny Coyle

Danny Coyle

Renaud at Quality Inspection Blog ran a post last month discussing how price negotiations can sometimes have a negative impact on production quality. The basic idea is this: if you negotiate a very low price, a supplier may get the margin he needs by skimping on the quality of the end product.

“A Chinese factory has intense pressure to grow up fast. Every day they hear stories of other manufacturers that achieved impressive growth with aggressive tactics. The temptation to do the same is very strong…  importers should not count on a supplier’s ethical standards.” (read the article here)

Recently we ran into a similar situation when we negotiated the price for a new product with a supplier we’ve been using for 5 years.  He’s developed a lot of his processes and quality control measures because we have sent our own people to his factory to help him do it.

The new product is expected to sell hundreds of thousands of pieces.  So we asked him to give us his best price and continued to put pressure on him to give us a rock-bottom price.

He began to manufacture the product (after sampling) and gave us the first samples off the line.  We received them and they were sub-standard.  Basically, they were falling apart at the seams (literally).

I called him and asked what was going on.  He complained that we had driven the cost so low that this is what we get for that price.  I told him that after 5 years of training him on our quality standard he decided to abandon it.  He knows we don’t accept product like that.  He gave me the ultimatum (take it or cancel it) and I hung up on him.  A few hours later, our staff found a way to solve the problem, communicated it to him, and he’s back on board.

So it’s not always a price issue, sometimes it’s just a China issue!

Knitwear: It’s all about Details and Service

Danny Coyle

Danny Coyle

Our business focuses on Textiles and Garments.  We started in jewelry, but now we only specialize garments and textiles. For about 5 years we focused on woven garments, but in the last year we’ve shifted to knitwear items.  The difference between our two lines of business is much greater than I expected.

Our woven apparel business is product-based.  We have a few core products with item codes; a customer can tell us the code # they want, and buy that product with minimal customized adaptations.

Knit apparel is a totally different story. It’s all about service and details. The customer’s need to get a long list of details exactly correct makes it hard for overseas buyers to source knitwear from China without going to a large, established, expensive factory with large minimum requirements..

A long list of details

A typical knitwear order with 5-10 styles could have as many as 1,000 individual details to receive from the buyer and then execute and monitor.  These details include:

  • garment measurements (20-30 per style)
  • garment style and construction details (yarn tension, knitting style, design elements)
  • manufacturing details (requirements for washing, drying, and ironing)
  • yarn details (color, composition, handfeel)
  • accessories

Then there are all the other details involved in international trade deals, such as:

  • Documents required by the customer
  • Labeling
  • Packaging
  • Payment terms
  • Shipping

Every one of these details has the potential to destroy an entire project.  While this may also be the case in many other industries, knitwear manufacturing includes a variety of subjective criteria that that cannot be quantified – suitability is up to the opinion of the buyer.  Handfeel variations, color variations, and even measurement tolerances can be acceptable to one buyer, and unacceptable to another.

Managing the varied and subtle details is a very complex undertaking. It is impossible to cover all your bases from a distance. This is where we come in, with a blend of foreign expertise and hometown advantage.

Where service comes in

Our job is to fully understand all aspects of the project, effectively communicate all requirements to the relevant parties, then monitor each stage of the process to return finished products in line with customer expectations. In short, we oversee and manage the entire project, from start to finish.

We take the detailed instructions we receive from our customers and explain them to all the suppliers involved – dyeing factories, knitting factories, after care providers, etc. We frequently work with smaller factories as they give the time and attention to detail that is required for smaller orders, without the higher costs associated with large factories.

The communication hub we provide creates benefit on all sides. Our foreign staff walk customers through the details of each style with greater effectiveness than a small factory owner could. Our local staff communicate with small factories more clearly than a foreign buyer could.

By using our services, our customers leverage the benefits of boutique factories while keeping their costs down.

The Compromise Tests: when Gray becomes Black – part 2


Danny Coyle

Danny Coyle

Doing business in China invariably means running into some tough ethical dilemmas. There is often no clear line between black and white, and wading through shades of gray is difficult.

In the first part of this article we looked at two tests I use to help me make these difficult decisions. In this part we consider two more.

Test #3: The Children Test

If your kids were in the exact same situation you are in, what would you counsel them to do?  Since most parents want their kids to grow up as outstanding members of society, we usually teach our kids to do the right thing.

Another side to this test is whether my kids would approve of my decision. If my kids knew everything about the decision I am making, would they be proud to have me as their dad?  My kids are so much more important than making money; I will not compromise my image in their minds.  As in the newspaper test, they may not understand the situation fully – my decisions may appear hurtful to them at times – but this test reminds me to be a person my kids will be proud of in the long run.

Test #4: The Company Name Test

In this test, I picture the name of our company in polished silver, hanging on a wall for the world to see.  I then ask myself: will this decision tarnish or polish our company name?

Ethical and moral decisions have a polarizing effect – they are on the black side or the white; they tarnish or polish. A hundred small smudges will tarnish our company name just as surely as a single large-scale error in judgment will. The situation I find myself in today may be forgotten next year, but every decision has lasting effects. Each decision I make impacts the reputation and standing of our company.

The bottom line of all these tests is to take a long-term view of the situation. There is more at stake than what you see on the table in front of you. Each decision you make has follow on effects. My decisions affect who I am becoming. My decisions affect the direction and the character of our company.

The question is: what do you want to be known for?

The Compromise Tests: when Gray becomes Black

Danny Coyle

Danny Coyle

Doing business in China means things are rarely black or white; there is a lot of gray.  There are issues to do with business registrations, taxation (where and how much), customers wanting to rip off other customers, cheating suppliers, kickbacks – and the list goes on. These situations often have many layers to them, further complicating already-difficult decisions.

You can’t do business in China without stumbling across this question: where does gray become black?  When does something that is not technically wrong cross the line into something that is definitely not right?

I have a few tools that I use in these situations, to help me navigate the path of integrity.

There are four tests I apply to difficult ethical dilemmas I face. I have included two below, and in the next part of this article, we’ll look at two more.

Test #1:  The Friend Test

Seek counsel from wise friends who will encourage you to do the right thing.  A friend often sees your situation with much more clarity than you can yourself.  In the thick of a tough decision the reality of the situation can be hard to see.  For me, this often feels like guns lining the ridge of a canyon I can’t find my way out of.  A friend standing outside the canyon observes the whole situation from a different vantage point.  This person will give great advice that you would never have thought of.

Test #2: The Newspaper Test

Imagine that the full story (with all the minor influencing details) were written in the newspaper for the whole world to read.  Everyone who read the newspaper would understand all the gory details.  Would you be embarrassed about the decision that you’re making?  If the answer is yes, don’t do it.

Often we deal with angry responses to the decisions we make. Integrity is not, however, based on the opinions of others. This test helps you distinguish between the right decision and a decision that simply looks right to those on the outside. Make the decision you would not be embarrassed about were all the details to come out.

What do you think? What are some tests you use when facing the gray zone?

Having fun together – a core part of successful teamwork

Jill Coyle

Jill Coyle

Teamwork is essential to all businesses. I’ve found that moments outside the office are sometimes more powerful catalysts of teamwork than any of our workshops or lectures on teamwork.

A lot of bonding happens when we as a company just go out and have fun together. Every quarter we take all our employees (and sometimes their kids and our young daughters) to volunteer at some local charity. We play with orphans, do crafts, wash windows, shuck corn (no kidding!) —whatever needs to be done. Then we go out to eat, play games, and have a bunch of laughs.

During the summer of 2008, we took employees to both the Olympics and Paralympics—for some of them, this was their only visit to the Olympics; it was fulfilling to give them an opportunity that they might not have had otherwise. Another thing we do as a company is celebrate birthdays and Christmas together – complete with silly hats, cake, games, and carols.

Having fun together increases camaraderie when we “get back to work.” Having fun together also helps both the employee and employer to bond in ways that they wouldn’t normally—they see each other more as “regular” people. On these outings, we get to observe each other in more relaxed circumstances. We get to mingle with each other’s families, play with each other’s kids, laugh and tell stories.

If you can, try to schedule some social events during work hours – it shows your staff that you see these times as important to the running of the company, and that you value them. Requiring your staff to “have fun” after hours can feel like a burden, which is not conducive to bonding and building trust.

What about you? What have been positive experiences you’ve had outside the office, with your employees or employers?

Should you choose to partner with Big Factories or Small Factories?

Danny Coyle

Danny Coyle

There are big differences in the way large, established factories operate, as opposed to smaller boutique-style factories. To choose the best manufacturer for your products, you must weigh the pros and cons.

From our experiences with manufacturing in China, we almost always choose to use small factories rather than big ones.

Here are a few reasons why:

  • Lower minimums
  • Usually cheaper
  • More flexible
  • Unaccustomed to working with Chinese-speaking foreigners (find it interesting)
  • More readily adjusted to our way of doing things

Flexibility

When choosing a factory, you must consider his attitude to project changes. A big factory requires its customers to be very precise and orderly. These factories do not like to take on a project unless all details are clearly confirmed up front. This sort of factory is uncomfortable proceeding on verbal instructions, especially when the orders are large  – they won’t just trust a foreign buyer’s word that this new method will work, or this new idea is going to sell big.

Of course, the smaller factories have their own set of headaches. Very few have English-speaking staff. Not all have adequate quality control systems in place. In manufacturing the types of products we sell, however, flexibility and responding to unknowns on the fly is important. Our bigger factories have a harder time with this. The flexibility we gain in working with smaller factories is worth the losses in other areas.

Guanxi

The most significant gain in doing business with smaller factories is guanxi. Guanxi, or relationship, is more easily built with smaller factories, as usually there is one factory owner you will deal with. All the accommodations made on both sides are carried forward with the same working relationship. When that one owner likes you, you have it made (although the converse is also true).

This is because the owner of a small factory is usually directly involved in production, overseeing all steps involved. Rather than an aloof observer waiting for information to be passed to his huge corner office, the small factory owner will hopefully be on the factory floor working with your order hands-on.

Communication is clearer and progress made faster, too, as you always talk with the decision-maker, not a salesperson who isn’t involved with production. Messages don’t have to be passed along the line, chewing up time and delaying progress.

If you experience headaches working with big companies, try a small one.  They have worked out for us.

Do you prefer working with big factories or small factories?
What other pros/cons have you noticed?