Imports Oriental Blog

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

Posts Tagged ‘communication’

Working well with Chinese suppliers

Tanya Crossman

Tanya Crossman

Last week Renaud wrote a piece about working with Chinese suppliers I enjoyed.

He starts out by saying that when you first start working with Chinese suppliers, you may notice a need to change certain habits.

It is very important to define the product requirements in the smallest details, including the labeling and the packaging.

I’m with him here! It’s important not to make assumptions. Don’t rely upon the supplier’s “common sense”. The problem with this isn’t that your supplier is “stupid” but rather that he doesn’t know what you’re thinking. You have a clear idea in your head of what a label should look like, whether you realize it or not. It may be that you think it “obvious” what a label should look like. If you do not communicate these specifics clearly, don’t complain when the supplier goes with his own assumptions of what makes for a good label!

Labeling and packaging are aspects of production we have changed our system on over time. Originally, all product was shipped to our warehouse where we did our own quality control and per-piece inspection, before labelling and packaging every piece by hand, ensuring no mistakes. At the time, this was something our supplier could not handle to a standard which was acceptable to us. Over time, as we have trained our supplier and improved other aspects of production, we have moved more of the labeling and packaging tasks to the production factory. When punctuality, quality, quantity, and color tolerances were all happening well, we added these extra jobs.

Quality and timing are never guaranteed. Expect a very bad experience, and you might be pleasantly surprised.

If by “expect a bad situation” he means “plan for the worst” then I am in total agreement! Things go wrong. It happens. It happens when you’ve made the same product at the same factory with no problems before. It happens when you have time to recover and when you don’t. Having a contingency plan ahead of time saves time and stress when those unforeseen problems crop up. Some questions to think about:

  • What will I do if the product is not ready on time?
  • When do I need it, as opposed to when I want it?
  • How will I respond if product quality is unacceptable?
  • How do I prioritize different production values (punctuality, cost, quality…)?
  • What scenario would force me to cancel the order?

Monitor production closely and micro-manage the whole process.

Yes, yes, yes! Keep in regular contact with your supplier – make sure you know the specifics of what’s happening with production. This kind of micro-managing helps not because your supplier is not going to look out for you (although that can be the case on occasion) but rather that your supplier may well have a different set of values to you. He may value punctuality over quality, or price over time – whereas your values may be opposite. This shows out when things go wrong (which they inevitably do, eventually, even to the most reliable of suppliers). When a choice has to be made -such as “I can either get them done on time OR at the price/quality promised” – the supplier will do what seems best to HIM, which may not be your own preference.

If you know what’s going on at every step of production, you have a chance to step in and make those calls yourself, rather than finding out weeks later what the supplier decided to do. We have several times averted what could have been problematic issues simply by asking specific questions and letting our preferences/values be known. When production was inevitably delayed, we knew early enough to accomodate the delay, rather than promising a delivery date to our own buyers we would later find out we could not keep.

Don’t take everything they tell you for granted. Once production is under way, in 50% of cases you are not told the truth.

I don’t entirely agree here. Although there certainly are unscrupulous suppliers out there who will lie and cheat and do whatever they can to make a fast buck, these “deceptions” aren’t always so malicious in intent. Sometimes it is simply a case of different priorities, leadership styles, or manners of dealing with conflict. While it is good to assume you don’t have the whole story, let it be a healthy awareness rather than an overly suspicious nature.

Don’t promise anything beyond the next order. It is useless. Your counter-party thinks short-term and in a distributive manner (“there is a pie to share, and I want the bigger half”).

Again, I’m not in total agreement here. I absolutely believe you should never promise a future order you can’t guarantee you’ll be placing with your current supplier, longterm relationships are very beneficial. Saying you are going to place an order later won’t gain you any extra leverage with your current problems, but a history of placing regular orders will. Chinese suppliers look more at your past history than at future possibilities. While this means you have no benefit when starting out, it does mean there is benefit in sticking with an imperfect but proficient supplier rather than constantly looking for a better supplier every time. Over time, a supplier will learn your values, know what details you get upset over, and future orders (and problems) will be worked through more smoothly. (This is especially true when you work with smaller factories).

I remember working with a buyer who had set up a very strong (nearly bullet-proof) system for avoiding getting burned. . .He had a theory that once a relationship has turned sour–for whatever reason–he’d better cut his costs and stop everything right away with the supplier in question. I saw first-hand how brutally he acted against a poor supplier who had committed an involuntary mistake. . .That supplier got about 100,000 USD worth of product cancelled, and the importer lost a relatively good supplier. The bottom line is to try to understand the real situation. It is not easy, but it is far better than assuming the worse and resorting to knee-jerk reactions.

Here’s the important part – if you persevere through small/unintentional mistakes, problems that come from ignorance or bad planning rather than from malicious intent, you can train your supplier over time, improving their quality while building a relationship. Giving up at the first small sign of trouble means you’ll never realize the benefits of a long-term supplier relationship.

Do you have any long-term relationships with suppliers you cherish?
How have your supplier relationships changed over time?

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Posted in : Business in China, Export, International Business, Manufacturing

Working with your spouse

Jill Coyle

Jill Coyle

While leading a talented group of female entrepreneurs at the Women in Business conference in September, I learned that 4 of the 6 entrepreneurs on the stage (myself included) worked with their spouses.

This led to some interesting discussion as one of the panelists shared that she’d actually had to “fire” her husband and tell him to go start his own business.

Here are some of the things we female entrepreneurs shared about the joys and challenges of working with our husbands.

Some of the challenges

Work doesn’t stop.

One panelist shared that she and her husband had a difficult time leaving work at the office. They continued to discuss work over dinner, during vacation, on Saturday, etc.

Home life can spill over into work

If a husband and wife are having a “discussion” (oh, alright, let’s call it a “fight”), we often find it challenging to not let that fight affect our relationship once we’re in the office.

Personality conflict

For some business/marriage partners, working together brought out the best in them – they balanced each other perfectly, offset each other’s weaknesses, etc. For some, it was a major clash of the titans -  they drove each other so crazy that they had to dissolve the partnership…or totally risk their marriage. As one woman so aptly put it, “I can be married to you – I just can’t be your business partner!”

The joys

Total trust

One great thing about being business partners with your spouse is that (most likely) you totally trust your spouse. I’ve heard so many horror-stories, especially in China, about “partners” running off and stealing the whole business. That’s a lot less likely to happen when you are married to your business partner.

Balance each other

For this group of women anyway, most of them talked about how they work so well with their spouse. One person handles the staff, the other the sales and output; their strengths go hand in hand. They’re able to build each other up – and soften some of the rough edges.

Sharing

One great thing about building a successful company with your spouse is that you do it together. It is something you accomplish together – you can put your arm around your business partner and say, “Wow, look what we are doing together!”

What about you? Do you work with your spouse (or have you done so in the past)? Share with us some of your stories.

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Posted in : Business Relationships, Entrepreneurs, Leadership

Intuition and the “gut feeling” that gets you out of trouble

Tanya Crossman

Tanya Crossman

Fashion Incubator is a great blog focussed on pattern making. We don’t often link to it as while it is fascinating to me it doesn’t generally overlap the topics we cover on Imports Oriental. Kathleen posted a really interested article the other week, however, which I wanted to bring to your attention.

She talks about intuition, and the importance of paying attention to it, especially in business. She tells a story about a time where investigating a gut feeling regarding a certain project enabled her to escape the worst of what could have been a very big mess.

In terms we typically define it, intuition is a gut level impression we get about a person or situation and for which we are at a loss to understand why… understanding the mechanisms of intuition allows me to move from indecision to informed understanding.

Kathleen talks about intuition as the “back brain” – the forebrain thinks logically, according to information obviously available, while the back brain deals with more subtle “cues”. Those cues may not be articulated as evidence of a problem, but are more like red flags – markers that “this” often means “that” is happening underneath. So the gut feeling isn’t saying “here is what’s wrong”; rather, it is part of you noticing a pattern that in other situations has been connected to a problem under the surface.

You go out to dinner with somebody you’re thinking of doing business with. They are pleasant enough, the details seem equitable but your intuition tells you something is amiss. Problem is, there’s nothing your fore brain can interpret as being a rational cause of discomfort but still, your dis-ease persists. I know what many people (most of them women) do, because you can’t articulate exactly what’s bugging you, you elect to give them the benefit of the doubt because that’s the only fair thing to do. Right? Well, maybe you shouldn’t. First you should try to pull cues from the situation which can help the back brain to communicate.

The next time you have a bad feeling, you need to map it. Clear your mind and write down any and every single misgiving you have no matter how stupid, trivial, childish or germane to the situation. Things like, do they salt their food before they even taste it? You don’t want to be involved in manufacturing or engineering with someone who does that, no way no how (long story). Many things may seem like emotional reactions that have nothing to do with business or being fair or open minded -you know, giving the benefit of the doubt in the absence of proofs. These are cues your inarticulate deep brain has put together in a pattern but does not have the means to tell your front brain. As you do this, more things will occur to you that you hadn’t recognized before. You won’t get too far into it before you realize that a pattern has emerged and your course of action is clearer.

I was particularly struck by the comment about people who salt their food before eating. I often do that myself. Once I stopped to think what that might say about a person, I was stunned. Salting food before eating it means I’ve made an assumption that the food before me will not be to my liking before I’ve even tasted it! I also have a tendency to make assumptions about people and situations before investigating them properly. It’s clearly a flaw, and while I am capable of changing my quickly-made-up mind, I waste time and offend people in the process.

Back to the topic, though; I think this is great advice. Investigating a “bad feeling” may seem like  a bad idea. You’re under a deadline, and you have no logical reason to delay. However, if that investigation leads you to an early warning, it may save you big time in the future. Think of such thinking time as an investment in the future of the deal you’re working on.

The point is, if you have a gut reaction without rational reasons, your deep brain is trying to tell you it has put the cues together. Give it a chance to speak so you can move forward decisively without feeling guilty that you haven’t given someone the benefit of the doubt.

Read the full article on Fashion Incubator here.

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Posted in : Business Ethics, Entrepreneurs, Leadership

Cultural sensitivity for international business

Tanya Crossman

Tanya Crossman

There was a fantastic 3-part post on the China Law blog the other week. A new contributor, Jason Patent, gave advice based on the idea that knowing the Chinese culture is a huge help to anyone doing business here. All three posts were very well written and worthy of a careful read.

I’m going to go through the general idea of each post, with some of my own thoughts and a few quotes. If you find it interesting, do go and read Jason’s original posts.

In Part I, Jason shared a story in which an experienced businessman who had done his research blew a great opportunity in China through a lack of cultural preparation.

This is an important topic for anyone planning to do business in China, whether directly or through an intermediary. Things are DIFFERENT. Whoever is on the ground needs to be culturally aware, and whoever is managing them needs to leave space for the differences culture brings.

If you are using an intermediary for your China dealings, try to listen to their explanations of situations that come up – don’t expect it to fit in the box of business in your own culture. If you can accept that the Chinese way is not “wrong,” but simply different, it will help you be more relaxed and, in the long run, effective.

I particularly enjoyed this quote from the summing up at the end of the post:

Business is not just business, despite our American insistence to the contrary. The only way to succeed in China is with the curiosity to examine our own beliefs and practices, and the humility to see other ways of doing things as equally valid. And the good sense to spend a bit of time and money now to save, and make, much more down the line.

Part II focused on ethics, and in particular, the perception that Chinese are less ethical in business than westerners.

A favorite critique by Westerners of China is that “the Chinese are unethical.” It is claimed that Chinese deceive, don’t stick to contracts, deliberately cheat. While few would deny that China can be a frustrating place for Westerners to do business, and while unethical behavior certainly occurs in China, claims of unethical behavior are often exaggerated, and result from Westerners’ own failure to understand the different background assumptions held by the Chinese.

Jason includes a chart which compares some of the values emphasized in China/the West, and the implications of these mismatches to business. For example, we may see a person’s behavior and, misunderstanding the intention of this behavior, assume they are trying to cheat us in some way.

The rub is that we have no access to anyone else’s intentions. All we have to go on is behavior. We observe a behavior, and attribute an intention, whether it’s accurate or not. The result: we make a lot of mistakes, often assuming evil intent where intent was either good or, at worst, indifferent. Whether we like it or not, we are wired to judge those around us based only on their behaviors, while at the same time judging ourselves based mostly on our intentions. That’s a cold, hard reality — but a good one to know about.

I really enjoyed reading this discussion. As Jason himself says, it’s not new information, but it is very important to business (and life) in a cross-cultural environment. I know that, personally speaking, understanding that behavior which frustrates me may have a different intention than I would naturally ascribe to it helps me be more at peace.

Giving others the benefit of the doubt (assuming their intentions are good) and then trying to clarify the situation with careful, calm questions helps greatly. This is not just in dealing with suppliers or customers (external parties) but even within your own company. There have been several occasions in Imports Oriental where misunderstood intentions have created unnecessary tension – tension which dissolved almost immediately once there was clarification.

Part III focused on stereotypes that we carry, and how they affect our perspective. Jason lists 9 stereotypes many Westerners carry into business dealings in China.

1. The Chinese are out to cheat me.
2. The Chinese think they’re superior.
3. The Chinese lie.
4. The Chinese go back on their word.
5. The Chinese are always stalling for time.
6. The Chinese are stingy.
7. The Chinese don’t care about quality.
8. The Chinese don’t care about their environment.
9. The Chinese hate Westerners.

Jason goes through each of the 9 and gives perspective on each – how these stereotypes can come about and explaining a bit of what can be behind them. There are unethical people in every culture, but labeling all Chinese as dishonest or liars is not the solution. I’ll end with a quote from Jason’s summary:

Categories can be useful. Reasoned, informed judgment can be useful. Stereotypes have zero business value. Get savvy about your own stereotypes and re-frame them. Not only will you feel better and get along better, but your business will do better.

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Posted in : Business Ethics, Business in China, Entrepreneurs, International Business, Leadership

Listening Part III: Powerful Listening

Danny Coyle

Danny Coyle

In the past two weeks Jill has shared some insights on the topic of listening (see Part 1 and Part 2 of our series on Listening). I have also been experimenting with listening lately.  I am not strong in caring about people, listening to their problems, and engaging them on a deep level, especially if we do not already have a strong friendship.

I am only starting to realize that I have a very hard heart; I really don’t care that much about people. That needs to change.  My listening skills are a reflection of that.  I often want to turn the conversation so I can talk about my ideas, my achievements and my skills.  That is not loving to anyone (it’s really a form of hatred).

I’ve been trying to train myself to listen more deeply – to shut off my mouth and instead listen to people with my heart. I try to clear my brain of all tangents and just focus on what a person is saying.

Recently, I was listening to the wife of a friend talk about a struggle she was having.  I wasn’t really deeply listening.  I could sense that she was taking the conversation deeper, but since I wasn’t listening deeply, she wasn’t going to engage the conversation deeply.  It was like she just stuck her toe in the water, found it was quite cold, and recoiled.

I realized that the reason she recoiled was because I wasn’t listening to her heart. I decided to try to listen better in the next few moments. As I was making that decision in my mind, her husband walked up and entered the discussion.  I tried to focus on the words they were saying; I just let them talk.  I tried to ask questions that clarified the situation for me, and questions that tried to pull out the true meaning of what they were saying.

I was amazed at the depth of the conversation now taking place.  The only factor I could point to that was different was my attitude in listening to them.

I am amazed at the difference that listening can make.

I’ve been practicing it with my wife as well, and our conversations have gone deeper.  I can’t believe how loving, powerful and simple true listening can be.

Here are some tips that I’ve found that really help to listen carefully.

  1. Don’t let your brain run away on a tangent when someone else is talking.
  2. Look at the other person in the eye as if you are really listening to them – because you are listening to them.  Eye contact is key.
  3. Engage your heart.  Let yourself care about what they are saying.
  4. Do not try to fit your ideas into their words.  Ask clarifying questions if needed, but don’t assume they are saying something they are not.
  5. Be patient and let them do the talking.  They will finish when they are finished.  The point is not about getting your own ideas in, but about letting the other person feel loved.

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Posted in : Business Relationships

Listening Part II– one of the most powerful tools you can learn

Jill Coyle

Jill Coyle

(Read Part I here)

Listening is powerful. I wouldn’t have believed it if I hadn’t started to experience it for myself over the last year. I wasn’t a very good listener before – and I certainly have a long way to go. The funny thing is that learning to be a better listener has also helped me (i.e. in helping others, I’ve helped myself). I’ve overcome tensions with people, I’ve faced intimidating people more easily, I’ve helped people uncover some powerful truths about themselves (and man, it was SO exciting!). Here are a few things that I’ve seen work for me.

Helpful tips in learning to be a better listener

Actually Listen

Pretty simply, try to actually listen to what the person is saying. Don’t be thinking of the next thing you’d like to say or about where you should go for lunch – and don’t be thinking about “how can I change this to a subject I have lots to say about.” Instead, give the person your attention (don’t be doing SMS or email while he’s talking) and listen.

Engage

Very simple again – but make sure to look at the person when they’re talking. And be engaging. Don’t look bored (even if you are!). Try to look the person in the eye and give them your full attention. If you’re having a conversation with someone on the phone, make listening noises like “uh huh” or “ok” to let the person know that you are listening.

Go Deeper – Investigate & Ask Questions

Try to find out what things mean to the person. Ask questions related to the subject that they’re talking about. If it’s an industry you don’t understand, ask questions about it. If it’s a hobby that they’re enthusiastic about, find out why they love that hobby so much. Find what makes that person tick. Ask them how this (experience, relationship, business) relates to their life in general.

Attitude – It’s NOT all about me

A wise friend and mentor, Vivian Peebles, gave some great advice to me when I was going into a particularly hairy meeting where I was rather intimidated by the bigwigs that were going to be there with me. She said, “Be prepared for the meeting – and then forget about yourself. Ask about them. Ask about their business, how they got started, where they’re from, about their kids.” And you know? I found this to be such a powerful tool. Not only was I a lot less nervous about facing these people – but I found that they were much more open with me, because I was showing an interest in them.

We as human beings generally find it easy to talk about ourselves and our interests.

Ask about someone else’s, for a change – and see if it doesn’t change your life!

Share some stories on how listening has changed your life – either someone really listening to you…or you listening to someone else!

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Posted in : Business Relationships, Leadership

Listening Part I – Are you a conversation thief?

Jill Coyle

Jill Coyle

I learned something about myself a couple months ago – something I really didn’t like. Through a series of events, I learned that I like to hijack conversations. What does this mean? Finishing people’s sentences, thinking of my answer before the person is done talking, taking what the person is saying and trying to figure out how to get it onto a topic that I’m more expert in, etc. A friend (as a joke, I hope) has even offered to make me a T-shirt that says “reformed conversation hijacker.”

“Hijacking conversations” is a skill I’ve learned in business where things move at lightning speed – and finishing each other’s conversations is actually a skill. When I have been working with team leaders and we can finish each other’s sentences, this means that we’re on the same page, that we know where the other person is going, etc. It’s a great skill.

Also, time is money – right? So let’s move things along, people. If I know where the conversation is going and the person is taking FOR-E-VER getting to the point, I like to cut in (hopefully at a tactful place) and cut to the chase.

And sure, I am not trying to undermine “hijacking” as a skill. It is a skill. And completely necessary to busy managers or bosses who are trying to get things done but have dozens of people clamoring for their attention.

However, I’ve found that – especially in the relational part of business (and let’s face it: you have relationships with your staff, boss, customers, etc, whether you like it or not) – this is a detriment rather than a skill.

If you don’t believe me, go home tonight and finish your spouse’s conversation all throughout dinner and see how he/she reacts.

Probably not very positively, eh?

The people you work with – or have working under you – need for you to listen. They also need to know that you can give them space to listen. If they see you as distant and unapproachable – sure, they won’t bother you with some of their nonsense…but they probably also won’t come to you with the good ideas that are churning around in their heads.

Things you can do:

  • Don’t squash people’s ideas.
  • Have more patience.
  • Listen just a bit longer – there might be a diamond in the rough.

So there is a time and a place for “hijacking” – but I’m convinced we’re all pretty good at this. I think many of us need to focus more on LISTENING.

In Part II, we’ll talk about a couple tips to being a Better Listener.

What about you? Do you feel like your boss listens to you? Do you think listening is a problem at your work place? Any tips on being a good listener?

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Posted in : Business Relationships, Leadership

The 2 Kinds of “Yes”

Danny Coyle

Danny Coyle

I recently found myself in a position where I need to make a quick decision to suspend operations in a department.  I spoke with some of my mentors about it, and they said it was a good idea.  I was not in a place to have a physical meeting with my top leaders, so I sent them an e-mail detailing the decision that needed to be made.

We all decided to suspend the operation for the time-being and go ahead with the plan.  With the decision made and plans moving forward, I was surprised when two of my top leaders came to me later. They asked questions indicating insecurity regarding the decision we had made together.

I then realized I had not received the “yes” I had expected.

When leading a team, beware of the 2 kinds of “yes”.

Before I describe the two kinds of “yes”, there are two components to engaging a team of leaders in a decision.  These components are Heart and Mind.

When making key decisions, your team needs to say “yes” with their minds. They need to think through all the positive and negative outcomes of the decision, along with resource consumption, potential output, etc. Those questions must be asked and answered in a rational way. A good decision will not be made without engaging the Mind.

You also need to engage the Heart. Your team needs to feel that the rational decision is the best one – to have that “gut feeling” that what is logical is also right overall. Even if your team has thought through the plan and engaged with the Mind, unless they also engage with the Heart, they will be prone to uncertainty. When you can engage their hearts beforehand, a new venture has a much better chance at success.

That said, here are the 2 kinds of yes.

The ‘We are with you’ Yes

Sometimes a leader connects with his team in a way that brings the team on board 100%. The team is behind the leader, supporting the new direction, convinced that it is the best way forward. This happens when the leader engages both the Minds and Hearts of the team. When a team is engaged like this, they are willing to fight to bring about the vision; they will jump through rings of fire to make it happen.

The ‘No one will get killed’ yes

Sometimes a team will go along with new direction while remaining unconvinced that it is the best way forward. They say “yes,” but what they really mean is “not no”. This happens when the leader fails to engage his team on a Heart level; the decision making is happening on a purely Mind level. The team can’t find a logical reason to say “no,” can’t find anything to say that will dissuade the strong leader from going forward with the plan. Team members not engaged on a Heart level are not sold on the decision they have made. Later, when facing the consequences of the decision, they will not strongly support the new direction, and may try to wiggle out of their part in it.

The second type of yes happens when the leader does not do a good job of engaging his team and winning their hearts for the decision. This lack is compounded when the leader doesn’t stop to check whether the team is engaged during the decision-making process. The team may be saying yes on a practical level, without it ever being a whole-hearted, “we are with you!” sort of yes. A good decision is of course a rational decision, but the heart is a critical component of the “yes” you need from your team. They must be fully engaged both in Mind and Heart in order for a new venture to fully succeed.

Most of the time, people don’t have the vocabulary or courage to explain that a leader has not engaged their hearts.  It is up to the leader to determine if the heart of the team is engaged or not.  This is a challenging task, and worthy of another post.

In my case, the decision to temporarily shut down the operation in question for a time was the right decision, and we reaped the rewards for this decision. I learned a valuable lesson without paying a big price in negative consequences – dodged a bullet with that one! On the other hand, I missed an opportunity to engage the hearts of my team. If I were to do it again, I would give more scrutiny to the position of their hearts before making, and moving forward with, the decision.

Next time we make a big decision like this, I know that I’ll be looking for them to say yes with their not only minds, but with their hearts as well.

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Posted in : Business Relationships, Leadership

Guanxi – is it essential to business dealings in China?

Tanya Crossman

Tanya Crossman

Andrew Hupert posted an interesting look at foreigners and guanxi recently. The concepts of face and guanxi are closely related, and for any foreigner planning to do business in China it is certainly worth taking time to try to understand the two.

Andrew starts his series on guanxi with a definition. It is a wonderfully clear explanation of a very complex concept:

‘Guanxi’ literally translates as ‘connection’ though it is often used to mean ‘relationship’ and ‘network’. When Mainlanders use the phrase among themselves, they are referring to a fluid network of cordial business obligations and debts – sort of an institutionalized version of ‘you scratch my back, I’ll scratch yours’. A person with a wide range of well-placed relationships, all of whom acknowledge their indebtedness and willingness to reciprocate, is clearly in a very advantageous position. Conversely, a person who lacks connections and is not in a position to do favors for new counter-parties is in a relatively weak situation. The worst position of all is one who owes valuable favors to a wide range of highly placed connections.

Guanxi is not just having relationships and connections – it is about those “obligations and debts”. Knowing people is of no value, guanxi wise, unless those people have a reason to (and are likely to) help you out.

When Chinese associates talk to Westerners about guanxi, it takes on a slightly different meaning. Here the emphasis is on the ability to influence members of his network. . .For a long time, guanxi was synonymous with “local knowledge” – but carried a strong implication of corruption and under-the-table inducements.

This calls to mind the image of a shady guy making things happen that shouldn’t, because of his mysterious guanxi power. Guanxi has been built up in the minds of some foreigners to something almost mystic and unattainable to the uninitiated. This isn’t accurate. Guanxi is simply a network of give-and-take – doing something to help another person, without any obvious short term gain for yourself, understanding that they are now in your debt, and will return the favor sometime in the future.

When the China economy was first opening to the world (up until the mid 2000’s), commercial laws were still haphazard, contradictory and opaque. In such a chaotic environment, a local ‘fixer’ was often required to prod bureaucrats and state managers to make a decision. . . China’s central government, however, was busily constructing what it hoped would be a strong legal system and a (relatively) transparent regulatory framework. . .

That is why Westerners in China often find themselves caught between two opposing views on the guanxi issue. On the one hand, locals still maintain it is the only way to get things done in Mainland China – and that without it foreigners will never overcome their status as rich but clueless outsiders. However, a growing community of experienced, knowledgeable international experts maintains that guanxi is an ineffective, expensive and ultimately counter-productive throwback to the ‘bad old days’ of a lawless, chaotic China where personal influence trumped laws and regulations.

I think Andrew has it right here – China has changed. While calling in favors may have been essential for getting through the endless bureaucracy in earlier years, bureaucratic processes are becoming more formalized and it is harder to skip steps with simply the say so of a well-placed friend.

Guanxi is extremely useful and powerful – as an information network. A broad, active web of plugged-in connections can alert you to people who are willing and able to help – but who have no idea how to find you and no other way of being found by you. . .As a skeleton key that will magically unlock doors, it is problematic.

Guanxi is not the solution to business problems. Knowing a person in the visa department doesn’t negate you from the responsibility to submit your visa application correctly in a timely manner. You must follow the law and complete the required steps, no matter who you know. That said, knowing a well-placed person may help you to find information you need, or get helpful advice on a situation.

In the manufacturing industry, doing your supplier a favor now will generally result in them doing you a favor later. It’s not about skipping steps but rather helping each other to better solutions.

Guanxi networks are great as information and networking resources. However, if you plan on using connections to open doors – or knock down walls – then you are going to encounter some major difficulties down the line. When you use guanxi as a shortcut in China commerce, the destination is usually business failure.

All in all, a useful article. Looking forward to the rest of the series…

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Posted in : Business Ethics, Business Relationships, Business in China

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.

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Posted in : Business in China

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