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Entering Another Country: Focusing on the People

Brian Renwick, Managing Director of Boyden Hong Kong and Board Member of Boyden World Corporation discusses the challenges companies face in entering new markets.

Entering another country to do business is never easy.  There are many legal and practical difficulties to be understood and overcome.  Most companies are aware of these and take pains to get them right.  But – as with most mergers and acquisitions – few dealmakers take advice about the people who work, or may work in the companies for which they are responsible.

In over 40 years’ experience living and working in several countries, I have seen all too vividly the mistakes that companies have made with people.  And Chinese companies going outside China are about to make the same mistakes and for the same reason ­­– people do not seem to be a factor on which it is worth spending much time and effort.  This is odd, of course, because without the right people in the right jobs with the right motivation, even the best legal and economic structures are useless. In fact it really doesn’t matter what structure you have, you will succeed only if you have the right people.

How do you do that?  A large regional, now global, bank of which I was the Head of Human Resources had one of the best people development programmes I have ever encountered.  In an effort to increase localisation of senior posts, executives began at the bottom, were posted roughly every three years into different jobs moving in a steady, upward, spiral.  Though some got further than others, the process led to the evaluation managers from many viewpoints during their careers.  And here was a curious thing: the local people the western managers thought were best were always thought of poorly by local managers and – yes – the local people the locals thought performed best did not rate with western managers!

Why was this?

Some excellent research and writing explain culture in organisations well.  And I can attest to the truth of it in practice.  In Chinese companies for example, it is the norm for the boss to take every decision; he or she instructs subordinates as a Father and is revered and looked up to in turn.  It comes with the job.  In the bank for example, when I visited branches and asked about the staff, I almost always got the same answer: ‘my employees are excellent: they are very obedient!’  It was the highest praise a manager could give.

While Western companies are rarely democracies, employees are expected to come up with ideas, to disagree with the boss and take individual accountability for the decisions they take.  This would be infuriating to most traditional bosses in China.  By contrast most western bosses operating in China find their local employees lacking in initiative, unresponsive and quiet in meetings and needing constant, specific direction.

This is just one of the many aspects that make living and working outside your own culture a fascinating learning experience.  Understanding issues like this is one thing; but what can you do about it?  To what extent should a company try and impose its policies and values on employees living and working in cultures far from headquarters?  Nearly every global company I know of struggles with this.

I make these points about the selection and management of people and the cultural issues involved in going global without suggesting specific solutions.  Every company is different and needs to work out its own solutions – and remain flexible having done so.  My point is that consideration of them MUST be included in the process of going global successfully.