Monday, June 8, 2009

The Chinese Apology and the Chinese Ego.

Chinese culture is often opposite to American culture. Probably the greatest difference lies in the practice of being humble.

In China, people do not boast about themselves. It is considered common courtesy to deny complements and offers of assistance prior to accepting them, and as a result, criticism must be delivered differently than it is in the States.

Examples of Chinese complements and denials of flattery exist everywhere in the country. On my first day in China I picked up simple sentences like "hello, my name is Ben", "thank you", "how much does that cost", etc. Upon uttering these simple sentences I often was told "Wow, your Chinese is very good!" This was decidedly not the case. I was mis-pronouncing words and speaking with a heavy Minnesota accent. I didn't know how to properly use the tones. My Chinese was possibly the worst they had ever heard.

That was in 1994. By 1999 I was pretty much fluent in Chinese. All through the stages of development and learning, I was told my Chinese was excellent. To this day, it is difficult to gauge the sincerity of the complementor.

One thing that changed between 1994 and 1999, however, and continued to change as I learned more about the culture, was my own response to such complements. It is considered normal in China to exchange complements with one another as an ice-breaker. "Your Chinese is very good." "Your wife is very beautiful." "Your son is obviously very smart." The expected response is not, "Yes, I am aware of this, thank you", but rather very humble. One is expected to mention being lucky to have a son, or happy that their wife agreed to marry them, or to say, "No, my Chinese is not very good, I still have a long ways to go".

When I would visit Chinese friends that I did not know well, they would bring out a bowl of fruit or some other snack to eat while we drank tea and talked. They would always ask me to please have an orange or an apple. I would politely decline and state that I was not really hungry for food, but for conversation. They would leave the bowl of fruit on the table anyways. Then we would sit and talk and whether or not I was hungry, I always ate something. It was the right thing to do. The host was happier when I peeled an orange. But I never ate all that was there.

Many Chinese conversations begin with an apology. This is nearly the opposite of American culture. Often times if a conversation begins with an apology, you are about to be told you have made a mistake. The reason for the apology is to soften the blow of the criticism. It's an unspoken warning of what is to come, a way of telling you to prepare yourself. Often times, to smooth things over even further, the recipient of the apology may want to state that there is no need to apologize, and that their input and guidance are valued and as friends we can speak frankly with one another. Once these formalities have been taken care of, the two parties can speak more directly about their concerns and how to resolve issues.

In my most recent job as a residential loan officer, my boss would come into our close-knit department and sit down at the cubical of whomever she needed to discuss something with, and if it was not a private or personal matter, she would just say what was on her mind loud and clear. It was a great way to let the offender know that they needed to keep their client pipeline current, and a great way to make it clear to everyone else that they'd better clean up their own pipelines or they'd be next. It was a highly effected form of management and resulted in quick communication to the staff just what was expected.

This approach would not only be ineffective in China, but it would backfire, cause morale to plummet, and cause the recipient of the criticism to lose face and be publicly embarrassed. Had we been at a Chinese company, my boss would have called me into her office or a private meeting room, then sat down and apologized for having to take my time away, and probably waited a moment for me to say something like "please, do not feel bad, I need to have your guidance in order to better do my job". Then we could get down to business and I would be told my pipeline needed to be cleaned up.

All of this apologizing in no way suggests that the Chinese lack self-confidence. Egos and personalities of all varieties can be found in any country, regardless of political system, wealth and culture. China has five thousand years of history. They are a high-context, indirect society with long-established rules of communication. Direct orders are not given quite so often. Public scoldings are reserved for only the most egregious of errors. Complements, though regularly handed out, are always received with a humble reply of "no, you are much too kind".

It is important from a management perspective to understand how to be gentle when beginning a conversation with a colleague from China who does not understand American culture. One must make them feel comfortable in their environment and at ease before being frank. Otherwise they will close up and be embarrassed, and may start looking around for other employment. Giving direct orders to employees in front of others causes morale to plummet. It creates a working environment that produces less, becomes listless.

Being humble and spending time on Guanxi, or relationships, are two of the most important aspects of Chinese culture to understand before proceeding with a business initiative in China. If you've put in the time to get to know your Chinese employees, colleagues, business partners and official contacts on a personal level through social outings and dinners, you'll be able to more easily address issues paramount to the operation of your business. You will already know each other and be committed to a long term relationship, whether or not you've signed a contract to cooperate. The Chinese are more respectful of a person putting in the time to get to know them than they are of a stack of papers outlining each person's responsibility. That is changing as China delves further into the global marketplace, but one thing that remains the same is the importance of spending time building relationships. Going to China a few days before a big business meeting to meet socially with potential partners might cost a little more and take more time, but it will save thousands in the long run if the relationship is appropriately maintained.

Friday, June 5, 2009

My Teacher: Zhou Enlai.

When entering the Chinese market, be it for export manufacturing, domestic sales, or servicing multinational corporations, any business will face significant hurdles. Chris Berghoff, president of Control Products, mentioned in a presentation recently that the largest of these hurdles is understanding Chinese culture prior to entry.

Language is a useful tool to understanding another culture, and nearly a necessity in order to feel comfortable in a foreign environment during an extended stay. Culture, however, is what makes it possible for one to thrive. One of the biggest differences between US and Chinese business practices is the existence of "guanxi".

Guanxi simply means "relationships" and sometimes "connections". But relationships in China are more complicated and work-intensive than they are in the US. The best way to explain how guanxi effects business is through one of its master practitioners: Zhou Enlai.

The late Chinese Premier rose to prominence under Chairman Mao and stayed in his position without being sent to the farms to work or losing his status through political errors. This wasn't because he did a good job and the Chairman looked objectively at his performance and thought "this man is irreplaceable". It was because Premier Zhou was one of the greatest ever at leveraging relationships to his benefit by tirelessly working to make others look good.

When Richard Nixon came to China, he was not met at the airport by Chairman Mao. The Chairman was ill. Premier Zhou went instead. In all honesty, both men were quite old and ill by 1972. Nixon's visit was Premier Zhou's idea. Chairman Mao wasn't going to risk looking bad to the public if the visit went poorly. Had the visit been Mao's idea he still would have sent Zhou.

The first dinner they had together that evening, Nixon and Zhou toasted one another. In the photo at the beginning of this blog, Zhou holds his glass level with Nixon. This small gesture was photographed, analyzed and commented on all over China. In the US it was just a nice photo.

By holding his glass level with Nixon, Premier Zhou--essentially sharing rank with Kissinger-- is not showing respect to a superior position. At an official Chinese dinner, if a government official wants to toast another government official, he must first know the official's rank so he can hold his glass at a lower level, showing the proper respect. Zhou, by holding his glass at the same level as Nixon, was suggesting that he was on the same level as the US President, and also stating with a simple gesture that Mao was therefore higher. This opened the door for the Chairman to enter meetings with Nixon to develop a relationship with the US while not looking weak to the Chinese bureaucrats that were watching his every move.

Zhou Enlai was a master strategist, expert historian, and unparalleled politician when it came to surviving in China. Businessmen from the US need to take heed of the myriad of ways they can get themselves into trouble. The Chinese will not point out that you are wrong, but they will give you a lot of slack if you show them that you understand just a few simple things.

Simon MacKinnon, former president of Corning Shanghai, spoke a few months ago at Seattle University about encountering sluggish, unresponsive government officials who seemed to be waiting for a handout before they would help with permitting for a new production facility. Mr. MacKinnon set up a meeting with the Chinese official and presented him with reports from US economic publications that had been translated by Corning employees into Chinese. These reports allowed the official to go to his boss with information that would help in his work. The process of obtaining permits to move forwards with production immediately smoothed out.

This is just one small example of the importance of relationships in China. One can form business relationships in China, but they are much more social than they tend to be in the US. In addition, friendships in China generally involve helping each other out. If a business needs permits to operate in China, they're going to have to do two basic things: Build up a relationship through informal meetings with their Chinese counterparts, and find ways to make those counterparts benefit from the relationship that has been formed. The Chinese, though fierce negotiators, believe firmly that all business transactions should be mutually beneficial. They will consider a permit request to be a business transaction. Corning was going to get a production facility out of the permits it needed from the government official. What was he going to get?

The irony of this situation lies in its simplicity. Even though it is a natural part of Chinese culture, it is often misunderstood by US businesses. Once the people at the US company realize the official is holding out or moving slowly, they become suspicious. They wonder if the official is waiting for a bribe. Sometimes they even confront the official face-to-face (this is the worst possible thing one can do) and announce that they are not paying one red cent just to get an official to do his job. Meanwhile, the official sits at his desk wondering why the Corning people can't understand that he needs something, some sort of helpful piece of information or connection, that will make his own life easier. As the two sides fail to connect, both become increasingly suspicious that the other is out to get them and will never cooperate. Move in this direction long enough and you have Isreal and Palestine. Not a good way to do business.

The Chinese can't tell you they need a favor. Sometimes they will suggest it by telling you what seems like a harmless anecdote about their lives at a dinner. In some cases that anecdote was the whole point of the dinner from their perspective, to see whether you can pick up on their needs. But if you don't realize they're telling you what they need in order to proceed with what you want, they can't be more obvious. It would be extraordinarily rude to do so.

One thing that foreigners in China fail to understand is that the Chinese have just as much trouble understanding our culture as we do theirs. They are not going to take steps that would be rude in their society to build bridges to ours. We are in their country, so it is rare that a Chinese official or businessman will be in a position to even attempt looking at the situation from our angle.

The best example of perfect, long-term execution of guanxi is the late Chinese Premier Zhou Enlai. Each businessman that enters China lacks the skills that Zhou built over a lifetime. But there are simple actions that will facilitate successful outcomes. One of them is learning to apologize, something that US businessmen and politicians rarely do. Apologizing for one's ignorance from the start will make the Chinese officials or business partners immediately more sympathetic.

I'll post more on apologizing in the next entry.