Impossible is Nothing!
Back when I was the General Manager for our Asia operations at Lynx Innovation (I’ve since returned to the USA and now spend only half of my time in China), I challenged our executive team to come up with a mission statement. I told them to talk amongst themselves for a week and come back with what they thought was a statement that reflected our values as a company. At our next meeting I asked them what they came up with, and they proudly proclaimed “Impossible is Nothing!” It was a proud moment for me, reinforcing our success in attracting a team that embodied the right cultural orientation. You’ve heard me say it before but truly nothing is more important than choosing employees that embody the culture of your organization; almost anything else can be taught.
It was this mission statement that lead to the slogan I’ve attached to our China business years later. When discussing China, especially with newcomers, I often explain that in China, anything is possible but nothing is easy.
Anything is possible but nothing is easy
A friend of mine that works in corporate services in China commented that over the past two years, they’ve been winding down more businesses than they’re starting up. It makes sense when you consider the rising costs of labor, especially unskilled or low-skilled labor, and that most of China’s early growth came through the very labor that is experiencing the sharpest rise in cost. The exploitation of labor observed by Karl Marx continues to flow through developing nations; low-skilled labor tasks naturally gravitate to the areas that can provide production value at the lowest cost; he saw this in the 19th century and we still see it now as low-skilled jobs flee China for lower cost alternatives.
Another often ignored cost is the people needed to overcome cultural barriers. As we mentioned in our mantra above, anything is possible but nothing is easy. Doing business in China is hard, and crossing cultural boundaries takes seasoned, globally-minded professionals that come at a very high cost, either in salary alone or in the expat packages that need to be given over in order to tempt them to live in China. My own personal affinity for China aside, China generally is not one of an expat’s preferred countries, even when looking only at Mandarin-speaking countries. The costs of being in China must be factored into the cost of labor; it’s all well and good to get wages down to three to five dollars per man-hour, but once you add back in a few hundred-thousand-dollar-per-year expats (usually much more than that, by the way) your costs can rise significantly. For high-tech, mixed-media, precision, and rush orders, nothing beats China and in our humble opinion, this advantage is likely to continue for some time. On the other hand, for commodity assembly work or dying/cutting/sewing soft goods, there are other manufacturing centers in the world that are either inherently cheaper or become cheaper by virtue of not needing nearly the level of western supervision that we put into China manufacturing.
A director at one of our customers years ago explained how he would often spend more time in candidate interviews trying to talk people out of working for him than trying to get them to come on board. His reasoning was that the glamour of long hours, travel, and working for cool brands wears off fast, and you’re left with pushing through adversity by taking on the mindset of “impossible is nothing”. I’ve used this same tactic in interviews and I’ll use it again now when advising those looking at undertaking business in China, manufacturing or otherwise. The rewards can be great, but the path to get to those rewards can be long. Far too many people come to China expecting to sprint to cheap labor and easy savings but the reality is far closer to a marathon than a sprint, and like marathons, finishing is as much a mental exercise as it is physical.
So what does it take, besides marathon-level commitment, to be successful manufacturing in China?
The number one characteristic that predicts success is to accept the vast differences in culture between China and the West, and find ways to reframe your needs in the context of Chinese culture. Easy to say. Hard to do.
I’ve seen people absolutely beat their heads bloody trying to get their Chinese vendors or even employees to accept the “Western” cultural outlook. There is a temptation to think of our way as “right” and other ways as “wrong”, but remember that the people sitting on the other side of the table likely feel the exact same way, except in their eyes your way is wrong.
I love studying Chinese, but my drive to do so is only somewhat related to thinking that it confers an advantage to me in my business there. It’s great (really great, actually) to be able to talk on the factory floor with an engineer or toolmaker and describe that the mold needs to be more concave to correctly make a particular plastic part. My Chinese is far less helpful in the boardroom, not because most every supplier has a translator (hopefully you do too!) but because speaking culture is far more important than speaking language.
Speaking culture is far more important than speaking language.
I’ve always found that if you communicate through a mutually understood language, you speak to minds, but if you communicate through a mutually understood culture, you speak to hearts. It’s like that old chestnut about how Christopher Columbus didn’t order his crew to sail to the new world, instead he made them yearn to make a new discovery that would put them all into the history books. Tell me to do something and maybe I’ll do a good job. Instill in the drive in me to be successful and I’ll push for greatness.
The topic of what is Chinese culture, business, manufacturing, or otherwise is a topic for another post. Or a book. Or the result of spending ten years in China, only to realize that you’re still learning something new. Every. Single. Day. Regardless there are a lot of great resources that you can use to start getting your mind around the generalities of Chinese culture. Remember ALWAYS that people are all individuals. My being Italian does not predict that I would talk with my hands or enjoy opera or eat a lot of pizza any more than someone being Chinese predicts that they eat stinky tofu or only make deals after you all finish a bottle of alcohol.
There is no rulebook or process or audit procedure that is going to make your Chinese supplier do a good job; rather you need to communicate with them in their culture. Make line leaders strive for greatness, make everyone feel like a part of something bigger. Barking orders will get you nowhere, fast. Does this work for every supplier? No, of course not. It’s about finding those right cultural matches. It’s about spending time together and building a relationship. It’s about running a marathon, not a sprint.