How western firms can get the right fit in an eastern market
Breaking into China and staying the distance is no mean feat for foreign businesses. Since China opened up to foreign investment in the late 1970s, some of the West’s most successful organisations have boldly launched themselves into the market, all guns blazing, only to stagger out dazed, battered and bruised, with a large dent in their finances and their pride, just a few years later. Many companies fail because they make automatic assumptions about the market without truly understanding the differences between the East and the West’s business cultures and—crucially—fail to adapt to local principles and effectively bridge the gap between the two.
HR Magazine met with Heidi Neal—Clarks’ Asia Pacific Vice President of HR, C&J Clark International—to explore some of the challenges British businesses face when creating empowered management teams in China, whilst still embodying British values and business culture. As the iconic British footwear brand sets its sights on significantly growing its business in APAC, Neal shares insight into the organisation’s new global strategic direction which aims to ensure staff have the confidence and tools to make the bold decisions required at a strategic, local level to facilitate long-term business growth.
Finding the right fit
According to Neal, getting the right people in place with the right kinds of skills can be the first obstacle for western firms looking to succeed in the long term in China. Add to this the challenge of recruiting high-calibre middle and senior management level executives amid an acute talent shortage driven by China’s meteoric economic growth and the task becomes even greater.
She commented, “While foreign investment has soared in recent years and with it the need for good quality managers, China has struggled to meet demand with its much younger, less experienced workforce. While there is no shortage of ambitious young graduates with high aspirations entering the workforce, they lack the practical skills and experience many western businesses require.”
Neal explained that this is a challenge the Clarks business has faced during its own period of rapid growth and expansion but one which it has tackled head-on by giving its youthful management team the tools, support and encouragement they need to fully develop their management potential.
Culture clash
Cultural differences are another challenge for businesses investing in China to overcome, Neal shared that traditional Chinese management practices can sometimes be seen by foreign-owned organisations as fundamentally at odds with western approaches to management.
She pointed out, “While employers in the West tend to delegate responsibility and have very flexible lines of authority, Chinese workers are often more accustomed to a hierarchical structure in which each person has a clearly defined role. Such differences inevitably lead to tensions between western managers who are used to employees taking their own initiative and Chinese staff who are more accustomed to following instructions.”
Neal explained that western managers can sometimes be left scratching their heads in confusion when their Chinese colleagues are reluctant to admit they do not agree with particular policies or courses of action, preferring to express any concerns through intermediaries due to the importance of not losing ‘face’ or ‘mianzi’.
Bridging the gap
The good news for HR, however, is that none of the differences between Chinese and western business practices and management styles are insurmountable. Neal is an advocate of practical, workable strategies foreign firms can implement as long as they understand Chinese cultural preferences and use this knowledge to develop their HR strategies.
She commented, “Particularly in the early stages of a new venture, this may require a shift to a more hands-on style of leadership with capable, ‘role model’ senior managers steering junior members of the team and encouraging them to take ownership of specific projects and giving them the confidence, in time, to start making key business decisions themselves.”
From the outset of Clarks’ strategic move into China, the organisation has been acutely aware of the need to support and empower new staff to embrace the brand values and ways of working while taking into account Chinese cultural nuances and practices. One example of how the company has tackled this is through its new ‘Step Forward’ global leadership training programme, specifically designed to give managers the skills they need to drive the business while supporting and nurturing employees to develop their potential. The programme helps staff across Asia to live and breathe the company values yet is flexible enough to allow for subtle, cultural differences in management styles.
Neal added, “The talent shortage is not going to go away at least in the short to medium term, and western businesses, if they are to succeed, need to develop a strong learning ethos within their organisations to ensure employees learn new skills and gain useful work experience that supports their career development. The days of jobs for life are over and, in their place, job-hopping has become the norm in China with employees tending to stay in firms for a year or two and then moving on to boost their CVs.”
Attract and retain
With the high level of staff turnover compounding the talent shortage issue, Neal stressed that it is now more important than ever for HR to develop effective attraction and retention strategies to keep top talent onboard. She explained, “China is indeed a lucrative market for organisations from the West; but success can only be achieved by finding the best local talent and providing an open, supportive, coaching-orientated environment that recognises and values employees, their contribution and offers ample opportunities for career development.”
This is something that Clarks has strived to achieve by building a global brand with a clear set of values born of its British heritage, while embracing the best of western and eastern business practices. Neal added, “We put our staff at the heart of the company to create an environment where people want to work, develop their careers and where all staff feel they have the support they need. Our managers in China and the wider Asia-Pacific region understand Clarks’ brand values and principle, but are actively encouraged at the same time to feel empowered to make their own local business decisions that are right for the brand, the business and the market it serves.” She concluded that the organisation’s brand values and advice to staff wherever they are based in the world are the same: act responsibly and with integrity, show that you care, work with expertise, always innovate and be authentic.
Paul Arkwright
Publisher
