Part 5 – Managing your team of Consultant, Service Providers and Partners

Once you have decided what your general China strategy should be; what kind of skills you need to acquire; and selected the appropriate service providers and consultants, you can't just sit back and let business take care of itself. One thing all overseas managers will agree on is that running a China operation requires much more rigorous management than is called for back home. You can't set your China business entry on “autopilot” and expect results. There are two basic approaches to handling a group of consultants and service suppliers.

1) You manage them as though they were your own team

2) Appoint a “lead consultant” or partner who acts as the project manager

 

Both can work, but you have to know what you're doing. The key is making the decision yourself, and not just “letting things happen”. Many overseas businesses have ended up with a Project Manager by default. Don't start giving one consultant more and more responsibility because you feel you don't have any other options.

In general, novices to China should resist the impulse to go the Project Manager route unless they have made specific arrangements to follow that course. This may sound counter-intuitive, but there are a number of reasons for you to get involved in managing your China business entry from the beginning.

1) Success in China requires a high level of skill and specialization. If you pick the wrong Project Manager, then you will have a major problem from the very beginning. The challenge is that there are very few QUALIFIED project managers in China . You will find lots of people who will happily direct you (and your budget) towards their friends, associates and relatives' companies, but few people who can actually plan and implement a strategy. If this is what you are looking for, make sure you are selecting a consultant who specializes in this, and check references for THIS LEVEL OF RESPONSIBILITY. Remember – you are placing your trademarks, IP, budget and reputation in this person's hands.

2) The Project Manager option is very opaque. It will be extremely difficult for you to gauge what is happening, and what kinds of agreements are being made on your behalf. All of your information is coming through one source. There's an old saying in China – The same people who can open doors for you can also slam them shut.

3) You have to make sure you learn how to manage in China. You have to put in the time and learn what's happening on the ground. The two key skills in China right now are HR and Marketing, and they require familiarity and experience. The Project Management approach, even if handled very well, doesn't really help you hone the skills you will need to run your operation.

4) You are simply asking to be ripped off – especially if you are offshore. This is why so many JVs failed. Contracts and regulations simply don't carry much weight here. Don't put the fox in charge of the coop and then curse him when things get messy.

If you choose to manage your team of consultants, service providers and partners directly, here are some of the issues you will have to deal with from the start. As always, management in China is completely different from back home, so ASSUME NOTHING.

Communications

This is not really a language issue. Plenty of China-based consultants who speak great English are poor communicators. Don't count on other people's judgment or initiative. Take nothing for granted. If you are working with consultants, it is your responsibility to develop a communications strategy that includes regular conference calls and emails. We recommend regular emails, with a conference call to confirm and reinforce important issues. Consultants or professional service providers who are “not comfortable” with email should be screened out early. Phone calls – especially cell phone calls -- are not reliable means for transmitting instructions or serious information. It is your responsibility to enforce the regularity of communications.

If you only pay attention to 1 piece of advice in any of your dealings in China , this should be the one.

Scheduling & deadlines

This is also a key area for your attention. Scheduling and deadlines simply don't carry the same weight in China that they do in some other places. You can pretend that they do, you can fool yourself into believing that your situation will be different, or you can incorporate this simple fact into your planning. We favor the last option.

One way of dealing with the deadline and timetable issue is to budget more slack-time into your scheduling. For critical path issues, you should consider redundant systems or strong monetary incentives for on-time completion. (Incentives work much better than penalties in this market).

Setting key milestones or interim goals is also a highly recommended strategy. Break down your project into manageable parts, and then agree on a completion criteria. This will help you control timetables, budgets and information flows. A big part of the battle will be getting a clear picture of what is happening on the ground in China , and setting a series of key milestones will definitely help.

Critical path pitfalls

No matter how careful you are with scheduling, you are probably going to face critical path problems and bottlenecks. Some of this is beyond the control of your consultant – government regulations and approvals, market conditions, weather and even economic changes have all resulted in unavoidable delays. That is why you should always know what your critical paths are, and have an intelligent answer to the question – what if we can't accomplish Task A on time (or at all). You will need alternative and back-up plans. Find out IN ADVANCE what your options are, and if they are feasible. And check them periodically.

Multiple sources of information

One of the advantages of managing your own team is the multiple information flows it should be bringing you -- so don't sabotage yourself. Now, pay attention to this next part – Chinese people speak Chinese. If you don't (and if you're reading this there is a good chance you don't), you will have a strategy for getting information. There are 3 choices:

1) You will only get information from people who happen to speak English and have an interest in telling you things.

2) You will not get information and will be operating in an environment of ignorance (if you are lucky) or outdated misconceptions and lies (if you are typical).

3) You will make sure that you always have at least 2 sources of real-time translation at any given time.

Option 3 requires some planning and a little extra expense. It's not really all that difficult though, if you make the effort in advance.

One of the biggest mistakes you can make is to rely on one consultant for 100% of your information about your China business. That sounds silly, and you probably think that only a fool would find himself in that situation. It's actually a lot more common than you might think. Make sure you have multiple sources of information, and confirm facts often from different people. Ask naïve questions, and assume nothing.

Changing horses in midstream.

You are not getting married to any of your consultants. You may have to fire someone. Your needs may change. They may quit or go do something else. Lots of things can happen. If you hire 3 people (i.e.: a business registration consultant, an account and a translator/assistant), then there is a very good chance that at least one of them will part ways during the course of a year. So be ready. Have backups and new sources of professional assistance at all times. It is not advisable to have all of your consultants or professional staff come from the same group or network.

Will they steal your idea and IP?

A significant concern.

Minimize the chances by hiring experienced professionals and performing thorough due-diligence on them. As a general rule, highly-paid, successful, busy consultants with good reputations are less likely to steal your IP -- while rock-bottom, inexperienced consultants of questionable repute are more likely to do it.

Monitor the situation, by having multiple sources of information and by being engaged in the process throughout. If you are some shadowy presence on the other side of the world who rarely even calls, then you're a pretty likely target. If you are in town every two months and have a keen sense of what is happening on the ground, you are in better shape.

Protect yourself BEFORE IP theft is a problem. IP lawyers and consultants are becoming more common in Shanghai and Beijing , and other major cities. Do yourself a favor and get to know them at the beginning of you China entry – not after it's already too late. Then listen to them. Sometimes they really do know things.

The basic rule is that at the early stages your China operation will require a very close style of management. Systematize as much as possible, and train your team to communicate regularly and accurately. That makes a significant difference in this market.

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