DiligenceChina

Will the issue of Cultural Difference solve itself in 5 years?

If you traveled in China 10 years ago, you probably got to hear the phrase “meiyou banfa” more than you cared too. It means, “There’s no way” or “nothing can be done”. It was a conversation stopper – usually delivered from a sitting position, with the speaker’s gaze wandering back to the newspaper or TV screen. It was hopeless and final. “We tried, Dude, but there’s just no way. Sorry. Now quite blocking the screen.”

Then came the great opening of the Chinese economy and FDI and the commercial boom like no others. And soon, the phrase “meiyou banfa” was gone from the vocabulary. But it has been replaced by another catchall comment that is just as loaded with meaning: “Cultural Differences”.

“Cultural Differences” has emerged as the politically correct toss-off line to end all conversations having to do with standards, ethics, competence and general business practices. Everyone loves using CD as an explanation, because it absolves all sins and shortcomings.

Western managers in China love it, because it takes the pressure off of them. They can’t help it – they’re single-handedly dragging China into the 21st century – but there are still a few holdovers from “the dark time” (pre-1979, usually). It’s also a great reason for hiring expensive ex-pats, overseas Chinese or returnees for key middle management spots.

Chinese managers use it to explain why their own performance varies from expectations. It can serve as a convenient screen between Chinese and Western colleagues, offering a politically correct excuse for inadequate communication or for ignoring inconvenient rules and policies. And lately, it has been very effective as a rationale for poor performance or lack of management recognition.

The China-based consulting community loves it because it is like a BIG printing press for high priced contracts. “Cultural Difference” has become an industry in China – particularly in Shanghai & the other major business centers.

Got a management, hr, marketing or operational issue? Slap on a big “Cultural Differences” label, and the problem doesn’t go away – it just becomes much easier to ignore. It’s no one’s fault – it’s 4,000 years of culture.

It’s been a great run, and when it goes away I’ll truly miss it. But is “Cultural Differences” as a catch-all excuse, commentary, and expectation-adjuster running out of road? Is this something we will stop hearing and using in normal business conversation? It just might be.

Why is “Cultural Differences” about to lose its status as the Swiss-army knife of corporate rhetoric in China?

1) The code has been broken. Cultural difference isn’t about chopsticks vs. knife & fork. It’s about lowering expectations, different compensations systems for local & ex-pat managers and failed executions. Vague euphemisms start to become less useful when their meaning becomes loaded with negative connotations.

2) Chinese managers are changing. A graduate of China University Class of 2006 looks a hell of a lot different from the Class of 1996. Recent graduates have skills, training and sophistication that set them a world apart from managers in their late 20s and 30s. While this may be terrifying to Chinese managers approaching the big 35, it also has ramifications for international managers in Shanghai and Beijing. The talent is out there, but now you have to make it work.

3) MNCs are getting busy. It was easier to play the Cultural Difference card when the world’s biggest corporations were bleeding red ink, but now that famous international brands and little multinational service companies are all banking some serious renminbi, it is getting harder to say that sales and profits are an impossible dream. Everyone else seems to be making it – why can’t you?

4) Success has been coming from some illogical places. Ikea. Dairy Queen. Pizza Delivery. Lining up at Carefourre. Lots of extremely iconoclastic, “foreign” brands and products have been doing great. You can talk all you want about how much Chinese consumers look down on foreign products and methods – it’s just not so. Chinese buyers are as open and accepting as consumers anywhere else.

5) Taiwan, Singapore, HK, etc. Other Chinese cities seem to be doing just fine without the need to revamp operating standards or gut their HR policies. 10 years ago, we talked the same way about Taipei as we do now about Shanghai. As the city grew more sophisticated and international, managers stopped using “cultural differences” as a justification for poor performance. It is already starting to happen in China.