President's Statement

Joerg 2019

Succeeding as a Leader in China

During my 30 years of executive experience in China, I have witnessed many different leadership styles. One thing I have learned is that if executives want to succeed in China, they must learn to think differently and devote particular attention to their people. This demands two crucial skills from leaders: an ability to read the external environment and its effects on their staff, and an understanding of what makes employees tick. However, the ongoing generational shift adds an additional challenge, as the expectations of younger people diverge quite markedly from those of their predecessors.

In China, executives must have a keen grasp of political and social trends in order to position their business strategies and communications in the most effective way. They also need to develop a nonmarket business strategy in parallel to their regular market strategy. The nonmarket strategy should include plans for building a network composed of intersections between the government, their business partners, suppliers, customers, and other industry and public stakeholders. Successful executives will develop an intuition for this if they prove receptive to learning from Chinese patterns and thus begin to think and behave differently.

Giving personal attention to staff and colleagues is also key for managers operating in China. In this country, leadership is a contact sport that demands a personal approach. As such, prioritising face-to-face engagement with employees and external stakeholders is key, and good leaders may have to play catch-up on emails and reports during the evening because they have spent so much of their day being present for their team.

Selecting the wrong business leaders for the market can prove crippling to European companies here. One European retailer, for example, chose a manager to head up its China operations who had an excellent track record in their home market, but lacked any experience outside of Europe, and was a poor listener. Within months, relationships with the retailer’s Chinese joint-venture partner were shaky, several well-qualified European employees had resigned and staffing was behind schedule. After two years, the executive was replaced but the damage was done and operations closed 18 months after the manager’s departure.

As already mentioned, the equation is increasingly complicated by the shifting expectations of new generations entering the workforce. The talent challenge for European companies in China has intensified since the generation born in the 1980s and 1990s began to take on managerial responsibilities. At the same time, it has also become increasingly difficult to attract suitable talent. Additionally, as a result of China’s one-child policy and uneven patterns of higher education, many businesses are facing a shortage of capable young leaders. Moreover, the new generation demands both purpose and work–life balance, and no longer automatically accepts hierarchy in the workplace. The best way to retain leaders from this generation is to provide them with role models who inspire commitment, which makes it even more important to select leaders who can read and respond sincerely to their stakeholders.