Troubled Western companies in China often know how to find out if a candidate has a strong enough mechanical engineering background, but they do not know how to assess if they are diligent, cooperative, passionate or will have the same attitude when they start as they had in the interview.

They then compound that by loyally keeping workers that were chosen wrongly and employing them for years. These bad apples move up and alienate other workers who then leave. The percentage of bad workers and toxic behavior gradually rises.

We recently plead with a company to not choose Xiao Liu as his character was doubtful. We said they should choose Xiao Zhang as his resume was not as good, but his ability and character were what they really needed. They made the offer to Xiao Liu. Xiao Liu got the job offer and then started to delay and then started to not answer the phone and finally they gave up on him and hired Xiao Zhang. So this story is ending well as they paid the price early for choosing resume over character and ability.

I knew one company here that had an operations leader whose only achievement in 7 years was instituting tea time in the middle of the work day. He also knew how to make the boss feel important. I met another guy who had personally secretly destroyed progress on multi-million dollar projects and who was passionately defended by his American leader for half a dozen years. Why do we accept such manipulation?   Too many are worried about technology, and they are struggling as they have the wrong culture due to the people they chose to support. Their IP problems and productivity problems come despite their tight focus on technology as they did not solve the problem of the character of their candidates.

Why do hiring managers do this?  Bosses will criticize you if you hire someone with a doubtful resume who turns out bad. Bosses should be smarter and not make hiring managers feels this way. It makes for too much sorrow and lost profit especially in China.

Thoughts?

In 1998, China pulled the plugs on lots of State Owned Enterprises (SOE’s) and let them die. That was a painful but necessary adjustment for China.  It brought great growth.  Now China Economic Review has an article up on potential for further reform in the State Sector.

The Article notes that forces that have stalled further reform since 2005 seemed to have been pushed aside.  Thus General Party Secretary Xi Jin Ping and Premier Li Keqiang may have a chance to pull the plug on many investments that are made to prop up remaining State Enterpirses.  These big State Enterprises get money too easily under the present system. The increase in efficiency could be dramatic if money goes to the most profitable investments rather than to the most politically connected.  Even the US Post Office is still afloat, so China is unlikely to go all for the market, but any step they make will make them a stronger economy. I sense 2013 may yet be a good year for reform, and we should watch for dramatic shifts in bank lending or panic among money losing project or enterprise leaders

Thoughts?

China Law Blog noted that China has brought down poverty impressively over the last 30 years.

I worked as an English teacher for a brief time in 1991 when I first lived in China. I taught at the Anhui Institte of Finance and Economics in Bengbu. My teaching partner and I were the only foreigners in that city of 500,000 at that time.

Life was simple, and the whole winter season I saw no green vegetables at all in the cafeteria: potatoes, rice, occasional Chinese white carrots, lots of cabbage and little else.  In America, I knew people by what car they drove, and in China I could spot them by what clothes as they only had one set.

I gave an oral English test to my students in the spring of 1992 where I had 40 topics I put in a bag, and they had to be able to take one out at random and talk about that topic in English for 3 minutes.  I met privately one by one with each student. One student from Anhui pulled out the topic, hunger. I though he would talk about feeling hungry before lunch. That was not the case. He began to explain to me how his family often had no food, and he was left hungry or deeply underfed for weeks and even months. I listened transfixed and did not make notes on his diction. These 19 year old kids had seen a lot in their few years of life.

That is not often the case in China any more, and you do not know people by their one set of clothes anymore.

I had a chance to visit Bengbu for a rural wedding recently, and the peasant homes were better than city dwellers in 1991. The college is 7 times as big and 7 times as grand. The city now has a skyline.

The Chinese government and Chinese people have done a great job at developing the country . It is now a big market for Western companies and may the children not again tell their teachers about personal hunger like that.

Any thoughts?

American Magazine has some goood thought on running your business and one goes double for China.  See their article called Five Things I Did That Caused My Business to Fail.

Their thoughts are aimed at a business owner, but even if you are a GM for a US company here in China, it is a good article.

He mentions that he had no deep thought on hiring. He hired  on gut feeling and fired the same way. He failed to do background checks.  This all killed his business, and one guy he hired stole over US$200,000.

This was in America. Imagine the risks in China. If you have already hired a risky person, call us, and we can help dig you out. Do it today.

More importantly, you need to hire a recruiter who has experience in doing the dirty work of proper background checks above and beyond calling references.  Then you do not need to get dug out.  We believe all recruiting should have deep background checks in China, and so it is part of our basic package. You need surety on people and should not be trusting your instincts cross culturally about what your HR can do.

Today I saw a report on how China has muscled out the Philippines for ownership of a pile of rocks in the South China Sea. See report here. China has a lot of behaviors to dislike.  Last year, I wrote a blog comparing 1912 USA to 2012 China.

It is notable that the comparable historical period is 1867-1914.    I find it gives some perspective to understand that the US went through a similar process in our similar stage of development.  The US became the largest economy in the world in 1890. China could get there in the next 10 years. The US Overthrew the Kingdom of Hawaii and colonized the whole of the Phillipines, Puerto Rico, and Guam,  in 1898,  That is a lot more than a pile of rocks. China is doing nothing that we Americans did not do in our our Gilded Age.  Actually, they are much kinder. China is not extremist Muslim and has freed its own country in remarkable ways over the last 30 years. We need them and can only judge them properly if we give back Hawaii.  China and the US can be great economic partners despite Chinese behavior like we showed in our Gilded Age. I vote to keep Hawaii.

Just listened to a talk by Martin Jacques.  It is really good. See it all here at Ted Talks.

He gives a good picture of China’s importance to our future for good or bad and gives three differences I note here.

China is

1. A Civilization State and not a Nation State

2. Race – China is very immature in race relations as 93% are Han and feel superior.

3. The State is overall, It is the patriarch of the country and of each family.

This is well said, This is true. A lot of details can come out from these three points. Not all of his explanation is well said, but on the whole this is well done and great to help us think about China differently and not just ask. “Why do they not act just like us?”

Take a look

Forbes has a contribution up that I cannot help but comment on.

The only three true job interview questions are:

1.  Can you do the job?
2.  Will you love the job?
3.  Can we tolerate working with you?

This is insightful, but I cannot agree.  See their whole thing here.

I cannot bear their point number 3.  Should we tolerate anyone on our team? US companies have lost countless Millions of Dollars in China following advice just like this.

How about, “Are you aligned with our mission, vision, values and goals in a way that will energize all that is right on our team?”  That could cover points two and three.

You need force multipliers on your team and not people who drain life from the team.

I know it is hard to know why you dislike some Chinese worker and how you could do better. You need a guide you can trust on these people matters, and they should be leaders and not HR people.  Chinese HR people only think of cost and cannot see value in 99 out of 100 tries. They say they can handle these people matters, and the result is usually not pretty.

We never send you someone who you should tolorate, and you should not allow it to occur on your team. Some people you dislike, but you are wrong.  Then you need to change your attitude.  That small voice that says this person is harming the whole is almost always right, so do not doubt your self wrongly here.  You should move in weeks and not months or years to lower your own losses. Better days can come.

One of my customers mentioned to me how he felt before he let got of his power hungry invaluable Shanghai leader. He had this guy before we dug him out of that hole.

He mentioned that that guy had an amazing ability to make him fear that he would lose everything if he fired that guy.

After he let him go, he kept waiting for something bad to happen and nothing did. That guy had held over half their sales and yet they did not lose any clients when he left.

Because of our unfamiliarity with China, we often fear what will happen if the invaluable employee is let go.

These people withhold information and keep a lid on their workers, so none are free to talk to headquarters. They often recruit people who are worthless, so they appear even smarter.

Do not fear loss of these people. Fear the loss of value in the whole rest of your team because of them. You will be better after they leave, and we guarantee you will have someone better and more able to make everyone a hero and not just themselves.

Two years ago,  I wrote about that here.   I was reminded of that problem and so wanted to say more here today.

I have never fired someone too quick. I have more than once waited too long.  I have also seen this in other Western leaders here in China. We are unsure and delay the decision. From all my experience, I have learned one thing.

If you are waiting on a guy to turn the corner and become something else, then you should have fired him 6 months or more ago.

If these people change marginally and put on a good show once, you are still missing out on the excellent guy that you have not yet hired to replace him.

Hire a recruiter with depth in finding game changing people like us and Pull the Trigger to start the process of finding a better person to help you know that who you have is far from ideal.

Have you heard the phrase that we should hire for character and train for skills?   Let me explain why I have found that can give us an answer to the issue of train or replace.

I personally have trained and/or hired many hundreds of people in China with great success.   In training I have noticed a distinct gap in my success. When I train skills, things go well if I have teachable workers. When I train for character, I see virtually no change at all. The first gap in character is usually teachability.

If you hire a person who is teachable, then any efforts you make to train will be worth it. However, if you hired for skills and technology, and teachability and other character attributes were not identified, all your training to fix that problem is likely to be a waste of time.

So take a look at all your managers.  Consider which is teachable and which is not.  Then you will know who to replace.  You are not going to change their character, and these managers are not going to align with your efforts in their heart.  So they will actually be working against you whether you can see it or not. Paying people to quietly work against you is madness, Training is usually only used by them to learn to hide their bad sense.  Replace will help but only if you get the right person.

Thoughts?

I am familiar with a host of businesses decisions on people in China that went bad. Here is one.

Mistake 1: Focusing on Resumes

In 2006, one US$20M factory of a US MNC  I know was searching for a GM.  They had a candidate with character and deep knowledge of China and leadership here.  The candidate was trustable but with limited factory experience. They passed and sent out to a large international recruiting company who then found them a person with more resume perfect factory experience.

That guy loved to play and even would recruit managers to play basketball during work time as he was the top guy in China. Years later and several million $’s in lost business and opportunities later, they let him go, We then placed a very technically strong, trustworthy leader to replace that guy. Unfortunately for them, the headquarters had used a famous international recruiting firm who had placed an Asia Director to be in the factory over the GM. The Asia Director immediately started to micro manage the GM and frustrate him in every way.  This led to arguments which the Asia Director used to dismiss the GM though he had raised productivity in the factory to very high levels.

Mistake 2: Having Chinese People Report Separately Abroad

The Asia Director appointed a new GM who was his friend. Together, they drove productivity down by 50% and more over the next year.  Millions more in losses followed.  The MNC started having more and more positions report directly aboad as they did not trust the Asia Director.  By the time they let go of the Asia Director and GM, there was already very little left to manage for the new GM. Though the new GM is trustworthy, the overseas managers like to have their own people inside this facility and will not let them go. There is no teamwork to be found and productivity remains poor and turn over is epidemic.

Summary

Good resumes and the wrong people meant they went astray in 2006 by trusting some big recruiting firm, and had a chance to fix things in 2009, but again allowed the internationally famous recruiter to place the Asia Director. Then internal dynamics crippled the factory by complicated reporting structures overseas before a trustworthy GM could be placed.

It does not have to be this way. Focus first on character of the hire,and then check the background of the hire for character and then interview to bring out character, especially in your top people. Be willing to give up the perfect resume as they are lying  anyway.  You do not want the lying perfect resume guy working for you as your top person. Finally, never let departments report back separately abroad. That is a cop out.  You only do this as did not place the right leader. What you need is the right leader and a great team in China. Do not let any fast talkers sell you a good resume and lead you astray.

China has capapble people who ARE worthy of trust. We prove this again and again by the people we place. You can believe it too.

Any comments?

Following on from our last post on How to Find a Good Recruiter for you Business, I wanted to cover outsourcing here.

People are the key to your business.  You should not casually outsource.

If you have a good system, and you are getting the right hires consistently, then confirm the system and maintain it diligently. It is valuable.

It requires people who are good at screening and people who are good at connecting with candidates and good at interviewing and good at getting facts beyond the interview and resume. In  summary you need everything from the last post in house full time. We find three years of training and practicing can grow a good recruiter in house.

It is unreasonable to presume that all hiring managers will have a good eye for talent. They were not hired to be HR.  Candidates should be vetted  for fit, so the hiring managers should NOT see anyone who would not help the business.  There are a great number of hiring managers who are not good at choosing and even some who choose candidates to serve their interests instead of the company. Beware.

HR, in  fact, is a very broad topic. There is always a limitless amount of people work for HR to do inside the business. The detail and confidential work of HR combined with the relational ability are already a stretch for many departments. The core data for HR must be reinforcing the vision and values of the company by all conceivable means. Even the detail work can be outsourced. You need to do vision and values on the inside for sure, and most HR people and managers fail to get that most critical thing done among HR tasks. That cannot be outsourced.

I work to fix problems inside companies in China, and most times messy hiring is how people got where they are today. Most companies would do well to outsource recruiting and some should even outsource the detail work of personnel records. Then they could get back to the work of building and maintaining a strong culture.

However, you need to find a recruiter to partner with. If you outsource recruiting, then they need to really know you. Casually outsourcing would lead to bigger and bigger cultural problem on the inside no matter how good your HR was. Chinese HR managers almost always oppose outsourcing or paying for quality as Chinese people emphasize cost over value in this generation.

In Summary, recruiting is the life blood of your company. If you want to do it in house, then invest all the energy and talent necessary to make sure you have the right ability to build your team without adding to complexity by the kind of people placed.  If you are not focused on this, then outsource and make sure you get the right group. Then partner with them as you need them to be deep with you.

Any comments?

Today, I want to answer an important question for any leader considering outsourcing recruiting.

“How do I  get a good headhunter for my business? ”  Here is my answer and hope you can implement successfully.

The Best Headhunter for Your Business has the Following:

1. Desire to understand you and your company’s specific needs

2.  Manpower to focus on your needs

3. Responsiveness to your communications via email or phone

4. Speed in finding good candidates

5. Ability to understand and find the right candidates to save you time

6. Only send you vetted candidates, so every recommended candidate from them is a potential hire

7 Ability to find vetted candidates that others do not

8. Ability to know more about each candidate

9. Willingness to build relationships with your company

10. Focus to develop relationships with candidates and not treat them as numbers

11. They are transparent with information they know about candidates

12. They work professionally

13. They take initiative to get the placement done

14. Have a good hit rate on homerun placements

The Best Way to Use Headhunters 

1. Focus on one and have another as a spare just in case.

This is because it is too much effort to deeply inform multiple head hunters. Only head hunters who know deeply will be able to save you time in the process like point 6 above. All good head hunters can access almost all the same candidates.  When head hunters have lots of competing firms, they dump as many unvetted resumes on you as they can as the first is the winner. This weighs you down and gives you no value.

2. Be open with that one as they serve you much better if they have all the information.

3. Seek partnership with a company who wants to focus on serving you well. They will develop more connections useful to finding you candidates as they are focused on you and your success. This improves what you get on point 7 above. They have confidence to invest more if you are committed.

Announcing a trio of new LinkedIn Groups that you might be interested in.

Starting R&D Cheaply in China (Getting Design Engineers)

How to Get Your Own Person in China Cheaply and Effectively

How to Cheaply Have Sales Reps for China (Sales Managers)

I wrote the other day about the value of having your own person in China and the amazing difference it can make for your work here. See that blog here.

I thought you might need a little more, so here are some specific interest groups to help take you the next step.

Recent PDF report from Amcham Shanghai highlights the present China opportunity.

China has at least 80 Million people who are middle class by American standards, but this quote is the real eye opener.

This new environment also offers tremendous opportunity to tap into China’s fast developing domestic market, which according to McKinsey & Co. is expected to grow 9 percent each year through 2030.

Consumption is expected to triple by 2030.

How much growth do we expect in the US over the next 17 years?   How many middle class people will there be in China in 2030?

The report also indicates that companies that are just here for cost reasons are starting to leave. Companies that are here to grab the market are expanding.

China is a shockingly active growth market. With wisdom, many companies can do very well here.

When you are in a foreign country, you need, market, investment, legal, property, culture. language, IP protection, etc…

As China is completely different from the West. Almost everything you normally think will get you in trouble. I read a popular book on Business Leadership in China and know that will not dig many people out of trouble and will get many into trouble.

You need an in China guide full stop. You need a Chinese person.  You need someone in China that can help you navigate in this context. Get that person and everything else can go well from then on. Unfortunately, often that first hire either is not made, made using Western thinking and biases, or otherwise throwing the future to chance. Some companies get lucky. This is a sign that China does have good and trustworthy people.

This would be the same in choosing a partner in China of any kind. The right people will be transparent with you and patiently help you know how to be successful in this context. The wrong people will leave you in the dark or get you going in wrong directions for their purposes. Westerners and Chinese people do this in China as the opportunity to swindle is real in this foreign context.

Again and again, I come upon companies who got in a mess because they choose the wrong top person or partner for their China work. Then they have tons of headaches in China and say China is a bad place. That is not the case. China is a great place to work, but you must focus on getting the right step done correctly. Get the right first person or organization who can get you more right people and contacts.

Again, getting someone who will be loyal to you is a good first step. However, getting someone who can be loyal to you and attract more good contacts of character is what you really need. Make that your first goal before you do anything.

China has good people. Find them. Then trust them and check them.

I recently wrote an email in response to a comment by a customer contact saying they were not going to replace their secretive China leader, but place a Quality Manager instead. The situation is so common that I produce my response generically here.

Hi Frank,

Thanks for quick response.

Perhaps a phone call would be smart to think through.  Here is some thought to help in process.

Do you mean your company wants to push back movement for some reason?

Might this be an effort to place someone who will report back to someone in Bloomington separate from your present China leader?

I am guessing but ask these questions as I have deep experience with US company decision making in matters relating to China.

1. US companies do not have a good methodology for making decisions of this nature, so they end up kicking the can down the road. Fear overcomes systems.

2. Instead of solving the problem, they have new people report in different reporting structures trying to finesse the problem.

Both these methods are highly problematic. Problems do not get better naturally or with good meetings with the problem people before you get on the plane.  The Chinese person just gets more well trained in bad ways. They get harder to detect and more damaging. Time has never been an ally of any of my customers. Few operate with alacrity to handle problems before they get yet bigger.

Reporting back in multiple streams to the US in separate or even to the same manager is problematic.

The Chinese winner in such matches is the person who is most devious, and the more pure person is destroyed and made to look bad. Deviousness is rewarded commonly though no one in power in the US knows what happened.  The US leaders only knows that the Chinese do not get along very well, but it is the reporting structure that is to blame. Managing Chinese people from overseas is problematic and beyond the reach of US companies when any power player in their China operation is devious in any way.

Admittedly, I am preaching to the choir.   I am not trying to push XXX around, but give thought to save you from potential further sorrow.

I have copied ZZZ above.  ZZZ has been in a very similar situation to yours with us. I think you would benefit from knowing him either way.  He is our customer and would be glad to help you understand us and what you are seeing.  He also will keep confidential anything he knows.  I list his phone number x-xxx-xxxx, but admit I usually Skype him when he is in AAA.

A list of customers I have served is attached. The contract you requested is bilingual and so a little hard to understand. We collect an up front fee and then collect the rest after the person begins work. We provide a replacement if the first candidate does not work out. I cannot imagine that happening however.  The contract is global meaning it would cover any person you hired through us and not just one position. If you sign the contract, it costs you nothing, but if you assign us a position to search after that, we will invoice you 1/3rd.

Given the overall circumstance in China, if we started a search in late February, you would likely see the person start in May or even June.

Best Regards,

Jim

Chinese satisfaction with their work is up ….. from 2% to 6%.  Oh My.

Gallup is great.  See them here.  Their chart shows what I see in most Western invested companies in China with a twist.

First, this is pathetic and Leaders in China both Chinese and Western think they are doing good.  The situation is terrible, and we are leaving a lot of money on the table by not doing better.

One problem we have is that we have not noticed that 26% of the people are actively disengaged. 26% of workers in China are working against the boss they work for. Their pull on the people who are not engaged is the key point, and they make the whole environment toxic.

If you are not giving it your best shot to connect with Chinese workers to get past their prejudices, then start.

If you are doing the right thing and do not know who those actively disengaged people are, get help to find them. You must move them or fire them, and in most cases you cannot make a committed leopard change his spots.

Contact us at info@shigroupchina,com if you are concerned about this, and we will send you a case study on resolving the non engaged to bring them in and getting the actively disengaged off the team.

Additional thoughts?

I was reminded today by one of my colleagues that when I first came to China, I was shocked that people could say yes to me when they meant no and no when they say yes.

Over time, it developed in me a deep distrust of all Chinese people.  This was not fair. I learned that China did have people who were genuine.

This led me to look at what was happening in foreign companies and realize that this was a big issue.

Companies even had bad leaders who held their companies hostage as companies were afraid to confront or dethrone the leader who consistently played with the truth in some way. They often felt resigned to this result.

I began to place hiring workers of character on an equal plain or even ahead of resume qualifications. The results were dramatic and led to success in business units that on paper were weaker than other teams.

Even in America, Character is an important factor that should not be ignored, but in China where yes often means no, it is a critical factor that often does not get nearly enough attention.

Thoughts?

My family recently bought the game called Boggle, and I have been boggling with my 9 year old for the last few days. Boggle uses our divergent thinking ability.   It is the ability to look at the same thing and see it in a different way.  In my childhood, I understood that most excellent US students had poor divergent thinking.

The US standard NDA is a classic business example of this. It says you will not disclose this to anyone.  No one every considered that their supplier in China would not disclose but would use to compete against them.  No one ever imagined that this guy’s business would sign to and not compete but his other family business would.  Chinese thinking is divergent in the sense that they are not stuck in the same rut of thinking that we are.

This will help you if you hire a Chinese person who will really put his energy to work for you and without getting you in legal trouble. Do not think of their divergent ability as a problem. It is simply a leadership challenge.

Anything to add?