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.

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?

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?

When I was in the US Army, they had a program that anyone who proposed an improvement could receive 1% of the value of the improvement which would normally be some cost saving someone recommended.

I was reminded of that today talking with a factory manager who also pays 1-2% for ideas that save costs in the factory. Industrial Engineering popularized it, and in their 3000 person factory they get 50-60 suggestions a month. That’s a bottom up continual improvement plan to consider.

It is not easy to bring such a plan to life. Posting notices will have little effect. Leaders should be rated in how many suggestions of value their people turn in. Leaders should regularly talk about it, and it can take hold.

What do you think?

Here are a few quotes from Fast Company

Fewer than 3 in 10 workers admit to having their hearts in their jobs. This lack of employee engagement will cost business upwards of $300 billion this year alone.

And their quote from Emerson which is part of the anti-dote.

Trust men and they will be true to you; treat them greatly and they will show themselves great.–Emerson

Trust people. Indeed. However, I know one place where they run like a country club. That is not the way.

The right people join a company wanting to make a positive impact.  The right people do not want a country club.

So get people that are trustworthy and want to work. If you cannot, then call us.  Then give these people direction and catch them producing  for you regularly.

You will have a good start.  Read the whole article here.  I love these problems. How do we get force multiplier impact going inside your company? That’s a great problem.  Then you can earn and save more money to treat everyone better, so they reach higher, so you have more money.  Let’s do this.

Insights?

I was talking with some workers at a factory putting an assembly together. I asked the line leader, “What is that assembly used for?”

The worker said, “I don’t know.”  She had finished 80 already that day and who knows how many that month.

The worker did not know as the Americans were deeply afraid their product would be copied by Chinese people, and they would lose their market.

If your ability to hire good people who will show loyalty to your company is so low that you have to have them make something that they do not know what it is, then you are sunk pretty low.   I suggest you turn hiring and possibly management over to someone who can create more whole life connection with workers than “Put the screw in here’   Workers who work for me do not seek to leave and ruin me. I do not hire or develop those people. You should not either.

Apple is well known for keeping a tight lid on knew product developments. However, many people would be in on these sensitive elements.  Only a team could develop features like they have.  Finding the limits and getting there is so valuable.

You need to achieve some buy in from your workers on the floor and in the office. We all should know that line workers at Toyota know exactly what they are making and can make improvements on the line as have a deeper understanding of what the internal customer and final customer want. Toyota is great because everyone is thinking with all they have and not just the top office. So their turnover is lower and even workers who leave do not leave to bankrupt Toyota.

What do you think?

Some companies automate to keep head count down as people are their headache. It is so sad to me to hear. Sure, automation is needed in many cases, but to throw up our hands at the people problems and automate is not good business.

We invest in good equipment. We should also invest up front to get good people.  We invest in upkeep of equipment and should invest in the development of our people.

One big gap I see is that it is hard to calculate the value of having the right people properly motivated. What is the ROI on that hire or that cultural investment?  Some people can show you the ROI, but I doubt. The upside benefit of the right hire and the right motivation are game changers that are hard to put in a box. Recruiting, hiring, coaching, and team development can all be measured for quality, but they will be hard to get an ROI for that is real. That does not mean they cannot impact the top and bottom lines. They can be the biggest impact of all for better or worse.

People do not have to be such a big headache if you have a means to guard the gate so only the right people get in and are brought in well.

I have been taking some time this week to coach my direct reports. I coach all the time. However, this is deeper and a chance to take an hour or even more to go deeper with my people. We are busy, and it is not super convenient. However, these non urgent things need to get done.

Reviewing performance and cleaning up lessons learned and making sure communication links all around are good are things I have been hitting on as well.

The alignment and passion of your team are worth a lot. Resolve to put some energy this week and this year into your organization. It pays good long term results.

What is your commitment?

I love the Boy Scouts. I learned a lot from them and carry some ideas with me to the present day. Many of you may know what the Boy Scout motto is: Be Prepared.

So simple and so useful.  Keep an umbrella and hat in the car. Keep the spare tire in good condition. It is widely applicable.  How does it relate to our businesses?

Fire fighting is a part of business. We all must do it at times. Be prepared is a motto to help us face the non urgent and important things that we let slide. Be Prepared helps us lower fire fighting.  Developing and maintaining vision would be one example.  It is invaluable to have motivated workers who bring their hearts into the business place. But envisioning and coaching to build up workers passion usually gets pushed to the back burner.

We should keep a list of non urgent and important things and then schedule people, time or support to keep them or get them well.  It is worth the effort.

Finally, coming to and working in China tends to get us fire fighting.  We need to get prepared and do our background checks, due diligence and research. Then we can do it well.

Thoughts?

We started the blog on December 12, 2010 and have been happy to develop it over the 351 posts in these two years. There is a lot in the archive now.  Thank you for reading.  Also, thanks for taking ideas from here and spreading good thought on great leadership and business in China.  We make the world better when we spread good thoughts to make business stakeholders fulfilled, productive and energized all the way around.

I am a serious thinker, so hard for me to lighten up at times, but a good company should have a spirt of celebration. Celebrations, big and small are so valuable as are laughs and fun.

Let’s add humor and find more ways to celebrate in our own work. It makes the world a better place when we find good reasons to smile.

I have written that Struggle is a good word to describe what is going on in each Chinese heart. One reason this is true is because of low self esteem. The whole country suffers from low self esteem and thus even the Chinese government is super sensitive to criticism.

How do we help people who have low self esteem to bloom?

In 2006, I was tasked, among other jobs,  to build an HR department for a consulting and manufacturing holding group.  A person with a good resume was recommended to be my assistant. I instead hired a recent college graduate who had read a book on personalities. I hired her on character. Her teachability was high, but she carried naturally low confidence.

I saw the diamond inside this introverted organized person. So I immediately started to give her principles and projects to manage on her own with me only encouraging her to build. 12 months later she had a creative, hard to manage, assistant.  3 months after that the test came.

We were in Beijing and had a project in Wuxi where we needed to hire a whole factory of people over one summer. We needed to recruit and hire 70 people in 90 days for a factory start up.  I was busy in Beijing, but considered sending those two young college graduates to Wuxi to work with an American GM who would push them hard. I knew that my diamond could do it, and that she now had confidence to face this task at age 24.

I had carefully handed her my confidence in her by word and in work I gave her, and so she accepted the assignment.  She and her assistant filled a new factory with workers in 90 days while living alone in a city they did not know.  My job was to continue to build their self esteem throughout. They had the ability as I had trained them, but they lacked the confidence. Everything got done, and they were heroines.

This assignment led to bigger successes for these two over time.  The missing ingredients for a young person are teachability, principles to work, and confidence.  Our ability to see what they can do and help them stretch, while leaning on our confidence, can take them a long way.

Agreed?

Last week, you may recall, I wrote on how adjusting fires in Artillery before firing for effect can be useful. First experiment broadly and then fire for effect once you have clarified the best target. Check out that blog here.

I once ran an organization making market priced loans to micro-business people who have only an outside stall or a piece of the sidewalk.

Our goal was to make money available to the smallest businesses who usually have no access to bank financing and make money doing it. To protect the capital, we had stringent requirements like small amounts and requirement to make small payments every other week.

In Africa, this is huge as no one saves. Everyone lines up for the loans. You could have tens of thousands of applicants within a week in Africa.  We worked for years and only had 800 active loans in China. Chinese people borrow from their friends and relatives, who have money.   We were highly profitable however.  African programs usually lose money though they have many loans.

Just the same, we needed to expand our market and preserve our capital.  We had ten offices, and each office had it’s own profit and loss to manage within our system.

The office managers were always trying to get me to make changes to increase the market.  I felt most of their ideas would never work or lose money though I did not say that. They wanted to lower the price, or allow single people more broadly, or make bigger loan amounts or longer terms.

Experiments

So I had a system of adjusting fires.  Any manager who was hot to convince me to try something, would get my guidance. “You do it here within these constraints.”  They gave price discounts for 3 months to try the elasticicity of demand in price for example.

I can think of many such experiments that I formally allowed in one office or another.  Often, there were 6 or more experiments of different types on at one time.  Most proved that our base model was excellent.

One salesman in an office took me to an indoor market. We always served outdoor stalls. The businesses inside were bigger, but our loans were small. The people laughed at us and made fun of us when we told them what we wanted to do.  I felt the salesman had made fools of us, but I allowed him to pursue this if he wanted to as a kind of experiment.

30 days later, one person from that market walked in to get a loan and every day, till today I hear, one or more people came in and borrowed. People who had made fun of us sheepishly came in and got loans.  We tried in some other similar markets in other places. The results were the same, so we put more resources there.  It grew until all offices everywhere were focusing on similar markets.  That path grew to be over half our market.

At least a dozen experiments proved to be no use. However, our thinking to allow small experiments led to a discovery that made us much more profitable when we fired for effect.

Thoughts?

A common mantra from those of us in China business is Due Diligence, Due Diligence, Due Diligence.  That is still true and should not be forgotten.

Today, I want to add another useful emphasis, Expectations.

It is useful in any context, but you would be surprised at what people expect cross culturally that will work for you.

A contract can help clarify expectations and should be used, but contracts and agreements rarely hit on all critically important expectations.

On the first day people work directly for me, I usually have them write out their expectations for this position. I write out my expectations for this person, and then we put them together.

Some people want more space to work and others want support. Some expect to get paid for overtime. One person asked that I not yell at them.  I agreed, and we worked together for 6 great years.

Joint Venture partners are a critical expectation question. Contracts may not say that the Chinese side wants to gain increased prestige leading to better positions in the Party. It may not say that he hopes to get his kid to America through this relationship.  Understanding all players expectations in this context is invaluable and worth searching out in informal discussions.

Vendors, Government officials, and customers also are candidates for deeper delving in expectations.  Finding the expectations that lie below the surface is more than worth your effort.

Thoughts?

On a day where Election results are coming in in America, tears come to my eyes to see people voting with  their kids and waiting hours in line to make their vote. May we love the other guy even if he did not vote the way we did.

Freedom has two sides we can consider in business today.

Freedom from complaints from that worker you can silence is certainly ours.  However Freedom from seems too weak to me.

Lets have freedom to treat our workers right, so they will treat our customers right.

Let’s resolve to have freedom to fire the guy who is manipulating us and not telling us the right or whole story.  China has better. You do not have to live this way.  Let Freedom Ring to encourage workers and give them the right environment and coworkers to prosper with the company.

Let freedom Ring.

Your company grows in the same way China grows.  China grows when its people increase their overall output by getting to work and getting to work more efficiently. I see 6 common levels

1.  I see companies with low hanging fruit as people sit around a great deal of every day whether in the floor or in the office.

2.  People are working but with no heart. They are just there to get paid.

3.  People are working with heart, but little ownership

4.  Ownership exists but little alignment, so people are often pulling against each other to equal near zero in forward movement.

5.  Alignment is pretty good, but the collaboration is weak.  Silo’s is an oft used term.

6.  We are reaching high and there is still a lot of work to stay high as the factors that get us here can be lost through neglect.

These levels are not always in this sequence but often are.

Thoughts?

Forgive me for oft repeating, Trust and Check in some form or another.

If your China manager has any information that you do not have, then you have no verification.

Do not be held captive by your China workers.  They are good people but absent accountability, we all do less than we would otherwise.

Oh, and if you have any problem with your Shanghai manager and are not feeling confident you know what is happening under him/her, then give me a call.  Shanghai managers have a stronger tendency in that direction than elsewhere though Guangzhou may give them a run for their money.

You can have a good and fully transparent team.

Fast Company has a blog up on Roberta Matuson’s research on what it takes to build and retain leadership in your company.

You can find the whole blog here.   I also paste one piece below.

Put down your smartphone, walk around your desk, and invite one of your people to lunch. While dining, sit there and really listen to what your employee is saying. Ask them to describe their dreams and aspirations. Then go back to your office and come up with a plan to help this person and others achieve what is important to them.

I could not agree more. Let’s go do that for someone on our team today or atleast plan it for next week.

Thoughts?

I want to follow up on what I said yesterday.  I noted that 3M encourages wandering around, and I can add they even have walkways just for that.

However, today I want to add that they also rotate people from one project to another every 4 to 6 years. This cross pollinating is another part of their innovation culture.  We can think how to rotate people to cross pollinate in our own organizations.

I was a US Army officer before leaving to enter the business world 20 some years ago.  The Army also rotated people. I worked for 18 months as the Fire Support Officer leading men who were they eys of the artillery for 1-7 FA, 10th Mountain Divsion.  I then got assigned for 1 year as the Support Platoon Leader providing beans and bullets to a 450 person artillery unit. Then I operationally developed a Finance Unit all in three years. Then I would to to come place completely new. What I did for each of those units and people in them was long lasting as it was hard hitting?  Perhaps that is why I consult now?

I left the Army and came to China instead.  The value of the rotating system  in the Army was we would bring high energy to each new assignment and reach peak about 6 months on and star to lower energy by 18 months in as the low hanging fruit we could pick had been taken.  Perhaps that is why I am a consultant today.

At West Point where I went to school, the instructors were Army Officers on 3-4 year assignment.  On the whole, they were fabulous and still are. They are high energy professionals trying to make their mark in 3-4 years and then go back to the regular Army.  It causes me to wonder what value tenure has to the public. We had a few long term people in each department for some continuity, but the new ideas and new energy method is powerful.

Companies are always looking for experts with 5 years experience in so and so.   I never had that at West Point and it is a great school.

At 3M, they move you after 5 years.  This may be why 3M is so alive.

How can you apply this where you are to reinivigorate your business?

In his book, Imagine: How Creativity Works, Jonah Lehrer tells how 3M created a great inventive company.

1.  They encourage people to take breaks and do whatever during the work day. The even have one hour to work on whatever each day which Google later copied.  Breakthroughs more often come when people can relax or change speed.

2.  They design ways for each department to see and interact with other departments on what they are doing as they found that crossing two or more disciplines often produces breakthroughs.

Small companies can do this in smaller ways.  Encouraging people to walk get up and walk around when they are stuck is a good way to help them get from their specific left brain to their global right brain to solve difficult problems creatively.

Force each department to tell what they are doing to the other departments and free the other departments to comment freely. This takes some work to get moving, but breaks down silos as well.

Agreed?

Dan Harris of the China Law Blog listed thought from Ben Shobert of Asia Healthcare Blog.

1. Limit the Role of the Expat. Shobert notes that the facilities that have struggled in China have had expats “front and center.”  He goes on to say that he has yet “to speak with a player in the senior care field who does not wish they could find a local Chinese senior executive or facility manager who ‘knew the business.”

Some companies have a clear indigenization policy.  One high level manager in such a company said within hearing  of my assistant, “Play along with the (Expat ) GM. Don’t worry, he will be gone soon enough”    One Fortune 100 company I know of had an honest high engagement environment which when indigenized became a back door, playing favorites culture. I would not call that Chinese but succuming to a Chinese tendency and saying that is Chinese.

A policy of indiginizing or sending back expats seems out of line to me in my experience.

Why not have a policy of filling roles with the best quality person at the best price?  This could lead to a Chinese person, an Expat, or a local hire Westerner.

Unfortunately, most companies do not have clear guidelines on what values they will use to promote and hire managers. JD’s do not say – ” Need to be on line with and championing company culture. ”   That is understandable as people can pretend and grandstand to make points, but soomeone has to be checking boxes on maintaining and improving the culture.  I have heard people say thay want a tough person for this position which is good to know but still a far cry from a global culture where we can all really talk to each other.  Politics and the resulting high turnover of good people is way too costly to be allowed to bloom because no one is tracking the trend of people who are not political and other factors.

Comments On Fit Are Not  Usually Enough

It might be that Shobert is hearing about business leaders who want leaders who know the business in terms of knowing the culture of their business. A simple example would be they want someone who can sell their product on its value and not its price or as a solution and not a product.  This could be a culture question. Often it is a person’s values and how they see your product that create a misfit.  However, it is a rare company that is looking deep enough at this question to avoid costly troublsome political problems.

If you cannot figure out what values you need, then I guess you better stick with Western people and hope they have the values that you have. That does not seem like a good bet either once you send them to China.