Insights For Success

Strategy, Innovation, Leadership and Security

Management

DEALING WITH CHINA (PART 3)

Behavior, Management, Marketing, Risk Management, StrategyEdward Kiledjian

The importance of “Saving Face”

Having spent many years in Asia, I quickly learned the importance of maintaining “face” when dealing with Asian businessmen. This becomes important when engaging in negotiations (for example). You must always allow the other participant to have a little wiggle room [even after submitting their best offer]. Even tough the new offer may be only minimally better, it should allow the Chinese participant (whether customer, partner or other) to have the final say and maintain face.

Interesting read : Wikipedia 

Working with imperfect information

It’s no secret that information does not flow freely in China and local culture dictates that negative information should be suppressed as much as possible. 

The National Bureau of Statistics publishes a giant manual called the China Statistical Yearbook. It contains all kinds of goodies for interested parties from the amount of residential floor space built to the amount of cargo carried by Chinese shippers. All wonderful and interesting stuff… 

Foreign statistical experts I have spoken to question the validity of the information contained therein. They state the pressure on local officials to constantly show improving performance thus the motivation to “inflate or deflate” the published numbers. The delta from reality is sometimes small and other times extremely large. There is no way to tell for sure.

It is believed that a better source of information is the World Bank and Asian Development Bank reports.

Conclusion

Even with all of it’s pitfalls, China is still the land of possibility and most business’ will choose to embark on the path of the Dragon. Remember to measure twice and cut once. Spend as much time as you need at the start of your endeavor to ensure it ends up the way you want. 

DEALING WITH CHINA (PART 2)

Behavior, Management, Marketing, Risk Management, StrategyEdward Kiledjian

... continuation 

Intellectual Property

The previous paragraph highlighted the difference between laws “on the books” and the extent to which business people are willing to bend them for profit. As a foreign company entering into the Chinese market, you should be thinking about how you will protect your Intellectual Property. 

A common example of this is that of Will-Burt. Will-Burt is a company that manufactures and sells Night-Scan telescoping masts for police or military use. They entered the Chinese market and sales boomed. Then all of a sudden, the sales stopped. It seems a local company had reverse engineered their products and was selling perfect replica fakes. They went as far as printing Will-Burt’s name on the counterfeit products and presenting them at a local Chinese trade show. The irony is that its prime customers are law enforcement and military who seemed to be choosing the cheaper counterfeits. 

Because of international pressure, the Chinese government is trying to fight IP theft and counterfeiting but it is an uphill battle. There are well entrenched officials and powerful Chinese business leaders who like things just the way they are. As a company entering the Chinese market, it is important to understand that you may have to spend buckets of money to defend and safeguard your corporate IP assets. 

When in Rome, do like the romans

Anytime you are dealing with a foreign entity (partner or customers), it is important to learn as much about their local customs as possible. In North America, when I hand someone a business card, they likely take it with one hand and shove it into a pocket. In Asia (particularly in China), the custom is to accept someone’s business card with 2 hands, then read it carefully and present a genuine compliment related to it, the business or the neighborhood the business it located in. 

There are also topics that will be cheerfully welcome and others that will be shunned (like Taiwan, Tiananmen Square, Tibet, Japan, etc). It is important to work with a local contact who can provide guidance and support as it relates to this section. 

Many western educated Chinese are now returning home and taking  prominent business positions in local companies. You will find it much easier to work with these younger Chinese managers as they are more likely to accept your western ways.

 

... to be continued

Dealing with China (part 1)

Behavior, Management, Marketing, Risk Management, StrategyEdward Kiledjian

If you have spend any time at a multinational company, the one topic that comes up is how to benefit from the rise of the dragon (aka China). 

Over the next couple of entries, I will provide some information about China that I hope you will find useful. 

The socialist impact

Although it is easy to overlook China’s socialist political system, it is important to understand that it influences every aspect of their business style. As an example, they have very little creditor protection. They would never allow a big capitalism company to throw poor helpless citizens out of their homes because of missed payments. This is one of many such examples where companies are disadvantaged because of the ingrained policies and beliefs. 

A police state does not equal a lawful state

It is important to understand that most of China is in a state of lawlessness. Corruption is rampant and businesses routinely ignore laws. One of the most obvious examples is software piracy. Although China has software anti-piracy laws, they are rarely enforced. 

In a partnership setting, I warn companies to be cautious when dealing with Chinese businessmen. It is common for them to use the complicated Chinese legal system and culture to their advantage (eating the investment without giving you anything in return). To be clear, partnering with a local entity means you get know-how and contacts very quickly and this can be a huge strategic advantage. It is important to be extremely careful when conducting your pre-deal due diligence before entering into the agreement.

 

... to be continued

Consumerization is here and you have to deal with it

Datacenter, Management, Motivation, StrategyEdward Kiledjian

What is consumerization

Consumerization is a term used to describe the trend where manufacturers release new innovative technologies in the consumer market before the corporate one.  Interestingly these same technologies then find their way into the corporate world through the employees. 

“Consumer IT will affect every enterprise" said David Mitchell Smith, vice president and Gartner Fellow. "Attempts by enterprises to deny this are doomed to failure, just as previous attempts to deny Wi-Fi, 'smart' mobile phones, the Internet and even the PC itself failed." -  

The above statement seems timely and clearly describes consumerization today. The only gotcha is that Gartner released this in a 2005 press release. So this change has been a long time coming but is finally and definitely here. 

Why

Many years ago, employees did not have reliable high speed internet connectivity at home. More often than not, a work PC was many times more powerful than any device you had at home. 

None of this is true today. Most people have Personal Computers at home and in most cases, they are many times more powerful than their work PC. The lines between traditional work and an employee’s personal life are blurring. Educated knowledge workers want the flexibility to manage their work as best fits their needs. 

This new breed of technical employee wants to bring their own laptop to work. They own a smartphone and tablet, which they believe makes them more productive. They would like to leverage these powerful technologies and bring its productivity to their workplace. Employees are increasingly familiar with cloud computing services and leverage social networking for collaboration.

The business reality

What employees don’t see is the strain these requests place on corporate IT. Talk about personal devices connecting to a corporate network and CIOs start to have nightmares related to  theft, compliance, Intellectual Property protection and risk management. Add to that the cost of supporting dozens of new devices and you have a mess CIOs are being asked to handle without best practices. 

What if one of these devices is stolen (which is very common) and contained company confidential data? Knowing that most of these consumer devices do not have “good” encryption makes the worries that much worse. 

IDC conducted a survey on behalf of Unisys about consumerization. Interestingly, 95% of the respondents acknowledge using technology [at work] that they had personally acquired. Another interesting tidbit was the fact that many employees thought their employers are more permissive [regarding the use of consumer technologies in the office] than the employers actually are. Communication anyone?

Born Digital

Anyone born in the last 15-20 years was “born digital”. By this I mean they grew up in a digital world learning the use of these technologies very early on. Now as adults graduating with the degrees companies need, they demand more. To attract and retain this new breed of qualified and desirable employee, you have to give them an environment they want to work in. A much less restrictive environment where facebook is allowed and a device can go from retail shelf to corporate office very quickly.  It's time to kiss that iphone and hug that iPad.

What is a company to do?

Standing in front of this train won’t do you any good. You will have to find a way to cope and manage this situation. 

  • As an IT executive, your first priority should be security. Instead of protecting the corporate perimeter, you will have to figure out how to protect individual pieces of corporate data. How do you ensure secure deletion of data if the employees leaves the company [with his device]?
  • Who is responsible for backup up the device?
  • How will you manage and support employee devices in your corporate environment. Most companies are ill equipped to support a large range of non corporate (non-standard) devices. It’s time to get creative with your support teams or your outsourcing support provider.
  • The employee needs to understand how much and what type of support you will provide for their device. Are their situations when they should contact the manufacturer instead of corporate support.
  • Unisys expects companies will experience a four-fold increase  in transaction load with the introduction of these consumer devices and applications. What would that do to your cost model?
  • Modernize your IT portfolio to more closely match the computing experience your employees are accustomed to. Is it time to start evaluating a corporate tablet? What about WIFI everywhere so employees can connect their devices to the internet and “get work done”? How do you feel about allowing Facebook and Twitter in?
  • Setup an employee advisory committee to learn what they want, how they want it and also what they don’t want. Use this group to test different scenarios.
  • Pilot…pilot…pilot…. Whatever you come up with should be testing with a pilot group. Start will a small group of power users and then slowly grow the group to less technical users. Iron out all of the kinks.

You need clear and concise policies employees can easily find and understand. Your policies should clearly explain:

  • Which devices your support
  • The process to add new devices to the supported list (and associated lead time)
  • Which consumer applications are authorized for use
  • Which consumer applications are forbidden for use (and it is good practice to explain why)
  • The process to have new apps added to the authorized list.

 And last but not least, GOOD LUCK CHUCK! It will not be easy but the effort will be worthwhile. Use your network of contacts to "get a feel" for what other companies are doing and how you can leverage this information.

5S is an easy Japanese philosophy to improve your work environment

Behavior, Management, Motivation, OrganizationEdward Kiledjian

My current employer is committed to achieving excellence and empowers its employees with simple yet powerful work strategies. One of the tools we use is called the 5S. It comes from the management practice of the Japanese giant Toyota and each of the 5 guiding principles start with the letter S: 

Seiri – Means to sort. It mandates that you get rid of anything that is underused or not used. It allows your employees to work in a clean environment with less distraction.

Seiton – Means to straighten. This is the mandate to streamline. The old adage of “A place for everything and everything in its place” is a great description for this step.  

Seiso – Means to sweep or shine. This is the concept of maintenance.  It is the principle of keeping the work area (and equipment) clean and tidy. Would you rather work in a pig pen or a clean office? The 5S process does provide some guidance and recommendations but feel free to extend it beyond these simple examples: 

  • Ensure adequate lighting in all work areas
  • Repair all work equipment
  • Clean work areas including floors, walls. ceilings, windows
  • Implement processes to minimize dirt (i.e. taking boots off at the entrance)
  • Conduct maintenance for work area and equipment 

Seiketsu – Means to standardize. This allows more people to do the same process thus creating redundancy. It also allows people to undertake more tasks since things are documented and easier to explain.  In this case, standards may apply to all aspects of your business including: 

  • Procedures
  • Processes
  • Work methods
  • and more 

Shitsuke – Means discipline. It is the step that 

  • Ensures people practice the rules
  • Form good habits
  • Look for opportunities to improve