China Tech Best Practices - Part 2: High Tech Challenges

Like the traditional technology companies featured in this first blog post, high tech firms face significant challenges with their China operations.  This post highlight the key challenges for high tech firms and two best practices that will enable companies to overcome them.

The Challenges: Pressures and Competitors

At the Minnesota - China Business Forum on November 1, 2014, I highlighted two key challenges for high tech companies:    

• Market Pressures: The market pressures on high tech firms can be seen in Microsoft's on-going anti-trust investigation and Adobe's decision to close its R&D operations in China.  Though Obama's attendance of the APEC conference in Beijing in early November brought welcome news of a US-China partnership for potential reduction of global tariff on IT products, the China market remains challenging for high tech firms.

• Innovative Competitors - Alibaba and Xiaomi:  Viewing Chinese technology companies as merely Western tech knock-offs of Apple or Google is inaccurate and unhelpful - here are two prime examples:

• Alibaba - World's Largest IPO: Not only has Alibaba, which holds over 80% of China's e-commerce market share, conducted the world's largest IPO of $25 Billion in mid-September, but they have also begun to discuss a potential partnership with Apple to help bring ApplePay into China.  

• Xiaomi - World's #3 Smart Phone Maker:  The company moved into the #3 spot for global mobile phone market share (up to 5.3% in Q3 2014 from 2.1% the year before), and was ranked as the world's 35th most innovative company in Boston Consulting Group's 2014 survey.       

The Way Forward: Clear Vision and Teachable Teams

The good news is there are two best practices that will enable high tech firm's to overcome these challenges:  

• 1) Clear Vision - Build and Communicate a China Business Case and Associated Metrics: Successful companies have a well resourced, long-term vision for China operations that clarifies both the value-add for the China market and how this value can be leveraged globally.  This vision must include a clear business case for the China operations and timelines for achieving related metrics.  At the same time, the business case and associated metrics must be co-created by the China leadership and the executives accountable for evaluating the Chinese operations.  Once there is agreement, the business case and metrics must be effectively communicated to the China team.  Such communication must be more than thin executive presentations communicated on an annual basis.  Instead, an on-going, two-way discussion with local managers and individual contributors about their priorities and daily activities that will support the vision is required.   

• 2) Teachable Teams - The Key to Keeping Pace with Constant Change: For such on-going communication to be effective the teams must remain teachable on China.  The China market is incredibly complex and constantly changing.  Therefore, the business case and metrics contained in the company vision must be clarified through an on-going emphasis on learning what is most relevant to the target customers in the China.  Such continuous learning requires employees to leave behind any biases about how their company successfully operates in other countries.  They must see the unique value they provide to their Chinese customers with fresh eyes.       

Everything is Possible but Nothing is Easy 

The potential of the China market is indeed significant, but success comes to high tech companies who work hard.

In short, the key is working with the China leadership to craft a company vision that is both clearly understood by the local team and is adaptable to the changing needs of Chinese customers.  Such adaptation will come to firm's that can cultivate teachable teams who continuously seek to understand the customer's perspective on the unique value they are providing in China.

China Tech Best Practices - Part 1: Traditional Tech

On November 1, 2014 I had an opportunity to join the inaugural Minnesota China Business Forum, which was co-sponsored by two organizations focused on fostering Minnesota's engagement with China - China American Business Association of Minnesota (CABAM) and U.S. China Business Connections UCBC.  My remarks on the panel that concluded the forum answer the question "What are the key challenges and best practices for foreign technology firms operating in China?"  I answered this question in two parts: traditional technology firms and high tech firms.  In this post I will focus on traditional technology firms and in a future post I will address the best practices of high tech firms.

Traditional Tech: 2 Best Practices for IP Protection - KISS and KICX 

Traditional technology companies are in traditional markets such as manufacturing, but rely heavily on technology to remain competitive.  For these firms a major challenge continues to be protecting their Intellectual Property (IP).  Key reasons this problem persists include: lax enforcement of IP protection laws and a traditional culture that encourages copying.  However, what is most critical isn't what is causing the issue, but proactive ways to address it.

Field research I conducted with executives in China identified two key solutions: keeping it simple and keeping it complex.  

1) Keeping It Simple (KISS):  When firms focus on simplicity they are crystal clear on both the broader picture of why they are in China and the business intelligence for the specific segment of the massive China market they aim to service.  At the same they put simple legal practices in place to protect their company trademarks - in their home market and in China.  It is critical to note, however, that these practices must go through a process of continual refinement as the needs of the Chinese customers and the legal landscape are very dyanmic.

2) Keeping It Complex (KICX): Competitive firms work hard to keep their operating framework complex from the vantage point of their competition, partners and even employees.  This best practice is broken down into 6 pillars

• Interest Alignment: Understand the interests of your community, government officials, customers, employees and suppliers; actively find ways to put your company in a position to benefit their interests.  
• Disagregation:  Don't put all your eggs in one basket.  Externally work with a variety of local vendors and partners and proactively seek to understand what they will do with the IP you've share with them.  Fragment knowledge of your IP - internally and externally - so that IP is shared on a need to know basis.       
• Dynamism:  Seek to out innovate the would-be copy cats through continually improving your products and processes.  The more flexible your company is in adopting technology that benefits end-customers, the more difficult it will be for others to copy.
• Control Discipline: Clearly segregate the access anyone - internally or externally - has to IP information through varying levels of IT access.  Deliberately build a culture that encourages control of company information and reinforce this culture through rewarding good behavior and quickly addressing questionable actions.
• Talent Management: Create a company culture marked by challenging work, opportunities for professional develop and recognize employees who share their knowledge in a way that benefits the company.  Actively work with employees, especially high performers, to outline a career path of continuous development and increased opportunities to contribute to the company.
• Focused Community Activities:  Attract and retain top talent through both a reputation for community involvement and on-going activities that support this reputation.  If a company has both a positive impact on the community and treats employees fairly, staff are less likely to steal company IP. 

More details about this research can be found both in this Forbes article (May 2011) and in this MIT Sloan Management Review piece (Summer 2014).

In the next post in this short series I will focus on the best practices of high tech firms in addressing similar challenges in China.

Taking Your Guanxi / Relationship Building On-Line

Guanxi or personal relationships are one of the three cultural keys (Relationship, Face and Hierarchy) that will help us work effectively with Chinese colleagues - See this June 2013 post for more details.  I want to build on my June 2013 post to look at relationship building within the context of China's workplace today.  Today the workplace in China is increasing influenced by social technology tools. However, like many things about the Chinese market, China's social technology landscape is unique and largely unknown to non-Chinese consumers.  Honestly, how many people outside of China - myself included - have ever heard of any of the popular social technology brands listed in the image below?

 Source: Digital Strategy Consulting Post - November 28, 2012

Context: Social Technology in China is Growing

First, it is helpful to understand just how impactful social technology is in China today.  According to this post from the CEO of the internet marketing company ByReputation.com there were 597 million active social networking users in China as of July 2013.  What is more, the volume of information these users have created increased by 60% in 2012 alone.  In addition social media usage is more common than in the U.S. as 91% of China's online population has an account on a social media site compared to only 67% in the U.S.  Much of this staggering growth has been fueled by smartphone penetration where where according to this video produced by the PR company GroupM there were over 360 million mobile internet users in 2011.  In addition, this number is expected to overtake PC netizens by 2015.  What is more, the same report indicates that smartphone users typically check their phones every 6 minutes and 38% of smartphone users spend more than 5 hours a day on their phones.  Clearly, if you are going to connect with Chinese colleagues today, you need to actively jump into social technology.  

The question is - how do you properly harness the value of external social technology activity to drive deeper connection to your Chinese colleagues?  

Connecting with Chinese Colleagues

First, pick a platform. A few years ago all the rage was about micro blogging on Sina's Weibo, which functions a lot like a mashup of Facebook and Twitter. However, in the last year WeChat has become the tool of choice due to its simple mobile interface and the ability to limit the information you share to a specific group of followers. Personally, I think WeChat is the best choice unless you aim to become a serious Chinese blogger or follow the Chinese language news closely.  For a full list of social media platforms popular in China, see great list from the ByReputation.com CEO in this infograph.

Second, determine how much and with who you want to share.  As I learned from my "Facebook Fast", you don't need to share all of your thoughts or experiences on social media. Before you jump in take some time to think about the type of things you want to share. Personally, I am currently focusing on humorous or puzzling aspects of Chinese culture and actively asking my co-workers about their thoughts on what I post.  Also take time to think about your target audience.  Who are the key individuals or groups that you want to connect with.  One practical action I took was to lead the creation of a WeChat community for the colleagues with whom I frequently sit in the office.

Finally, connect your social media conversations to real life.  Don't passively view or merely comment on what your colleagues post, but ask them about it in person.  Also take your off-line activity and place it back on-line.  Your relationship with your colleagues will be strengthened even further if you share information and pictures from a shared experience like a team outing or trip to the local Karaoke Bar.  

Why This Matters: The greatest value from following the social media activities of your colleagues is to gain a deeper personal connection. While in the West this might be seen as intrusive or crowding into our personal space, in China it provides critical relational context that will directly benefit your working relationships.

What about you? 

How are you using social technology to connect with your Chinese colleagues?  Have you discovered any best practices for deepening that connection?

If you have an experience you would like to share, please post it below or send me an e-mail at joabmeyer@global.t-bird.edu.

Technology as a Productivity Tool

Does getting on-line ever feel overwhelming like this "hyper-connected' guy below? 

Personally, I have felt this way, but in this post I  want to add technology to the mix of tools I began to address in this January 25^th post on the power of personal goals and mono-tasking (focusing on one thing at a time) to make an impact on those around you.  Specifically, I want to focus on how we can leverage technology tools such as e-mail, social media and video to further enhance our ability to connect with others and increase our productivity.

 

Practically I aim to use the following practices to extract the benefits of technology to develop my mono-tasking abilities:

1)    Information Stewardship:  E-mail and social media (especially Twitter and Facebook) provide a flood of information that threatens to overwhelm us every day.  However, there are two practices I use to properly direct this flood so that it enables me to effectively connect with others and accomplish my priority tasks.

a)      Keep E-mail Caged:  First, I have disabled the sound and flashing icon that accompanies every new e-mail so that I don't go to Outlook like a “Pavlovian Puppy” when I receive an e-mail.  Instead I strive to check it between meetings and prioritized tasks.  For other great e-mail practices, check out the 10 best practices in this E-mail Charter - my person favorite is the suggestion to “tighten the thread” by picking up the phone if the issue can’t be resolved in three e-mails.

     

b)     Use Social Media with a Purpose: Rather than being “on” Facebook or Twitter all the time, I attempt to log in only when I have a specific purpose and not linger longer than necessary.  In addition, I seek to prioritize my social media activity into my day; in fact, I find when I am more deliberate about the key things I want to accomplish in a given day, social media often doesn’t make the list.  It is true that social media can be a great way to connect with others, especially those who you are unable to see in person, but many times a personal e-mail or (gasp) a phone call can be a much more effective way to connect with others.

2)    Be present, be honest and show your video:

a)         Be Present: In meetings, I strive to give my undivided attention to the people before me.  In our hyper-connected world it is easy to fall into the trap that I can focus on more than one thing at a time (my e-mail and the person talking to me on the phone), but as this 10 minute TED film called Brain Power illustrates attention is the brain’s most important resource.        

b)     Be Honest: Unfortunately, I can’t always focus on the person I am speaking with and need to attend to other urgent issues.  When that is the case, I aim to be honest with the person in front of me by asking for time to conduct an additional task during the meeting.  For example, “Can you excuse me for a second, I need to wrap up this IM chat before we start our conversation.”

c)      Use Video: According to research by Albert Mehrabian when we talk about feelings or attitudes face to face, 55% of our meaning is conveyed through non-verbal communication.  This means in a world where the vast majority of my work meetings are virtual, I am cutting off over half of my ability to fully convey the meaning of my attitudes when I don’t show my video.  When bandwidth allows I will always show my video to ensure I am maximizing my ability to connect with those I am meeting with.       

Your Opinion: I would love to hear others thoughts on this topic.  Do you see the above two uses of technology as effective ways to connect with others and accomplish your personal goals?  Do you have other methods that you find helpful?

I look forward to hearing your thoughts on this, whether here in this blog or e-mailing me directly (joabmeyer@global.t-bird.edu).