China is getting tougher, but offers lots of opportunities to grow!
Imagine a visit of the city government of your site in China. They open the meeting with: „We are sorry Mr. Meier, but nevertheless we ask you to leave the city as fast as possible and move to another, more remote place in China. If you move within 5 months, we’ll support you with 1 Mio. Euro. If you are clever, look for a new cite that welcomes you with the same sum.“
That happened to a medium sized company in Beijing in October 2017.
The offer might sound profitable at first sight, but let’s look more deeply into the facts and figures.
- The construction of a new site on an area of 20’000 sqm according to international standards including all equipment, machinery and production lines costs between 30 – 50 Mio. Euro.
- If the employees don’t move with you, severance packages have to be paid. They are based on monthly salary x years of service. Let’s estimate 500 employees stay in Beijing. They have worked for 3 years, and earn on average 1000,– Euro a month. The sum is Euro 1,5 Mio. – managers not included. The sum of the city government doesn’t even cover the severance packages!
- Having lost 500 employees, you have to search for new hires. Will you find enough talents at the new site?
- Additionally to the salary of the new hires you need to pay for their training on the job as well as the (travel) expenses of your HQ technicians and engineers, who will secure the start-up phase of the first 1 – 3 months. That leads to roughly Euro 2,5 Mio. Even if the new site donates another 1 Mio. Euro, the expenses are not covered.
- And we have not yet talked about storing, the new logistic chain, etc.
Yes, 2017 the governmental arbitrariness has increased and will stay this way in 2018! We have to expect sudden cost explosions and uncertainty in planning. Nevertheless, we should stay in the trendsetter market China AND grow together!
In fact, China has always challenged us. We hoped – wrongly – that it becomes more Western one day, and therefore easier for us to handle. But what an arrogant expectation is that!
China has decided to go its own path, to define its own rules. Its up to us to decide whether we are willing to learn from China. Or leave. Escape is the last option described by Haro von Senger in his fantastic book "The 36 Strategemes".
If we stay and learn from China, we have the chance to
- profit from the Chinese agility and
- stay a trendsetter.
Let’s start to think in a new way, a more Chinese way to grasp the many opportunities in China! Let’s study Xi-Na, the China under the leadership of Xi Jinping, and learn Chinese Qi instead of playing chess.
Re-think, re-set, re-learn to become more attractive!
In which fields should we raise flexibility and openness, and give up comfort?
Whom should we send from HQ to China to make them realise what real speed means?
Which organisational structures limit our success in China?
Are all our leaders fit for the new targets in China? And are the all aligned?
How can our enterprise become more attractive for Chinese talents?
How often should board members be in China to set the right signals?
What about having a real board member be head of China, based in China?
And last but not least: How to profit from the Chinese agility skills?
Lets have a look at how to become more "Chinese" and attractive, and book a free 30 minute call with me.
No one is born a Xi-Na master!
But you can learn to be one! Invest precious time in your "Chineseness"! Encounter them in novel situations to start to comprehend them intuitively.
- Why and when do they tick differently?
- Why does it make sense to lead them differently?
- How to really inspire them?
- How to get to the core of customers’ aspirations?
Learn from Jack Ma (Alibaba), Zhang Ruimin (Haier) or Ren Zhengfei (Huawei). They inspire their workforce with ambitious visions as well as with presence, approachability and Chinese benevolence.
Hier Learn from Jack Ma, Zhang Ruimin and Ren Zhengfei!
Together we build up your leadership power to inspire the Chinese in your own way! Let’s foster their full agile and innovative potential and make your business bloom in China.Contact me
I count on you!
Daniela Fehring, catalyzer and compass for your China excellence