Posted by Sue Perlmutter on Fri, Jul 31, 2009 @ 11:13 AM
Just a day or two after a New York Times article surfaced on the increase in Japan's hostess trade (see previous blog), there was a piece in the Financial Times* which also illustrated the omnipresence of the ‘surprise factor' in the Asian business arena. This one, however, struck a far more somber note. It involved an entire company, Business Media China, left in ruins, after its German head was blindsided by the locals it hired and leaned on -- far too heavily, as it turned out -- in its quest to expand its global reach via the Chinese market. While it is easy, naturally, to see in hindsight what went wrong in this case, some of the signs were blatant red flags (color-coded pun intended here), and one wonders not only what on earth a savvy businessman like Klaus Hilligardt was thinking, but also how many others will fall prey to a similar fate as companies rush to cash in on the vast opportunities China provides at the moment. As a global coach and consultant, my first thoughts turned to what went awry on the advising end, since it is hard to imagine anyone coaching global business executives who wouldn't immediately see the folly in letting Chinese locals run a foreigner's business practically unmonitored (though in this case, it wouldn't shock me to learn that any outside parties HIlligardt employed were also local). Given the tangled web of relationships in this instance, however, from the dubious marriage of Hilligardt's secretary to his closest ‘confidant', to the Chinese mistress the couple ‘found' for him, among other things, the whole debacle sounds like a toxic mix of naiveté and hubris.
Aside from some of the obvious poor judgment calls involved in this case, there is another factor at play here, which was casually alluded to in the FT article but which to me is significant: Hilligardt had lived in Japan, enjoyed living and working in Asia, and thus concluded that he'd be fit for managing business China style as well. This line of thinking was terribly flawed, since Japan and China, aside from some language and philosophical overlaps, are as different as Mexico is from Norway. It's true, the two cultures operate under the Confucian umbrella (though even here, in different ways and to different degrees). The way they conduct business and, even more significantly, view and manage relationships, however, is very much at odds. Another glaring flaw here is the fact that Hilligardt lived in Asia during the late 60s/early 70s. The region has changed so drastically in the years since then, more so for China than Japan, one could argue, and I suspect that even if he thought he was keeping his finger on the business pulse, he was viewing Asia through an outdated prism. I could go on and on about what else was so wrong with this whole scenario, but the article's title, "A Cautionary Tale from China," itself hints at the dangers of doing business in the Middle Kingdom, and in the "wild east," in general. Let's hope that corporate identity theft doesn't, before we can say "guanxi," become the new piracy darling.
* http://www.ft.com/cms/s/0/66013c16-7b0e-11de-8c34-00144feabdc0.html