How to Make Business Connections in China
8:18 AM Tuesday January 20, 2009
by Ed Gilligan --- http://blogs.harvardbusiness.org
There's a debate whether or not the reputed Chinese proverb "may you live in interesting times" is a blessing or a curse. I'm not going to tempt fate or argue semantics. As I see it, there are three truths about this greeting and what they may mean for making business connections in China.
1. We are absolutely living in interesting times.
2. If you work for a global business, any global business, China will only increase in its importance to your long term growth.
3. If you approach doing business in China as only an exercise in short-term profit-making, then you might as well stay home because you'll be disappointed.
In China, success is defined by more than just the economic impact of a deal. To be successful in business ventures with (and in) China, you need to invest time in building relationships, understanding cultural dynamics and gaining Guānxi - the personal connection and understanding between two people which helps to get things done.
Now, I don't purport to be an expert on China by any stretch of the imagination. But I have done business with Chinese partners for several years and I've learned a lot through experience (trial and error - you may say).
I also like to think of myself as fairly up to date on Chinese business trends. In late November, I gave the opening remarks to a business forum in Shanghai on "Opening Global Doors" sponsored by American Express. We brought Chinese business leaders together for dialogue with Ken Chenault, Chairman and CEO of American Express, John Thornton, a former President and Co-COO of Goldman Sachs and now Professor and Director of Global Leadership at Tsinghua University in Beijing, and Dr. Henry Kissinger, former U.S. Secretary of State and an advisor to the Board of Directors of American Express.
You might be saying to yourself, "I don't have experience like that. I don't have a rolodex like that. I don't have a chance in China."
Not true. All this experience and access certainly helps, but when it comes to doing business in China, success starts with listening. You need to know the right questions to ask - and really listen for the right answers.
Here's my advice. I suggest you ask four key questions to understand what (and more importantly -- how) you think differently from your business partners in China.
1. How much are you willing to share with your potential Chinese partners so they can learn from your experiences and what should you ask in return?
2. To what degree will you accept a different business model in China in return for more long term potential?
3.Can you position your deal to not only have a positive impact for your potential partner but for the broader Chinese economy and society?
4. What is your partner's opinion about you and your company and what are their sources of information?
These questions might be obvious, but they all underscore my main point. Only by focusing on building relationships with your Chinese business partners will you achieve economic and cultural success in China. You have to develop real depth in your relationships. I believe this starts first by challenging your own assumptions and stepping outside your own frame of reference - and most of all listening. Listening leads to understanding and that leads to trust.
And if all of this doesn't help you, then let me close with an insight from a true expert on China -- Dr. Henry Kissinger. When asked during the "Opening Global Doors" forum about the potential progress the West could make with China, Dr. Kissinger pointed out that if we make the progress that we've made in the next 30 years that have been made in the last 30 years, then it may turn out that this present crisis will be viewed as an opportunity which enabled us to ask the right questions and deal with really crucial issues.
Does your success in China begin with having good Guānxi? Maybe. Does good Guānxi begin with building relationships for the long term? Absolutely. You'll need a lot of good communication back and forth to open doors in China. But you'll also need leadership -- leadership demonstrated through relationship by relationship, deal by deal, and handshake by handshake. There's no more "interesting time" than now to start.
Ed Gilligan is vice chairman of the American Express Company and oversees the company's global business-to-business group which includes merchant services, network services, commercial cards, and business travel. Ed joined American Express in 1980. He lives in London with his wife Lisa and four children.