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China HR Management Needs to ‘Think Global’. But That’s Only Half the Story.

By Oscar Fuchs

Managing Director and Co-Founder of ChapmanCG
https://www.linkedin.com/in/ofchapmancg

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In October 2016, ChapmanCG hosted a gathering of China Human Resources and Talent Heads at the office of Johnson & Johnson in Beijing. The theme of the meeting was about creating globally-minded leadership talent in China. But the conclusions that were reached should resonate with all HR leaders overseeing Asia.

The Old Recipe for Change: China HR must ‘Think Global’

A portion of the discussion was focused on how to further globalise the mindset of domestic talent in China. In this regard, the group discussed some of the key themes that would be familiar to most HR and business leaders who manage China.

1.     At a fundamental level, Chinese executives need to be confident communicators with global leaders, not just by improving their English language ability, but by utilising story-telling and negotiation skills to truly influence global decision-making.

2.     At a managerial level, Chinese executives need to set aside some ingrained behaviours that might be a disadvantage when dealing with global counterparts. In China, as in other North Asian cultures, there is a cultural propensity towards being humble, as well as being overly deferential to seniority. These traits do not help in getting your voice heard at the global level.

3.     And at a leadership level, Chinese executive need to be more comfortable in taking risks and in learning from mistakes. These attributes haven’t always been actively encouraged in China, which has been more culturally conservative up until the recent past.

Flipping the Narrative: It’s Also Time for Global HR to ‘Think China’

The group agreed that there is much that can be done to develop globally-minded executives in China in this way. But the consensus in the room was that more can be achieved if global leadership were better educated about China themselves. Because as much as Western multinationals have invested in China, they continue to hold on to biases and distrust about its people and its business environment.

1.     We can’t expect to attract and retain the best talent in China by offering global career paths. Career assignments at global headquarters used to be seen as a ‘golden ticket’, but this is less relevant now that China’s economy is more mature and that home-grown multinationals can offer similar careers on the ground. There needs to be a multiplicity of career paths rather than an insistence on global mobility.

2.     Since Asia continues to be the engine of growth for many global companies, there need to be more roles with global responsibility based in China and elsewhere in the region. Some Western multinationals have already started to lead the way in this trend, but the group agreed that even these examples have been very limited. Global roles currently based in Asia tend to be designed around an individual, rather than the role itself. As soon as that trusted individual moves on, the global role itself tends to disappear or revert to headquarters. So we haven’t yet seen a genuine trend in this direction.

3.     While many aspects of society and the economy in China could still be described as ‘developing’, there are just as many aspects in which China is on par with the West. Any visitor to China’s Tier I and Tier II cities will be aware of the sophistication, creativity, tech-savviness and modernity that greets them. Executives at multinationals might be relying on outdated notions about how management in China needs to learn from the West. There can be just as much to gain by maximising local talent in situ, especially if this prevents them from joining local competitors.

In an example of this final point, one HR leader explained how his company acknowledged that it derives a large percentage of its global revenue from China, so took steps to create a culture where the China office can innovate locally, incubating China-specific ideas without any input from the global HQ. The good ideas that have come from this programme have allowed the company to enjoy a strong advantage in the local China market. And the best ideas have been exported globally within the company. The group agreed that this was a good illustration of how a global matrix structure can coexist alongside a culture of championing local leadership.

ChapmanCG is very grateful to Johnson & Johnson for creating the perfect environment for this thought-provoking discussion, and we look forward to reconvening in Beijing in early 2017.

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