Thursday, June 4, 2009

One last learning for China - 5. Too many laowai is not good

Laowai in Chinese is the same as firanghi in Hindi – a slightly condescending word for a foreigner.

Look around most of the multinationals in China – the CEO is likely to be a laowai. Too many laowais inhabit the senior corridors in companies here. It is well tolerated, and many a time even welcomed, by the Chinese. I think Chinese should be less tolerant of laowais running their companies.

That used to be the situation in India a long while ago – its no longer true. I happened to work for a company that was, before my time, the pioneer in the movement to “Indianisation” of management in the 60s. India gained enormously from that move. Its time China did too.

Why do so many laowais run companies in China. Multinationals bemoan the lack of senior management talent in China. Various reasons are given – including the effects of the cultural revolution on the generation which would be senior managers today. I beg to differ.

There are three reasons why companies don’t find senior management talent in China. Firstly they look for English mastery. You won’t get it in that generation in China. But English mastery is an overemphasized quality. It is truly not required. Secondly foreign companies, expect a Western management style, and are uncomfortable with a Chinese management style. Again an overemphasized requirement. What works in China is more important than what is theorized in text books. Remember Japan ? And thirdly many companies are yet to “trust” Chinese. That’s the worst reason of them all – it just shows lack of cultural inclusiveness. Just because the person is different, as he comes from a different culture, is no reason not to trust him. In my experience, you get the same breadth of Chinese managers – the trustworthy to the untrustworthy – as you find in any other country.

There is a fourth reason. The willingness, sometimes even the groveling, for a laowai head, amongst many Chinese. There is an undercurrent of inferiority feeling amongst many Chinese managers. Just because the laowai speaks fluent English and can be loud and boisterous, it does not make him a better leader. This is the one huge difference I notice between India and China. In India, Indians will only grudgingly accept a firangi CEO. In China, it appears Chinese will only grudgingly accept a Chinese CEO !

There are many brilliant leaders and CEOs in the Chinese management pool. To all these guys – here's a message. Go global. Work abroad and learn about other business environments and cultures. Come back. And puff up your chests. Thump the table a bit. And take over running the businesses in China. One of the lovely things about you, is how welcoming and friendly you are to laowais. Be friendly for sure. But don’t let the laowai run you. Only Zhongguoren can build great businesses in Zhongguo