Take a look at this quoted question.

How come teams with an average IQ of over 120, function with a collective IQ of about 60?

from Peter Michael Senge who is director of the Center for Organizational Learning at the MIT Sloan School of Management. He is known as author of the book The Fifth Discipline: The art and practice of the learning organization.

I think any of us with any experience have seen this problem. I laughed when I saw this. However, I have been closer to tears at the results I see in the lower level workers when this is true.We need to make a deeper investment in the health of our team. It takes an integrated look under the hood, but we can find the right diagnosis. Any team, be they good or bad can start to have a group of 110 IQ’s operating as a 130 IQ team. That is more than a 2X change from the common 60. The boom you get from that is worth the effort. However, many leaders do not invest here as it seems too touchy feely or too unlikely of success as hard to measure exactly.

Of course, teams are weaker than they need to be because leaders often only invest in readily measurable things. They do not seriously invest in the unmeasurable of leadership team dynamics. Further, leaders make or break their teams. Few leaders want to do the heavy lifting of changing their own attitudes and behavior even the small amounts that could give big boosts to their team.  Thus, so many teams are operating at an IQ of 60.

Others thoughts?

When I was dating my wife prior to marriage, I was introduced to her parents. They talked to me like it was an interview for a job.

Her father asked me whether I had a good job and a good career path. He asked me if I made enough to support his daughter and a family.  Finally, he said, “How am I supposed to know if you are not married with a family in the States and are just using my daughter?

I so respected this father who cared for his daughter in this way and with his questions.

When you meet stakeholders in China like suppliers, customers, potential partners, and even employees they carry a lot of the same concerns about who you are and what your ability is.  They have greater concerns about your character and honesty toward them.  I was open with my future father-in-law and respected him and tried to help him get to trust based on knowing who I was.

We really should think about Guanxi in this way. Chinese people have natural fears about character and ability based on their experience in life.   We should have the same concerns, and they actually understand when we ask for proof of their identity and such. Ask all that is in your heart and more and encourage them to do the same.  Guanxi is really about knowing the person and who they are to establish trust.   It is reasonable and is not about seeing who drinks the most liquor at meals actually with any good stakeholder.

Thoughts?

So Chinese are known for doing business with their friends. The word Guanxi is being internationalized as networking did not seem to capture what was happening.

Why do Chinese work with friends and relatives?

Trust.  They hire a relative while thinking: “You may not have as much ability, but I know you will not steal it all.”

With no functioning better business bureau and many people seeing that anything goes, then the Chinese business people themselves feel uneasy and confused in a world that is not very safe or predictable.

The Chinese want to know what is really in your heart before committing to you.  They do this out of habit as they live in China.  You should do the same.

For example, they do not hire on resume, and you should not either. I do not mean to throw out the resume, but rather to recognize that knowing what is inside a person is more important than what he says he did on his resume.

Any thing to add?

I wanted to talk on this principle that yesterday I touched on.

I was leading a factory through a large reorganization, and a home office person wanted me to give him a man to clean up the floor right now.   I politely asked him to bear with us.  I felt we needed to find out why the floor was not being kept up despite the large scale reorganization.  To understand the why was much more important than a clean floor today.  In America, it is easier for me to know why the floor is dirty in this reorganization.  In China, I need to be smarter and work harder to get the right understanding and then move.  It is more trouble, but the right leader Understands First and Decides Second even if it is more trouble in China.

It will help create the right team and the right service to make customers consistently happy.

Agreed or have other thought–examples?

In honor of the 200th post, I wanted to put up the second post back in 2010 which was the first with content after the admin in the first post.  It is timeless in its message and had really a lot in it.  Maybe too much, so welcome to take it in small bites. It is called:  “Leadership or Being China Savvy”

First, I have been in China working for nearly 20 years, but do I know more about China than my top Chinese manager? Than the secretary? No. And I never will. So the key is to get properly trustable Chinese people on your team. They know. Find them and listen to them.

What Kind of Person is a Great China Business Leader?

Speaking the language is great if you are a Westerner in China. However, my experience is that Chinese speakers as leaders don’t always do better than non Chinese speakers..

I speak Chinese and am deep in the culture, but I came to know a guy who was a great leader in China at a factory but did not speak or try to speak Chinese. I, further, witnessed him more than once taking actions that were insensitive to the culture. But his leadership was impressive and the result was a great factory success for that US SME.

So, if you have a chance to learn Chinese, learn it.. If you can learn how Chinese people think, excellent. Nevertheless, great leaders are succeeding in China whether they know China or not and whether they speak Chinese or not.  Seek to be a superior leader.

Understand First, Decide Second

Let me share a simple leadership principle I almost lost here. Understand first, decide second.

I always did this as a leader in the U.S. without thinking about it. When I arrived in China, I started deciding issues at the same rate as if time was the standard. Then I explicitly realized the principle. I needed to first understand. Then decide. What might have taken 5 minutes to decide in the U.S. might take two days in China. However, the standard is to understand and being in China does not change that. I get understanding from trusted people in culture. They will always have data that I cannot sense on my own.

Knowing the language or culture can help you get understanding faster. It is uncertain, however, whether that understanding or great leadership will get you the best data. My experience is that great leadership trumps as even the secretary knows more about China than me.

How much Data is enough Data?

I know some decisions can never reach a 100% understanding as their complexity is too high or the time will take too long to get there. You need to get 70% there and then make the choice. That is what I mean in saying, understand first, and decide second.

So in conclusion, great leadership knows that it needs to hear all the voices and get all the necessary data. Great leaders develop teams that can do that excellently and quickly in culture. Pride can undo the China savvy Westerner as she starts to think she knows better than her secretary. If she has enough leadership wisdom to avoid this hole, then knowing the language will not hurt her.

Hope you enjoyed this blast from the past.  Anything you care to add?

The Procurement Leaders have a great  blog up especially if you like the Wright Brothers. Take a look at the whole thing here.

They note that complicated SLA’s ultimately mean that important things are not focused on enough.  Well said.

I also think we need to consider our life here in China.  Simplifying contracts is good generally, but the Devil is in the Details. We must not just believe that the supplier will not use cancer causing materials to reach our KPI for performance for example.  We must specify and not assume anything especially in our BOM.

So one ditch is a too simple contract that does not specify everything clearly.  The other ditch is a contract that has details but no clear goals for performance that encourage suppliers to stretch within very clearly defined boundaries.

An aside is that the cancerous milk story I linked to above that came out 6 months ago was the last straw for many middle class families in China. They no longer trust Chinese companies on quality and safety anymore.  Product sales to China are now open season, and if we are smart, we can do good sourcing without being in either ditch.

Anything to add?

All Roads to China has a few articles posted recently on food in China. You can find them here and here.

Inside one Richard had a link to Market Watch in an article titled Chinese Getting Tired of  ‘Made in China’

Market Watch had a very stock price sense of the present turn in the Chinese market toward foreign brands.

I paste a small portion of the article here:

In a new research report, Barclays Capital says that after continued double-digit wage hikes, many more mainland Chinese aren’t just getting wealthier, but also more discerning on how they spend. Increasingly, they are looking at premium products and often, foreign ones. This, they say, applies to both staples and discretionary consumers stocks.

Barclays warns that mainland companies who have neglected to invest in building strong brands, R&D and product development will be exposed to this shift in consumer tastes. Many local companies achieved dominance through cheap manufacturing and low pricing, as well as dominant local distribution. As the era of cheap products comes to an end, companies that are unable to upgrade are vulnerable.

The whole post is worth a read. If you are sourcing in China, great.  Now you can start to mature how you use your sourcing in China. If you are not yet selling or bringing service to China, then the time is now. Come and do it well and smart. Never forget that you are not in Kansas anymore, but come.    For more on this market opportunity,  take a look at my previous posts on this dynamic:

Yes, Chinese People and Businesses Will Buy More and More From the West

Japan and China in Quick Historical Comparison and Contrast

Increasing Opportunity, Increasing Pace

Hurray! The Chinese Consumer is Ready to Buy!

China Import Growth

Yes, Chinese People and Businesses Will Buy More and More From the West

Foreign Brands in China

Welcome to China, a land that trusts what you have.

Any other thoughts?

I wanted to note that some of us have a very sharp eye for what is wrong.  This can be very valuable. That dissatisfaction can lead toward Six Sigma performance in quality for example.  (Six Sigma is considered 3.4 defects per million)

No one is going to reach zero defects per 10 million at this point. Actually, no one I know of is even 3.4 defects per million over the long term now.  We all have some place to reach.

So we as leaders need to carry dissatisfaction and push to reach higher while still helping workers know how far they have come.  I try to keep people around who will tell me I am wrong.  I need to know my jokes are not that funny. Really, sometimes those negative people are really too negative, and you need to tone them down or let them go.  However, that dissatisfaction with things is valuable if you can bear it or bring it to the table yourself.

So celebrate progress, and celebrate bringing to light another place that can be made better. Let’s not become complacent, but reach higher and celebrate all along the way.

Finally, Did you know that precious few have any practical success along the Six Sigma or Lean road?   For good Chinese companies the question is not, “What are recent adjustments to your control plan?, but rather, “Do you have a written control plan?”

Anything to add or be dissatisfied with?

Scott Thompson, CEO of Yahoo!, has a computer science college degree listed that he never received (It was accounting).  Another leader at Yahoo! has a degree that she got but in a different major.  See the whole story here

So if a relatively honest and even naive America can have falsehood in resumes, then how do you feel resume falsification looks in China, a land where fakes are so common.

We have seen enough in our work to say that 100 out of 100 40 year old leader resumes have material falsehood.  We are not confident enough to say 1000 out of 1000, but the percentage is very high indeed.

So it puzzles me why leaders still seek to fill their companies with people who have perfect resumes.  Naturally, this just encourages more falsification. Everyone feels required to have a perfect resume, and so they appear.

Agreed?  So behavior modification needs to occur in hiring.  We need to look for the person for each position who will best help the company grow from that position.  We need to attack the naysayers who attack if people have some apparent lack in their resume. We need to disarm them.  A guy fails in his position and people say it is because he did not have an engineering degree and that should have been assured. The leader does not fail because he does not have a certain degree, but rather because of his own leadership gap or the lack of support he got from the home office.  Scott Thompson is no less a leader because he has an accounting degree. He is less of  a leader if we learn that he consistently alters facts when under pressure or cannot admit his falsehoods.

We need to avoid pushing job seekers into needing perfect resumes.  It is self defeating to do so.  Especially in China, we get the tricky people in our business when we do that.

The highly successful Western GM of Bosch Siemens Wuxi likes to say this.  “Fear must be driven out.”

What he sees is that fear is a big enemy of high quality production and overall business growth. I so agree.

When workers fear, their creativity dives. Their initiative goes down.  Reporting of problems goes down.

Workers must be managed, and they must know the limits on behavior, but great managers create passion in workers to follow their lead rather than force them to obey.   Workers who cannot come to good leadership can be coached or let go.

The team becomes passionate when fear is driven out.   Mission, vision, values and goals must be emphasized at every turn. Coaching to find out workers’ passions and personal plans can also be added faithfully to escape fear and not end up a lax organization.  An emphasis on the so called non urgent aspects of business can breed passion that is a force multiplier and removes the need for fear throughout the business.

What do you think?