Leveraging goodwill
Over Labor Day weekend I got together with an old friend — a fellow I once taught Chinese to, who for a couple years made a quasi-career out of advising Western leaders on the ground in China about how to do business. I asked him to tell me a few stories. He told me of a "good ol' boy" American exec whom he just couldn't convince that doing business in China was different from doing business anywhere else in the world. A case in point: after several days of intense negotiations, the Chinese counterpart had invited the American and his entourage to a farewell banquet. As the time of the banquet drew near, the American exec told my friend: "I don't think we're gonna do this dinner thing. I'm tired, they're tired, we're all tired. Let's just call it quits." It was only after my friend gave him some hard coaching that he relented and decided to be a gracious guest and attend the banquet.
After the trip my friend was on to other clients and never found out what became of the exec and his venture. But my friend wasn't optimistic. As is so often the case, Westerners — especially Americans — depersonalize business in a way that sets them up to fail in China. Goodwill matters. It matters a lot. It makes no difference how tired or energized you are, how hopeful or hopeless things look, how cut and dried things seem to be. Without goodwill, you're swimming upstream, if not entirely sunk.
I turn again to Jack Perkowksi's experiences, told of in Managing the Dragon. His company, ASIMCO, invested vast amounts of time and money in establishing goodwill with their brake-manufacturing partner in Langfang. In recounting what this accomplished for ASIMCO, Mr. Perkowski writes:
In the end, despite all of our changes in management and export focus, the Langfang joint venture will probably never be a big moneymaker for ASIMCO by itself. But because of the strong relationship we've built with our Chinese partner there, we've since spawned two wholly owned businesses. (pp. 175-6)
Mr. Perkowski goes on to detail successful, moneymaking businesses that sprang from the Langfang success — which was founded upon goodwill.
Goodwill alone won't get you far. Business will always to some extent still be business: you have to deliver quality goods and services that your customers want, and do so cost- and time-effectively. But if you've got the business practices down, goodwill can multiply itself, along with time and money, to create truly enduring, successful businesses in China.