Doing business in China: the importance of a learning mindset

"How can you catch the cubs if you don't enter the tiger's lair?"
- Han Dynasty proverb, 25 AD.

The seven-part video below, which is one of the best documentaries I've seen on China, is another must see! The documentary is both informative and entertaining (Warning: there is some "colorful" language in this video). Here are a couple of quotes from it:

"Doing business in China is like a [the] wild, wild West, except they shoot better than the cowboys . . . you really could lose your shirt in the wild West."
- Chinese businessman

"To close the deals the Chinese way, wining, dining and wenching is necessary."
- Chinese businessman

" . . . the most expensive education there's been."
- British businessman who learned by entering the tiger's lair.



I had my first experience of doing business with Chinese and Taiwanese businesspeople in the late 1980s. I would never describe myself as an "expert" on doing business with the Chinese but can still offer some tips based on my own experiences:

1. Adopt a learning mindset and leave your assumptions at home.
2. Don't be ensnared by the charm, beauty, plumage, and general friendliness that you will encounter.
3. Relax, take it easy, be extremely patient, protect your physical and mental health like never before. Pace yourself.
4. Base results solely on outcomes: "Yes" often turns out to be "No" (as an outcome) and vice versa.
5. Dump your linear way of thinking and adopt a more fluid, emergent approach.
6. Be flexible, or you will snap.
7. The person you'll be communicating with (usually female) won't be the decision maker.
8. Never think that you know it all. Observe and learn.

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Ten things we know about innovation

What do we know about innovation in 2007?

1. Innovation is not a new phenomenon.

2. Innovation should be viewed as a system. The notion of the lone innovator is largely a myth.

3. Innovation builds upon other people's inputs (horizontal inputs) and dead people's inputs (historical inputs). (I just made up these terms)

4. Claiming outright ownership of an innovation is going to be more difficult in future.

5. Innovation starts young. Often it gets educated out of us.

6. The world we experience today is the outcome of zillions of seemingly insignificant, incremental innovations, from seemingly insignificant people, plus a few radical ones that get all the attention.

7. The Internet has allowed geographically dispersed lead users to work together and create their own innovations -- well ahead of manufacturers.

8. Most radical innovations are crude in their initial form. In fact, they are often laughed at.

9. Incremental innovations along a sustaining trajectory lead to overshooting, which leaves huge vacuums of opportunity for firms/individuals with disruptive business models.

10. Joseph Schumpeter was way ahead of his time: especially with regards to aging populations in economically successful societies.

In Business, a podcast from the BBC, has a fantastic show this week on the democratization of innovation. This is a must listen! The home page for previous In Business podcasts can be found HERE. Image: Todd Ehler.

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