BUILDING A SALES TEAM IN CHINA is difficult. The country really only opened up in 1992, only 22 years ago, when Deng Xiaoping said “To be rich is glorious”. Consequently the culture of sales, negotiation and overall good service has been increasing, but still lags behind the developed countries. This gap in ability is not as obvious within State Owned Enterprises (SOEs) and government departments, but for multinational companies, that are globally linked and compared, the difference in ability can be stark.
First there was Guanxi
Once upon a time in China only guanxi mattered. While those days are not completely gone, the role of guanxi in business deals is far less important to the outcome. Due diligence, conflict of interest policies and a crack down on corruption has meant that relationships might open the door, but to close the deal a broader understanding of the sales process is needed.
[quote style=”boxed” float=”right”]The presence of relationship building within business circles is found in many corners of the world, especially where trust is not enforced by strict policies and laws.[/quote]Guanxi is not unique to China. The presence of relationship building within business circles is found in many corners of the world, especially where trust is not enforced by strict policies and laws. Sales people can rely on guanxi initially, as they coerce their network, but this circle of friends and connections is soon exhausted and doesn’t allow for expansion of the market, or alternatively, creative sales approach. In essence, a sales process based on guanxi is limited by a finite market.
Guanxi can also lead to self-serving deals and even corruption. This is because Guanxi is like bartering – ‘used’ guanxi must be ‘returned’ in kind, and the choice of when and how to return the favor is not always a true choice.
Finally, Guanxi is quite frankly distasteful to those in other cultures. One must keep in mind that other cultures do not share the same values and may see things completely different than those in China. While many in China place those connections on high regards, others see it as unfair and dishonest.
[quote style=”boxed” float=”left”]Finally, Guanxi is quite frankly distasteful to those in other cultures.[/quote]
Thus the existing guanxi one has is a great platform on which to build, but should not be the sole technique to win business. Instead of pressing others for favors, sales staff need to be able to branch out, take advantage of networking opportunities and establish new networks, continuously.
Unfortunately, this is easier said than done. Networking does not come naturally to a lot of Chinese. A collectivist culture means that socialising is more often done with close family and friends, and outsiders are not afforded the same level of trust. Business networking, in bars, fundraisers, mixers and conferences can therefore be uncomfortable events for many Chinese in sales.
Consequently, many Chinese sales professionals sink into the familiar day-to-day ‘administrative’ functions of the role, which leads to impressive plans, but little results. And this is why managers of sales teams need to embed pre-work, such as rehearsals, role play and the creation of cold call scripts into the week. One thing that Chinese are not afraid of is repetition, so make this a regular event.
Self Management Issues
[quote style=”boxed” float=”right”]…the one child policy, en masse, has created a group of “significantly less trusting, less trustworthy, more risk-averse, less competitive, more pessimistic and less conscientious” individuals[/quote]Repetition is a strength of the Chinese education system. Its weakness is that many graduates do not learn how to set goals and priorities, because they are trained to take orders. Worse still, the one child policy, en masse, has created a group of “significantly less trusting, less trustworthy, more risk-averse, less competitive, more pessimistic and less conscientious” individuals, according to studies conducted by Australian universities, Melbourne and Monash. As was highlighted in the NetworkHR article ‘Who is the Chinese Employee of the Future’, the joint university research focused on 400 Beijingers who were born just before and immediately after the implementation of the one-child policy. Based on their year of birth, these Beijingers are likely to be middle managers today – middle managers that lack management skills.
Poor Management Skills
It is therefore no surprise that the manager in China fares poorer when to compared against managers from other regions. The 2009 ‘Global Manager Comparative Study’ conducted by Stanford University, compared 16 different nationalities of managers based on their answers to 18 questions. The result highlighted the management gap between US managers at the top of the ranking, to those managers in China, who appeared at the bottom of the ranking.
More recently, Great Place to Work ™ released research confirming this weakness. Their study, called the ‘2012 Best Companies to Work For’ looked at the three leadership qualities of credibility, fairness and respect. Again, the USA was at the top of the list, with Great China appearing at the bottom. These three qualities can be taught, but stronger hiring requirements are just as important, and these qualities should be instilled in management from day one.
Farmers versus Hunters
In the sales metaphor Chinese are more commonly ‘farmers’ than ‘hunters’. Again, this is due to many salespeople’s reliance on guanxi, rather than building new networks. As explained earlier, guanxi can only go so far; once those resources are exhausted, salespeople are left with nothing. This would also explain the high turnover of staff in the sales industry in China. The way to survive in the very competitive sales field is to be a hunter and to seek out new targets instead of waiting in the office for the phone to ring, or bothering existing clients. For this reason a certain amount of uncertainty is necessary within a Chinese sales force. While ‘harmony’ is an important aspect of both ancient and modern Chinese culture, too much in the workforce can create compliance.
Assessment tests can highlight whether sales are hunters or farmers. Such tests will also uncover which leaders can coach and motivate sales teams, and ultimately reduce staff turnover while develop staff who may have the right skills, but lack a comprehensive understanding of the sales process.
Career or Chance; Judge or Mentor?
And this lack of comprehensive understanding is often caused by a lack of direction. China is like any other country when it comes to the pool from which salespeople originate.
[quote style=”boxed” float=”left”]Many young sales ‘fall’ into the sales function because they do not have strong academic background, and not because they are good, or interested, in a sales profession.[/quote]Many young sales ‘fall’ into the sales function because they do not have strong academic background, and not because they are good, or interested, in a sales profession. Consequently, when it comes to a management style being a mentor is far more valuable than being a judge.
Thankfully Chinese education teaches to respect teachers and the master. Sales managers should leverage the mentality and coach their team. So they need mentors – someone who can hold their hands, walk them step-by-step and lead them until they can run on their own. It is best for those starting in the field to reach out to seasoned professionals working in similar fields. Sales managers can assist by linking sales professionals with mentors. The most experienced professionals are often more than happy to meet and share their wisdom.
The sales ability gap, between the local and international staff is closing, but there is still a way to go. Sales managers in China need to understand that Chinese perform better and contribute more when in groups. Thus, those who take on the role of managers must be mindful of others on their team and be able to set aside personal pride to assist others on their team. The new ‘ABC of Sales’ is not ‘Always Be Closing’. In China, it is ‘Always Be Contributing’. Only then will you develop a world-class, multinational mindset sales team.