Recruiting in China

By Carol Hymowitz

From The Wall Street Journal Online

SHANGHAI -- On a recent evening stroll, James Rice, a vice president at Tyson Foods and the head of its China operations, wandered into a narrow alley, drawn by the pungent scent of spices coming from a food vendor's stall. The vendor was selling skewers of barbecued lamb coated with cumin, a popular evening snack here.

That detour gave Mr. Rice the idea for a new food product: cumin-flavored chicken strips. "I found just what I was looking for -- an exotic flavor that is authentically Chinese," he says. Within a few weeks, his research-and-development manager had created a new recipe, and members of his marketing staff had begun testing it with consumers. When they got a 90% approval rating, they knew they had a hit. Mr. Rice began selling the new product in just two months.

That quick launch was the result of strong teamwork by his staff. It also reflects the freedom Mr. Rice has been given by superiors at Tyson's headquarters in Springdale, Ark., to build the company's business in China as he thinks best. "When I see a way to modify or create a new product I think we can make money on, I don't have to go through layers of management or wait months to get a decision," he says.

Some of the executives who oversee operations for multinational companies in China have this kind of autonomy. Others must seek approval from bosses located elsewhere for even small decisions, such as making a change in packaging or pricing. Many spend considerable time weighing when to act independently and when to take marching orders from corporate headquarters.

It is the yin-yang management challenge for overseas executives everywhere. But the stakes are higher in China, the world's fastest growing economy, where every multinational company wants to do business. "If you don't have flexibility to respond quickly to new markets or situations -- to make a pricing or flavor change -- it's very hard to compete against Chinese companies, which do react quickly and also have the advantage of much lower fixed costs," Mr. Rice says.

It also can be an operational nightmare when corporate bosses insist on centralized systems. An executive at an industrial-products concern spent months last year arguing with his bosses in the U.S. about an information-technology system they wanted to use globally that wasn't compatible with Chinese characters. They purchased the system, and he had to buy a separate IT system that his employees could actually use.

A manager at a consumer-products company wanted to reduce the package size of a product in order to lower the cost and attract more lower-income Chinese customers. He sent the request to his boss, the vice president of Asia operations, who sent it to the vice president of international, who in turn sent it to senior executives in the U.S. The request was approved, but by then five months had passed and a competitor already had launched a similar product in a small package.

Country managers who focus on what their superiors back home want may not pay close enough attention to local preferences and practices. That can be a fatal error, says Desmond Wong, Americas Coordinating Partner-China at Ernst & Young Americas. "Anyone who manages Chinese employees has to understand that they expect an extra month's pay at Chinese New Year, and if they don't get it, they'll try to find work elsewhere," he says.

Local hires also want assurance that their boss has the ear and respect of his or her boss. "So it's important to persuade top executives to visit China at least once a year," Mr. Wong says. "And if you tell employees before the visit that you want them to look good to the bosses, they'll go extra miles for you."

The most successful executives in China have autonomy, as well as access to corporate chiefs when they need it. Jack Q. Gao, vice president and regional director of Autodesk's operations in China, believes that "to grow in this market, which is so dynamic and unique, I need to be directly supported by top executives who can present one strategy to the government." China's government, he notes, not only sets economic policy but is the largest customer of Autodesk and many other multinational companies.

Since he took his current job two years ago, Mr. Gao, who oversees about 1,600 employees, has opened research-and-development centers in China to create software products tailored for Chinese customers. He also is partnering with local businesses to create new applications for AutoCAD, Autodesk's software design tool. "It's a new business model," he says, and it may help to offset software piracy.

Mr. Gao meets several times each year with Autodesk Chief Executive Carol Bartz, along with the company's chief operating officer, head of global sales and vice president of the Asia-Pacific region. The group, which is known as the China Initiative Steering Committee, is also available to confer about "anything unique or experimental I may want to try," he says, " and gives me a direct channel [to the top] for decision making." Unlike some of his counterparts at other multinational companies, he adds, "I don't have to spend all my time educating corporate executives about China."