This is the third in a series of eight real world examples of how western companies became aware that their ‘man’ in China was on the take.
In this series of “Eight Signs,” I suggest that you keep an eye out for behaviors and circumstances that could indicate that something is amiss in your organization.
Please treat these items as caution lights of potential trouble, not proof of wrongdoing. If you notice several signs adding up, you should begin to be even more vigilant, giving everything a second look.
So. Here’s another item to add to your checklist. Again, a positive indication here doesn’t prove fraud but means that you might have something worth investigating. This time, it involves language. Your man is the only English speaker in the operation or the only one you ever really have any in-depth communication with in China.
How in the world…
I know, I know, how does this possibly present a threat to the company’s China operations?!
Good question. And the answer? Well, it doesn’t necessarily, but it might. Here’s why I say that. If this is true for your company, and it is for a surprising number of western companies in China, and especially smaller companies in the early stages, it can lead to a situation where you are totally dependent on one person for everything related to the operation. That’s not a good practice anywhere, but in China, it is particularly dangerous because the law is written in a way to exacerbate the problem.
“General Manager” is not just a title, it’s a legal designation that confers a great deal of authority to the person holding it. If you want to invite trouble, make it clear that your top manager can hand-feed you whatever information /intelligence he likes, filtered solely through his eyes.
I know of several cases, where the General Manager deliberately hired only non-English speaking subordinates, ensuring that he would remain the CEO’s sole source of information received by HQ about ‘his’ operation. This gave him total control over his subordinates and their loyalty, and the news his superiors received, and of course he used that to his advantage, not the company’s.
Precautions you can take
The simple general rule is: single sources of information are risky. Make sure you have more than one source for English language data, information, news, and opinions – about your operation in China, about the sector, the economy, the market, the regs, the competition, etc. Cross-check what you learn using as many of your sources as you can.
The most successful International operators I’ve seen in China make it clear from the outset that new hires at senior and mid-level will be English speakers expected to communicate with US-based counterparts regularly. Then they weave into the fabric of their day-to-day operations lots and lots of opportunity and necessity for multiple, routine and special conversations and interactions at different levels and between different levels of their companies; between different geographies and functions; formal and informal; by phone, email, and in person; one-on-one and in groups.
Do the same. Over communicate. And in as many different ways as you can. You’d be amazed at what conversations take place over dinner, beers, etc. as opposed to formal settings such as management meetings. And in one-on-one settings. Don’t expect forthcoming, self-initiated revelations; they don’t happen in China.
So. Who are the English speakers in your China operations? Is it only the top man, or is it several of his subordinates? Can you characterize the communication web between the US and your China business as robust, thick with conversation, every day, week, month? If so, that’s great, you can thankfully skip this tick in the box.
If not, if you are really only able to speak to one or two people in the organization, one of whom reports to, or was hired by the other, then tick the box and let’s move on to the next item. You really don’t know what you’re dealing with…