Tuesday, August 10, 2010

Get your picture taken with an American

Where to start...? I learned a tremendous amount during our week abroad, but I suppose my preconceived notions of what to expect prior to the trip would be a good place to begin.

Before leaving for China: I envisioned a lot of people, weird and tasty food, smog, and some interesting old buildings with historic significance.

What I learned in China: There's a lot of people, the food is great (in moderation), smog does exist, and foot massages rule!

Kidding. The learning experience commenced as soon as we stepped off the plane in the incredible Beijing Airport. As we scampered through customs an interesting sign greeted us and served as a friendly reminder that we were "not in Kansas anymore".

Shortly after arriving in the hotel a small group of us ventured out to sample the local cuisine. We first came to the street with all of those "snacks", but we kept walking. Charles found a great place and we had a terrific meal that Saturday night. Sunday was also enjoyable with all of the sight seeing.

Monday's presentations went well, but I still hadn't gained an understanding of the real differences in doing business in China versus the US. For me that moment came during our discussion on the bus ride back from the B&Q store. In that discussion it became so clear to me that retail in China is nothing like retail in the US.

  • Store Design: A two-story home improvement store? This is unheard of in the US...and apparently it wasn't working well in China either.

  • Transportation: "I don't think this refrigerator will fit in the basket I have on my bike...do you offer delivery?"

  • Staffing: It might be fair to say that there were more employees than customers in the store that Tuesday morning when we were there. US stores tend to have far fewer people out on the floor.

  • Pricing: "You mean you won't knock 30% off of the sticker price? I'm out of here..."

  • Products: Don't even try to start a business selling ovens in Asia...they don't bake, period!

In all seriousness, these were excellent observations by the class because it showed such a direct link between culture and business. These observations don't just apply to B&Q, or even retail in general, they apply to all businesses. I came away from this discussion with a new appreciation and understanding of how culture dictates how businesses function (or is it vice-versa?). I recall this as the most educational portion of the trip.

The most interesting visit of the trip for me, however, was the presentation by Joerg Wuttke of BASF. During the hour-long discussion I managed to fill four complete notebook pages! I believe most of the class was impressed with his level of knowledge about economics in China and the World, and what the future holds. What an excellent presentation for a group of MBA students to experience.

The last visit I'd like to highlight is the trip to the Lenovo manufacturing site. Working in manufacturing for my whole career, I was immediately struck by how many employees they had working in such a small space. In the US, businesses simply cannot operate this way because labor is far to costly...a PC would cost $10K! Instead, we implement more and more automation to reduce head count. This observation prompted a question that I posed to Jack Perkowski during his presentation. I asked what he would recommend to a US company opening a manufacturing operation in China. Specifically, should a US manufacturer with lean operations and a high level of automation use the same approach in China. Jack's response was that he would not recommend that, but rather conduct the operation the way the Chinese would (more people, less machines). His answer shocked me...I would never even imagined that this concept would be one that could influence the success of a new business in China.

All in all, I firmly believe the trip was successful in meeting its objectives. Regardless of what was listed on the syllabus my take is that we were expected to experience and learn the culture, understand the differences in doing business in other parts of the world, and continue to build relationships within the group (make friends). I'm 100% satisfied in all of those aspects, especially the making friends part (karaoke anyone?).

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