Only by focusing on building relationships with your Chinese business partners will you achieve economic and cultural success in China. You have to develop real depth in your relationships. I believe this starts first by challenging your own assumptions and stepping outside your own frame of reference - and most of all listening. Listening leads to understanding and that leads to trust. --Ed Gilligan, Harvard Biz Weekly
Guanxi: Its the Relationship and More
Guanxi was among the words in our lexicon recently. As you are all trying to build new relationships in China, its time to unpack that word. It really is more than "relationship." Its about a particular kind of relationship.
Dr. Gallos shared a link to a short piece by Ed Gilligan yesterday that hints at the re-thinking we need to do when we consider the importance of relationships in business, in leadership, and in strategy. Reading the article left me wondering if we shouldn't apply the same ideas to all our business relationships and not just those in China.
Take the picture of Mr. Ming, above, who is showing his video camera to a group of rural middle school students from Sichuan Province. These are Yi kids from up in the highlands; our team was able to visit after two years of getting-to-know-you meetings, on and off, in Chengdu. Students of friends, colleagues of colleagues made the connections for us. And we'll be back--we aim to, and if we want our China practice to be sustainable we have to be back. That's because the guanxi we established in Sichuan runs all the way to Beijing and the National Academy of Social Sciences. Guanxi is no short-term networking meeting. It isn't speed-dating. Its a lot more than that.
So what about here in the USA? We need some re-thinking of what we mean by business relationships, and I think we should start using the word guanxi. Makes sense to me. Give the article a look!
This concept of guanxi is a nobel. Yet, it is a challening concept to fully appreciate its application in doing business with the Chinese.
ReplyDeleteThis parallels the video by Bissky in which he discusses that the Chinese view a contract as a relationship...a long term marriage. One that provides mutual benefit (and does not change partners)
As Americans, we are accustomed to drafting an agreement that is in our best interest first and then we try to find ways to convince the other party that this is good for them as well. This make sense to us...so why don't they just get on board? I can see this difference in philosophy being frustrating to both parties. The process likely takes longer to establish the contract and the basis of that agreement may not be bound by terms or timelines as we know it, but as a mutual relationship.
This understanding of the expectations of this relationship in business for the Chinese is an important step in establishing a solid guanxi foundation.
I don’t think shall romanticize guanxi. The fact is that guanxi is a significant problem in China today. So much so that the Chinese government on Sunday imposed stronger legislation to reduce the non-monetary corruption consisting on granting favors. The success of America is based on the Declaration of Independence stating that all men are created equal. Everyone shall have an equal opportunity to make it. Guanxi can easily take some of that away and create a network aristocracy. I would not be surprised if some years from now, when we analyze the current financial crisis, that we come to the conclusion that “American Guanxi” perhaps played a part.
ReplyDeleteRomanticizing guanxi would indeed be a mistake. It is also a significant mistake to conflate corruption and favors in exchange for contracts with the notion of relationship or obligation.
ReplyDeleteI believe that obligation is a driving force, even in obtaining an MBA or operating a business, and even for cellular biologists and anthropologists.
That is not to say that guanxi is everywhere.
In fact, I agree that the current financial crisis may be the result of something American, but it seems to me that a lack of guanxi between the Masters of the Universe in the banking and securities trading worlds and ordinary mortals may be more to blame than the presence of American guanxi per se.
Just my two cents. Thanks for reading, thinking, and commenting!
Sticking with the financial crisis. It is my belief that the global business structure and portals for communication will strengthen and become more abundant. Transparency will reign due to the masses demanding it. This "event" has made virtually everyone realize that we are all interconnected and that it will take guanxi and the resurgence of true leadership coupled with open global communication and realignment of global goals for everyone to have success. No longer can individual countries survive alone. This crisis has brought to light our inter dependencies and now is the time to support and build upon them not destroy or leave them in dismay. Guanxi is a great thing and should be respected, built upon and learned from for better international relations.
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