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US vs. China - a very German Point of View

For many years my father worked for a company being German in their essence. He was a broker for technical insurances. He had projects like the aerial cableway in Wuppertal, the A45 motorway ('Siegerland-Linie') or power plants like the Lausward plant in Düsseldorf. When the company was acquired by March the internal culture changed completely and he was happy to be able to retire shortly after. From his point of view the new American shareholders never understood the German business - and the existing German management surely did not accept their management style.
Maybe because I was much younger, I never had a problem with the reporting structure of an US company being traded on the Nasdaq stock exchange. I learned to receive quarterly goals and to report in quarters. In the beginning I was impressed by emergency calls of my boss, one week before the quarter ends. The only real message of the call was the division of the revenue missing to achieve the quarterly goal by the number of days or hours left. A calculation that usually was not very helpful. The pressure was increased day by day. The day after the quarter ended, all business again was as usual and most of the time he proudly gave me some pat on my back, knowing that after overdoing at the quarter end, he now has to do something that I still feel well in this company.
After a while an experienced sales representative learns how to handle such pressure. I learned that it is the job of a good sales rep to provide excellent reporting throughout the whole quarter, so that my boss could never have wrong expectations regarding the quarter end. Never forecast a project to be closed on March 31st. Even if you are sure to do so, your report will have to promise it to be closed in April. If it comes in March everybody will be happy and nobody will ever complain about missing exactness of your reporting. And if not - nobody has the right to complain as you did not promise too much - and until the end of the next quarter, nobody will ask too much.
On the other side this behaviour prevented situations as they happened to some of my collegues. They previously received some feedback from their clients and based on that they forecasted a deal to be closed before March 31st. Due to internal reasons the client then was not ready to decide. The boss forced my collegues to go to the client and ask for the deal. Do you think asking a client to order when he is not ready to do so will be successful and good to strengthen your relationship with that client? Surely not. So they took some risk to damage the previously good relationship with that client and returned unsuccessfully to the office. The boss asked them to sell the goods to a distributor or reseller, promising some extra discount for stocking. In the end the vendor lost some percents of his margin - only because a deal was promised and had to come in that particular quarter.
US companies tend to pay a sales rep mostly on success; some base salary plus a huge commission. This enables people to earn really good and can make sales organizations extremely expensive. A good German sales rep working for an US IT company earns 50-70k per year as base salary plus another 80k commission (split into quarterly quotas) - if he reaches his goals. A US sales director would never consider to pay a salesmanager mostly on a fixed basis. He would always believe that the sales rep should share his quarterly pressure.
This quarter based behaviour puts pressure to an organization and occasionally it helps to make lazy people work a bit harder. But often it does not help much. And I only learned how to protect my clients and prospects from my bosses desires. And the better I achieved my goals, the easier this became.
It took until I founded SELLto.DE to work for a Chinese company. In the beginning everything was very strange and communication often was extremely difficult. But the more I worked with Chinese managers the more I payed respect for their completely different management style. I became impressed by the non-interchangeable and efficient way. They are greedy for western MBA titles - but they do not become evangelized by that. The Chinese managers I worked with, are extremely goal oriented and think business.
Chinese managers plan in medium and long periods. This makes a difference. There are not many US managers thinking in 5 or 10 years epochs. And they act very strategic. Example given Huawei, the telco supplier. After their  first success on the local market they started to sell into emerging markets. After they achieved that goal, they successfully started to sell into the industrialized countries. And it was a 10 years development.
Chinese Managers are really willing to learn. And they are willing to contest existing behaviour and to correct it if applicable. Decisions are more likely developed in teams and not made by a single person.
I never was forced to close a deal only because a quarter ends. Instead they want to be involved all the time. They discuss every 'letter of understanding' that I send to my client after a meeting. The deal micromanagement is impressing. They want to learn about the client's expectations, concerns and decision criterias. But if the message is that there is a good reason why it will take until June to receive the order they never complained and expected me to ask for the business in March. They also see some advantage of predictable costs instead of the high sales commissions. Sales managers start to become more a team player.
I learned a lot from copying US methodologies and it worked because I was working for US companies. Learning from China does not mean that we simply copy what they do. This would not work. China will not become Western by simply sending their managers to western business schools. And we will not become Chinese by learning from Chinese managers. But both will help us to improve our management styles - and to better understand and work with each other, as business is global in our days.

Hans-Peter Brill

Hans-Peter Brill

writes about his opinion, observations and analysis on the IT, the German market and the offshoring business.

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