The Sink or Swim Approach to Managing Foreign Operations

By William R. Dodson

7 April 2003

 

“So, will you be joining the new group?” I asked my Chinese friend. He had just told me excitedly how his Fortune 100 manufacturing company had finally designated a person to head up the Asia market operations for his company. The new hire would be posted in Shanghai. My friend – call him Tao – had been looking for ways for quite a long time to return to China through a company-sponsored transfer. I thought this was the opportunity he was looking for.

 

“It sounds like a great opening,” I opined.

 

“No,” Tao said emphatically.

 

I was surprised. He had just returned from a holiday in China visiting his relatives and friends, and waxing enthusiastically about all the things he missed – and didn’t miss – about his home country. Instead, it sounded as though he wanted just the opposite of what he had been promoting for years.

 

“There is no group,” he said dryly. “There’s only this guy they hired.”

 

“To handle the whole Asia market,” I intoned.

 

“Yes. And that market is 20% of the company’s revenues.”

 

Tao went on to tell me how the company had gone into the Asian market because it felt it had to. There were automobiles there, after all, and they would need the kind of components the company made. Asian company representatives had been reporting to the Controller’s office in the Midwest United States. The Controller hadn’t wanted to move to Asia. Tao told me the Asian representatives were frustrated at the lack of attention and communications they were receiving from the Corporate Headquarters. Indeed, there were times when the Controller would hang up on the Asian managers or not even return their phone calls, because he “couldn’t understand what they were saying.”

 

Finally, though, with the rapid expansion of the Chinese market, the company could no longer ignore the fact they needed a Headquarters representative in China. The new representative would also address the management needs of the rest of Asia.

 

“I’m not going to join the group because the new guy’s got no support.” The new guy was Chinese, educated at blue chip universities in the U.S., and having worked for a blue-chip consultancy in Shanghai. Now, he would be returning to Shanghai and the sole manager and salesperson for the entire Asia Pacific region, responsible for sales of several billion dollars. “I don’t think the guy understood that point very well when he took the job.”

 

Tao felt it would be in his best interest to stay as far away from the new guy as he could. He wasn’t very confident the new manager would succeed; or, in the least, it would all be an ungodly amount of work.

 

“Have you heard the expression ‘Sink or Swim?’ I asked Tao. He told me he hadn’t. “That’s very much the American Way when it comes to new business initiatives. I think it goes back to our pioneering roots; when Americans went out alone to make new homes. There was no one to support them when they had to find the new place, cut the trees, plow the land, fight the Indians. We call it ‘Sink or Swim:’ you get thrown into deep water, and you either learn how to swim or you sink to the bottom.”

 

Tao acknowledged it seemed to him that was what was happening in his company. “You know,” he added, “our company’s managers don’t mind going to Europe. They love to have an office there. It’s even one of the benefits for senior managers – time spent in a European office.”

 

We both laughed at the simple, plain fact that Americans were more comfortable in European settings than in Asian. And why not: most managers are of European descent, and at least look like most European citizens. They may look awkward at a Parisian café, but at least their crimes against culture are not as obvious.

 

For his part, Tao was disappointed at the lack of commitment his company was showing for the most vibrant region of the global market. He put it down to the observation that the CEO of the company had only a couple more years until retirement and so had no interest in what he saw as risky ventures. Tao was genuinely concerned for the future of the company – and for his own future at a company that would risk its position in the global markets, and risk losing a bright, energetic employee like himself.

 

William R. Dodson is Managing Director of Silk Road Advisors, L.L.C., a market research and business development consultancy that advises companies on how to enter and succeed in international markets. He is the contributing editor on international business to the American Management Association’s (AMA) MWorld Journal of Management, and writes the column “The Cultured Business”, found at www.silkrc.com and at the Global Perspectives section of the AMA’s member website. He can be reached at sradvisors@gmail.com or +1 (847)722-7817.