Change management: Why can’t China and the Chinese win with our companies?

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LONDON — It’s a funny old world we live in. The Chinese state aluminium giant Chinalco just failed in its quite generous attempt to help Anglo-Australian Rio Tinto out of a massive great hole. And where do we go to see the sense of remorse? Not to this ‘management’ section of the website. Although the website has been jazzed up recently… there is no noticeable sign of personality. And business stories these days are increasingly personal interest stories.

It’s been a bad run for China and its various state enterprises.

In 2005 the China National Offshore Oil Corp. (CNOOC) tried to buy the California petrol business Unocal from Chevron. All was agreed with everyone who needed to know. Except the politicians got involved:

“As the world energy landscape shifts, we believe that it is critical to understand the implications for American interests and most especially, the threat posed by China’s governmental pursuit of world energy resources.”

…say some geniuses in the US Congress.

The deal dies. A Congressman again crows that the failure is:

“…good news for the free market”

An analyst says about the Chinese business:

“They had no game plan. I don’t know if they had bad advice or did not listen or if the bureaucracy just couldn’t move fast enough. CNOOC is at a disadvantage in a fast-paced market.”

Whatever it was, it’s not good, is it?

Same goes for the Haier Group’s bid for the Maytag Corporation the same year.

Only the Lenovo purchase of IBM’s computer business stands out as a deal that has gone through. But now that the IBM brand is being rolled back and Lenovo is coming through, what has happened to the brand?

Lenovo reports fourth quarter loss

Ouch.

Not surprising then that news that Sichuan Tengzhong Heavy Industrial Machinery Co. will buy GM’s Hummer has been met with scepticism… even in China.

What is China missing? I am not close enough to know with any real certainty. I know the Chinese are well served by western bankers (they’ve even invested in a few). They have investor relations teams in the west too. But I have a few suggestions of what they might be missing.

1. A process and plan for change management, stakeholder relations and communications.

2. A single, simple set of messages for their organisational communications.

3. A group of people (Chinese or not) with the skills and tools who are able and ready to talk on their behalf.

4. The ability to get on the front foot with the questions that you just know the western media and politicians are going to ask.

There is no doubt in my mind but that the Chinese will change the global rules of business in the decades to come. It may not even be gradual, and it will definitely be shocking to many people in business. But today there is still some work to do. China must learn how to take better advantage of the rules on the pitch that they’re visiting.

/df



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