Yesterday I had the privilege of visiting the beautiful campus of Tongji University in Shanghai where I was a speaker at a workshop on innovation and managing R&D in China. This international event was organized by a highly respected expert in global R&D management, Dr. Max von Zedtwitz, founder of GLORAD, a firm that helps companies with their R&D management issues and some of the toughest challenges of global R&D organizations. After the workshop, I had a very kind tour from a Chinese professor of the beautiful campus and the world-renowned MBA program, ranked by the Financial Times as one of the top 50 in the world.
In my remarks, I briefly touched upon what may be the biggest barrier to successful innovation and research in China: retention of talent. Indeed, companies requiring highly skilled employees repeatedly find turnover to be one of their greatest challenges. Employees gain a few months of years of experience and finally get trained to do the work you need them to do, and then they jump to somewhere else for higher pay. Large multinational companies may be viewed, for example, as good places to get trained for career advancement, resulting in those companies essentially providing training for competitors here.
There are no easy solutions to this problem, which is a challenge in most nations. But managers of skilled employees need to realize that especially in China, the guanxi or relationship between the worker and the company, or especially between the worker and the supervisor, will be an important factor. If the employee feels a sense of loyalty to the supervisor and the company, and feels that he or she is being cared for and nurtured in his or her career, the temptation to leave will be reduced, and the desire to look elsewhere may be largely forestalled.
Many things can contribute to a healthy relationship that keeps Chinese employees on your side. Managers need a great deal of training in some cases in order to be more helpful to their employees and build the respect and trust that is essentially for good guanxi. Authoritarian attitudes aren’t helpful for retention, though they can result in fast short-term results. Kindness and respect, shown in many ways, can bring out the best from employees and motivate innovators to share their best work. Good team-building events and extra-curricular activities can help, though sometimes they become viewed as a burden employees are expected to shoulder on their own time. Avoid eating into employees free time with mandatory events.
Here’s on often overlooked issue for Western-owned companies: Corporate cafeterias in Asia, if available, should have really good food. I’ve seen corporate sites with good food and noticed that the employees mention it frequently, and a site with just OK food which the employees also mention frequently. The place with the lower quality cooking has much higher turnover. Might just be a coincidence, but upgrading a cafeteria ought to be a priority for anyplace struggling with retention. If you’re in an urban setting without a need for a cafeteria, try some creative ways to make good local food affordable and readily available from time to time. If you keep food in mind as a motivator, your efforts may strike some important targets.
Western managers must be especially aware of Chinese attitudes, including the role of guanxi, the importance of family relationships, natural hesitancy in speaking out or challenging management even when truly needed, etc. Western managers really need a close relationship with key locals who can help them be aware of the feelings and concerns of team members and provide guidance in building rather than eroding relationships.
Around the world, the ways things really get done is through relationships, through guanxi. But understanding the special importance of that concept in China can help companies here find more success in innovation and new product development by retaining their star employees. And those stars can use their own network to reach out and find other stars as well. Guanxi again, not job boards, is the key to finding the right talent in the first place.