Business Lessons from the First Lady’s China Visit

Michelle Obama's use of ‘guanxi’ can be employed by entrepreneurs

michelle obama clapping and smilingOn the heels of First Lady Michelle Obama’s weeklong visit to China, it’s a good time to look at what small business owners can learn about doing business in one of the world’s economic powerhouses. To that end, BE tapped Julia A. Wilson, CEO of Wilson Global Communications, a Washington, D.C.-based international public affairs consulting firm.

Wilson (Twitter: @JuliaWilson_DC), who will also serve as the moderator of BE’s ‘Doing Business Globally” session at the 2014 Black Enterprise Entrepreneurs Conference + Expo to be held May 14-17 in Columbus, points out that the First Lady’s style of relating to Chinese people on a personal basis and showing interest in Chinese culture is the Chinese art of ‘guanxi’ (Goo-ang-she). This is an art that applies strongly to business relationships as well. According to Wilson, who has spent considerable time doing business and living in China, the Chinese people appreciate ‘heartfelt’ relationship-building, or guanxi, –their concept of a deeper version of networking.

Here are some things to be aware of when looking to do business in China:

There are no “business deals,” in China, only “business relating.” The Chinese value relationships that are anchored in mutual trust and take two forms: trust with the head (one’s abilities, skills and knowledge); and trust with the heart (which involve emotional closeness, empathy and rapport). “Correlating both is essential to building a long-term business relationship. The second form of guanxi can challenge American businesspeople since we’re more accustomed to showing our competence to earn trust, but may find it time-consuming to develop the ‘heart-based’ trust, which sometimes can take years, says Wilson. “We can become impatient in an effort to ‘close’ a business deal,” according to our independent and sometimes, short timeline. The strength and longevity of relationships in China show trustworthiness, which take precedence over specific know-how in a business setting.”

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The Chinese value the continuity and reliability of the relationship over profits and sales figures. According to Wilson, while some US businesspeople understand that process here in the US, she says what’s different and central to learning guanxi is the fact that China is a group-oriented ‘community culture’ as opposed to America’s ‘individualism.’ “Within this concept, everyone takes responsibility for each other as part of a close-knit group of immediate and extended families and strong friendships built over many years, rather than each person only being responsible for his or her role,” she says. “In China, you are judged less on your individual merits and more on your personal qualities.”

Wilson also offers the following advice for American entrepreneurs looking to participate in a business culture based on lifelong business relationships and demonstrate ‘heartfelt’ trustworthiness:

Don’t Stereotype: When interacting with a potential client, make them feel that you are understanding them from a human perspective, and not merely stereotyping them. This is where doing your homework comes in handy. And if you don’t fully comprehend what someone is saying, ask for clarification. Ask “what do you mean by that?”

Learn the Language: While the Mandarin Chinese language is challenging, learning how to speak and understand it is often the gateway to entering Chinese culture. When you learn their language, you will gain a better understanding of Chinese thinking through communication. If you hire a translator for your interactions, keep in mind that the translator does not have the same stake in the relationship as you do. S/He is not trying to develop guanxi, you are. So, listening, observing and participating in Chinese language will give you a deeper understanding of the culture.

Do your Homework: If you’re hosting a presentation on your company in China, learn about the target markets’ needs and interests and hone in on how your products and/or services would enhance their industry. Once you demonstrate that you are willing to work with them where they are, the Chinese people will begin to open up.

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