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Thursday, October 12, 2006

The right leadership model for Chinese start-ups

I read Helen Wang's post on innovation and leadership as presented at the HYSTA conference which I missed because I was too jet-lagged and tired from my 40 meetings in 15 days in China. One question I'm interested in is: "What is the right leadership model for Chinese venture-backed start-ups?" First of all, I should preface it by saying that there are many different roads to the same destination, and its difficult (especially in China) to come up with generalizations.

Here's part of the comment I added to her post:

Differences between China and US that drive differences in the right leadership model

1. Pre-legal environment
In general, China has a much less predictable legal environment. Its much easier to take intellectual property from your employer and start a competing company, without the company really having any legal recourse. That is why I think many traditional Chinese leaders have held know-how, customer relationships, etc. very very close to the vest, to insure employees are dependent on them. I think this is rational, but needs to be coupled with the habits of a Western, collaborative environment in order to generate better team based results.

2. individual vs. team. I've heard from Chinese CEOs that employees are much better at individual competition than cooperation as a team. One theory (I think from James McGregor) is that the Chinese education system is examination based, and there is a much lower focus on team sports and other extracurricular activities that Americans are exposed to early on. Young Chinese employees want to learn, and are very open to Western management style, but need to be provided the training.

3. Communication. There seems to be an opportunity for leaders to coach team members and employees on communication, both inside and outside the company. This is related to the team point above.

4. Hierarchical. Possibly related to the educational system point above, traditional Chinese businesses are much more hierarchical. Therefore, people expect to take direction in a corporate environment. Is being an open, collaborative leader interpreted as a sign of weakness, rather than strength? On the other hand, I've also heard returnee CEOs say that managing people in China is easier because people take direction!

5. Training and education. One similarity is that people want to feel invested in. I think a rich set of training/education tactics, and habits of identifying high-retention people and investing in them, is highly valued in China.

Anyway, this is not really a robust model, but just a start. Maybe I can convince some of my CEO friends to share some of their secrets (though this is harder in China than in the US ;) I'll keep noodling on this and I think the model will get better and better with some good collaborators...

2 comments:

Helen Wang said...

Elliot,

Thank you for your comment. You have very good points. I agree training and education, coupled with local know-how, are the key to grow business leaders in China. In particular, I see the local know-how is very critical for businesses to navigate through the unpredictable legal environment. As you mentioned, communication and team-building are also important. There definitely exists a need for coaching.

Because there are many copy-cat competitions, I believe China is more an execution play rather than technology play (from VC investment point of view).

Would love to get together for coffee or lunch to hear more about what you learned in China.

elliott said...

Thanks Helen. These are some insightful comments. As I said, I know there is no single answer. I hope to engage some talented leaders/CEOs in China in this conversation to share their learnings with us.

Look forward to meeting over lunch and hearing about your startup!