China’s rise as a global economic superpower has meant that many of the country’s fledgling businesses have quickly graduated from being purely domestic or regional players to occupy a role on the world stage. As this has happened, many have come to look, sound and act like their longer-established counterparts in the West.
Yet in one key area – their approach to talent management – the great majority still remain resolutely Chinese.
"Most Chinese companies remain driven by a single individual at the top, usually the owner or appointed CEO," said Ryan Owen, a partner at the Shanghai office of Antal, an international management recruiter. "The ‘one kingdom, one ruler’ policy is essentially the same today as it has been for 500 years."
In essence this means that, despite its growing economic importance, China is increasingly out of step with much of the rest of the business world. In major Western corporations the concept of the leader as commander has been largely discredited, and may have been finally buried altogether by the failure in leadership which led to the global economic crisis. Instead, organizations seek to enhance the efficiency of the whole corporate machine rather than focusing on the few individuals who might appear to operate it.
Consequently, there has been a shift in emphasis on to front-line managers – the group that the talent management specialist Ochre House has called "the magnificent middle."
Up with the middle guy
Academic and author Henry Mintzberg, who teaches at the Desautels Faculty of Management at McGill University in Canada, has long argued that the managerial role is often over-idealized as detached planning and strategizing. However, in reality the most productive work is done by individuals dealing with small actions, opportunities and challenges on a day-to-day basis – namely middle managers.
The key to success, therefore, is to ensure middle and senior management remain effectively connected: "Middle management can be more in touch with the details, but, with a disconnected senior management, middle managers get pressures from the hierarchy that make it very hard for them to manage at their own level," Mintzberg said.
According to Jorgen Thorsell of Mannaz, an international leadership development institute, this means that to be as competitive as possible in the global arena, Chinese companies must accept that middle managers need to be freed from a "command and control" structure and educated to become leaders in their own right.
"Underneath the surface, Chinese organizations are actually less autocratic than they may first appear," he said. "Despite the strict hierarchical structure, there is more in the way of consultation and sharing than one might expect." Thorsell argues that, if handled with cultural sensitivity, this could be the starting point for the development of a more flexibleand internationally competitive model of management.
Pace of change
At the China Europe Institute at Nyenrode Business School in the Netherlands, Professor Haico Ebbers echoes the need for cultural sensitivity in bringing about this change. "China is not the West and some of the tools that Western organizations use to alter behavior would be unlikely to work in Chinese organizations right now," he said.
He also questioned how quickly the changes could be made; granting inexperienced middle managers too much latitude too quickly could backfire.
"While many of them might welcome it, it would be important to build checks and balances into the system because on the whole these are not people who are used to flagging up when something is not working or is going wrong, and they’re not used to strategic thinking," Ebbers said. "There is still a prevalent attitude that one can deal with a problem when it arises rather than looking for ways to stop it happening in the first place."
Given its complex nature, one radical solution to the challenge of unleashing the potential of China’s middle managers may lie in the approach of three of the world’s top entrepreneurial business schools: France’s EM Lyon, Babson in the USA and Zhejiang University in China itself. The three schools have banded together to create a Global Entrepreneurship program which exposes young professionals to the diverse business markets and methodologies in the host countries. It has attracted a high proportion of students from China.
"Working in completely international teams, the participants get to understand the potential of the entrepreneurial spirit, not just in small start-ups but also within the very largest organizations," said Patrice Houdayer, dean of EM Lyon. "Not only does this give them… an ability to use freedom within the workplace, but it also helps show them how to work with their peers in the wider world."