Is American Talent Getting Payback From Chinese Executives?

Kris Dunn Candidate Pool, Culture, Joshua Letourneau, Recruiting

The more time I spend in the dimly lit corners of the global Executive Search sector, the more I learn about how the global business world ‘really works’. I’m sure you know what I mean – how things really work include the little things (in some cases, big things) that we so often overlook or blindly accept with the age old mantra, “Get used to it — That’s just how it is.”

However, in my particular line of work, I also often run into new phenomena that largely goes unnoticedManchurian by 99.9% of professionals, unless they find themselves operating within certain finitely small circles of the global biz world . . . and/or the more likely situation — they happen to overhear an unusual comment in passing that causes them to take pause and raise a single eyebrow.

Maybe you’re one of those people . . . or maybe you simply enjoy keeping up with unusual business ‘goings-on’ . . . in either case, consider MNCs’ that meet the following criteria:

1. A non-U.S. based Corporate Headquarters. (Ah, yes, the MNC without the ivory and gold HQ on U.S. soil.)

2. China-Executives playing a major role in the hiring decision. (‘China-Executives’, in this case, refers to those Execs born and raised on Chinese soil.)

(Note that the MNC’s Corp HQ may not itself be based in China, however China is certainly a recurring theme. Why? Frankly, because China can’t be ignored – a population of over 3 billion represents market opportunities that most businesspeople can’t even begin to fathom. With growth rates relatively stagnant here in the U.S., it’s no surprise that MNCs’ are investing heavily in the Chinese consumer market.)

So, this is why it matters, and here’s what I’m seeing on the street: China-Execs are now getting even with their U.S.-Exec counterparts when it comes to Upper Management hiring decisions. When I say that, let me be specific in what I’m suggesting: I am seeing an increased rate of China-Execs disqualifying U.S.-Execs and instead selecting China-Exec expatriate candidates to run business units here in North America. I can count 7 different searches I’ve worked within the last year where U.S.-Exec candidates (both internal and external) were turned down in lieu of a China-Exec expatriate candidate (yes, internal and external China-Exec candidates alike).

At first, I chalked the initial occurrence up as some kind of oddity — that is, until it happened again . . . and again. After around the 3rd time, I knew something else was going on and decided to subtly start asking the questions that would hopefully lead me closer to answers. Here is the short-list of what I’ve learned (in no particular order):

1. The level of U.S.-Exec expatriates that used to be commonplace in China (through the late 1990’s and early 2000s’) left a bad taste in the mouths of China-Execs. They felt we were taking their jobs . . . which created a slow-brewing resentment that is surfacing its ugly head today.

2. The brand of the U.S.-Exec is associated with negative perceptions resulting from the well-documented U.S.-Exec expatriate failure rate of between 30% – 80% in China, depending on sector. (Anyone remember Colonel Sanders’ KFC tag line “Finger-Lickin’ Good” being mistranslated to “Eat Your Fingers Off” in Chinese characters?)

3. The brewing Cold War between the U.S. and China is resulting in a growing level of animosity and non-collaboration in most MNCs’. (From what I’ve gathered, U.S.-Execs aren’t normally on China-Execs holiday mailing lists, regardless if they work for the same company or not.)

4. Our current administration’s foreign policy seems to have branded U.S.-Execs as “American Cowboys” (i.e. non-calculated, ethnocentric, “shoot from the hip” types in the mind of China-Execs.)

5. The rising price of oil has made U.S.-Execs look as if they have no control over their own Cost-of-Goods-Sold (COGS). At the Exec-level, recent financial performance is an often-cited reason for candidate disqualification. (i.e. “The revenues and margins of your current organization have declined steadily over the last 24 months, yet you’re telling me about how you can improve this organization’s performance instead?”)

6. Hiring decisions are being distorted by China-Exec pride. (i.e. “The U.S. market is nothing compared to that of the Great Dragon!”, and “Looks like the tables have now turned, Mr. Little Eagle.”)

7. China-Execs embrace a more autocratic style of workforce management and are not yet appreciative of a more democratic approach. (To a degree, this is fairly predictable given an economy with a rapidly expanding middle class. Anyone remember Henry Ford’s comment during our own Industrialization Era, “Why, when I only want to hire a pair of hands, do I get a whole person?”)

I’m not at all suggesting that this phenomenon won’t normalize, surely it will. However, my question is how long it will take and how far-reaching it may become before we begin to see a significant trend reversal. The true irony here is that U.S. based organizations with Corp HQs’ here in the U.S. have learned that the expat failure rate can range from 30% to 80% . . . normally linked to a lack of cultural understanding. That being said, have China-Execs learned from this and taken it into account? Or is it now their time to bask in the sun and repay the favor?

Perhaps (to a degree) it’s relative to the situation at hand as each case is unique, but through the eyes of a global Headhunter, I’m seeing much more of the latter . . . and I believe this trend will escalate a while longer before we see a break on the horizon. For what it’s worth, I hope I’m wrong.