Monday, October 14, 2013

Top 10 Ways of Building Guanxi

Creating and managing guānxí is enormously important for anyone doing business with the Chinese, but given the complexity of doing so, it’s small wonder that most Westerners find the entire concept immensely frustrating.  Knowing what guānxí is in an academic way is one thing; knowing what to do about it in the real world is quite another.  Luckily, the basics are fairly easy to master, and the Chinese tend to give great credit to foreigners for trying. 

The basics of good guānxí are dependability, trustworthiness and respect.  The emphasis on dependability is related to China’s fast-changing environment (it’s hard to depend on things that change every day) and Chinese people’s feelings about the rule of law (they’re not sure it actually works in their world).  Creating certainty in an uncertain world is worth a lot to Chinese people. On the other hand, this is exactly the aspect of guānxí that takes the most time to establish.  The value of trustworthiness is also related to the rule of law – when you can’t rely on courts or the law to protect you from getting cheated, being able to trust someone becomes enormously important.  This is an area where Westerners actually have an advantage over other Chinese people, because Chinese people tend to believe that Westerners follow the rules.  Clearly that’s not always the case, but the Chinese recognize that rule-following is more of a cultural norm in the West than in China, and consequently it usually takes less time for them to establish that a Westerner is trustworthy than that a Chinese person is.  Respect is related to the incredibly  important Chinese concept of face.  Although face can be complicated, people usually know when you respect them and when you don’t, so it doesn’t take special skills or a long time to demonstrate appropriate respect to a Chinese partner.  Being dependable, trustworthy and respectful will go a long way towards establishing good guānxí with your Chinese counterpart.

As a practical matter, the following are ten of the top ways for establishing, managing and improving guānxí.

10.  Playing golf.  Chinese people LOVE to play golf and view it as a great time to get to know one another.  It also carries an air of sophistication and exotic luxury, which goes down well with most Chinese business people.

9.  Doing favors.  Probably the most basic and universal way of forging relationships, doing favors is nevertheless often underappreciated as a method of building guānxí.  With Chinese people doing business outside of China or with foreigners in China, the opportunities to do favors and provide help are usually significant.

8.  Paying compliments.  Especially in public, paying compliments to a Chinese counterpart is a powerful way of demonstrating respect and giving face.  No one likes insincerity, but honest compliments openly given build a lot of goodwill with Chinese people.

7.  Making introductions.  Like doing favors, making introductions is usually an easy and deeply appreciated way of helping a Chinese colleague.  In the same way that most Westerners don’t know many people in China, Chinese people usually don’t have deep contacts in the West.  Pointing them in the direction of the right contact can win big points.

6.  Being aware of who’s who.  Knowing who’s who works on two levels.  First, although lots of people struggle to distinguish individuals within a different racial group (they all look alike to me), nothing is more insulting than NOT being able to tell one person from another.  Most Chinese people have an English name that they use with foreigners.  At least learn to distinguish among your Chinese colleagues.  Second, knowing who’s friends with whom will make it easier to navigate the guānxí network you’re trying to build.  Second order relationships matter a lot in the context of guānxí.

5.  Inviting them to your home.  In almost any culture, inviting someone to your home is a sign of trust and intimacy.  Doing so with the Chinese helps give them a better idea of who you really are (establishing trustworthiness) and shows them respect.  In addition, Chinese people often don’t have many Western friends and they are curious about the details of Western people’s lives.  Inviting someone to your home helps answer a lot of questions for the Chinese.

4.  Accepting an invitation.  You should always accept invitations by Chinese people, as this serves many of the same purposes as inviting them to your house.  Declining such an invitation is at least wasting an opportunity to build guānxí and can sometimes be seen as rude or standoffish. 

3.  Giving gifts.  As with doing favors, giving gifts is an age-old way of building and strengthening guānxí.  In Chinese culture, there are rules around gift giving that should be observed, but in general, Chinese people appreciate gifts in the spirit in which they are given, and gift giving is often a key way of improving ties with someone.

2.  Drinking together.  For Chinese people, drinking together carries more importance than in the West, where it is most often used as a way of showing hospitality and of lubricating social interactions.  Additionally for the Chinese, an important aspect is the lowering of inhibitions and the insight it gives them into what people are “really thinking.”  For them, the unguarded comments people make while drinking are important clues about how those people really feel and how they are likely to act under pressure.  In vino veritas isn’t just a catchy aphorism for the Chinese, it’s an important tool in vetting people and developing guānxí.

1.  Spending time.  The great inescapable requirement of building guānxí is spending time.  Long meetings, golf games and nights spent drinking together over a period of weeks, months or years is the price to be paid for creating strong and lasting relationships with your Chinese colleagues.  It cannot be done over a few dinners together in the course of a one week trip to Beijing.  It takes time.  Lots of time.

While following these steps won’t solve all your guānxí-related problems, they’re a good start.  Investing the time and energy needed to build guānxí pays huge dividends when doing business with the Chinese.

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