Integrate Chinese and Western Sales Strategies w/ Francis Kremer

[Music] Hello and welcome to the International Trade Resource Podcast, where we explore the latest trends and developments in global trade. In today's episode, we will be discussing the integration of Chinese and Western business strategies, a topic that has become increasingly important as China's role in the global economy continues to grow. Our guest is Francis Kramer, an expert in international business and trade. We'll share his insights on this topic. So sit back, relax, and let's dive into the world of international trade. Hello listeners. This is another episode of the International Trade Resources Podcast, and I am beyond excited to have my friend, Francis Kramer, who is also a podcast host of China Flex Pat. He's interviewed me in the past, so you can go to his website, go on LinkedIn, and look for him and the China Flex Pat podcast, and listen to all of the fantastic episodes, you know, including mine, should you choose. Francis is in China, has been in China for about six years now. He's currently the Sales and Marketing Director for Julie Automotive, which is a electric vehicle motor company. And I invited him on here today because he and I have had conversations about managing teams in China selling domestic customers versus foreign customers. So what we really wanted to talk about was selling automotive customers in China and being an ex-pad in a domestic company. So welcome Francis. Thank you so much. We're really glad to have you today. Thank you, Kim, for having me. And it was episode 72 in the China Flex Pat podcast. There was a fantastic episode about leadership and supply chain management in China. Wonderful. Thank you. Yeah, it was really good. Okay. So what we want to start with our listeners who don't know you is how did you find a job working in China, especially for a domestic company, a Chinese owned company? Can you tell us a little bit about that? This is my second job in China. So I started my career in 2007 in Germany and then when I was in my 30s, I had this now or never feeling. So I had the feeling, okay, I can go on like this in Germany or I can go to China now, but if I don't go now, I probably will never. So I found one job and this was a typical not typical expert job, but let's say an international company and they sent 10 experts to China at the same time. And I kind of just mingled in with them. So I kind of just dropped in with the crew and went to China and then stayed there for three years. And this didn't really work out. So there was a lot of culture issues and well, I decided to look for a job in China and what I was looking for is a job as a general manager from a German company in China. And that was difficult to get and I was very ambitious and I was just looking for this. And then one head hunter, she said, okay, friends, I know what you were trying to get, but this is not going to make you happy. But I have this Chinese company and I need a guy like you. They need a person to make the company international and to drive sales, especially in international companies. And this is how I ended up a truly automation because it was just a good fit. And I still remember that was very difficult for me to accept this and I was talking to my expert friends and they all said, don't do that. That's too risky and you work for Chinese company. That culture is so different. You forget it, doesn't work. When I joined, they were working six days a week and I got exception, but there like there's a lot of different cultures. What you have in Chinese companies, that is difficult to accept. But it was a great, a fantastic adventure. Yeah, I think that's a lot of what you said is very true in that it's very difficult for a foreigner, X-PAT to work for a Chinese company. And it's difficult for Chinese to work for a foreign company, right? And you have all of the adaptation that goes on, even if you were a native Chinese citizen to adapt to a new company environment and culture. But add on to that that there are expectations around you mentioned the work hours. They're expectation around the work hours, around how you interact with management, people below you, people above you. Now before we get into that, let's talk about, so they hired you originally and this is happening more and more with Chinese companies. They hired you originally to work on international customers. And I think you've also started working with more domestic customers. So why don't you tell us, because I think one of the things our listeners would be new for our listeners to hear about is what are the challenges and the benefits for domestic companies selling into China compared to foreign companies? Because you've now worked for both, right? Americans think, I don't know about Europeans, but Americans think that Chinese companies have a leg up when they're selling in China, that they know the market better, you know, for all these reasons. And then Chinese companies often think foreign companies have an advantage when they're selling in China. So what are the advantages and disadvantages, the challenges, the benefits of being a Chinese company selling into the domestic market versus a foreign company? Let's start with the other advantage. So American or German, Italian, Japanese companies, they have a big advantage because usually what they sell in China is a product they have developed for 10 to 30 years. So they really know what they're doing. They have organizations that are really set up. So experts who come to China are usually also trained in the company for 10 years or longer. So they have a know how about this solution and product that they sell which is unique and very impressive. And this is something which Chinese customers really value a lot. So this is why Chinese customers, both international companies and also domestic companies, they like to work with international suppliers because they get this know how and this comes with cost and also some burdens with lead times, cost, language barriers and so on. So now the question is, now there is domestic companies like my employer and how can these domestic companies claim the same benefits as international companies? Because they could say, well, I take away all the burden, I make a cheaper and less lead time and language barrier, there's no language barrier, but they will also be maybe less know how because you know how has been developed in let's say two or three years, not in 20 years. So this is the main difference and what I'm fighting with is first to get companies and customers to understand that know how which is developed in China is good know how. That's the first thing. It's difficult to get in helps that I'm German to explain this to customers. The second thing is that I tell my team that if we want to develop know how we have to do it the same way that Germans in Japanese we have to do the same thing over and over again for 20 years and that is difficult for Chinese companies because I always innovate and always change and do something new and then they never do something twice and three and four times and this is a big challenge. I think if you compare the two directions then the international companies they have more advantage on know how and experience and process. The Chinese companies have more advantage on cost and maybe relationships and speed. And if you put the two together then it's fantastic. So both can work from the other but it's very difficult to learn this. So what I'm doing now is to teaching the Chinese company to learn the German skills. It takes a long time. Yeah I think that's really an interesting way for people to look at this that maybe they haven't before. I find a lot of a lot of people and I think both you and I are fans of history and fans of reading and understanding the why. What's happened in the last 40 to 60 years that we ended up where we are now? And I think a lot of people don't look at that in business as much as they should. To understand that European and American companies went through their early industrialization in many cases in the 40s, 50s and 60s and they developed these core technologies and these processes. So they have this huge depth of knowledge and capability of delivering with confidence. And Chinese companies, many of them have only been around 10 years, 15 years, maybe 20 years at the most because of China's industrial development. So they don't have those the same procedures in place and they don't have the consistency of product and development. It's just a whole different ecosystem. And yet as you said, they've got the flexibility and the speed and they're always iterating. They're taking an idea and they're iterating into other ideas. So I think it is very different and I think there's definitely benefits to both as you brought up. So I think that's really important. When you're managing your Chinese sales team, how do you help them understand how the foreign competition is selling and the benefits of that, how the domestic competition is selling, how they can integrate new skills into their sales capability. The main advantage of international companies is that they can access this really vast know-how that they have in the headquarters and they have in China in their teams. So what I teach my team is to really understand what is something we are really good in, what is something we have done one, two, three, four times before, and how can we describe this in a way that the reader, the audience really understands, oh, this is a standard, this is know how, this is experience. So let's concentrate on this and make it a little bit bigger than it really is, but focus on this and not just do something different every day. And this works really well. So when I started, we had just entered the EV market, EV Motors market. So we had three products and I more or less made the decision to push the whole team on just one product, just EV Motors. So we started to build PowerPoint documents, PowerPoint documents where we described both the prototyping of this kind of motors, but also the way how these machines are built down to the last process steps, how the welding works and so on. So this both helps to understand how we really work, so we can explain it to customers, but it also helps customers to understand. Yeah, actually the Chinese company, they also have standards, they also have know how. And this is really useful. And of course, there's a bit luck that we got the right business and there was a lot of drive in the market in the last two years. But this means now that we have more than 25 references now in this market. And so we're either leader in China and we can describe this. So customers come to us because they hear about this, but they only come to us now for this one product. And before this was the first product, now it's the main product, actually the only product we could say. And it was a very difficult decision or it's a difficult to accept for the team to focus on this, but it was a worked out. That's good. It reminds me of when I work with clients to hired staff in China, we often work with recruiters, Chinese recruiters. And there's constantly this situation of the recruiter sends over three resumes to the European or American management. And the very first thing the management in the West says to me is they only found three people. Because in the West, the recruiter would say, I found 50 possible candidates. I've gone through this process to vet those candidates. I've gotten it down to 10. I'm going to talk to all 10. I'll bring you the best three. But the Chinese recruiter doesn't do that because in Chinese culture, it sounds like they're asking you for help or, you know, that they're asking you to approve something. And it's their responsibility to do all this. They shouldn't bother you with it. They should just give you the three best candidates that they found. They do that. Then the Westerners think you only found three. So it's the same kind of thing you're doing with your team. So I even had an off topic, but I had a guy working for me and we were looking for suppliers in China. And I said, we have to give the Americans at least five to look at. And he said, why? You're the expert. You know this one is the best one. Why do you have to give them five? Because they like to follow the process Americans. They want to know what the short list of five is. And then how we're going to get to three and then how we're going to get to one. And if I only give them one, the very first thing they're going to ask me is, was that the only one you found? You know, so it's interesting. I think that you're applying this in this way with your team. I think that's fantastic. You know, you're, you're helping them understand how to establish credibility and trust with the customer. From your perspective as an outsider kind of coming into a completely Chinese company, what were some of the challenges that you had about things you found you needed to adapt to that were maybe difficult? And the main thing is transparency. So I basically don't know anything. I don't have any details. And so what you just described before that I want to understand the process. I'm the most German guy of all. So I want to understand what's happening. I want to know where something coming in and what's going out and what's happening in the meantime. And people just tell you, why don't you make sure it has nothing to do with you? So why do you want to know the first question is, why do you need to know? And then I say, well, yeah, it helps me to understand. Well, but can you not do it without knowing? Just just try. Yeah, I can. And now I can. I can't move the superstar of in transparent stuff. I still push my team to work on this to get more transparency. And it took me three years to first adapt to this to do my job without knowing the facts. People would take me to a meeting. I don't know which customer I don't know which topic. I don't know what we are going to discuss. Just show up and smile. And I can do this now, but I also know that it's not efficient. And it's somehow my job to accept this, but also to change this. And it's a very difficult position. But I like it. I really enjoy it. And I also see that my team, they see the value and they change a lot. So we have much more transparency now that we used to have three years ago. So it's actually, we just built a list of all of the 25 positive references we had. And actually the result looks quite good. So there's always some problems. And we know the problems, but if you look at it from a bird's eye, then we are quite successful looking back. But I just didn't know. I had no idea. And that makes me so nervous. But it also makes a job interesting. Yeah. That resonates with me. I was managing a sales distributor, Shippen China from probably eight years ago until four years ago. So it was about four years in total and it ended a year before COVID. And it was one of my clients. We'd set up an office for them in distribution in China and sales. And one time we're going to, it was in the coal mining industry. And we were in Shandong province and I was with the distributor for the day. And they said, we're going to go visit this customer, Shandong coal, basically use huge. And I thought the way that it had been explained to me was it was the typical meeting. We're going to meet a few of their engineers. We're going to talk about our components and their equipment and how it works. And instead we end up with the headquarters. And I'm having meeting with the number two guy in the company who's in a new role. And this is a billion dollar company. He's in a new business development role. And across the table he looks at me and he says, you know, Kim, you know that coal mining has been struggling the last five or 10 years in China. We need to acquire new technology. We want to buy your company. Can we buy your company? Well number one, I don't even work for the company. I'm a consultant and I'm holding this role. I can't commit to selling the company. And yet you know culturally in a Chinese situation like this, the only appropriate answer is yes. And so I looked at him and I said, well, we would be so honored if a company like Shandong coal wanted to acquire us. Then I let him be happy for a few minutes. And then I said, maybe what we should start with is a project where we can work together and get to know each other. And he's like, oh, that's a great idea. And of course, nothing happens in the end. But still it's so funny that I was not anticipating having a meeting with the number two. I certainly was not anticipating them offering to buy the US company. So it is, it's very, very funny. You have to be very, very flexible when you're in China and very able to handle whatever's thrown at you. So, and these are great skill sets. You know, you've got your German skill set, you have been acquiring your Chinese skill set. So it's really wonderful. Kim, I just, we're just hired a German project manager and I'm training him. And when I talk to him, I just, I just asked myself, how could I do this the past three years? Because what I'm actually asking him to do is what I wanted to do myself all the time. But I didn't have the authority. And so I'm just, now I'm just giving him the authority. Nobody's giving it to me. I just say, okay, well, let's try it. And if something goes wrong, then, you know, we can blame each other. But now with the two German guys and my boss says, yeah, good idea. So I think my goodness, I could have done it three years ago. But what I always say is that you have the challenge of the inter- transparency and you have to find your place, you have to trust and you have to also behave and be polite. But if you don't challenge, then you also don't bring your value. That's something very important to learn. I'm very challenging and I can be very aggressive, but it's still, every time I do this, I feel insecure at myself. I say, maybe I'm pushing too much. And it was very difficult for me. This is why the podcast helped me so much to just share this experience and also learn from others to get more insights. And then just to try something in the company and see what happens. That is such a great experience. And you bring up a great point that I actually reminded young woman, I know seven or eight years ago, she took a job with one of China's major dairy companies. And she kept saying, I don't know what I'm doing here. What they're asking me to do, I don't know how to do it. I've never done it before. No one's showing me how to do it. And I said to her kind of what you have said, which is part of your value here is that you are the outsider. And they want you to challenge things. And they want you to ask questions. And they want you to bring that foreign perspective into the company. Now, is it going to be easy? Are they going to intuitively understand the value of some of what you're doing or the benefits? No. will it be a challenge for them? Absolutely. But that's part of why they want you there. They want you there for your fresh perspective and a different way that you've evolved as a business person before you got into that company. So I think that's a really strong point, a really powerful point. So you have lived hands-on day to day with the intersection and sometimes the conflict of European expectations and business practices and value system with the Chinese expectation and value system around business and perspective. How would you tell a foreign you know a manager who's living in Germany or in France or in the United States who doesn't have the day-to-day integration that you have to be able to learn so clearly from? What kind of advice would you give them about managing Chinese teams? How might they want to adapt their own behavior? How would they be able to encourage you know the Chinese teams behavior? What kind of advice would you give them? I would focus on the wisdom of the crowd. So I would try to understand okay what kind of team do I have here? If we want two or three teams that are cooperating together. So how can they influence each other and help each other? And how can you create a system where they have to work each other and have to create value to each other and have to also a little bit compete with each other? And then see what happens. Just put them in this situation and see what happens. What kind of support do they ask for? What do they need to do their job? And what do you feel they could do better? And if you find improvements and you will find a lot of improvements, then just take a deep breath and just wait a few days before you jump in. I've shared many many improvements here, but basically all my improvements, I don't think with any exceptions, they didn't lead to the big revenue. The big revenue came from my fantastic team. So they go to Great Wall and they come back with 100 million R&B revenue. I have no idea how they did this. So my advice led to maybe a small deal somewhere here and there and some improvements. But what I would recommend to this international manager is to trust the ability that this team already has. And just to try to improve the advantages that international cultures have on transparency, on standards, on know how, on working together, on teamwork. This is something you can step by step, by step, integrate, but it takes time. And the best way to do this is to let teams try this out in a game, in a competition, in some kind of fun way that they get to know each other and try what they're able to do. I think that's great advice. I think it's difficult. What I see with a lot of foreign executives who are not on the ground in China is it can be difficult for them to trust the Chinese team. And as we discussed earlier, and you refer to it as lack of transparency, I was talking about it is that they don't want to sound like they're asking for help by telling you everything that they're doing. I think that's where foreign managers struggle because they're not getting a lot of detailed back from their Chinese teams. And they don't know how they're doing what they're doing or why they're doing it. And that makes them paranoid sometimes. Maybe they're not doing anything or maybe they're not accomplishing our goals. I can't trust them because they're not being detailed and transparent to me. So it's difficult for the foreign managers to trust without the detailed feedback that they're used to getting. I think that's a real challenge for foreign managers. So what happened in my company is that we called this lessons learned. So what I do is I try to challenge my team during a sales process to say what are you doing, what are your feelings, what can we do better, who's making the decision. So I asked lots of questions and I tried to challenge them all the time. My boss wouldn't do that at all, but when we fail, once we lost the deal, then he calls the customer and asks lots of questions and then tries to learn for the next time. And I always I'm so frustrated because I say why didn't you do that before? Why didn't you call the customer before and ask them what we can do to win the deal instead of calling them afterwards, what we could do better. So I have to accept this and I find my way with this because I always say every year we lose like one really big deal. Every year is one big deal and every year it hurts. It really hurts. And every time I think we could have prevented this. We could have prevented this. If we had had this discussion three months before we could have prevented this. It's so stupid. And then I think, well, now we're fantastic because of this. So maybe this learning experience was just necessary and it's difficult to describe. And this is why whenever somebody tells me we should do this, we should do that. I always say, well, wait and see. Wait and see what happens. And we're doing quite well actually. We can do better, but let's focus on what we do well right now. I think that's interesting. And this may sound like a completely different topic, but I think actually what we're talking about and this idea fit well together. So you're talking about, you know, again, the transparency and the awareness and communication, you know, regular ongoing communication between teams and sharing things. I think that's important and that can be difficult to foster in a typical Chinese work environment, but also in implementing processes and procedures, which I'm a huge fan of. And I've got to believe you're a huge fan of. And I like it because I think it it saves a lot of time from the perspective that people know that I need to do these things every time. I go through this process of signing up a new customer. I have to fill out these 10 forms or whatever it adds data and clarity and consistency to the organization. But it also communicates the company's priorities. If my procedures say that you have to document these things and get approval for them, then that's influencing your behavior, right? I'm encouraging certain types of behavior and non-couraging others. And I think that also can be another way to come at this problem. Besides the encouraging communication and team building and feeling comfortable failing and sharing information, it sounds counterintuitive that procedures would eliminate or not help be more flexible and more communicative. But I think both of those can work together. What do you think? Yeah, absolutely. So processes really help to guide professionals through a process, through like step-to-step. And this is important to learn and it's difficult to accept if you think that you have a different way, which is more efficient for you. So it seems like a hurdle, something that you don't really have to do. It just keeps you from finishing your job quickly. But it helps if you can compare one process step, which one process step and not just one complete deal with one complete deal. You can say, "Okay, did you ask the customer if he has budget?" And then you can say, "I asked this customer and asked this customer and this was the reply." So there's much better to compare, rather than saying, "I had two deals that both take one year and one buy and one don't buy." So that's really important. And so this is what I do all the time. To improve these processes, we even have processes now for customers coming here to visit. So if they come here, then the team has to book the meeting room. They have to order lunch. They have to make sure that there is some kind of a reception area video which hosts the customer. They have to order tea or coffee. And then they have to make sure when they pick them up from the car and bring them back to the car. So that's not, I didn't implement this. My team implemented this. So this is something we have processes in all kind of different areas. But also what you also have to say is that in Chinese companies, you have many, many, many, many rules which really don't make sense. But sometimes somebody made this rule and then nobody dares to challenge it. And this is also something that I teach my team to say, we have to build processes which we really believe in all of us that makes sense. And not just follow some rule because it was made by the boss a long time ago. Yeah, he's the boss, but we can always challenge this rule. I think it's interesting you use the word rule compared to the word process. Because they're very different. And yet, yes, to some people in an organization, they may feel like the same thing. And yet they're not. They're not. They're not a process. I think the process really has to also change with market demands and with what you do every day and has to help you during your job and not just kind of squeeze you in something that you don't really like. And it's interesting to see that now in China, many things happen that happened in Germany 20 years ago. So the way that people interact, what they do, how they compare, they buy second hand cars and they kind of stuff. That is something which is now, yeah, it's getting more transparency. And this allows people to change their behavior. And it's very interesting. But it takes time also in the company. We have the discussions about dress code, what people dress. And it's very difficult for them to make decision about this. So some people dress this other people dress this, but the easiest for them is just to say the boss just tells me what to dress. And it's not clear. And what I always do in these situations is to say, Does it make sense to build a process? Does it help? Does it help us? If it helps, then let's just do it. Let's just try it. Don't let it delay it forever because if we have a process, it makes lots of things lot easier. It's interesting. I'm in my head. I'm trying to think, how would I describe the difference between rule and process? And what came to me finally is the rule might be you have to lock the doors before you leave, right? That's the rule. The last person to leave has to lock the doors on the building. That's a very, you should statement, right? You should accomplish this thing. All the doors should be locked. A process would be that as you leave the building, you find out if there's anyone else in the building, if there's anyone else in the building, then you can leave. If you're the last person in the building, then you have to go to door A and door B and door C and door D and you have to lock each door and you have to check a piece of paper on the door that you checked it and locked it and you initial it on that date. Now we have a procedure that really drives someone's behavior to make sure that they're the last person in the building and then to make sure that they have checked the box on each door and initials that they've locked it. Now you're going to have people locking doors. Whereas if you have a rule that says the last person that we've has to lock the doors, you're going to have failure in that situation. I think that's the best way I could think of to describe what's the difference between a rule and a procedure. As we wind this up, because I think we're getting close to our time here, what else would you like to share for people that are managing international teams in China and again, not in that day-to-day situation? How can they encourage transparency and communication with their team? The most important thing is that people can see you and they can understand how you work and why you work and what you do. So I have a very close relationships to all of my managers and also to the complete team just because I want to make sure that they know that I will always back up every single decision that they make. I will never challenge their decisions, maybe challenge, but not punish them for decision. At the same time, I also want them to see how I make decisions very quickly. By seeing this, by respecting each other, this really helps a lot to work together and to go there. By allowing my team to also challenge me and to tell me that they don't like this or that and they want to change this somehow. This also takes time and trust that team members are willing to do this. That's important. I think having this two-way communication really helps a lot. What I did is that I think in the past three years, I didn't ever punish anyone. I never, ever criticized anyone for any behavior. What I did is I asked for help in specific areas. For example, I need your help to build this PowerPoint presentation. If they didn't do it, then I just found another way how to do it. But I would never say you didn't do the PowerPoint. Now you have to work overtime. I would talk the boss or whatever. I would never do this. I would also really share my happiness if something works out. So my thankfulness is like a purely positive mindset to say, I have a target and the team has a target. We have the same target. I have a maybe different approach. You can follow my approach and then we're going to all be happy or not. But in the end, it's not right or wrong. It's just it's a decision and you make the decision every day and I will respect your decision and I hope that you respect my decision. I have been really happy in this approach and I have never had any of my managers leave. We had a couple of guys leave who are not really so professional, but they didn't fit in this strong culture. But the strong managers, they all stayed and they all grow. So I promoted for people to management and I was I'm really happy about this. Thank you. I think it's important for people that are trying to manage from 5,000, 7,000 miles away. It's just like with a child. If 80% of your communication is negative, it's only when you didn't achieve something or I didn't get the document you were supposed to send or I wanted to correct something that you're doing, then anyone is going to tune you out of that. We tend because we're doing everyone so busy and they've got other, maybe they're managing other offices in other countries and in their own country and they're not stopping and giving that positive feedback and saying every couple of days, every week, you know, hey, you did a great job on this. I just wanted to say thanks. Hey, I wanted to bring you in for a conversation about this new project. We're going to come out with three months. Really, really touching, touching, touching, keeping that relationship fresh, fresh and alive and going. That's what creates trust and you also alluded to that they know you as a person, right? That you're a real person to them and the mistakes that you make and the concerns that you have so they can feel like they understand you better and how you make decisions and why you make decisions and that's part of how they develop trust in you. So we often think management thinks I need to have trust in my team that I need to trust that they're going to follow directions and do what I say, but the team needs to trust you too and you need to build that trust up. So all of our listeners, I hope you take that and many of the other pieces of wisdom that Francis has shared with us today to heart and think about how your company as a whether you have a domestic Chinese company or a foreign company, how it fits into the market, how you can manage bridging the differences between management styles and using the best of both building trust with your team. I think these are all really important topics. So thank you again, Francis. It's always a pleasure to have a chance to speak with you. Thank you very much, Kim. It's been a fantastic experience. Thank you so much. Thank you for listening to this episode of the International Trade Podcast. We hope you found the discussion on integrating Chinese and Western business strategies, informative and insightful. A special thanks to our guest, Francis Kramer for sharing his expertise with us. Be sure to tune into our next episode where we explore another exciting topic in the world of global trade. Be sure to check out our website, www.inhtltraderesources.com.