Capability building

Why companies in China need support for capability building

By Giorgia Madonno Marco Polo Consulting

From the "attached" article by Mc Kinsey Insight I extrapolated some key points (in black) about the challanges that multinational companies face in building capability in China. It is exactly what our clients face when they ask us for support (in blue)

Challenges:

1) Perennial challenge for multinationals: the Chinese context and culture, which may require local tailoring of global approaches. Often an effective balance between centralization and decentralization is difficult to find and companies need an help to set up a proper discussion on the topic between global HQ and local subsidiaries

2) Chinese companies generally lack a systematic approach to nurturing employees moving up the organizational ladder. They misconstrue capability building as a classroom activity, missing the impact of linking it to actual business. And they are too inflexible either to fire underperformers or to reward and promote employees, including managers, who change their behavior and adopt the necessary mind-sets. Succession planning, talent development and performance management are processes that still need to be improved in many companies in China, for this reason we are asked to support companies to set up these new processes or to improve the current ones.

3) In many Chinese companies today, capability building remains synonymous with classroom training, partially thanks to the tradition of rote learning in schools When we audit the training system of companies in China very often we have to recommend and help them to develop integrated learning systems where the traditional classroom training is integrated with experience learning, coaching, e-learning, individual development plans, communities of sharing and gaming approaches to learning

4) Historically, many human-resource departments emphasized quantity over quality, placing priorities such as cross-functional collaboration and leadership skills on the back burner. Even today, many HR functions do no more than oversee salaries and benefits, relying largely on one-to-one training in local plants. The HR competence in China is quite young, HR teams, expecially in medium companies, need support to build their capabilities and learn a more sofisticated HR Business partnership approach. Co-design and co-implementation with external HR senior experts who coach them is often the best solutions,  these programs can last from a 6 months to 2 years of part-time on-site or off-site support.

5) Most of its leaders had transferred from technical positions into general-management ones, without sufficient training or coaching on how to manage that transition Coaching programs are very effective solutions to prepare individual contributors to become managers of others and build a broader skill-set

Here some practices companies have started:

1) The venture has now set up a “corporate university” to encourage cross-functional collaboration among a range of functions—notably, engineering, finance, manufacturing, purchasing, quality, and sales—as well as better communication with global headquarters to ensure a successful launch Cross-functional collaboration is a very big challange in China, we work with teams (expecially executive teams) to enhance the trust among team members, to improve the ability to manage conflict, and to set team objectives that canalize the energies of the team on a common target instead of individual targets, this is a true silos buster.

2) Developing Chinese teaching materials to help solve problems, building day-to-day business problems around products that participants would find in the Chinese market, and localizing global training materials through culturally appropriate metaphors and examples. Cross-cultural knowledge is key for every practice in China, the biggest mistake is to assume that what works in our culture works and make sense also in another. Cross-cultural programs can help to increase cross-cultural awarness

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