China expat leaders became unwilling trade war heroes

September 18, 2018

As the USA and China fortify their trade-war trenches, expat leaders at multinational corporations (MNCs) become unwanted combatants in a conflict as obscured by what Robert McNamara called ‘the fog of war’ (conflicting orders, lack of information and unsure outcomes) as any armed conflict in history. American and European managers, together with their peers from the world over, anxiously observe the reversal of the integration in supply chains, markets and technology, meticulously accomplished since the 1990s. In many ways, such expats resemble the reluctant heroes of classic war epics: faced with impossible choices, they do their best to ‘do the job’ and minimise damage to the people and environment they know all too well.

 

Take the automotive industry, a top source of my intercultural leadership coaching jobs in Asia. Cars are the most traded consumer goods in the world whose supply chains, including raw materials, parts, assembly, logistics and services like quality control and marketing, are mammoth employers. People and nations disagree on many things, but they all want to get somewhere and get back, which turned car firms into hubs of global innovation — think of electric and self-driving vehicles. When someone in Beijing cashes out for a BMW, a top aspiration for China’s growing middle class, the ‘Precious Steed’ (the meaning of ‘Bao Ma’, the brand in Chinese) is likely to come from the world’s largest plant in Georgia (USA), and made by a network of firms (four of which I coach or consult)  from parts and materials everywhere, including Mexico beyond America’s future great wall. As a buyer, you may ignore this beyond price and quality. Being in charge of steady supply, expat leaders lose sleep over trade war barricades, complete and forthcoming ones alike.

Like Tom Hanks in Saving Private Ryan, China expats never craved such glory. They are behind front-lines due to three decades of multinational expansion. When the Berlin Wall fell and China cracked its Iron Curtain somewhat, global firms eagerly spread the message of capitalism and free trade. An Eastern European diplomat moving China in 2002, I marvelled their soft power. Nobody wanted to read Orwell — everyone wanted a BMW. Arguably, Disney, Nike and Apple opened Chinese minds more than Henry Kissinger, Francis Fukuyama and Simon Sinek combined. Expats were superstars heralding a new era: Chinese people literally asked us to autograph books we hadn’t written. In return, foreigners spit in their palms and grabbed a spade in the effort to build a new China, but soon got accused of also digging the graves of their home economies. In a decade, the EU and the USA talked of erecting symbolic or literal walls to keep China’s influence out. Like their predecessors stuck in early-Mao China half a century before, managers who arrived to build cars, fridges or apps are again forced to take political stances. Here are a few things we learned from each other with coaching clients from a variety of countries and industries.

 

What is your mission?

 

China expats cannot, as many would love to, ignore trade wars, because they change the nature of their jobs, repeatedly, and often. America’s recent slaloms regarding Iran forced energy, aerospace and automotive firms to shred tons of planning. Recent USA-China exchanges of fire did the same to industries related to markets in steel, vehicles, electronics, soy beans, financial services and energy, which is pretty much all industries. Corporate strategy cannot change course as fast as politicians change their minds, and lean-and-agile companies lack the reserves to weather storms. Expat leaders jet-setting around the globe suddenly face questions befitting a dictator’s second-in-charge rather than multinational executives. How will American steel tariffs influence labour fluctuation in Shenzhen? How much of China’s soy bean export goes to animal feed? If the EU raises duties on Harleys, where will our management trainees fall in China’s new visa category system? China’s noxiously obscure economic data make a hard task next to impossible.

 

I advise clients who find themselves in such conundrums to use them as career planning opportunities. Untangling macroeconomic issues with engineering and MBA degrees is a dream for some, a nightmare for others. If an executive wishes she ran Uncle Arthur’s grocery store instead, it is better to choose a technical career path. But if the risk and ambiguity results in the thrilled goose-bumps of renewed motivation, China is the place to earn your first battle-scars, get results and move on to higher strategic responsibilities. As Sinatra sang: “If you can make it there…” Neither do expat leaders get battle-tested to discover their true colours. A reliable assessment tool like DISC or StrengthsFinder, and a few Action Learning-style questions reveal someone’s level of risk tolerance, outgoingness, flexibility and predictability, which are the decisive factors between one trajectory and another. Whether intuitive or data-based, such information helps companies to identify and place talent in both strategy and execution, both of which are essential for survival and success in the murky battlefields of trade wars.

 

Ready to become a messenger?

 

Multinationals in China not only need expat leaders of both career paths — they need close coordination between them. Many of my clients are engineering firms, where the political talent of navigating state-controlled prices and intercultural negotiating skills are just as essential as the focus and patience of engineering leaders who can work the way battlefield surgeons operate. Distractions will come from everywhere. While for China, sanctions are a welcome opportunity to nudge local champions ahead while squeezing foreign firms, America and the EU first points to multinationals as valuable overseas assets, then as despised agents of destructive globalisation. While practices as mundane and procedural as global tax solutions offer an easy targets for anti-globalisation sentiment at home, expat leaders often feel unfairly disadvantaged. When the West wins, they must deal with zero-sum mentality at home and the resulting resistance in China. When the East gains the upper hand, closures, dismissals and added financial pressure raise the stakes.

 

The key to survival, success and even a bit of fun in such circumstances, I remind my clients, is to be a bit like the father of Australian immigrant writer Osamah Sami, an ethnic Iraqi in Iran — knowing both sides but retaining an external viewpoint. Many expat leaders landed in China as a result of successful missions elsewhere, which can be an invaluable advantage. C., an engineer turned executive I coached, understood the life sciences sector in China better than most German, and due to his Asia-wide experience, perhaps better than many Chinese experts. Executives who accumulate such are indispensable for their firms, but they must develop the communication skills to deliver the right message on both sides: tough news and options at home, targets and solutions in China. Both can be unwelcome: wars (including in trade) start when both sides expect to win and take the other one’s wealth as bounty. Currently, the West cannot stomach China’s agility, speed, innovation and ability to cut across previously unsolved gordian knots, while China arrogantly underestimates its dependence on the existing network of rules, agreements, infrastructure and stability. But unlike politicians and diplomats, expat leaders can work toward impartial solutions without being elected out of their jobs.

 

Work to win the war, prepare for peace

 

A leadership workshop I delivered to Pakistani participants in 2011 included Simon Sinek’s legendary video on why leaders eat last. As he described the heroism and humanity of US Marines in Afghanistan, I realised in horror that my participants might have had family members on the other side of the firing line. To my surprise, participants I asked did not take offence at their firm’s media choice: The message, they reckoned, transcended nationality. Having traded diplomacy for consulting, I find business people more receptive to such wisdom. While politics is often dominated by hereditary clans, multinationals increasingly produce rags-to-riches examples of global mobility exemplified by Satya Nadella or even Elon Musk. While politicians shrug off a few thousand layoffs as collaterals of a glorious mission, most China expat leaders see their own reflection in both the tribulations and triumphs of their people. Their exposure to China’s economy, politics and culture, perhaps even local property, their children’s classmates or a life partner makes them realise that normal life will have to resume through the infrastructure left in place after the battles have been fought.

 

Therefore, they seldom need my advice in doing the right thing. But since part of a coach’s job is to hop across demarcations, I am happy to learn from the daily acts of commitment at one firm and turn them into encouragement at another. To some extent, they resemble the eye-moistening wartime stories we have all heard: Germans and Brits playing football between First World War Trenches, Nazi Party Member Johann Rabe rescuing Chinese victims of Japanese troops in Nanjing, or the US pilot who, downed in hostile Hungary, eventually married my grandmother’s sister. Fortunately, the bullets that China expats dodge these days are symbolic. But their principles seem to be the same: get the job done, minimise damage to life, property and dignity and do as much as you can for a speedy return of normalcy. After all, once the generals have signed their treaties, we will be on the same side again.

 

Read next: Losing and regaining your global leadership mojo

 

 

 

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