Forming Productive Friendships in Asia
January 16, 2006
Case categories include: International Business Leadership
By Robert Sher
Mother always said to choose my friends wisely. But I never realized that she was giving me advice for doing business in Asia. As you’ll discover below, Asians prefer to have the comfort of a personal friendship before they do business.
Dave Seldon, CEO of Interpacific Management Group, recounts his methods when he landed in Korea for what became a seven-year stay. “I cultivated friendships with two company presidents of big firms that could use the equipment I was selling. As a big ticket item, I knew that only through friendship at the top would I ever get the order,” he says.
It’s Not Sucking Up
I have to say, at first, it seemed like the worst kind of sucking up. Was it a malicious plan to abuse a friendship for profit? No! In Asia, asking for the big order without allowing the time to build trust is overly aggressive and presumptuous. Trust me, the Asian businessman knew why Mr. Seldon was cultivating the friendship. It’s their protocol he was following. The Asian was using the time together and interaction to judge Mr. Seldon: To decide if he was worthy of the order.
Dave Seldon discovered that one of his “prime targets” had a deep love for calligraphy. Every chance Mr. Seldon got, he found a reason to bring it up and talk about it. It took six months of relationship tending to get to negotiations. Even though a friendship is pre-meditated, the result of the time invested must be a genuine, mutual caring about each other as humans. That’s at the heart of the Asian protocol. If the seller cares about the buyer, and doesn’t want him to be hurt personally, then the seller will work twice as hard to insure that all goes well. The seller may think that he is “currying favors” with all the attention. While this is true, the buyer is relying on developed trust to cover his back.
Dave got the order for the mega-machine. The buyer trumpeted the big purchase to stakeholders as a proud step forward for Korea. But when it arrived seven months later, a manufacturing mistake meant another big delay and was an enormous embarrassment. Because of the friendship that Dave had cultivated, the Korean president was able to share what the personal cost would be to him and his family if Dave’s firm did not solve the problem: The President would be fired, and would have to recall his children from college in the USA. For both personal and business reasons, Dave flew into action, drew the embarrassment away from his friend, and solved the problem within an acceptable time frame. That is what friends do for each other, and that’s why Asians prefer to do business with friends.
You Have to Go There
I’m not saying that you have to become “best friends” with business associates in Asia. But getting to “close friend” status won’t happen as a pen pal, or over the phone. You have to spend time in their county, immersing yourself in their culture. This means multiple trips, with plenty of time for both business and for socializing. Many US businesses go as far as to relocate a key executive to Asia for years to set a solid stage for growth. The decision depends on the complexity and importance of your company’s Asian objectives.
An accepting, listening posture is most appropriate, especially at the start of a relationship. You must think before acting and speaking at all times, since all your skill in understanding etiquette and attitude is based on your home country’s culture, and you’re not in your home country. Adding to the complexity, Asia is not one culture, so the “way it works” in China is different than Korea or Thailand.
If what I’ve just described sounds like a slow process, you’ve read it correctly. Get used to a slower pace for business to begin in earnest. Making true friends in our own culture takes time, so you can’t expect disclosure of the other party’s “hopes and dreams” on a schedule. The good news is that once you’ve become friends, the pace of progress quickens. You will have the inside track with a committed partner.
Choose your Friends with Care
You don’t have to make friends with the taxi driver and waitress. Identify the companies that are likely to be most important to your business. Devote the time and air miles needed, focused on the highest-level executive appropriate to your interests. Mr. Seldon also stresses that development of close relationships with a local accountant and lawyer is invaluable as they will be guides to local laws and business practices. Also carefully build relationships with any local national that might become a key employee or partner, running your operations in that country over the long-term.
Are you really in a rush? One shortcut is to find a Westerner who already has friends and connections in Asia, like Mr. Seldon. Asians will come to the table much faster for a friend of a friend. But it’s never a free pass. Buying the relationships of another’s personal network built over many years has significant cost, too, and will only carry you so far. Once the right parties are found and discussions begin in earnest, they’ll want to feel the bonds of friendship directly with you, just like your mother said. If you’re too busy for that, they’ll be too busy to sign the deal.
• Asians prefer to have the comfort of a personal friendship before they do business.
• Carefully select those people you wish to cultivate relationships.
• Devote plenty of time and energy to the process.
Robert Sher is principal of CEO to CEO, specializing in assisting CEOs and business leaders as they navigate critical passages. He is the author of The Feel of the Deal; How I Built a Business through Acquisitions. He may be reached at Robert@ceotoceo.biz.
Company and Case Facts:
Company: Interpacific Management Group, LLC
Person: Dave Seldon, CEO
Alliance Member since: 2000
Business Founded: 2001
Service: Advisory services for doing business in Asia
Typical Customer: Businesses with objectives in Asia
Written: January, 2006
Address: Interpacific Management Group, 17 Bobolink Road, Orinda, CA 94563