How to deal with Asian stakeholders?

Should we really pay attention to relationships (‘Guanxi’) and Trust (‘Xinren’) when it comes to business in Asia? Do you remember the debacle of Wahaha and Danone? Or the debacle of Groupon China? Matteo Ricci was certainly the first one to understand the need to understand local culture to establish the first Jesuit Mission in China.

After only 2 years Pufferfish Partners has built teams and market access for more than 5 fast growing Enterprise Software companies all across Asia. Our expertise about the region is valued and we are often contacted for advice when it comes to deal with Asian contacts. The number 1 question that people ask us when they are about to visit Asia for a business trip is always: ‘What are Asian people expecting ? How do you deal with them?’.

The funny thing is that even though you warn them about the obvious (trust is important, Asia business people care more about relationships than transactions, there is no such thing as One Asia, don’t lose the face and don’t let your counterpart lose face), people tend to forget all and go back to their natural way of dealing with business contacts.

How many times have I seen US based or European based folks wondering why you need to approach Asia differently? The story goes as ‘I just met x or y in Singapore, they are top decision makers and they mentioned they will help us succeed in this market’. After getting the plane back to San Francisco or wherever home is, the fantastic action plan that was defined for the Asian customer is incredibly not moving anymore despite the hand shaking when we met. What happened?

The answer is actually quite simple: you need to build trust and manage your stakeholders! What is quite interesting is that any seasoned sales executives understand the need to manage stakeholders but they mostly think about it from a transaction point of view (who has budget? who is the decision maker? who are the champions? who are the influencers?etc…). What they fail at doing is applying a personal relationship filter to it. The rule of law and business frameworks are thought to be more mature in the western culture so what matters is closing the deal rather than building a deep relationship with your counterpart.

This is where I believe Asia is different: building trust is paramount and even though there is no such thing as one Asia, building trust matters a lot in South East Asia, China, India, Korea, Taiwan and Japan. The reason is very easy: interpersonal trust acted as a way to replace institutionalised trust where it is low. By institutionalised trust we mean the trust built by institutions to ensure business is conducted under the rule of law. For more on the subject I highly recommend the working paper on Asian Business Systems by Michael A. Witt and Gordon Redding.

When meeting a business counterpart in Asia, establish yourself as trustworthy as soon as possible by showing how your company met promised expectations, by trying to engage at a more personal level (show interest in the local culture for instance) and by giving space and moment of reflection to your counterparts.

I found that one of the most important cultural concept to master when dealing with Asian culture is what Erin Meyer defined as ‘Context’. At Pufferfish Partners, we have defined a specific methodology to build that trust. Our methodology is based on two pillars: awareness and support.

By awareness we mean to reach out to Asian companies by introducing our customers values and what they mean in an Asian context. We mix a bottom-up and top-down approach to meet the right stakeholders and translate the value proposition offered by our customers in a language that talks to them.

By support, we ensure that our customers invest in a support structure for Asia. One big fear of an Asian based company is that no expert will physically present when trouble will surface.

Will they have to deal with a support team back in the US or Europe or will they be able to deal with a local person. In order to achieve success in the region, it is of upmost importance to establish local support. We work extensively with our Singaporean partners to ensure the local support infrastructure is established in Singapore.

We have now deployed that strategy for several companies helping them to enter markets in India, Singapore, Hong Kong, Taiwan, Thailand, Vietnam, Philippines, Japan, Malaysia and Indonesia.

In conclusion, if you ever have to come to Asia for business reasons, make sure to remember that you have to put the transactional playbook and mindset away and focus on Trust building. Drop us a line if you want to learn more.