Do's and don'ts of doing tech business in Asia

“Do’s and Don’ts of Doing Tech Business in Asia”

for the Annual Globalization Innovations Section of

Silicon Valley Business Ink

October 11-17, 2002 Issue

By: Jason L. Ma

CEO, Congruent Partners LLC

It would be foolish to attempt to stuff an all-encompassing column on how to do business in Asia into this space. Instead, I'll touch on the softer side of my operating experience and observations across Asia Pacific. My intent is to reinforce or enhance insights for U.S. technology startups or mature companies entering, growing, or managing their businesses across Asia.

Geographies. Calling Asia a market is like calling Silicon Valley a city. Avoid this common mistake. Asia Pacific is a world sector or region made up of different regions and markets, including Greater China (mainland China, Hong Kong, Taiwan), Japan, South Korea, South Asia (India, Pakistan, Bangladesh, Sri Lanka, Afghanistan, Nepal, Bhutan), Southeast Asia (Singapore, Malaysia, Thailand, Indonesia, Philippines, Brunei, Vietnam, Myanmar, Cambodia, Laos), and South Pacific/Australasia (Australia, New Zealand, Papua New Guinea, Pacific Island Nations). China is in some ways like the United States - a huge market, each with technological specialties. For example, China is known for manufacturing, wireless, and semiconductors, India for software outsourcing, Korea for broadband access and mobile wireless, and Japan for mobile wireless data. Some Asia businesses have historically been astute users of advanced technologies. Parts of Asia have become world leaders in the development of some technologies.

Cultures, ways and means. Culture is a set of values and beliefs that drive day-to-day behavioral and language patterns on a societal level. It impacts decisions. In general, Asians value family ties, education, respect for elders, and - especially - face. In other words, don't allow your Asian VIPs to lose face. Asia offers a spectrum of cultures and language dialects. For example, in business situations East Asians (Chinese, Korean, and especially Japanese) tend to be less direct than native Californians. Indian businesspeople tend to be somewhat more westernized, with an English language advantage, than those in Northeast Asia. It's important to try to understand and appreciate these differences, and communicate effectively and sincerely. Speaking the local language certainly helps, but knowing and working effectively with the local business cultures is even more important. Learn from other companies' past cultural mistakes, which were probably expensive to fix.

People and relationships. Business is people. Relationships matter worldwide. Leverage existing relationships and find ways to sustain and enhance them. If you don't already have relationships in place, build them. A few tips:

* Know your target markets and audience. What's in it for them? What's your value proposition and how can you help them? What makes them happy?

* Start with the right people. Know and take good care of your employees. Hire and empower regional/local talents.

* Don't hire and groom lower-grade people to run things. They drag a company down. Be ready to make tough firing decisions when needed, but learn to swiftly execute local legalities. A’s attract A’s. Bs hire Bs, Cs, and Ds. It’s mother nature at work. Self evaluate.

* Don't be seduced by apparent government/tax incentives, which could cause you to make a bad decision about where to locate regional headquarters.

* Pick and work with the right local or regional partners. Most businesses starting and growing in Asia should work with and support local partners, including sales, service, tech support, manufacturing, or development. But always remain close to major end customers.

Human, economic, commercial, technical, operational, geo-political, legal, regulatory. These adjectives all describe interrelated external and internal cycles and processes that companies must effectively manage when doing business with customers and partners across Asia (or the world). In today's harsh economic environment, more is expected with less, making the jobs of entrepreneurs, business owners, and senior execs even more challenging.

Execution, execution, execution. I have a cardinal rule: 20/80. That is, business is 20 percent careful planning (with clarity of vision and objectives) and 80 percent execution. In tech business, effective execution is the critical success factor. Often in Asia, it's not the most advanced technology that wins business, but the execution that counts. In other words, the companies that win customers are those that know how to take care of their customers and sustain relationships. It takes solid team efforts, while wisely positioning for longer term. Frugality and wise investments are virtues during down or up market environments. Know your company's capabilities and limitations. Don't over commit. Meet or exceed delivering consistently. Happy execution.

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Jason L. Ma is an international business veteran and is founder and CEO at Congruent Partners LLC, an executive management services firm. You can reach him at jma@congruentpartners.com. To send a letter to the editor, e-mail vbowesmok@svbizink.com.