Executive Insights
Executive search in China
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Finding the right CEO for Beijing
By Paul Lien,
of IIC Partners
(BEIJING) — In many discussions concerning hiring practices, companies express their disappointment with their current China-based CEO.
In the case of the locally-hired CEO, they say that there are serious misunderstandings and different expectations on both sides. Operational or other business problems are frequently concealed and not openly discussed with headquarters in Europe. But others are disappointed in the expatriate who was sent in from headquarters because he or she is unable to develop the company in China.
Some companies are uncertain whether to hire a Chinese person as a CEO, send a delegate from the home country, or hire an expatriate who lives in China. Other companies, in trying to find the right person by themselves, report that job advertisements do not really yield professional results and that many applicants do not have any of the required skills. All these concerns arise more often in China than elsewhere. Moreover, the uncertainty that surrounds selecting the right candidate is much higher, compared with Europe.
Searching for the appropriate Local Person It’s not easy to find the right local person: one who communicates openly (especially about problems), understands the international way of doing business, has the same understanding as Europeans do about quality (not only with respect to products, but also regarding processes, management and reporting, for example) and is skilled in dealing with different cultures. In short, it’s tough finding a person — local or expatriate — who can meet business objectives and create the vital common purpose between the local company and headquarters.
Searching for the right expatriate CEO Finding an expatriate CEO who has good Chinese language skills, the requisite job performance, as well as business and management experience, is also not easy. Those companies that have not had success finding Chinese managers sometimes select relatively inexperienced foreign candidates who, while they can speak mandarin fluently, have often recently graduated from university and do not have any real business and management experience. There are, however, suitable candidates in China. There are many examples of foreign managers who have decided to stay in China, have Chinese spouses, speak mandarin and are familiar with local ways. They know how to relate to their Chinese staff, are respected and are competent in their jobs. They have already learned from their mistakes — a big advantage compared with newcomers.
An experienced consultant in a recruiting agency, which has a good network, should be able to find the candidate who best fits a vacant position.
Deciding which type of CEO to hire depends very much on the company’s situation. Some factors worth considering are:
- Is the company new to China or already established?
- What is the nature of the business?
- What size is the company?
- Are intellectual property rights an important consideration?
Second-tier management should not be forgotten. On the one hand, it would be difficult for a Chinese manager to head a company, should foreigners occupy many management positions. On the other hand, if second-tier management is already mainly occupied my Chinese managers, the time has come to think about a local CEO. However, it is very important to avoid risks when selecting a candidate, who besides having the capabilities of a successful manager, should also have necessary experience and seniority as required by an international corporation. Chinese employees — like those everywhere — want to have confidence in their leader.
The current situation Companies in China today can be much more confident in hiring a Chinese CEO than 10 years ago, assuming there are no particular reasons that make a foreigner essential. The automotive industry for example — both middle-sized and smaller companies — has many competent, second-tier managers who can fill such a position, bringing with them the right experience and useful connections. They have also learned how to work in an international environment, which favours open communication. They are well trained, have an appropriate understanding of what a Western company expects and speak excellent English. These people are highly valued and consequently very loyal to their companies.
Not surprisingly, they do not often respond to job postings from competitors. They are only to be found through hiring companies, which have the selection criteria and arguments to persuade them to consider taking a new step in their career path. In more than 90 per cent of our candidate searches, the best candidate is found with a determined, systematic search in the market sector concerned, not through advertising. Often, candidates only seriously start considering a career step after discussions with an executive search consultant.
Many foreign companies hesitate in hiring a Chinese CEO. The main causes lie in cultural differences, doubts regarding the authenticity of documents, information about salary, ‘real’ positions in former companies and whether the candidate will be inclined to follow his own interests rather than those of the company. Of course, there are good reasons to be cautious and to avoid taking risks. An executive search company’s responsibility is to check all these factors prior to proposing candidates. But, all these factors can be checked more accurately in China than in Europe.
Criteria for selecting a professional Recruiting Agency
Quality of service is essential when selecting a recruiting company. Many products are cheap in China and even appear to be sound, but real quality is often only discovered after a purchase is made and in the end, the real price is too high. The same principle holds true for services: finding a human resources agency that will fill your top positions at lower price is not difficult. But to fulfill your company’s needs you require the best possible screening of proposed candidates. Answering the following questions can be helpful in China (more so than elsewhere) when selecting a professional recruiting agency. While this list is not exhaustive, should you receive satisfactory answers to these questions, you should also receive convincing results from a candidate search:
- How long has the company existed in China (check their office as well) and how often have they changed name?
- Do they completely understand the business, targets and expectations of the company and its relevant market?
- How experienced are the consultants?
- Specifically interview the person who is responsible for finding the candidate. Is the consultant able to find out not only business-related facts, but also information about the candidate’s personality?
- How many CEO-positions has the consultant filled during the last 12 months?
- Does the consultant have management experience himself?
- Is the recruiting agency able to judge whether a candidate is appropriate both from a Chinese and European point of view?
- Have you checked their track record?
- Have you asked which European companies can recommend them?
- How systematic is their search system?
- How much of your time do you have to invest in the search?
- Do they have a guaranteed time frame for their search activities?
- Will you receive regular progress reports?
- Do they make reference checks and salary checks and how do they make them?
Paul Lien is Beijing general manager with PCI Executive Search. PCI has offices in Beijing, Shanghai and Taipei and is a member of IIC Partners, Executive Search international. IIC Partners is the world’s eighth leading executive search organization, with 58 offices in 40 countries. |
