Trusted partnerships in Asia take a long time to develop. We have the tendency in the western world to rush things and try to get deals done quickly, often without properly knowing the people we are doing business with. This cannot be done when trying to find a trusted partner in Asia. In most cases you are working on your Asian partner’s timeline, not yours. Your Asian partner is the one with the power in their home market.
If you do your due diligence and take your time, you will find Asian partners you can trust. However it is a two way street. If you want the partnership to work to its maximum potential you must allow time for your partner to trust you.
A real life case study of this is when I was the Managing Director of the Asia Pacific arm of an industrial products business.
Our UK parent company wanted to form a joint venture with an existing manufacturer in China. What we were looking to do was to set up an arrangement where we would take shares into their business, provide management expertise and technology to make better quality products geared toward the Chinese domestic market and other markets we had interests in including Australia. The joint venture would also see us taking over responsibility for the export sales activities of the manufacturer outside of China. We went into the negotiations thinking what a deal for everyone a true win: win.
Our company and our potential Chinese partners were in negotiations for nine months. This is not a long time in terms of Asia. We travelled to China on four separate occasions over that period to negotiate and finalise the deal.
However, the principal decision makers in the UK had difficulty in understanding the hidden intricacies of how to form partnerships in Asia. They got frustrated because of the length of time the negotiations were taking, as from their point of view the deal was not complicated. They were very keen on cutting a deal and get on with business.
Instead of seeing the negotiation period as an opportunity to build trust, eventually the UK decision makers seemed to believe that the delays were because something else was going on in the background. They lost trust with our potential Chinese partners, and it was decided to end negotiations and not go ahead with the joint venture.
Conspiracy theories aside, from my viewpoint the real reason the joint venture did not go ahead was that we were not patient enough through the negotiation process. We did not understand that a business relationship in Asia had to go through various phases in order to build up trust and a good understanding of each other. We simply were not prepared to be patient and stick it out. Our Chinese friends pushed back when they could sense that we were trying to rush into a deal without due consideration to their needs and timelines.
The other thing I learned from that experience was that my UK colleagues did not really understand what it was going to take to be successful in China. They were not really interested in developing a deeper relationship from an Asian point of view. They just wanted an arms-length business relationship that they were used to in the UK.
This probably sounds basic and obvious, but the biggest tip I would give in any Asian partnership is it is not just a negotiation or discovery process – it is a time to listen, ask questions, and listen some more. Many western business people don’t realise this.
The natural instinct for an Asian when they meet someone from a western country is that they will be seen as inferior and they become very uncomfortable. They are expecting to be lectured to and they will be the ones doing all of the listening.
Here is my gold nugget for finding trusted Asian partners. If you come in with a very different approach in terms of being friendly, open, patient and relaxed, the entire process will go much easier. Show that you are taking a personal interest in them and their family, employees and friends. By listening to them and asking questions, you will immediately get their attention and differentiate yourself from other western business people.
In the end you will earn their trust and develop a meaningful long term win: win partnership. It is certainly worth the time and effort to do this if you wish to be successful in Asia.