Charles-Edouard Bouee is President of Munich-based strategy consultancy RolandBerger's Asian operation, a former investment banker who now splits his time between Paris and Shanghai. In this book of almost 200 pages, he identifies the financial crisis of 2007-2008 as marking the end of the "American experiment" of applying American business school thinking to the development of private enterprise in China, a process that had started in 1978 when Deng Xiaoping set the country on the road to modernization in the aftermath of the catastrophic Great Leap Forward and Cultural Revolution. No longer is the Western model seen as superior, now Chinese entrepreneurs are developing a specifically Chinese style of business management, built on their long cultural and mercantile traditions.
Bouee discusses Chinese business culture in the models of Spirit, Land and Energy. In spirit he outlines the sometimes conflicting philosophies of Confucianism, Daoism and Legalism, their interplay with Maoism and their effect on perceptions of leadership. Using the metaphor of Land he covers those aspects of Chinese society that are immutable and uncontrollable, including the role of the Communist Party. Bouee sees the CCP as direct descendants of the Imperial administrator class, while entrepreneurs are the latter day merchant class, and argues that the creative tension between the two works to China's benefit. The chapter on Energy provides commentary on entrepreneurial drive in China and also on fears that progress may start to undermine that entrepreneurial energy. Chinese businessmen, Bouee suggests, are motivated by a desire to contribute to the health of society as a whole, that they see themselves as patriots - and American ones do not.
In the final third of the book Bouee develops his theme by exploring what he calls the nine qualities of Chinese management - dynamic, adapted, flexible, synthetic, mutual, consensual, spiritual, disciplined and natural - and contrasts Western and Chinese styles before making some predictions about future developments. Perhaps most controversially - for a senior partner in a strategy consultancy! - Bouee identifies one of the most striking differences between Chinese and Western styles as being over strategy - and hence the quotation used as my title for this review (p. 138). The Western model, derived from Harvard and its business schools, is to overemphasise the importance of detailed strategic plans, of "focus" and of energetic but inflexible implementation. The emerging Chinese style, in contrast, prefers to emphasise vision and tactics, eschewing a detailed strategy in between because it inhibits flexibility and in part at least because too detailed a plan can lead to loss of "face" if not achieved.
There are also, in the course of the book, ten case studies on Chinese entrepreneurs - nine men, one woman - which give a clear idea of how their personal business styles fuse Chinese and Western approaches in different measures.
M. Bouee does, I think, set up some straw men in developing his argument. He contrasts large but owner-managed Chinese private companies with multi-national, mostly American-based publically quoted corporations which prioritise shareholders, customers, suppliers and employees, in that order. While such companies may be representative of those that have set up shop in China, they are not representative of all Western businesses. Some of the most successful Western companies have deliberately turned that on its head. (Steve Jobs, interestingly, is referred to as being a "Chinese style" manager.) I do fear too that Bouee sees China through rose-tinted spectacles: when he said that "while "Bismark's iron fist makes an occasional appearance...for the most part the authority wielded is the authority exercised by a father over his children, rather than the authority exercised by the strong over the weak" I spluttered metaphorically and remembered events in Tienanmen Square in 1989, amongst others.
Early in the book he references the work of HBS professors Data, Garvin and Cullen, who in their critique of American business schools -Rethinking the MBA: Business Education at a Crossroads
- suggested that management can be developed into three components: knowing, doing and being. MBA training, they suggested, emphasises the knowing at the expense of the practical complications of doing and almost entirely at the expense of being. The Chinese model, Bouee said, emphasised the being and doing. I haven't read Datar et al's work as yet, but on the face of it, based on my own experience of a British business school, it's a fair criticism. The MBA school is not, however, the only influence on Western business. There are many successful entrepreneurs in the West who were too busy creating businesses to attend business school, they are characterised by that same be-do-know pattern as ascribed to the Chinese style. Bouee will also be aware that a whole new model of business education has developed in the West over the last thirty years - coaching. Coaching puts a much greater emphasis on being, on effective doing, while bringing in new knowledge and techniques last, and only if necessary. Management is indeed evolving.
Charles-Edouard Bouee is clearly passionate about China and Chinese entrepreneurialism. Like him, I am sure that Chinese business people will develop new business models and styles of management and leadership - with its internal market of 1.3 billion people, rapid growth and a culture stretching back three thousand years or more, it would be extraordinary if it did not. I thoroughly recommend this book on at least two levels, even if you're not currently writing a business plan for your Shanghai subsidiary. Firstly, it's the source of some new and different ideas about what makes for a good manager and leader. Secondly, it's a fascinating insight into business in China, already the world's second biggest economy and which, in all likelihood, will become the world's largest one within a couple of decades or so.