Entrepreneurial spirit across borders (Part 2)

Chinese firms are not usually known for exemplary management styles. Rather, they are more typically known for being hierarchical, authoritarian and resistant to change.

However, MBA students from the MIT Sloan School of Management found plenty to surprise them when they visited smaller cities and counties in Yunnan province. The week-long assignment for one student, Wouter Jan Pieter Hoogland, was to advise agribusiness Malong Hongshi Agricultural Development. Located 160 km north-west of Kunming, it specialises in organic vegetables and farm animals. When Hoogland visited in late March, he found professional leadership and advanced technology combined with China's rural hospitality.

“What I saw was a relatively flat organisational structure, led by a dynamic woman, Mrs Shen. She was open to criticism and encouraged her staff to give feedback and suggestions.” Hoogland says. “All these aspects were strongly reminiscent of what I’ve experienced in good managers in the west.”

Hoogland was one of 24 MBA students participating in the school’s “China Lab”. In partnership with MBA students from some of China's leading business schools, they contributed their management expertise to help small- and medium-sized enterprises in Beijing, Shanghai, Guangdong and Yunnan.

The basic task for Hoogland and his teammates was to review Malong Hongshi's products, services and markets. Having worked in medicine, pharmaceuticals and venture capital businesses in South Africa, Canada and the US before pursuing an MBA, he was nevertheless surprised to find the company's business practices and procedures were very similar to those seen in the west.

Also striking were the socio-economic realities in Malong County, which has a population of around 200,000. Hoogland saw a stark contrast between the community's relatively low level of development and the company's investment in technology. He also wondered about the resources put into education in China’s more rural counties.

^{_{MIT Sloan School of Management students pay local enterprise Innofarm Fresh Foods a visit.}}

“I was surprised to see just how basic rural infrastructure and facilities were outside Malong, but at the same time was impressed with how advanced and automated Malong Hongshi’s newly built pig farm was,” he says.

Another China Lab participant, Akanksha Midha, spent time in Yunnan with Nan Xin Cleaning Services. Based in Kunming, the company provides cleaning services for more than 4,000 households, offices and other premises, and Midha was surprised by the level of management know-how in an “unskilled” sector outside China’s industrial heartland.

It turned out that Nan Xin's chief executive goes out of her way to keep employees happy. She plans to share 30 per cent of the company's equity with staff and to open a kindergarten at the main office for the children of employees. Midha saw these as “radical” ideas for a Chinese business of this size, and members of the management team told personal stories of how the chief executive has funded their education and professional development.

“We were really struck by how wrong our initial cultural biases were,” she says. “There are great managers and terrible managers everywhere.”

^{_{Students strike up a conversation with a local lab technician.}}

Midha and her teammates advised the company on data-driven decision making, dynamic pricing, and customer insight. They found the China Lab to be a full dress rehearsal for a real-world consulting project.

“It was a great learning experience in managing and leading all aspects of a consulting engagement - from diagnosis to delivery, relationship building and driving impact,” says Midha, who has a background in law, entrepreneurship and venture capital. She also complimented her Chinese teammates, describing them as smart, insightful and very sharp at picking up and communicating nuances.

“I would choose them as teammates in a heartbeat, even over many of my Sloan classmates,” she says.