Touch wood, our on-site so far could not have gone better. We’re working with the foreign export subsidiary of a $16b state-owned enterprise in a heavy manufacturing industry. As a Sales organization, they are looking for us to appraise their internal organization and look for ways to improve it. In particular, they’ve struggled with KPI design and implementation.

Prior to arrival, we put together a set of 5 hypothesized recommendations based on remote interactions with the client and explorations (interviews, case studies, literature, secondary research) of Sales organizational processes in similar industries. While we tried to put a point on them and make their rationale and implications clear, given the internal nature of our investigation we knew on-site interviews would be crucial to making recommendations with actual impact. Fortunately as soon as we arrived on Monday morning our primary host, the Assistant Director of HR, was able to start lining up interviews for us. We split into teams of two, and by Wednesday had managed to interview 15 people from 13 departments – various Sales regions, Marketing, IT, Finance, etc. Critically, we were able, as requested, to interview people at a variety of levels of management, from boots on the ground to division heads and the deputy GM.

Simply having interviews is not a guarantee of getting useful information, but we were additionally fortunate in that the climate at the company seems to be a relatively open one. While people of course won’t speak ill of one another in front of the relevant party, to us and amongst their friends people have been largely frank and open both on the site and at lunches and dinners. Even when polite equivocation is used, the read-between-the-lines implication is fairly obvious. There’s a relatively collegial attitude that pervades. In particular subordinates have been willing to have mildly open debate with their bosses and peers in front of us, something that can be rare at many US firms and I expected to be very unlikely at an SOE in China.

As a result I think we’ve got enough information to make recommendations that will resonate with the client and hopefully therefore be implemented and have a positive impact. To avoid getting stymied by trying to identify every organizational problem, we’ve instead focused on understanding aspects of the firm’s structure and norms that are relevant to changes we might feasibly suggest. This strategy has proven effective, and we think we have identified the most substantial roadblocks or weak points in their organization as well as practices from other industries that they would benefit from. For example, their first stab at a KPI system has been a bit off-target; it reflects a top-down design with insufficient insight into the operations of each department and is too detailed and varied (more of a task list). The metrics for example are more of a laundry list of things that would be nice, but aren’t necessarily central to their strategy and often invite perverse incentives, creating a lot of cost in how people spend their time unfruitfully unless they ignore the KPIs (which is appearing more typical). As another example, we’ve noticed that their CRM system can be expanded beyond order management to include Sales pipeline data, in line with most multinational wholesale enterprises.

Yesterday and today we’ve conducted a few more interviews, but have mostly focused on putting together preliminary findings and recommendations. We’re well positioned to present those on Monday to the GM and other relevant parties. For the weekend we’re splitting, I’m heading to Shanghai to see a friend, Juan is heading to Hangzhou with her family, one of our Tsinghua teammates is sticking around and the other is heading back to Beijing. Reconvening Monday things should be solid.

In addition to efficient professional progress, we’ve enjoyed great personal interactions here. Our primary host, the Assistant Director of HR, has been exceptionally helpful and gracious. He’s gone out of his way to support us professionally and personally. In fact, across the company there has been great consideration and generosity shown. The AD and his coworkers have ferried us to and from hotels, taken us out to lunches and dinners, and just generally been thoughtful and invested time and energy in being friendly. It’s not merely going through formalities or being polite, people have shown a genuine interest in making our time here pleasant and educational for us in addition to being productive and beneficial to them. We’re really lucky to be working with such sincere and good-natured people.