How can Chinese enterprises build winning teams in new, uncharted overseas markets

Chinese enterprises are increasingly venturing into overseas markets. Replicating their domestic success in new, uncharted markets starts with establishing stable overseas operations. This ultimately hinges on successful execution, with talent being a crucial resource for sustainable development.

1. Talent strategies across different stages of overseas expansion

In the early stages, Chinese enterprises should focus on assembling an “A-team” of top talent, as "A" players naturally attract other "A" players. The demand for overseas talent evolves through the four stages of international expansion:

1) Product Launch Stage: This stage is about building around the best business or technical sales talent who possess a deep understanding of the product.

2) Capability Landing Stage: This stage involves the transition from an individual- to a team- or organization-driven approach. A thorough understanding of local tax laws, company operations, and other policies and regulations is essential. The personnel requirements at this stage are high.

3) Brand-Building Phase: This stage requires a team with cross-cultural experience to support localization capabilities.

4) Ecosystem Stage: This stage involves achieving full business localization through a global talent team and extending it to the surrounding and even larger overseas markets.

The focus on selecting overseas talent varies according to the different stages of business development. In the first stage, it is essential to send Chinese professionals that are familiar with international markets to ensure a smooth entry into the local market. The second stage involves establishing a strong connection with the local market, empowering local talent, and fostering cultural integration. By the third stage, as the business expands into larger overseas markets, a dual-channel talent strategy combining globally dispatched talent and localized professionals will be implemented to leverage the strengths of both groups.

The focus on selecting overseas talent varies according to the different stages of business development. In the first stage, it is essential to send Chinese professionals that are familiar with international markets to ensure a smooth entry into the local market.

During this process, it is crucial to send the right talent abroad. These individuals must possess language skills and cross-cultural experience, as well as a deep understanding of the customer base and the product, enabling them to facilitate the company’s initial steps in the local market.

2. Empower Frontline Teams to Lead the Charge

Once a team is in place, the real challenge lies in its operations. Huawei, a benchmark for Chinese companies expanding internationally, empowers each region to make independent decisions and conduct business with confidence.

Huawei has created a customer-facing "iron triangle" that enables frontline personnel to take the lead. This structure includes three key roles: the product manager, account manager, and delivery manager, who work collaboratively to deliver exceptional customer service.

To enhance the operational efficiency of Audio-Technica and eliminate delays caused by frontline teams waiting for approvals from headquarters, Huawei has granted Audio-Technica clear authority. This allows them to mobilize resources and implement strategies based on real-time conditions. Alongside this empowerment, a robust framework for accountability and delegation has been established to maximize effectiveness.

In conducting overseas business, it is crucial to balance centralization and delegation between headquarters and the local teams. This approach ensures strategic alignment with headquarters while providing the flexibility needed to adapt to local nuances, ultimately improving management responsiveness.

3. Cross-Cultural Integration Can Make All the Difference

Data shows that cultural and language differences between an enterprise's home country and its host country contribute to an overseas failure rate of 10% to 20%, with rates soaring to 30% to 40% in areas with significant cultural disparities. Given these challenges, what strategies can be employed to enhance cultural integration effectively?

Respect Cultural Differences: Successful cross-cultural management hinges on valuing and respecting diverse cultural perspectives.

Establish a Common Value System: Refine core values that all employees can embrace, fostering a unified value system.

The globalization of Chinese enterprises extends beyond the export of products and brands; it also encompasses the export of talent and organizational capabilities. Implementing a diversified talent management strategy and developing a long-term overseas employer brand can facilitate the localization and deep integration of business and organizational capabilities.

This article is adapted from a more extensive piece published in August 2024 on Weixin, the Chinese instant messaging, social media, and mobile payment app. To read the original article in Chinese, please visit: https://mp.weixin.qq.com/s/5vL46uf43yppQU3K6xbV1g.

CGL Overseas Services

As Chinese enterprises accelerate their overseas expansion, CGL has broadened its talent services to key markets including the Americas, Europe, and Southeast Asia. To better serve our clients, we have established a virtual overseas team of over 40 professionals with extensive industry experience and cross-cultural expertise, dedicated to delivering tailored and professional services. Between 2023 and 2024, CGL successfully facilitated the hiring of key positions for numerous Chinese enterprises abroad, connecting them with top global talent.

Additionally, to support Chinese enterprises in their global localization and business growth, CGL offers comprehensive global employment compliance and management services. Leveraging stable local delivery teams and service networks across more than 130 countries, we assist clients in ensuring employment compliance, managing expatriate and foreign employee visas, and implementing global payroll and benefits programs.