Project Management Institute

Project culture in China

different strokes for different folks

Different Strokes for Different Folks

by J. Paul Dittman

images

Microwave oven assembly at Whirlpool Shunde

WHEN MEMBERS OF THE Whirlpool Corp. project management team took on the task of implementing a major manufacturing system and process change in a Chinese factory, little did we understand the full extent of the adventure before us. The American team not only had to complete their project on time, on budget, and within scope, they also had to master barriers of language and custom. But, when finished, this project—the implementation of a sophisticated MRP II system—proved to be a rewarding as well as a challenging experience.

Managing any large project is difficult, but managing a project in another country is another project in itself.

The factory was a complex microwave oven and small appliance factory. Microwave oven models exceeded 500. The material flow was intricately spread over a three-floor complex. With 2,000 workers producing 4,000 microwave ovens daily; it proved to be a very large, complex operation. And expansion was a major problem. The Chinese wanted to continue to expand this factory but saw no way to do so without a modern material management process and system. In effect, the purpose of this project was to allow for continued expansion, with dramatically lower inventory levels.


J. Paul Dittmann, Ph.D., vice president for Global Logistics, Whirlpool Corporation, is responsible for implementing logistics best practices across all Whirlpool regions. He is a member of PMI, APICS, the Council of Logistics Management, and serves as a lecturer in the MBA program at Western Michigan University.

Time to complete a project can increase with the number of time zones; and scope management, critical to any project, was of paramount importance. Therefore, a disciplined project management methodology, closely following the PMBOK Guide, contributed greatly to the success of this project. Change management was especially vital throughout the implementation.

But, beyond systems and procedures and the normal management of the project, the key element on this project was the care and nurturing of the morale of a small team of Americans working far from home, getting their jobs done and learning to cope in a totally different culture.

Cultural Omens. You don't “commute” to China: It is a 25-30 hour tough flight to Hong Kong, followed by a ferry to the mainland, and then a one-hour ride over “exciting” roads just to get to the factory site. To be productive, this meant that team members needed to spend at least three weeks in China per trip.


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The first trip to scope things out was not replete with good omens. Our team was somewhat unprepared for the language barrier we encountered in our first meeting. We understood there would be a translator, but did not fully appreciate that there are translators, and then there are translators. The gentleman we used as a translator was pressed into service on the spur of the moment. It was later estimated that the Chinese audience understood somewhere between zero and 1 percent of our team's message. We resolved to do better the next dayy only to learn that there was a typhoon on the way. It was suggested that we head back to Hong Kong as soon as possible. After cursory thoughts about saving face, we darted off like chickens. A category eight typhoon hit as we ran from a Hong Kong subway station through the streets to our hotel, where we arrived looking like drowned rats. Not an auspicious start! We looked at each other, thought about the project, and said, “We can do this, we can do this … how in the heck are we going to do this?'

Cultural Intricacies. There are only so many granola bars you can fit in a suitcase: eventually you have to eat the food, even if it is not what you're accustomed to. On my first trip, I was the guest and according to custom I was expected to eat first. The first dish was a bowl of nuts. I looked at the chopsticks, looked at the nuts, looked at the Chinese people looking at me, and realized that this was not going to be a face-saving opportunity. I smiled. I tried. They brought me a spoon. Used to U.S. fast food, in China we learned to eat such exotic dishes as eel, duck tongue, chicken foot soup, and cow lung.

As project managers, we must accommodate the culture of the customer, whether in Oklahoma or in China. Chinese culture has some elements to it that are fairly easy to learn, and some that are extremely foreign to Americans.

The team learned and accommodated to many cultural differences while in China. Those that were easy to earn included the following: Handshakes are weaker than those in the U.S. The Chinese consider writing on business cards something like writing on the person himself—clearly bad etiquette, and not a good idea. Family is very important to the Chinese and is a good conversation topic, while the topic of Taiwan is best avoided. Although Chinese business organizations are changing, they are in general very hierarchical. Age and status are still very important. The Chinese are extremely proud of their country, but also thirst for knowledge of the U.S., and are very receptive to learning American ways. Once a certain procedure is accepted, the Chinese follow rules and disciplines very well. Projects must be planned and scheduled to respect the holidays of the host country; in China, this meant carefully scheduling around the February Chinese New Year. (To the chagrin of our team, Thanksgiving and Christmas are not holidays in China.)

Think Big, Carefully

On the surface, the opportunities for project managers in China would appear to be tremendous.

More than a fifth of the world's population is Chinese. Its workforce alone is well over twice the population of the United States. It is estimated that up to two times as many people are learning to speak English in China as there are English-speaking people in the world todayy

But more than 20 years after the death of Chairman Mao Tse-Tung, and the sweeping reforms that followed, China remains a political and economic enigma.

State-owned enterprises remain the largest employers in Chinese cities, but they are increasingly ceding market share to more dynamic companies, with little or no state involvement. By 1997, private firms, foreign companies, and domestic startups using substantial foreign investments accounted for 73 percent of the country's industrial production, up from 35 percent in 1985.

Reliable economic data about China is difficult to come by. Clearly, however, it is struggling to avoid being swept into the economic malaise that is plaguing most of Asia. In mid-January China announced plans to establish asset-management corporations to absorb billions of dollars in bad debts from its four major government-owned banks. This is a key to China's eventual goal of commercializing its banking system.

The plan, modeled after the Resolution Trust Corporation created to deal with the United States’ savings and loan crisis, would free these banks from the crippling weight of bad debt, which is estimated at 25-40 percent of all loans. But the size of the debt is extraordinary. Using the lowest estimates available, the debt is equal to 20 percent of China's gross domestic product. (The bad debts of U.S. savings and loans never exceeded 8 percent of the U.S. gross domestic product.) Hong Kong financial markets dropped precipitously when the magnitude of the debt was revealed.

Politically China is as fragile as it is economically. Despite obvious reforms, from selling imported books throughout the country to television broadcasts exposing corruption in local governments, the Chinese leadership remains fiercely intolerant of dissidents of the Communist party. A new crackdown, started in mid-December, netted 30 activists by mid-January.

The Internet is also playing an increasing role in rising domestic tensions. A Shanghai businessman was arrested and jailed recently for selling Chinese e-mail addresses to U.S.-based publishers. Despite government attempts to filter the net in China of “spiritually-polluting” sites, from Playboy to CNN, information does get through from smaller rogue sites. Internet reports last summer of an anti-Chinese demonstration in Indonesia prompted Beijing students to protest at its embassy within hours.

This year is likely to be especially trying for Chinese leadership. In addition to the economic uncertainty, 1999 marks the 10th anniversary of the Tiananmen Square massacre, the 40th anniversary of the Tibetan uprising and the 50th anniversary of Chairman Mao's rise to power, each have the potential of triggering civil unrest.

No doubt, China is the world's largest potential market and has tremendous production potential. A great place for project managers! But there's also no doubt those doing business there must learn the culture and operate with caution. images

Mark Parker (production@pmi.org) is a staff writer for PMI Headquarters Publishing Division.

As Americans, we found some cultural differences more difficult to learn. Here are a few examples: Patience is not just a virtue in China, it is a necessity. Saving face is very important—obviously, “in your face” tactics don't work well. The answer “Yes” perhaps only means “I hear you.” Intense direct eye contact and touching are two things best left on the other side of the Pacific. And much of business is built on guanxi, the word for relationship … so critical to doing business in China. Guanxi is enhanced by mutual respect, mutual obligation, willingness to show vulnerability, and humility.

The look and feel of China is, of course, completely different from the U.S. The pace of construction is incredible! There is bamboo scaffolding everywhere and there must be 10 times more construction going on in China today than in the rest of the world combined. The excitement of it is intoxicating.

Our work with the Chinese on the implementation of the manufacturing/materials system and process for their Shunde factory was itself exciting. Here's how we approached the project management aspects of the job and how people from two cultures collaborated to get it done.

Project Scope. The project specifically consisted of installing an MRP (Manufacturing/Materials Requirements Planning) process/system in a large mainland Chinese factory. It was decided to use Whirlpool's existing materials management process, WMCS (Whirlpool Manufacturing Control System). WMCS is a sophisticated MRP II system with many unique features designed especially for high-volume, repetitive manufacturing.

WMCS completely regenerates its database daily for all implemented factories worldwide on the mainframe computer in Benton Harbor, Mich. One of the first hurdles the team faced was computer connectivity, which was ultimately accomplished with a fiber-optic cable connection from Shunde, China, to Hong Kong, to Singapore, to Benton Harbor. The response time from the screen in China to Benton Harbor back to the screen in China is two seconds.

Projects become exponentially more complex in a global environment, which makes scope management especially critical. This project consisted of 563 major tasks laid out meticulously on a precedence relationship Gantt chart. The team used Microsoft Project to develop the schedule and plan, and to level the resources. A key lesson project managers seem to continually relearn is that when scope changes, time or quality will suffer. Scope, time and quality are the proverbial three-legged stool—change one leg and you must rebalance at least one of the other two. Even with a rigorous sign-off process at the beginning, maintaining scope is a constant battle throughout a project. In this project, there were constant negotiations regarding scope.

Project Management Approach. The project management methodology we used was greatly similar to that described in the PMBOK Guide. We call our process ISD (Information Systems Delivery). It is a disciplined process consisting of a series of tollgates and checkpoints in areas including the business base for the project (detailed cost and benefits); project objectives; scope, as well as the process required to change scope; approach to managing the project; approach to executing the project; risk management; and change management.

We reviewed project progress in scheduled weekly teleconferences, finding that teleconferences worked better than video conferences because of distracting voice delay problems with video. Conferences were scheduled every Wednesday at 8:00 p.m. U.S. time/9:00 a.m. Thursday in China. During these meetings, often lasting two to three hours, team members rigorously discussed tasks and addressed all open issues. The team found that it was critical to capture all open issues on an issues list and discuss them regularly. At the peak of the project, the list exceeded 100 items and was growing. The discipline of keeping the list—painful as it was—was a major contributing factor to the ultimate success of the project.

In addition to the Wednesday teleconferences, weekly Steering Committee meetings took place every Thursday at 8:00 p.m. in the U.S./9:00 a.m. Friday in China to address problem issues and unexpected barriers.

Change Management. The management of change is critical to any project, but even more so in an international environment. The issues of language and culture play heavily in change management and are keys to the ultimate success or failure of a project.

We saw two major dimensions to change management: (1) During the preliminary phase of the project, change management takes the form of readiness assessment through focus groups, surveys, and so forth. The team skipped this step. We decided we were coming … ready or not, making the second dimension really important. (2) During the implementation stage, change management takes the form of training and feedback to ensure that everyone knows their job and agrees to change their job to the new process and not revert under any circumstances to the old process.

Guanxi—mutual respect, mutual obligation, willingness to show vulnerability, humility—is the basis for doing business in China.

We found that projects that follow a highly disciplined management approach like this tend to be successful, with the converse also being true. Humans by nature resist discipline, so this type of project management methodology is not easy. It takes “ideological fanaticism” to follow such a process (someone who not only won't change his mind, but won't change the topic).

Signing Off For Success. A crucial step in the team's change management discipline was the sign-off. We asked each of the nine Chinese module leaders to go through training; describe the work of their area currently; describe in detail the work of their area with the new process; identify the differences; verbally explain those differences to the Steering Committee; and sign off that these changes would be made.

If this sounds tedious, it was. If this sounds like overkill, it wasn't. It was critical to the successful implementation.

Training. The first step in the training process was to translate all of the U.S. training manuals into Chinese. Translations were done in Beijing, but then retranslated locally (about 30 percent of the manual) to capture the proper meaning in Southern China. Sixty-five training sessions were scheduled, involving over 200 people in the factory. This was a massive undertaking, at least doubling session time because of the translation requirements.

Our translator was the assistant to the Chinese project manager. She had to become extremely knowledgeable on the system before helping us teach the sessions. The process was pretty straightforward: The team presented a concept in English, she then explained it in Chinese. As trainees asked questions, she translated first to our trainer, and then answered back in Chinese. Clearly, this was a long and tedious process.

Unexpected Barriers. All projects face unexpected barriers, generally involving people issues, and this project was no exception. For example, we learned within weeks of the implementation date that the materials manager resigned (not good when you're installing an MRP System). Within days of the implementation date, during the home stretch, with the usual 18-hour days, the outstanding Chinese project manager was involved in a traffic accident and was hospitalized. The Steering Committee faced each issue and found a way to continue on schedule.

Team Morale. The team worked in an exhausting environment of heavy travel and late-night meetings. It was a very small team for a project of this magnitude, and each team member understood that his or her role was absolutely critical. One of the major roles of management was not only to address barriers but also to provide encouragement and appreciation to the team members.

Team morale stayed exceptionally high, possibly due to the lean team structure, allowing each member of the team to develop a feeling of ownership, each knowing that each job was critical to success. Throughout the project, the Steering Committee provided encouragement and recognition of our efforts—it's easier to do the impossible when other people know and appreciate that you are doing it.

At some stages, the team no doubt felt like it was in a war. Each member depended on the other for survival, and on his or her leadership for support. Like combat, team members operated at times on adrenaline, with a total immersion in stress. Our team members reveled in this, calling themselves “Global Warriors.”

A “Pulse Survey” was a useful device to gauge the mood of the team. We did such a survey every couple of weeks, asking team members anonymously questions such as Do you think the project will be completed on time? Does everyone understand his or her role? Have enough resources been assigned? Will the project deliver the benefits expected? Tracking the responses to these questions was an invaluable early warning signal to potential problem areas.

Results. With no MRP System in place, it was only due to the ability of T.C. Chow, the plant manager, and his staff that the factory was able to run at all. In fact, the factory produced high-quality, low-cost microwave ovens … albeit with a very large amount of inventory and the resulting obsolete inventory.

Without any disruption to business, the MRP system was implemented on schedule and the factory was positioned to grow into the 21st century. Obsolete inventory has been cut by half and inventory levels in general are down substantially relative to the level of business.

Global Lessons Learned. Lessons are learned from both successes and failures. A success is truly productive only if the valuable lessons are captured and incorporated into a company's education infrastructure. For example, we learned that:

images A project in another country, especially in China, will take substantially more time and resources than if done domestically.

images Cultural differences and their resulting complexities cannot be overestimated.

images Change management takes on an entirely new meaning in a global project.

images In the haste to cross tasks off the Gantt chart, it is easy to underestimate the effort required to manage change.

images Senior sponsorship and support is essential throughout the project.

images Attention must be paid to the morale of team members as they struggle with long hours and high stress levels.

IN THE FINAL ANALYSIS, people make it happen. Some teams are so highly motivated that they can do the impossible. In such an environment, leadership often takes the form of encouragement, and true leadership creates ownership. In fact, it calls to mind the words of that great Asian project manager, Gandhi, who said, “Here I am. There they go. I must hurry. I am their leader.” images


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This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

March 1999 PM Network

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