Thursday, March 5, 2015

The Chinese “Quality” Problem.

It is always dangerous to simplify a problem down to one root cause but sometimes you just have to take that risk and make a point.

I recently over heard some Chinese business people say they are not too concerned with the legal details or what will happen in some future date. They just want to get the contract signed now and get started working the deal and make money. These statements are made to answer questions I had about mitigating their risks down the road and helping them structure the best deal possible to anticipate what potential problems. Working in an American law firm has made me appreciate the small stuff, the tiny details and the seemingly not so important risks. The large firm experience taught me that something so small now can and will hurt you down the road. In fact, the Chinese business people came to me precisely because they didn’t care about the details in some distant past and just wanted to get started making money. So now they are having problems that they themselves caused and I’m trying to sort those out.

Unrelated to their legal issues are also quality problems of their products. Well, in this messy all connected world, their quality problem is also part of their current messy legal problem, but going into those details won’t matter to the point I’m trying to make here. What I think needs to be said is this: Chinese are not stupid, not lazy, not less than any other people. But somewhere in our history, we accepted the mentality that letting the details fall is not so important. This is also not prevalent in all aspects of the Chinese experience. In fact, growing up in China I recall how much I have to pay attention to the details in math classes. Getting a 99% was unacceptable. But somewhere between that demanding math education and the way Chinese do business and treat the rule of law, details become less important. Money now is what drives Chinese companies, not quality of product and doing things right for the long term.

So how is this a quality problem? Well, because the Chinese business people don’t think details are all that important, and are willing to sacrifice the few dollars now to avoid having to think through everything, they are not capitalizing the quality of product—legal or otherwise. And with this mentality carried over to the manufacturing production side, well you see the problem: why spend money fixing this small detail about this particular screw now when we can just roll this vehicle off the production line and count the income on our books? Same line of thinking as: why spend money now fixing this one word about this particular sentence because of this seemingly non-existence risk now when we can just move on with the adverse party and count the money in our pockets?

The Chinese quality problem, as I come to see it, is a lack of care for what the final product is. Money is what drives their decisions. Whatever happened to the old Chinese saying: 天道酬勤?

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