In some emerging markets like China, we find the pattern is reversed. Relationship comes first. It’s almost as if the assumption is that if the relationship is strong, then the two firms can solve any issues that exist with respect to product, service, or price.
There is a strong lesson in this for western firms about the need to invest in business relationships. It’s not only critical when they target new markets like China, but it’s a lesson that can apply even in the more traditional developed markets.
What can be learned from other geographic markets, firms or industries about building CoDestiny relationships?
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That means large commitments of time and energy in building the relationships that lead to this kind of trust. And it means going to great lengths to not squander that investment. We worked with a client recently who was forced by economic conditions to cut staff in Asia. I met with some customers shortly thereafter; they described not being consulted before those decisions were made using words like “offended”, “hurt”, and “betrayed.” These are words used to describe the ending of close personal relationships, not often used in the west to talk about personnel decisions in a supplier company. Indeed, what we would view as non-events in terms of company-to-company relationships were viewed as a signal that the business relationship wasn't valued or was ending. Consultation and a sharing of the pain of the economic downturn would have been the Asian way of proceeding.
If instead of the negative, we focus on the positive aspects of such a system, I think we can see important lessons and opportunities. Formal agreements have a context that can become irrelevant. But, friends help their trusted friends succeed, whether it is finding new business opportunities for a key supplier or key customer during a downturn, jointly determining how to take costs out of a product in response to a shift in competition, or running the factory over Chinese New Year to deliver a critical order on time. It also explains why major customers expect you to take responsibility for a defective product long after the warranty has expired. They would do the same, knowing that to do otherwise would harm the relationship that facilitates so much other efforts to succeed together.
So, while different in form, relationships in China can be seen as a different way of implementing a number of the important lessons in CoDestiny.