For business leaders in a regional responsibility role (or aspiring to it), managing the relationship with company headquarters can often require as much effort as the daily operational elements. For Global MNCs with China subsidiaries, the cultural complexities can be even more pronounced.

To provide some insight into how best to maintain your local strengths while being a global team player, CEIBS Associate Dean and Director of the Global EMBA programme Professor Bala Ramasamy enjoyed an informal yet enlightening chat with Justin Wang, VP & Regional Head, Greater China, for SABIC. Around 60 participants (CEIBS alumni and external guests) joined the event and subsequent Q&A session.

First, a little context 

The Beyond Classroom series was initiated almost one year ago by CEIBS Global EMBA programme. It is designed to invite senior business leaders to talk one-on-one with a CEIBS professor about everything that there isn’t time to discuss in the classroom. Whether the subject matter is sector or region-specific considerations, or more general career progression strategies, the guest interviewees lend the weight of their experience and personal insights, broadening the mindset of those in attendance.

Justin Wang has 30 years’ experience in the global chemicals industry. After 21 years with a local Chinese firm, he switched to a large Dutch conglomerate DSM before recently achieving the Greater China leadership role with SABIC. Headquartered in Riyadh, Saudi Arabia, SABIC is a globally diversified chemical manufacturer with total assets of US$78.5 billion, annual sales revenues of $37.7 billion and a workforce of 29,000 present in 140 countries.

The following insights are taken from the conversation between Justin and Professor Bala, as well as the group Q&A.

“Glocalisation” is the key to handling a regional role 

In any multinational company, the people at headquarters may have some bias either for or against a given regional subsidiary,” believes Justin. “If you’re a regional leader, it’s your job to challenge their way of thinking. Glocalisation is a good word, but it’s just a fancy way of saying that you need to think in a global context, while demonstrating local value.

Justin’s experience across a range of different corporate setups and company sizes within the chemicals industry has shown him that, wherever possible, regional leaders should be looking for ways to highlight their local value to HQ. While successes don’t have to be replicable or even transferable to other territories where the company operates, successes that have an impact beyond the local territory can help a regional leader “build their credit” with HQ.

Not only can this help revise HQ leadership’s opinions or biases regarding their subsidiary, it demonstrates how the latter is fully aware of the overall needs and objectives of the former, rather than choosing to operate in a vacuum.

Giving a concrete example, Justin outlined a situation in his previous role with DSM when African Swine Fever had just arrived as a novel virus in China. As an unprecedented outbreak, there was no textbook solution to rely on, so Justin and his team needed to be bold and use their local strengths to forge an outcome that was beneficial to both the subsidiary and the wider organisation.

We made a proposal for a 10 million RMB investment to find a solution. Our global colleagues asked if I could guarantee its effectiveness. I told them that while I couldn’t guarantee its effectiveness, I could guarantee that if we did nothing, we would be out of the market, so we had to do something. Initially, we got a lot of silence and scepticism, which I took as silent agreement. Two years later, we won the DSM Global Innovation Award and the whole market was following our approach. This shows that you have to be bold, put your trust in your local capabilities, and dare to show everyone what you can do.

Practice “Relentless” Communication

When Professor Bala asked Justin for his specific advice on how to handle any rigid thinking or slowness in responses from HQ regarding Chinese branches, he shared how his particular style of communication has proven effective. 

Recognise that communication is so important no matter the business or cultural context at play. I always try to promote ‘relentless’ communication. Tell HQ what you are doing, again and again if necessary. Share with them your perspectives, your successes and also your failures. Think about how you communicate with your partner or your children. Do you simply tell them one thing and then leave them to fill in the gaps? No, you constantly communicate with them, sharing what is important to you, while also listening to their needs and concerns. Such relentless communication makes for a better relationship in both setups.

The importance of free-flowing communication led the discussion towards the developing trend of top leadership spots in MNCs. While CEOs and other C-suite leadership positions of many of the world’s most prominent global companies are being filled by business leaders from India, their Chinese counterparts are far less present in these roles. Professor Bala asked Justin for his hypothesis on why this is the case.

It’s another matter of communication; our Indian colleagues tend to be far more effective in selling their vision and communicating their wins than Chinese business leaders. While this is a generalisation, when Chinese people have three achievements, we may only dare to share one of them with our superiors. Meanwhile, Indian leaders are front and centre, clearly articulating what they are doing well and what they hope to do in the future. That’s something people within a company respond to, whatever their role.

Seeing is believing – Get HQ to come to you

Justin’s final piece of advice was that if you aim to bridge the gap between your company’s HQ and regional arm, then quite literally, physically, bringing them over can be extremely helpful.

No matter the company or the countries involved, the HQ always has the natural advantage. They are the centre, and you are the periphery. So always recognise that you need to earn your credibility. While they may hear good things about you, they may read favourable reports from afar, it’s often the case that seeing is believing, so get them to come over. Invite them to see and feel the local context in person, to witness your local strengths and take it back to HQ. While you are demonstrating your strength on home ground, they are out of their comfort zone, out of their office and away from their innate biases. This is where you have the chance to change their perception of you and your team for the better.

Bigger Picture – How do European Companies view China today?

After delving into the complexities of regional leadership and HQ relationship management, Professor Bala drew the interview to a close with several questions on a more macroeconomic level.

While Justin is now working for SABIC, a Middle Eastern MNC, his recent years with DSM have given him acute insights into the European mentality regarding China. Given the ongoing mission of CEIBS, the past turbulence of COVID, and the current geopolitical tensions around the world, everyone in both the EU and China is keen to understand where the relationship is headed.

While our US colleagues often talk more straightforwardly about decoupling with China,” Justin says, “those from Europe more subtly describe their China strategy as de-risking. The Russia/Ukraine conflict was certainly a wakeup call regarding European dependency on Russian energy; now the question is how to avoid a future dependency on China, for growth, for markets, for anything.

Given this context of necessary de-risking, Justin explained that in many areas there is less enthusiasm for European investment into China, and often less acceptance of Chinese investment flowing the other way. However, this hesitancy doesn’t change the business realities or “facts on the ground”.

If you play the stock market, you only have three options: buy, sell or hold firm. If you think of China as the stock and European companies as the holders, the reality is that most of them cannot ‘sell’ (i.e.: retreat from China) because they are too heavily committed. Their major assets are in China, much of their consumer audience is in China, so cashing out really isn’t an option. That leaves ‘buy’ (invest more into China) or ‘hold firm’. Some companies may have the courage to invest, but that’s a risky move in uncertain times, especially when you’re trying to ‘de-risk’ your situation. Therefore, I think the majority will hold firm for now, and see what the future brings.

Be bold, but don’t make assumptions

A final, parting gem from Justin for would-be regional leaders looking to establish an optimal relationship with their headquarters was to recognise that empathy works both ways. While the regional leader is always battling to make their voice heard and their achievements recognised, HQ has its own battles to manage as well.

There’s a stark difference between being bold and being overbearing. The assumption is often that US or EU headquarters don’t understand China. Don’t make that assumption, and don’t assume that you fully understand the pressures and challenges facing your HQ. While the popular view is that HQs frequently ignore good ideas and intel from their localities, this isn’t always the case. Sometimes, we’re wrong and they’re right. So always try to convince and persuade, rather than complain and harangue. If you feel that you’re right, make such a convincing case that HQ cannot ignore it. They have a lot of smart people there, or at least, they certainly should have!