Silicon Hutong

Some Advice for The China-Bound Job Seeker

In the Hutong

Blogging as Work Avoidance

1051 hrs.

It is no secret that the economy-class sections of trans-Eurasian and trans-Pacific flights are increasingly filled with refugees from the global financial crisis, people intent on finding new lives and careers in the Wild East.

Aimee Barnes has written a post filled with thoughtful advice for these fortune-seekers (Falling in Love with China, and Your Career), and in the spirit of her exercise I want to add the following, posted on The Old Silicon Hutong in January 2006, but even more relevant today:

IF YOU’RE GOING TO GO EAST, YOUNG MAN, DON’T WAIT FOR SOMEONE TO BUY YOUR TICKET

It seems like every week or so I get an e-mail from a young person who is interested in finding work in China, and sends me a resume asking for my help. Nearly all of them are well-mannered, articulate, and well-informed about the region. I’m always happy to help.

But what I have discovered is that a large percentage of the class of 2005/2006 [NB: and 2009/2010] are not willing to actually come out here to seek their fortune. They would rather wait for the offer. I once thought that way, and it was the biggest mistake of my career. I’ve discovered since that the right thing to do would have been to get my ass on a plane and come out here - it would have saved me at least two years of scraping by, living in the guest room of a friend’s house, and working in jobs with limited prospects.

I want to help others avoid that, so this is the advice I gave today to one recent correspondent:

Not sure if I ever told you this, but between 1993 and 1995 I spent nearly two years trying to find a job in China from my home in California. I sent out 500 resumes, shook the guanxi tree, even published a quarterly China business newsletter. When I finally got a bite (from a newsletter subscriber), it was enough to get me over to China, but not the ideal job. Once here, however, I’ve never been unemployed for more than 60 days.

The primary reason for this is that most hiring decisions for China and Asia positions - even for multinational companies (PR, advertising, and others) - are made on the ground here in the region. If anything, this is more the case now than it was a decade ago, as most firms have so expanded their operations in the region that the Asia HR function is managed separately.

Because there are a decent number of applicants in the region, companies will only pay your airfare and expenses to come out for interviews under exceptional circumstances. Doing so is an expensive, high-risk proposition, and most companies choose not to take it. What this tends to mean is that if a company has to decide between two candidates, one in the US and one close by, the one already in the region gets picked, even if the one here is slightly less qualified.

On the other hand, executives and HR directors give high regard to someone who has come to Asia under his own steam. They tend to think that it demonstrates a commitment to the region and a high degree of personal initiative. The importance of initiative should be pretty self-evident. The importance of commitment cannot be understated. I can’t tell you the number of young people who get hired, come out to Asia, spend 2-4 years here, then decide “you know, I want to go back to the US and go to graduate school,” or “Asia is just not for me,” or “I’m afraid of being pigeon-holed as a China or Asia person, and the effect that might have on my career.” While understandable (except for the pigeon-hole case), such issues are frustrating for companies who invest heavily into the training and development of a young executive, only to see that individual pack it in and head back to the U.S. at just about the time they are starting to deliver a return on this investment. Commitment, therefore, is increasingly critical.

Trust me, I understand how difficult it can be to leave behind a secure home and 3 squares a day to do something like this. But even if you just manage to line up a couple of weeks of meetings and interviews, the price of a round-trip ticket on Air China or Northwest and a few nights hotel is well-invested. One young lady I now was finishing up at the University of Washington two years ago, and had been working as a waitress and a trainer at a national casual dining chain. She got a couple of weeks off of her job during the vacation, about a month before which she sent out a bunch of resumes, following up to line up meetings. By the time she got here, she had a full card of interviews. We didn’t quite hire her on the spot, but close. She came back, did an internship for 3 months, and we hired her. She was promoted within 18 months, and now heads the research department at B-M China.

Again, my goal is not to lecture, but to help set your expectations and to provide you with how I think you might best go about landing a job here. You may well be successful getting hired from where you sit, but I can say that the percentage of young, non-Chinese entry-level managers who get hired from the U.S. is small compared to those who are hired from here.

I’m not sure how he’ll take that, but I’m hopeful. Because I get a call or email every ten days or so from a friend or acquaintance who is looking to hire people like this.

The Lenovo Retreat

In the Hutong

Dreaming of summer

1920 hrs.

Jason Dean at The Wall Street Journal is reporting that Lenovo has replaced CEO Bill Amelio with Chairman Yang Yuanqing, and that co-founder Liu Chuanzhi is returning from his pasture to resume a seat on the board. They're also upping senior VP Rory Read to the new role of Chief Operating Officer and President, and the company has decided to re-focus itself on it's home market, China.

Bring on the Empty Horses

The announcement poses more questions than it answers.

We do not know what Mr. Read's duties will be in his new position, so we cannot assess to what extent the promotion was made to tap his talent, and to what extent there were other political or perceptual considerations involved.

We do not know to what extent this is a sign that Lenovo failed to effectively integrate the IBM PC division, to integrate the executive teams, and to meld its product lines, and to unite the cultures of the two companies. Lenovo has kept up a veritable sunshine pump of positive messages about how smooth the integration process was, and have effectively kept any discouraging words from sneaking out.

And we do not know the significance of Mr. Liu's return to the board, what forces brought him back, or what value he is expected to bring.

M&A is not a Global Marketing Strategy

At the same time, there are already lessons to be learned from the Lenovo-IBM saga. Purely from the perspective of marketing strategy, there are three that pop up immediately.

First and most important, as Chinese companies look to expand beyond the borders of the People's Republic, they should now see that mergers and acquisitions are no substitute for a global marketing plan. I am not certain what Lenovo thought it was buying when it purchased the IBM PC business, but if Lenovo thought it was purchasing a market position, it was wrong.

What the IBM purchase did give Lenovo was instant capacity to sell its products around the world, and to that extent the merger made sense. But that capacity only had value as long as it had world-class plans, products, leadership and support. Facing a rampant Apple, a resurgent Hewlett-Packard, and a humbled but determined Dell, Lenovo also needed forceful, and, focused, and capable leadership to turn the unified team into a winner against powerful competitors.

Winning against vigorous and entrenched competition is tough enough. Having to do so while integrating two strong and linguistically distinct corporate cultures must have added a maddening level of complexity to an already brutal challenge.

The World is Way Too Much

Second, trying to take on the entire world at once was ambitious in the extreme. Keep in mind that before the merger, the Lenovo team was struggling with its market toe-holds outside of China, and the IBM team was struggling to profit from its global market. A more modest approach was in order.

Rather than seeing this as Lenovo's opportunity to "globalize," the company's leadership might have been better off thinking of the merger as an opportunity to "internationalize" (a favored term among Chinese companies looking to expand beyond Greater China), focusing on a smaller number of markets where the combined company was strongest. (In fact, Dean's article in today's WSJ suggests the company will be doing just that going forward.)

After a merger of this magnitude, customers and employees in each market around the world expect the new company to spend a lot of time and effort explaining what the merger will mean to them. Who is Lenovo now? What is our vision for our company, our product, and our customer? And why should you, customer/retailer/employee/whomever, care?

Making that challenge even more complicated, each market has a different set of perceptions and expectations that need to be addressed, meaning that the effort has to be unique to each market.

It is hard to say whether Lenovo undertook that effort. But even if it did, doing it all at once in dozens of markets around the world would have overtaxed even the most capable, most tightly integrated marketing and communications teams in the world.

We're an American Brand

Third, the August 2005 decision to dump the "IBM" brand from products sold outside of China - five years before Lenovo was obliged to do so and mere months after the deal was finalized - will likely go down as one of the great mistakes in the history of brand management. The decision was made public in buried lede in an FT piece by Mure Dickie:

The focus on [ThinkPad and ThinkCenter] product lines marks a decision to play down use of the IBM brand for products made by the US company's former unit, even though Lenovo acquired the right to use the IBM name for five years.

More than a few analysts praised Lenovo's move to cast off the IBM moniker. As Bruce Einhorn of BusinessWeek reported in February of 2006:

It's a smart gamble for Lenovo, some analysts say. Using IBM's well-knwn Think brand has been helpful, but it won't do in the long run. 'The Band-Aid has to come off at some time,' says Samir Bhavnanii, principal analyst at San Diego-based PC consultancy Current Analysis. 'They need to establish the Lenovo brand and start thinking about their computer company as Lenovo, not IBM.' According to Bhavanani, this is the only way Lenovo will be able to break into the big leagues. 'If they want to compete as a global brand with Samsung, Dell, and HP, they need to get people to start thinking of Lenovo as Lenovo.'"

I do not disagree with the larger gist of the statement, but as I argued in August 2005, the problem was timing. (Apologies for the long quote and the fact that I was fasting and a little irritable at the time, but I think I phrased it fairly well and I wanted to convey my incredulousness at the time.)

As regulars here will recall, the primary reason I was a supporter of Lenovo's IBM purchase (from Lenovo's standpoint - it was a no-brainer for IBM) was that Lenovo was going to have an opportunity to leverage the IBM brand for five years while it built credibility with customers. Anyone with just a little business sense knows that's worth something.

In fact, it's worth a lot. According to the August 1 edition of BusinessWeek and InterBrand, the value of the IBM brand - the third most valuable brand in the world behind Coca-Cola and Microsoft - is US$53,376,000,000.00. My point back in December was that Lenovo wasn't buying a money-losing business for its $1.7 billion in hard currency, it was renting a highly usable $53 billion brand asset for a mere $350 million a year.

But Lenovo, under the expert guidance of Chairman Mr. Yang Yuancheng, apparently feels that not only do customers not need a transition, but Lenovo is unable to utilize a $53 billion asset to their benefit, an asset that they paid cash for and an asset that, arguably, was about the only useful thing they took from the deal.

Is the use of the brand "Think" worth that kind of money? I'm sure it's worth something, but I'm not sure it's worth $1.7 billion. And due to some stupid decision making at Lenovo, that's all the company is getting for its cash.

If I were a Lenovo shareholder, I'd be screaming. Five years usage of a $53 billion asset tossed into the garbage? In the U.S., that would be grounds for an uprising at the next general meeting, and grounds to question the competence of management, and any auditing firm with a conscience would require a write-off of those assets as a one-time charge against earnings.

The burning question is "why?" I'd suggest one or more of the following reasons:

1. Lenovo leadership just doesn't understand the esteem the IBM brand retains worldwide. Entirely possible since I'm not sure the Chinese side of the Lenovo house much understands the market outside of China.

2. Lenovo has no clue how to use the IBM brand. Also possible because they didn't know how to use the "Legend" brand, and they did a poor job building the Lenovo brand in countries where they lacked explicit government support and fawning-lapdog media endorsement.

3. Lenovo is ignoring it's advertising and PR agencies on a) the value of the brand, and b) how to use it. Having worked with Lenovo in an agency relationship and walked away when they weren't listening to either us or our competitors, I'd say this is a pretty real possibility. Salesmen and Engineers rank highly at Lenovo. Marketers do not.

4. Lenovo's advertising and PR agencies are incompetent and not pointing this out to Lenovo, or are terrified to do so because they think they'll get sacked for talking back. Also possible, because who knows where Lenovo is actually getting assistance these days.

5. Somebody really high in the Lenovo organization genuinely believes that the Lenovo brand means more to businesses and consumers outside of the PRC than what it really does, which is "Made in China by a Chinese Company - Beware."

Take your pick. I have my prejudices.

I genuinely hope Lenovo's management reconsiders. If they don't, I hope they're prepared for the consequences, which they quite clearly appear to have underestimated. If nothing else, they will have screwed themselves out of the biggest asset they got from IBM.

As I said, a mite harsh, but it makes the point. Had Lenovo ejected the IBM brand and followed it with a massive global effort to drive awareness, positive perception, credibility, and trust of the Lenovo brand in its place, discarding the IBM brand would have been a ballsy move. But both at the time and now in hindsight, that decision paints an unflattering picture of decision making at the top of the company.

Whither Points the Finger

Thus far the global economy and no less than two non-Chinese CEOs (Amelio follows his predecessor, Stephen Ward, out the door: Ward lasted just over seven months) have shared the implicit blame for Lenovo's fortunes. The latter have paid with their jobs.

In the coming months, however, the media and analysts will begin to turn their forensic attentions to the man who, in the words of author Ling Zhijun in The Lenovo Affair, "played a decisive role in the acquisition" of IBM-PC in the face of "serious" opposition from members of Lenovo's board: Yang Yuagqing.

It is instructive to remember that Lenovo co-founder and then-Chairman Liu Chuanzhi stepped aside after the merger, leaving the task of merging and running the combined company to Yang and Ward. In that light, it is even more interesting that he is coming back now. To those of us fond of the ancient and honored practice of reading tea leaves here in Beijing, the implications are compelling.

If I were a betting man, I would wager that there is a debate taking place behind closed doors at Lenovo headquarters in Beijing and in government offices around the capital about whether or not the IBM acquisition was the right call, whether it was handled well, and where the blame lies for its mishandling.

Make no mistake: the next few months will be critical for Lenovo, and they will be the deciding factor in Yang Yuanqing's career with the company. His task will not be easy, and he will be second-guessed at every step.

I, for one, wish him luck. He will need all the help he can get.

The Case for a New Public Diplomacy

Starbuck Pacific Place

A quieter, cozier coffee house

1457 hrs.

(Note: I wrote about Obama, China and Public Diplomacy in a Viewpoint piece on November 12 for AdAgeChina. The article is behind a subscription firewall, so I have expanded on, updated and revised it below for the benefit of Silicon Hutong readers.)

Now that Barack Obama has made his key foreign policy appointments, speculation and punditry is now turning to the shape that U.S. foreign policy will take after January 20th. When Barack and Hillary sit down to compare notes, I suspect that getting out of Iraq, staying out of Iran, fixing Afghanistan and North Korea, engineering a new Bretton Woods, and repairing ties across the Atlantic will probably top their lists.

Somewhat further down that list will be America's relationship with China. Given a full slate of issues, I am sure the President-Elect will be tempted to maintain the status quo, even if that may cause him some ideological discomfort.

I hope he resists that temptation, but not for the reason others might give.

A Different Audience

Since Henry Kissinger's first secret trip to Beijing in July 1971, the modern history of Sino-American relations has been conducted between U.S. diplomats and political leaders and a relatively small elite in the Chinese government. That same small elite, spread across the Party and the bureaucracy, has directed national policy, editorial bias, and public attitudes toward the United States.

When President-elect Obama is sworn into office, he and his foreign policy team will face a China that is different in subtle but fundamental ways from the China that each of the four past U.S. presidents faced upon entering office.

First, while the government and party remain in control, the means by which decisions are reached is evolving. China is increasingly governed through a process by which consensus is reached among groups and policy makers, or as I like to say "one party, many factions."

Second, this change has opened a window for groups outside of the government to exert more regular influence on policy making. While China's leaders and bureaucrats still operate in a system where they are free to ignore public opinion when they forge policy, they are (for a variety of reasons) seeking more input from business leaders, academics, foreign experts, and even the public itself.

Third, this is all taking place in an environment where the role of the web is growing in China, and the permissible scope of discourse is wider than most non-Chinese appreciate.

That all of the above has implications for the way companies do business in China should by now be axiomatic. What has not been explored is its importance to diplomacy. Because what this means is that the cauldron in which perceptions, attitudes, and policies are formed now includes a growing helping of public discourse.

Obama's China Challenge

This has critical implications for the approach the Obama administration needs to undertake in order strengthen U.S. ties with China, especially as many of the new administration's actions to address the daunting challenges it faces will be seen as running counter to Chinese interests. The Bush-Paulson Strategic Economic Dialogue was not without value, but it has shown its limitations in the wake of recent events. If Obama is to keep his hard choices from backfiring with China, he must make his case to both the Chinese government and the Chinese people.

And to be sure, Obama will need China. To see how much he will need to forge a true trans-Pacific partnership requires only a quick glance at the list of issues he faces. At the very least, China will be essential in forging a global energy and environmental regime, bringing security to Central Asia, ensuring that Russia remains integrated in the global system, midwifing North Korea's return to that system (and perhaps its peaceful re-unification with South Korea), and, of course, resolving the current global financial crisis and forming new system to both nurture and regulate international finance.

Speaking to the Chinese People

Conventional diplomacy will form a part of the Obama administration's effort to enlist that support, as it should. But in the current environment in China and the world, it will not be enough. Once in office, the President-elect and his team will need to undertake an unparalleled effort of public diplomacy to engage China's wider policy environment. This effort must shun the neo-propagandist tools and tactics of the Cold War, creating instead strategies, approaches, and messages more appropriate to a world rendered naked by the Internet.

That effort needs to be built on a foundation that includes, as a minimum, four fundamental steps that should be implemented by July 2009:

First, the administration must begin the effort to create (simplified) Chinese-language versions of nearly every public-facing U.S. website on an agency-by-agency basis. Some, like the Department of Defense, will and should be limited in their international friendliness. But others, like the Departments of State, Commerce, Treasury, Agriculture, and Transportation have immediate value and applicability in delivering US messages abroad, as does the White House site itself. This effort alone will open channels of communication that have been heretofore closed for no good reason. Meiguo.gov, maybe?

Next, the administration needs to learn how to listen to China's public voices. While this begins with engaging businesspeople, academics, editors, and other influential types, it has to delve far beyond the elites and find ways to listen to the people of China. Polling won't work. Far better to find a way to listen to what they are saying to each other, and China's blogs and online forums are an excellent place to begin. In lieu (or in advance of) creating an office in government to do that, independent contractors could be brought to begin delivering this information quickly and efficiently to every section of government.

Third, as the administration builds the capability to conduct its public diplomacy, it would do well to draw from the toolkit it created to win the election. Banished should be the United States Information Agency (USIA,) the Voice of America, and the feeble attempts to date by the U.S. government to use the Internet as a diplomatic tool. Any government can conduct propaganda. Given our tarnished credibility, America needs to win hearts and minds through engagement, not pronouncement.

This means learning how to make appropriate use of all of the online tools available to the administration that are popular among China's people. Trying to use tactics that worked in the U.S. would miss the point. Public diplomats must learn how to use the channels frequented by China's netizens in a way that will seem appropriate to those netizens and to China's leaders. That means treading lightly.

Finally, the administration must realize that to be effective, American public diplomacy must incorporate a substantial P2P element. Obama's efforts to enlist the help of all Americans in the changes he advocates would be well directed to an effort to rebuild our frayed reputation. In the long run, it will be the relationships between individual Americans and Chinese that will form the basis for grass-roots support for America in the homes and on the streets of China.

Walk First, then Run

The one impression I do not want to leave is that the administration should rush into this effort with great fanfare, with oversized expectations for near-term wins, or with the desire to create a massive new diplomatic bureaucracy. The art of diplomacy was not created overnight, and the Cold War public diplomacy I refer to above was itself a constantly evolving effort. It will be no different with the new public diplomacy with its new tools, new approaches, and new audiences.

What must happen quickly, though, is to recognize the challenge the U.S. faces in the reconstruction of a badly-damaged global reputation, to understand the value of the Internet and its myriad media in repairing America's image, to focus on China as perhaps the single most important focus of that campaign (aside, perhaps, from our erstwhile Atlantic allies), and to begin the effort at once on a modest scale.

I have no doubt that this idea will cause discomfort in some of the offices at the new U.S. Embassy on Nu Ren Jie and in the corridors and break rooms of State Department in Foggy Bottom. All the more reason to begin soon, while the new President still basks in the glow of his historic victory.

China 2.0 Tour: It Doesn't Get Much Better

Jingshun Road, Inbound

Adjusting to a more social life offline

1745 hrs.

If you haven't been following the China 2.0 Tour online via Twitter (#china20), you should really check out the site and the linked blogs of all of the participants. They are leaving Beijing tonight and heading for Shanghai to continue their tour.

I have had the opportunity to both run and to take part in many immersion programs seeking to help executives and others learn about China from the ground up. This one was ambitions in both scope and participants: audiences do not get much tougher than a roomful of high-profile bloggers.

But this program went off so well I told The China Business Network's Christine Lu that they need to make programs like this a regular offering to organizations, individuals, and businesses who really want a crash course in the China you do not see on CNN or read about in the papers.

I'm not accustomed to doing plugs here, but if they ever get around to offering such immersion programs, they would be well worth looking into. The kinds of people you meet, the range of perspectives you get, and most important the insights you take away are phenomenal. I fancy myself something of a China specialist and was participating as such, but I probably learned almost as much as the China "n00bs" on the tour.

Being the Change: Fonterra and the Milk Crisis

In the Hutong

Missing my nonfat latte

1933 hrs.

Better writers have covered the Melamine Milk Crisis at great depth already (check out Imagethief's article here as an example, or China Law Blog's coverage) so I won't belabor the story. I do, however, have two points to add, germane to what we've been writing here till now.

The Joint Venture and Ethical Rot

Fonterra, the large New Zealand food cooperative that partnered with Sanlu to manufacture the formula, will be remembered for a long time as a company that allegedly knew about the contamination some weeks prior to the kidney stone outbreak, that, justly or otherwise, reputedly did nothing to either stop the sale of the product or alert authorities. I cannot speak for the veracity of these claims, but they are circulating as if they are the truth.

In the Court of Public Opinion, what Fonterra did and did not know is now immaterial, and if the allegations of inaction are false, the company is going to face an epic and expensive effort in China and elsewhere to repair their reputation. I will not speculate on the cost to the company if the allegations are true.

The lesson of Fonterra is plain: foreign partners in joint ventures have three choices:

1. Pick a China partner of unquestionable operational integrity, and then watch over them like a hawk to ensure they continue to operate in an ethical manner, especially in crises;

2. Pick a China partner of imperfect operational integrity, then cram into every employee the importance of maintaining the public trust over any other consideration;

or my favorite

3. Avoid the joint-venture question entirely to ensure you can set and enforce ethical standards with ease.

Readers of this blog know that I am fond of saying that the Sino-foreign joint venture is a lawyer's dream and a manager's nightmare. Maintaining a semblance of control and a consistent strategy are difficult enough in a JV. In an environment where business ethics and corporate governance are no longer of mere academic importance, yet where moral relativism and the Eleventh Commandment ("thou shalt not get caught") frame individual and corporate codes of conduct, the joint-venture does not lend itself to the cultivation of ethical leadership.

My point is not to absolve Fonterra, Sanlu, or anyone else of any action or inaction because of their corporate structure. Rather it is to sound a warning to companies who are in or are considering a joint venture that these are easy places for ethical lapses to fester unless both partners are committed to setting - and enforcing - high ethical standards. Articulating those standards, training to them, and sticking by them even when there will be hell to pay for doing so is the only way to prepare for a crisis like this, and to have much hope of long-term recovery in its wake.

Quality is Free

When I was fresh out of graduate school, I was thrust into a production management role for which I was somewhat under-qualified. (I'm being charitable, here.) My job was to spend six days a week supervising the outsourced production of accessory furniture across 30 factories in greater China. I had trained in marketing and logistics.

Two things saved me: a deep affection for factories and line workers I gained working teen summers in my dad's investment casting foundry, and Philip B. Crosby's book Quality Is Free: The Art of Making Quality Certain. In the space of less than three hundred readable pages, Crosby gave me a graduate course in managing quality. But what was important was his core point: ensuring quality - and the considerable time, attention, and costs associated with the effort - is where profits come from. Until you stop seeing quality control as a cost center, you will never have passable quality.

Or, as cookie-madam Debbie Fields once said, "good enough never is."

The end result of this upheaval (once the children are healed and the accused have done the perp walk) will be that a few smart companies across China's food sector will see this as an opportunity, and will make major investments in quality assurance, both human and technical. These companies will realize that if nothing else, making investments in inspectors and equipment will be cheaper than regularly yanking product off the shelves.

As Mattel and hundreds of toy retailers learned last year, though, you can't trust quality to the last guy up the supply chain. There has been far too much "trust" and not enough "verify" in handling quality issues out of The World's Factory of late. When I was inspecting furniture in Taiwan, I frequently did it alongside third-party inspectors and buyers from some of my company's largest customers - American retailers. It pissed me off, it was costly for the buyers, but it was the only way to ensure that nothing slipped through.

It would be easy to throw this whole issue on the government, but this crisis has proved once again that business cannot wait for government action. The real lesson of the Melamine Milk Crisis is that quality is everybody's problem, from the farmer to the retailer.

Nota Bene

If you haven't already, you have got to read what David Dayton over at the Silk Road blog is writing about all of this. David is a longtime China and Thailand factory guy. He knows the ugliness around the quality control business, including what it is like to go into a factory and get accused of racism (or worse) for rejecting a critical shipment for quality lapses. In his writing, he's pretty merciless about the issues, but he's absolutely right. I am a certified pollyanna when it comes to China, but not when it comes to quality control.

The price of quality is eternal vigilance. And it is really clear there are lots of people asleep at their posts - or just looking the other way.

Being the Change: The Ethics of Baidu

Starbucks Pinnacle

Desperately Seeking Bandwidth

1241 hrs.

Over the weekend, The Register ran an a special report on Baidu, alleging that the Chinese search giant is engaged in technological chicanery in order to keep users plugged into vast and illegal reservoirs of online music (h/t maths at Music 2.0). The report is here.

Searching for trouble

The report explains - in forensic detail - how Baidu allegedly continues to make money on illegal downloads while maintaining plausible deniability. A taste:

Baidu's MP3 Search was monitored for six months at the end of last year, analyzing search results using 600 songs spread across multiple genre. A number of areas that seemed incongruous to a pure and neutral search engine were discovered, and three details emerged.

Firstly, a network of mysterious sites with closely related domain names contributed more than 50 per cent of the search links returned by Baidu. The songs hosted on the mystery sites were unreachable except through the Baidu search engine. Furthermore, infringement notifications resulted in unlicensed songs simply moving from one of these domains to another.

Secondly, Baidu does not link to the two leading paid download sites in China, 9Sky and Top100. While Google for example will return results for a song search to licensed providers (7Digital, Amazon, eMusic or even iTunes) as well as Torrent trackers, Baidu is much more selective.

Thirdly, music blogs and forums naturally form a significant source of music search links for any search engine. But with Baidu, these contributed to only 30 per cent of the music search links on Baidu’s MP3 Search.

The cumulative effect is to keep the "free music flowing" for Baidu's users - with devastating consequences not just for creators, but for rival internet businesses.

Even more compelling, the report also suggests that Baidu bullies journalists, publications, and websites into silence about its practices by threats and coercion.

In a superb post, Maths, a digital music advocate and avid China-watcher, builds on The Register's report and asks some penetrating ethical questions, suggesting that if the above allegations are proven true, Baidu's advertisers, investors, advocates, and anyone else working with Baidu in its music efforts are soiled by association.

It matters if the cat is white or black

I'm not quite ready argue for Baidu's conviction in the court of public opinion. The Register's report is only three days old, and I cannot ignore that the company has a list of powerful rivals that grows as it expands its business. Time will tell how valid these allegations are. Their appearance on a global website demands further scrutiny by the music industry, the media and the Chinese authorities.

But let's leave the specific matter of Baidu aside for a moment and examine the larger question.

At what point, we need to ask, does it become unethical to deal with a company that appears to be actively violating the law? Do you take a zero-tolerance approach? Do you wait for a criminal indictment? Do you do your own due-diligence? Or do you simply shrug your shoulders and say "I really don't care what kind of people I do business with, as long as my company makes out on the deal?"

These are not easy questions, but they are an example of the kind of issues a company needs to deal with in advance of doing business in China, or failing that, right now. As I noted in my second post on the iTunes blockage, business in China is a moral and ethical wasteland, so moral quandaries are a part of doing business here. Smart companies address those issues up front with clear guidelines.

As something of a moral absolutist, I know where I'd draw the line, but I recognize that others prefer a more flexible approach. Being a moral relativist in your approach to international business ethics does not mean you don't have ethical standards, however: it just means that every company will have different standards. Each company still need to draw a line, and you need to be able to justify it not only to local audiences here in China, but to your full range of stakeholders around the world.

Failing to do so puts your reputation - and your business - at the mercy of your least ethical partner.

Why are we here?

More important, such issues also give us a precious opportunity to demonstrate that the presence of our companies in China exerts a positive influence on the healthy development of the country and its economy. Either we come to Rome and do as the Romans, or we show up determined to leave the place better than we left it.

Deciding who we will (and will not) do business with - and under what circumstances - lies at the heart of our effect on China.

Twitter Branding?

In the Hutong

They shoot artists, don't they?

1614 hrs.

You can understand why many people in the corporate communications gig are still coming to grips with what many people call "Web 2.0," that collective set of online applications that depend on you, me, and other users to create the content. (I prefer calling it "people-generated media," but one buzzphrase is as good as another.) This is, after all, confusing stuff for a marketing craft formed in the comfy crucible of television, radio, newspapers, and magazines.

Sarah Milstein makes a good start in The New York Times, giving some good ideas about how Twitter can be used imaginatively in business. She explains some basics that apply to everyone (share ideas, share knowledge, and show respect), gives several that are imaginative (let executivess and employees Twitter as employees to make the company look with it, run contests, solicit feedback, respond to complaints, advise on status, thank customers.)

My biggest complaint about Sarah's approach is the Screwdriver-Nail Conundrum. Just because you CAN do something with Twitter doesn't mean that it is always the best tool to use (a truism that applies to any communications or marketing tool.)

Experience (and Sarah's article) suggest that there is no set formula for what Web 2.0 tools you should use in business, or how you should use them. Such decisions are not formulaic - they have more to do with your company, its business, its people, and the individuals and entities you need to interact with than the tools itself.

The best advice I can give to anyone about using Twitter (or blogs, or Facebook, or whatever) in your business is to actually go and try it out for yourself. Play with it for a while, get to know it, and then if you need go find somebody to help you figure out if and how it makes sense to use it in your business.

This is especially true when you wander beyond the the U.S. and Canada. Very few new media agencies or advisors in North America come packaged with regional experience or focus (Christine Lu is one of the very few.) The way to use these tools in China requires a more nuanced approach than in the U.S.

In the meantime, Joel Postman over at Socialized (which Sarah links) suggests some basic but excellent and principles-based best practices for using Twitter, but he keeps them basic and principles-based.

Free-Book-of-the-Week Club: Advice for Advisors in China

Outside Tower 2, China World Beijing

Waiting for the air to clear

1139 hrs.

Much of the work that we foreign-born and foreign-educated types do here in China is of a consulting or mentoring nature. Indeed, if foreigners have any long-term value in corporate China beyond serving as trans-cultural connective tissue , much of it lies in our ability to serve as conduits for soft skills like leadership, creativity, quality control, project management, and the like to the nation's growing ranks of executives and professionals.

A View to a Skill

Success in these roles means mastering an important but poorly-understood skill set. Whether serving as an advisor to the localized operations of a foreign multinational, as a quality inspector in a factory, a consultant to a Chinese firm expanding overseas, or as a mentor to talented young professionals, the way we deliver our counsel is as important - and in some cases, more important - than the information we deliver.

Sadly, the set of skills one requires to be an effective counselor, mentor or consultant is taught in only a tiny number of the world's business schools. It is as if these institutions - training grounds, as it were, for ranks of future consultants - assume that as long as the fundamental business knowledge is duly inculcated into their students, they will somehow magically graduate with the ability to appropriately, tactfully, and effectively passing on their acquired wisdom.

Worse, a discouraging number of professional advisory firms - not just management consultants, but law firms, advertising agencies, accounting firms, I.T. consultancies, and public relations agencies - also give short shrift to teaching advisory skills to their new hires. Off go their consultants, filled with knowledge and wisdom and no idea how to deliver it with the skill and grace to ensure its effectiveness.

The Missing Manual

The prolific professional-services guru David Meister has begun the effort to fill this vast gap, most notably with his work The Trusted Advisor (co-authored with Charles Green and Robert Galford), a book that should be required reading in any advice-giving firm. While providing an incomparable framework for building trust and selling yourself as an advisor, the book falls somewhat short on how to deliver good advice effectively.

Especially missing in Maister's work and that of others is how do deal with the challenge of giving such advice across a cultural divide - a particularly thorny problem here in China.

The good news is that there is a corpus of literature available to help, from the people who have been advising across cultures for decades: the military.

The U.S. military has been sending trained officers and senior non-commissioned officers into the field around the world as advisors to local military leaders since well before World War II. The British have been doing it for even longer than that.

And keep in mind that when these people give advice, it is serious business. When we provide advice, money and companies are at stake. When the military provides advice to senior officers of another country, the stakes are far higher.

Wisdom from the GWOT

Recently, the Yanks began pulling together the collected learning of a century of that experience into a form the rest of us can use. Most notably are two volumes of the U.S. Army's Combat Studies Institute Press' Occasional Paper series on the Long War: Advising Indigenous Forces: American Advisors in Korea, Vietnam, and El Salvador; and Advice for Advisors: Suggestions and Observations from Lawrence to the Present, the first authored and the second edited by Robert Ramsey, a retired US Army officer. (Both books are available as free downloads from the CSI Press website.)

Despite the ungainly titles, these are easy and fast reads. The first volume, Advising Indigenous Forces, is largely an exploration of the American experience in advising since Korea. Before you start, set aside whatever political issues you might have with these conflicts or America's role in them - they will only get in the way of you learning from the tactical, on the ground experience of people sent to advise strangers from a foreign culture.

The first two-thirds of the book will recount the experiences in detail so as to set up the last third of the book, which uses the conflicts as a means of deriving some extremely helpful lessons. It is worth slogging through - the insights and advice are poignant.

The second book, Advice for Advisors, is meant as a companion volume to the first, with fourteen supplementary articles fro men who had been advisors in the field, starting with World War I and moving through Iraq. The first article, for example, is "Twenty-Seven Articles" by T.E. Lawrence, more widely known as "Lawrence of Arabia." For reasons that don't bear going into here, I am not a fan of Lawrence, despite having read his book, The Seven Pillars of Wisdom. Nonetheless, his simple list of dos and don'ts elegantly encapsulates his learnings from years of field experience.

Another notable article in this volume is Edward Stewart's "American Advisors Overseas. From his position on the faculty of George Washington University, Dr. Stewart was one of the pioneers in cross-cultural communications and wrote one of the continuing classic texts in the field, and his article underscores how important it is to know your own prejudices and cultural issues before embarking on an advisory effort.

If you are in an advisory or mentoring position - or want to be - these are both worthy additions to your reading list. The price is certainly right (and much cheaper than one of my training courses on the same topic.)

Why I study war (and why you should, too)

Starbucks Lido

Blogging on the BlackBerry

0921 hrs.

In the midst of a discussion about business in China, a friend of mine and I had reached that point in the conversation where the talk was either on the verge of becoming profound or it was about to descend into arcana.

The discourse paused for a moment while the waitress brought our drinks. There was a relaxed pause as we each caught our mental breath.

"I've been meaning to ask you a question for a long time," he said. "Why do you read so much about war?"

Yes, why?

It was one of those questions that slams your brain into a hard left turn, not just because it was a hefty change in the direction of the conversation, but because it cut right into me. With all the books, blogs, papers, webcasts, magazine and newspaper articles on China, business, marketing, strategy, and communications out there, what the hell am I doing studying military science, military history, and international security?

I gave a flippant answer: "I enjoy it," and quickly returned to the previous topic. But there is more to it than just the recreational value.
Truth is, after three decades studying the martial sciences and two decades in business, I have discovered that not only does "studying war" enrich the development of business leaders, but also that a lot of businesspeople and companies desperately need a mental dose of modern military thinking.

Swords into pruning hooks

Let's address the question of morality first, as I am painfully aware that many people equate the study of war with the dangerous propigation of man's warlike instinct.

What is gained from the study of a subject depends entirely on the intent of the student. You can study anthrax with a view to using it to kill others, or you can study it so as to develop a cure, or to eliminate it and other infectuous diseases. In the same way, you can study war to help you plan an insurrection, organize a terrorist network, or invade a country. You can also study war to end an insurgency and what drives it, or defend a country from external threats.

Or you can study war as I do: to gain insights that can be intelligently applied in more peaceful endeavors. In fact, I think studying studying war is a moral imperative, even if the very idea of killing people and breaking things nauseates you - especially if killing people and breaking things nauseates you.

War's immense cost to mankind in blood and treasure through history is staggering. For us to waste any opportunity to derive whatever benefit possible that can be derived from that experience is unconscionable. A moral person may recoil from the ravages of war, yet acknowledge that we are ethically bound to extract from its study any lessons, innovations, models, or giudance that can be put to peaceful, productice, positive use.

Business and war

Of all fields that martial endeavors have influenced, perhaps the most compelling - and controversial - is how it influences business.

Drawing equivalence between war and business is an imperfect comparison at best. You may not buy the idea that "business is the moral equivalent of war," but like war business is fundamentally conflict and competition between groups for tangible ends. War is usually kinetic (the military's way of saying that it involves killing people and breaking things), and business is rarely kinetic, but there are enough parallels that key lessons can be shared between the two fields.

War and commerce are both conducted in the face of great uncertainty where the participants usually have a lot - or everything - at stake. Freedom of action is restricted - or enabled - by a series of factors outside the control of the individual. Time is insufficient, resources limited, and stress is high. The cost of failure, while not quite as severe in business as combat, is nonetheless high and very real.

Creating the business strategos

The first and most obvious way a study of war can enrich a business mind is in strategy, or, more specifically, helping a businessperson become a strategist - or at least a strategic thinker. In no field is strategy as important - nor the strategic art as well understood - than in the military, and the warrior-scholars (no, that is not an oxymoron) of history have added more good thinking to the field than all of the business thinkers put together.

For example, you probably know people who have read (or who have claimed to read) Sun Tzu's The Art of War. Long before Michael Douglas quoted Lao Sun while playing Gordon Gecko in the film "Wall Street," businessmen were tapping the ancient wisdom to inform their thinking. (Just a thought - anyone who actually did read Sun Tzu and took it to heart would never be caught quoting him. Why, after all let your opponent know how you think?)

The point is that Sun Tzu - a military scientist, after all - probably wrote the capstone text in business strategy, yet he was never even thinking about business. The reason his thinking is accepted in commerce is because generations of businesspeople had the foresight to recognize that good thinking, regardless of its origin, is what you need to succeed in business.

But wait...there's more...

So why stop at strategy? (For that matter, I wonder why most businesspeople go no further into the martial realm than Sun Tzu for their strategy, but that's a subject for another post.) There are a host of other areas where the military experience can enrich business thinking.

Take marketing, for example. Jay Conrad Levinson has made a career taking the simple ideas of guerrilla warfare - fighting larger rivals with unlimited resources when you have almost none - and applying them to marketing. Less known (for now) but equally wise Mike Smock has taken the theories of Sun Tzu and strategic visionary John Boyd and incorporated them into his Attack Marketing approach.

Just as marketing can benefit from a little martial thinking, so can consulting, managing global and dispersed enterprises, communications (internal and external), event management, and a host of specialty areas like medicine, telecommunications, and network theory.

There are entire spheres of business operations where the armed forces - especially those of the west - continue to match if not lead enterprise in the development of new thinking and approaches. Logistics and supply chain management, recruiting, training, intelligence, staff functions, career management, and creating and optimizing teams are areas where business owes much to the constant developments in these fields being driven by the armed forces.

Still not convinced?

You may be thinking "hey, aren't military types the thick-headed dudes we saw in ROTC who went into the armed forces because they couldn't get into grad school?" While I can't speak for your experience, understand that it's easy to be opinionated when your opinions aren't going to get people killed. The looming specter of death, defeat, and dishonor can turn a rigid thinker into an open-minded scholar awfully quickly.

Warriors become thinkers by necessity, not by preference. It is fair to say that the United States Marine Corps, for example, is a superb example of The Learning Organization. (Does your company produce a recommended professional reading list that covers each level of the organization? No? The Marines do, and the program has been so effective that all of the rest of the US armed services have picked up the practice.)

Even if you don't buy the whole business-war parallel, I urge you to pick up the book The Medici Effect. Frans Johansson describes how incorporating ideas from fields unrelated to your own with issues in your own area are a tested and accessible path to innovation. The application of, say, a new history of the Battle of Midway to your day-to-day work may seem counterintuitive, but I'm 100 pages into the book and I've gained insights into Japanese institutional dynamics that for me opened a whole new vista on Asian management. That's "The Medici Effect" at work.

All the help we can get

Globalization and the tempo it forces on us has made doing business insanely complex. You especially feel this in China, where the pace is brutal and the conditions in constant flux. Against that context, and particularly as we pause at the edge of what look to be even harder times ahead, we are foolish to ignore any rich vein of insights and approaches to difficult problems.

There is NO next-best thing to being here

Wangjing Gardens, 23/F

Looking over Northwest Beijing

1414 hrs.

As we watch these global arguments around whether heads of state should come to China for the Olympic opening ceremonies, another question rears its head in the shadows: where are all of the CEOs? And not just around the Olympics, but generally?

There has been a noticeable dropoff in the visibility of the multinational CEO in China. Part of this is the result of growing restrictions on the time national leaders spend in the presence of non-Chinese business executives, which itself is partly the result of the falling priority Chinese policymakers assign to foreign investment.

I sense, however, that there is more to it than this. Market access is no longer as problematic as it once was. Corporate focus has shifted to the day-to-day conduct of business, and many executives have likely convinced themselves that it is not as important to come to China as it once was.

One immediate example: as Apple opens their first China store in Beijing this week, Steve Jobs could not be bothered to decamp beautiful metropolitan Cupertino to attend the opening, much to Apple's loss. (We in the Hutong fervently hope that this is not for health reasons, and if it is, respectfully withdraw the preceding comment.) But Apple is not the only guilty party. The CEO who regularly comes to China (i.e., more than once per year) is the exception, not the rule.

That by itself is shortsighted. But I submit that much more is needed.

Put your butt where your business is...or will be

I am a huge fan of self-education generally, and I think that learning about China via books, web sites, blogs [see my blogroll], magazines, podcasts and other formats is a huge help to give yourself a strong foundation, maintain a clear view of China's evolving context, and stay current when you cannot be here.

For someone interested in China as a tourist or as an intellectual exercise, that and the occasional trip would be sufficient.

But for an individual who is counting on China as a significant chunk of his or her company's future, simply popping in now and again isn't enough. I discussed this at length with Christine Lu at China Business Network in a recent podcast, so I won't repeat it all here, but two points bear discussing - one that I made in the chat, one that I thought of later.

First, such a long parade of CEOs have aped key phrases like "how important China is to our company" and "how committed we are - and I am personally - to China" that those words have become platitudes. Officials and Chinese consumers alike simply ignore them. If you want to make it clear you are committed to China, you have to stop talking and start doing.

The best way I can think of proving that - better even than a monetary investment - is physical location. If China is so important to your company, Mr. Chairman, then transfer the flag. Take advantage of modern technology and the host of magnificent places of lodging and living and move to China for a bit.

Is China 40% of your business? Can it become 40% of your business? Then pack the bags and come spend 4 months a year here. I guarantee you that the insights, relationships, and brand value you get in the process will make it well worth your while.

MBWA is not about frequent flyer miles

Second is a lesson from Tom Peters - the best way to run a business is to spend as little time as possible at headquarters. Peters called it "managing by walking around." To Wal-Mart founder Sam Walton, it meant four-and-a-half days a week on the floors and stockrooms of his stores and distribution centers. To my dad, it meant spending about six hours a day on the factory floor, and most of the rest with customers.

To an executive running a global business today, it means getting on the plane and renting long-stay suites in countries that may not offer the creature comforts you're used to. Suck it up. Sure, you have great people running your offices, branches, and subsidiaries around the world. This is not about them. This is about you having an instinctive feel for the market so that your smart people on the ground can spend their time winning and keeping business, not giving you an extended course in China 101.

Elsewhere on the net

I also had a chance to talk to ChinaONTV about the China ICT conference, where I was a substitute moderator. Not quite as insightful an interview, but I really enjoyed my time at the conference and thought it stood out above a lot of the local tech confabs. Try this link if you're in China, and this one if you're not.

Aloha Airlines, RIP: Your customers may kill you

In the Hutong

Party Secretary on the piano

1056 hrs.

The death of Aloha Airlines can be used as an allegory for many things, but the lesson I take from it is that we as consumers need to rethink the role we play in the world. 

It's all fine and good to say "hey, I'm going to go over here and buy stuff because it is cheaper." That's the way we've been taught, and for many of us the need to save money is a matter of life and death.

How low do we need to go?

But a large and growing number of consumers around the world aren't going for "everyday low prices" because it means the difference between eating and not eating, or between having new clothes and going naked. For many, the issue is a matter of being able to buy what we need, and being able to buy a whole lot of things that we don't really need. 

When we were in Honolulu a month ago, we wandered over to the Wal-Mart behind Ala Moana Center, about two kilometers from our hotel in Waikiki. Prices were, frankly, really low, and when you walk into a place where decent quality is available at an irresistible price, a little gland in the back of your head fires and suddenly you are filling the cart with a ton of stuff that you don't really need. Think impulse buying on a grand scale that continues right up to the checkout line. 

The Party Secretary then did a triage on the cart, and we wound up "restocking" a significant chunk of the items that we had grabbed that we did not have on our list when we walked in the store. But we still bought stuff that frankly, we didn't need. 

And that is the upside to everyday low prices. We buy stuff we don't need because it is cheap, and we not only institute the Wal-Mart Effect, we also bring about unintended consequences in the form of waste, environmental damage, questionable labor practices, and businesses of all types driven into hardship, bankruptcy, or dissolution. 

So long, and thanks for the trips

And such was the case with Aloha Airlines. People saw the near term benefit of $29 interisland airfares that on the U.S. mainland would have undercut Southwest airlines by 65%. They ignored the long-term problem of destroying a business upon which much of the Hawaiian economy depends. And they were warned.

Oh, sure, there are still plenty of planes flying around Hawaii, but they are smaller (meaning more flights to carry the same number of people) and have no belly space (meaning the island lost critical cargo capacity to support not only its businesses, but that would drive up prices on everyday goods to everyone in the islands.) 

Time for Consumerism 2.0?

And service quality will decline. How many Californians old enough to remember the days of Pacific Southwest Airlines and AirCal would love to have those two airlines back, instead of USAir and United Shuttle? And how many of us would be willing to pay an extra $30 on a round-trip to have it?

I've always been something of a Milton Friedman laissez-faire capitalist. I am all in favor of creative destruction wreaked by the market. 

But I'm starting to realize that when we enable creative destruction, we have to use a little more foresight and understand exactly what it is we are destroying. The hidden hand will not ensure that creative destruction will not destroy something worth saving - we will, as consumers. 

Consumers in Hawaii are learning this the hard way. 

All of us had better. And soon. 

Selling Hong Kong

In the Hutong
Lactose Intolerance is my Cross
0832 hrs.

BusinessWeek reprints Gareth Powell's China Economic Review piece documenting how Shenzhen is about to overtake Hong Kong as the world's third-busiest cargo port.

On trah what?

Hong Kong began and grew as a trade entrepot, and for many years after 1949 was a busy center for manufacturing as well. Reforming and opening of the mainland have sucked most of the manufacturing upriver and inland, and (as today's story underscores) Hong Kong's importance as a center of transshipment declines as its picturesque harbor is pinched by reclamation and development - not to mention rising property values, growing pollution restrictions, and the climbing cost of labor.

In spite of all of this, Hong Kong's port will continue to prosper for a time. But to rely on the port for growth or economic vitality is growing less practical. Even the city's major port operators are betting on investments in faraway quays and harbors for their long term prosperity. Clearly, physical logistics is not the basis on which the SAR's leaders can or should build a vision for the future.

(Nor, for that matter, is some well-intentioned belief that the city is a great place to build online businesses - many of those industries are highly labor, power, and real-estate intensive, and the back rooms of Shenzhen, Hangzhou, Beijing, and Dalian are arguably better suited to become multimedia centers.)

More than Ports and Property

As many readers know, I hardly qualify as a Hong Kong booster: I think many of its people (Chinese and foreign) believe themselves far more expert in mainland affairs than they truly are, and I believe that the city clung to its role as a gateway to China long after that ceased being either true or necessary.

But I believe in Hong Kong, and feel that if the SAR could understand what it offers - and what it doesn't - it need not decline to become a lesser light than Shanghai and Singapore, a path it appears to be treading.

Where Hong Kong excels is in services. It remains perhaps the easiest city in all of Asia to get a lot of stuff done in a very little time. Every time I go to Hong Kong I am amazed at how many things I can knock off my list in the space of a morning or a single day. My company is domiciled there. My lawyers, travel agent, and accountant are all there, as are my bank, my tailor, my computer store, and my dive shop. What is more, I can get to every single one of those places in a single day, with time left over for lunch and some random shopping.

It remains the best place in the region to hold meetings, attend conventions, or run training programs. Setting up - and operating - a company there is about as easy as it gets. It is simpler and faster in Hong Kong than Singapore, Beijing, Shanghai, or Tokyo to do my banking, send a parcel (or myself) anywhere on the planet, buy a mobile phone, shop for just about anything, get a suit made, watch a movie, find a wi-fi hotspot, eat a meal, rent an office, buy a CD, or find a Moleskine notebook.

Where else is there a higher density of every business craft or profession? Law firms, accounting firms, advertising agencies, investment banks, venture capitalists, and head hunters abound in such profusion that you could probably get your needs met in any given office tower in Central.

(The Village Grouch and I frequently swap Hong Kong stories, each trying to outdo the other on how fast we got from the gate to the train at the airport, how much we got done in a morning or an afternoon, or comparing notes on our latest "Hong Kong hack." Yes, I know, it's a pathetic hobby, but it is mine.)

It's the Services, Guys

If I were doing a marketing campaign for Hong Kong, I wouldn't be pushing it as a "city of light" or "Asia's world city." Both campaigns are fine for people who have never been to the city and are looking to spend a few days in a conveniently compact Asian metropolis. They will not, however, bring people - and their investment dollars - back.

If I were doing a campaign for Hong Kong, the tagline would be simple:

Hong Kong. At Your Service.

Forget real estate and shipping. If I were Donald Tsang or any of his staff, I would be giving a lot of thought to how to shift the SAR's industrial policy and external marketing toward highlighting - and growing - Hong Kong's role as the service entrepot of - if not Asia - certainly of Greater China.

Getting Serious about Service

To make that happen, the SAR government needs to get itself a laser-focus on becoming the place where stuff that is unnecessarily difficult to do elsewhere is utterly simple to do in Hong Kong.

That means a marketing campaign aimed at three separate audiences - tourists, business people, and corporations - that all emphasize how Hong Kong is a critical part of Asia for them because Hong Kong will help them a) get stuff done, and b) make getting stuff done elsewhere in the region simpler.

That means an effort to attract and retain major personal and business service companies from around the world.

That means an education policy that prepares Hong Kong's children to be leaders in service based industries, including a commitment to restoring Hong Kong's leadership in English language instruction.

That means a policy focus aimed at encouraging - even subsidizing - companies who are genuine innovators in services. You have a better way to do something for people? This is where you want to be.

The great part of all of this is that Hong Kong is already half way there. Services dominate the economy. Hong Kong's major brands - Cathay Pacific, HSBC, A.S. Watson, Hutchinson, Shangri-La - are almost all service brands.

The greatest problem is one of positioning: Hong Kong has never articulated these strengths well. That needs to change. Now.

Otherwise the city is doomed to become a sad provincial shadow of itself, a narrow stretch of water surrounded by expensive real estate and the effluent of the Pear River estuary.