The MGS Blog

Friday, January 14, 2022

Celtic Tiger, Chinese Dragon (case)

The company organises its 'enterprise software' development and production teams according to a 'lean development' framework. The management team's emphasis is on the top line; new sales, big deals, big customers, (even better to get big-new-customers). They had achieved success in the past by being close to the customer, understanding the customer, achieving 'fit' with the customer. The executive team and the board of directors saw bottom-line cost control as important, however close involvement with the company's customers, bringing features inside the core product had enabled continuous renewal and evolution of the product lines.
A number of consultancy projects in China were now exceeding the size of those in Europe and North America. Chinese semi-states and private corporations were investing heavily in cutting edge, large scale, IT infrastructure. Of all the developing nations China was the biggest and growing the fastest. In the end the decision to setup a centre of excellence in China was straightforward.


Excerpts from interviews with a Senior Software Engineer (Chinese) and the Director of Product Management (China office).

(Director of Product Management)
"...one of the reasons is [the China office] adds value to the company. If we think about the four of five possible strategies for a growing tech company, well, having a foothold in your market, plus smart people, smart customers, high profile, high value projects. It ticks all the boxes."  
"Establishing a centre of excellence in China is a dream project in many ways. When you acquire a company you have to work with a pre-established team. But setting up a green-field R&D centre, like now, it's a clean slate, new office, new hires, using our 'foreign' methodology."
"Our in-house development methods and practices are inspired by the Agile and Lean movements. Projects, operations and development use our own take on the Scrum or Kanban style of process. I have decided to use our in-house methods from the start. The local engineers might look on it as a 'foreign' approach but I don't think we'll see resistance. They are open to learning about it." 
"My view is that Agile is a strict discipline; it's more disciplined than other methods if you do it in a highly structured way, get rid of the 'ad hoc' style that seems to be associated with it. Start your stand-ups at 10am (not 5 past 10), finish strictly at 10:15am. The stand-up conversation should be structured; specific challenges approaching, specific problems you are facing, you've either run or written a test case. Programmers will like that. There's 'do or don't', 'did or didn't', no ambiguity and you need these type of conversations. Agile brings this to the front." 
"But yes, I am worried about the difference in culture, particularly problems with 'face'. How do you get engineer's admitting to difficulty or failing to achieve something?" 
"When you set up an office in another country, there's a fear among your people at the home base! You immediately create the potential for a social divide that applies when you move to an offshore site." 
"Imagine, your company sets up an office in China where the engineering costs are lower. Do you want a situation where you say 'designed in California, made in China'? What does that say about a social divide in the company? That's the choice you have to make." 

(Senior Engineer)
"In China software engineering career has quite a lot of respect." 
"In general, software engineers work long hours, often seven days a week, starting early, leaving late." 
"International companies might have more formal policies, leave work at 7pm, come back in the morning. But they might not be as flexible as smaller companies that expect working around a project. If an emergency comes in a small company they might have to work all night."
"Yes, there is a lot of employee turnover. Conditions can be bad, the overtime, bad management, working away from home." 
"Now Agile is well known in China. In the real implementation there are some cultural differences that might make it feel different to an implementation in the US. But a company, should not admit some failure to its customers." 
"Let me put it this way; In western countries, people like to treat work like playing games. But here in China, a manager here is something like the parent, not childlike." 
"I don't accept the childish approach. Engineers think 'we are not kids, we are adults'. So Agile can inspire engineers in the West because it is playful, but in China, I don't know?"
"If your company commits to something your business lives or dies by it. But that's business in China, completely different to the West. Completely different."

Related Data
  • Agile 101 - Methodologies, Learn more about Scrum, XP, DSDM, FDD and Lean software development (www.infoq.com).
  • Understanding Chinese business culture: potential starting points for developing an understanding of guanxi (relational) and mianzi (face/status/rank) on wikipedia.org or google search.
  • Issues around manufacturing in China (sources: Irish Times Thu, Dec 29, 2016, 17:17; Seattle Times December 31, 2016; original article New York Times)