China Competes

I was then introduced to a medium-sized IT companies. The CEO and all senior level managers were all post-80’s. Yes all of them except the CEO had not reached the age of 30. And the CEO was only 31! It’s almost like a technology company in the Silicon Valley. Having said that, their business was based on the old and tried relationship cum technology application instead of innovation. If you’ve ever been in direct contact with any Chinese companies, you know their ambition is much bigger than entrepreneurs in any other Asian countries. There are simply too many business opportunities in China. For smart people they can easily seize any one of these available opportunities and become rich - very rich indeed.

The next day I was back to Shanghai to sign a contract with a Sweden-based training company. Just like most multinationals nowadays, they’ve selected Shanghai to be the location of their Asia Pacific headquarters, not Hong Kong. Did Hong Kong lost its lustre as a favourite place for company headquarters? I believe so. The market is not there. All eyes are on China now. Hong Kong only has a better legal system now, and all other competitive advantages that were there in the 90’s gradually disappeared – Higher quality human resources, better financial system, and more advanced infrastructure. Infrastructures like highways, airports, public transportation are easy to catch. Hong Kong still has a slim edge over Shanghai in terms of financial system. At least its currency is freely convertible to foreign currencies, and there is no control of currency flow in and out. Some companies may not care too much though, as they keep reinvesting their income into this huge market.

Human resource quality, however, is the most obvious area that Hong Kong has lost its advantage. Hong Kong used to be known as an international city, then ‘Asia’s World City’. My worry is one day it will become just one of many ‘China’s international cities’. Do managers in Hong Kong possess international perspective? You got to be kidding me! Maybe those over 40 years of age still have more international exposure. Over the past 13 years since Hong Kong was reunited with China, it’s tried very hard to become a domestic city of China. People may say the future is China so it is natural Hong Kong turns its eyes to the Middle Kingdom. By doing so, however, competitors of Hong Kong have also changed from Singapore and Tokyo to Shanghai, Shenzhen, Guangzhou and Beijing. What can differentiate Hong Kong from these competitors, and what advantages does Hong Kong possess that can help it compete? Unfortunately there does not seem to be any. The youngsters in the Yangtze River Region are well educated. Their English are slightly poorer but not that far behind. Their international exposure is as much, if not more than, as their Hong Kong counterparts. More importantly, they have a strong sense of purpose and will to succeed, which people in Hong Kong and particularly youngsters are lacking.

Let’s get back to my partner training company in Shanghai. The President was a Swedish lady who started this office eight years ago. She was very proud of what she’s achieved. She told me her daughter and son both spoke some Putonghua, and would be volunteer workers during the Shanghai Expo. More and more foreigners are heading to China. They are preparing to stay there for a long time, if not for good. They all feel the dynamism and strong growth atmosphere there. As one of my foreign friend from Australia once said, “It’s a once in a lifetime experience to be in a high growth country like China. I’ll be there for experience, if not for fortune.”

We are probably lucky to have the chance to witness all these historical changes in China. It is not yet in the big league but close.

Career in China!

Wuxi is a very different city from Shanghai. Shanghai is a metropolitan with more than 20 million people. Skyscrapers are everywhere. Wuxi is much quieter and in my opinion more livable. That does not mean that it is not economically active. It used to be an area with major heavy industries. And now it’s trying to turn itself into a technology hub. The local government has pumped tons of resources to kick start a technology sector, including building several science and technology parks. As CMMI is a top priority service, my friend was invited to set up a consulting company there a few years ago to support CMMI certification of IT companies in the Yangtze River region. Although there were plenty of incentives, I do not want you to think it was an easy decision for a professional in Hong Kong to uproot himself from a city he had lived for most of his life to an entirely new environment. The fact that his wife and almost grown up kids are staying in Hong Kong merely illustrates his determination.

To operate a company of similar scale in Hong Kong, we may be talking about a few hundred thousand dollars per month.

This may be a topic professionals including project managers in Hong Kong have to think through. There are plenty of opportunities, both business and professional opportunities in China. The living standard in China is also rising rapidly. Are you willing to give up, at least temporarily, your nice and comfortable living condition, even your apparently higher salary in Hong Kong, to move to a fast developing economy? When I say ‘apparent’ I mean the real living standard in China, based on the decreased nominal salary, can actually be higher. An obvious example is monthly rental for an apartment. You may be able to pay only RMB 2,000 for an apartment in a newly built and furnished low-rise building with good living space and all daily necessities including appliances, air-conditioners, TV, Internet and phone. In Hong Kong the same apartment can cost you HK$ 25,000. Adding to that, there is a real opportunity for you to ride along the fast-moving economic train, making much more than you currently do in Hong Kong in a few years’ time. If you are lucky, you may even become rich (say the company you work for is publicly listed).

The next day I went to his office in one of the science parks. The park also houses a Carnegie Mellon Technology training school, IBM, and numerous multinational and local technology companies. My friend’s company was nicely located on the second floor of a typical no-frill (minimum but still nice renovation) building, with a reception area, an executive room, a reasonable-sized meeting room, and multiple cubicles. He hired around 10 employees. That’s almost a dream office for a small company. In Hong Kong if you want the same setup and number of employees you may be talking about HK$300K per month. But in Wuxi we are talking about much less, one-tenth maybe. I guess we can pretty much conclude that the high rental and salary level in Hong Kong really kills lots of industries, including those high end knowledge-based ones. Yes you may argue with me using those archaic no-intervention theories of free economy. But the truth is when property prices in Hong Kong would eventually go down due to lower demand, many industries would have disappeared. Maybe part of the reasons why property would eventually go down is simply nobody wants to live there anymore, hmmm…

Carnegie University has a campus in this science park.

China Rising!

I went to Wuxi and Shanghai of China last week to visit an old friend and business partner. My friend used to run a CMMI consulting company in Hong Kong but moved to China two years ago. My curiosity prompted me to go there and see for myself what could have tempted him to such a drastic change. It’s also partly my other business commitment that I had to be in Shanghai for a meeting with another business partner that week.

So I took the first flight on a Sunday morning, right after my last workshop in March. I started with a lunch gathering in Shanghai with two of my former colleagues at AT&T. They are still in the ICT industry and doing great. One of them became a senior manager of a US-based telecom, and another a senior technology professional of a global technology company. Both of them seemed to be in buoyant mood, just like any other professionals you would meet in China. They are optimistic about the economic growth and future prosperity of China. Like any other Shanghainese citizens, they were amazed about the trend of property price there. None of them would bet the price would go any higher, but they would not bet against it either. They just knew one day property price would go down, though nobody could tell when. At the same time, I could also feel the slight dissatisfaction of most people about the vast discrepancies between the ‘haves’ and ‘have nots’. Better wealth distribution is really a big problem in China.

Swamped with people in front of the Bund; Only later did I know it's the day of re-opening after extensive renovation works of the Bund for the upcoming Shanghai Expo.

My friend picked me up at the Shanghai train station. The new Concord train was both quiet and comfortable, despite lots of people trying to get onto one of the many trains running around in the Yangtze River region everyday. Compared to the train trip which was really relaxing, the time spent in the ticketing office was far too tense, and unnecessarily long. Most ticketing booths were automatic, and one thing I really admired was people started to get used to staying in a line now (that’s something I was really pleasantly surprised and liked.) Having said that, there were just too many travellers. Well Chinese constitutes one-fifth of the world population so one thing you would not be able to avoid was people.

No it is not demonstration! It was just a popular tourist place near the Bund. Chinese people are much more disciplined in public place and beginning to demonstrate good everyday etiquette.

To be continued...

Hospital Authority Luncheon Seminar

The PM SIG of the Hospital Authority IT Division invited me to give a luncheon seminar last week. The topic was “Five Golden Rules for Managing Project Risks”. Risk is a topic that I am immensely interested in. Readers of this blog probably know I published a Risk paper here based on another seminar I delivered before.The PM SIG is organized by the PMO of the HA ITD, comprising several senior managers with rich and deep experience in project management. I really admire their enthusiasm and professionalism in promoting better management of their IT projects. It is appropriate to have many formal processes while at the same time elevating skills of individuals when delivering projects, as hundreds of millions of dollars are at stake there.

Given it was a luncheon seminar I did not want to burden the audience with heavy stuff so I focused more on the lighter side of risk management. One analogy that came out of the seminar is definitely similarities between managing risks in road traffic and projects. Both rely on a methodology – in the case of road traffic it is a set of stringent rules and regulations, as well as skills of individuals – drivers or project managers.

The funniest discussion probably is some drivers pretend to follow an important procedure when changing lane, namely check the blind spot, but do not really check. They merely turn their heads because their driving teachers trained them to just simulate this action to get past the exam. This is similar to some project managers in the real world pretend to follow an important risk process such as updating a risk log, but not really evaluating risks at hand. They do it for the sake of satisfying requests from senior management.

I look forward to another luncheon seminar at HA this month. This time the same topic will be delivered to a group of medical doctors, physicians and clinical staff.

WOW - Worst of the Worst Scenario analysis is an important concept in risk management.

Dr. Wing Nam Wong is a key driver of the HA IT PMO.

Although it was a luncheon seminar, projector and powerpoint slides were still essential.

A Few Cultural Observations

You’ve probably heard of the term ‘title inflation’. Title inflation means the title shown on a person’s business card does not match his/her job responsibility, and the power that comes with it. In Asia you can easily come across people with the title “Project Manager” which is quite senior in Western countries (i.e. North America, Europe or Australia). They look so young that you can hardly believe that they have the experience required to be called a “Project Manager”. Well, a “Project Manager” title is in fact a junior title in Asia. People in the IT sector, after the first few years as “Programmer” and “System Analyst”, will be generously given the title “Project Manager”, even though in Western business community this title more likely carries more than 10 years of project experience with it.

Other examples of inflated titles include “Assistant Vice President” (this title contracts itself – how can one be both assistant and vice something?), “Vice President”, “Director”, “Managing Director”, and “Project Director”, especially in the banking and IT sector. I’ve once visited an investment bank for a presentation. When I entered the meeting room, a lady handed me her name card. Her title is “Director” which, accompanied with the Chinese translation (董事) led me to think that she is a very senior person within the bank. Then her boss came into the room and his title is “Managing Director”. I was confused. Then again the boss of this “Managing Director” came in and handed me his business card. He was an “Executive Director”. It is only then I understood this investment bank was quite generous with titles.

Another observation in Asia is people likes academic and professional titles too. Some people in Hong Kong have so many professional titles such as PMP, CPMC, CSOXP, CISA, CEng and so on, and they feel the need to show them all to the others. I've met a few people before and one side of their name cards just enlists all their 20+ titles – so pathetic. Needless to say they show all their academic titles such as PhD, DBA, MSc, MBA and even BSc as well. In US, Canada or Europe, I've never come across a name card that shows more than 2 titles, many cards show none - and they don't like to be addressed Dr. Bloke, just Joe.

In my opinion this only shows their lack of confidence on themselves that they need some grand titles to support them. My hypothesis is Asian (mainly Chinese) education system does not aim at building up students’ self-image and confidence. On top of that Asia is under the influence of Chinese culture which emphasizes on: Formal education with stringent structure; Conformance to collective behavior; Authority and obedience over individual differences; and tangible measurement of success such as high social status and material possession.

Next time when you are in China or Hong Kong, remember to address every manager as “zong” (总) which means general manager.

PMI Leadership Institute Meeting 2009 - Orlando

Just back from Orlando after attending this year's LIM meeting. As usual, there were a lot of useful experience sharing and learning from other PMI volunteers. I'm most impressed by the session led by the San Diego chapter which is about volunteer development. These guys really apply management practices well, even their subjects are not paid workers. Motivation and skill development techniques still work here.

Bravo Management!

The keynote speaker, Dr. Gary Bradt, is a inspirational speaker with wonderful talents. All delegates have been inspired by his 'The Ring in the Rubble' and 'Golden Legacy' stories.

Both the opening and closing sessions drew a crowd of 700+ attendees, a record for LIM meeting.

Big news for Asia is Seo-san, Past President of PMI Japan Chapter, being awarded the 2009 PMI Component Award - Volunteer of the Year. (Left: PMI's CEO Greg Balestrero; Centre: Seo Megumu; Right: PMI's Chair Ricardo Vargas)

Me pictured with Seo-san and Kamba-san (President of PMI Japan Chapter).

Me pictured with delegates from the Hong Kong Chapter (Centre: Rossana Ho, Executive Vice President; Right: Patty Wong, Past President)

25-Minute Rule: The Art of Using Stretched Targets

I deliver more than 40 workshops each year. Almost all these workshops have time slots for group discussion or activities and a final presentation from each group. When the time for group exercise comes, I often tell them they have 25 minutes for discussion. They’d usually think 25 minutes are more than sufficient, until about 3 or 5 minutes before the presentation time they suddenly realize that they need more time. They will then plead with me for more time. So we enter into a negotiation, or more likely a bargaining. “We need 10 more minutes.” No you can only have 3 more.” How about 5 minutes.” Okay, deal. Each group has 5 more minutes.” This almost happens in every workshop, even in every group exercise.

I call this the 25-minute rule. In the end, there will be effectively 30 minutes for each group, but I always start with a stretch target of 25 minutes. Does this sound familiar to you? In real-life projects, don’t most managers use this technique to squeeze the most out of their project teams? I do this all the time when I run projects. When activities are defined and leaders identified, there goes the difficult task of time estimation.

As a project manager I have to let them state their opening bid, i.e. how much time they think they need. They are the experts in their own tasks so I cannot enforce some timeline to them unless in the case that there is an externally imposed deadline for that task (for example the insurance product has to be submitted to a government agency for compliance review.) When the leader tells me he needs 6 weeks, I will start negotiating based on my experience about the task from previous projects, opinions from other experts, or some external factors we cannot control (such as dependency of the following tasks which the responsible organization has resource constraints after a certain date), we will eventually settle at a duration say 4 weeks that both of us are comfortable. So lesson number one is never accept the opening position as-is, because people tend to overstate what they need.

So how does this 4-week duration agreeable to both parties sound to you? Is this an optimal duration, taking into consideration of the interests of both the performing team and you, the project manager? The short answer is no. This is actually a duration that is more comfortable to you than the performing team. In project management it’s called a stretched target. In fact you may have 5 weeks in your pocket but you push for 4-week duration. Chances are the performing team feels that 4 weeks are not sufficient, and they have to work extremely hard to meet the deadline. You may probably ask, “Isn’t mutual trust, open communication, and fairness important to a project? Why don’t you use a target that’s comfortable and ‘fair’ to both sides? “The answer is pretty simple. If you use a target that’s comfortable to the performing team, say 5 weeks, they would eventually finish the task later than 5 weeks. That is not acceptable to you. You are the project manager, and you have to ensure the overall project is on time. So you push for 4 weeks and have a one week cushion that is kept only to you.

There are theories behind stretched target. The first is Student Syndrome as observed by Profession William Goldratt. Just like students, when a team knows that they have more time that is needed to perform task, they will relax in the beginning. So in a corporate environment they will probably work on some other urgent things first. Not until a time when they start feeling there is probably not sufficient time left, they won’t start working on your task.

The second theory is Parkinson Principle - People will expand work scope to suit the time given to them. If you give them 5 weeks which is more than what they need, and assuming they have nothing else to do except your project, they will still deliver the task late because they would keep adding new things to the original task. And most of the time these added things are not useful to your project (for example, more beautiful fonts and formatting for a Functional Specification document.)

So, is stretched target always ‘stretched’? Or since the work team knows that you are going to try squeezing on a stretched target, they would probably open a negotiation with a position that offers them more margins (say opening with 7 weeks instead of 6)? This is possible. And this happens in the real world all the time. Remember this is an art. Nobody knows exactly what the ‘right’ duration for a task is. Depending on your trust level with the working team, imposing a stretched target may harm relationship, or end up in a corporate bargaining game (for example, I heard some managers always cut duration estimation from the work teams by 50%, leading to the work teams increasing their opening position in the next round, and managers cutting by 60%, and so on.) Your ability to master this art of stretched target (and all these negotiations and politics) demonstrates your calibre as a successful project manager.

Next time when you attend my workshop, you probably won’t be surprised that when I say 25 minutes, I actually have 30 minutes in my pocket. :)

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