TEM Lab: China – Anyue Lemon

Murphy’s Law seems to be the dominant force in emerging market consulting, superseded only by gravity.  Anticipating the amount of flexibility we would have to develop to successfully complete this project would have been impossible.  No good plan remains unchanged, and no finish line is ever static.  In a previous post, we mentioned the need to compress our timeline in order to get all stakeholders in the room at the same time. When presented with this option, we debated whether we would have enough research done to provide a robust set of recommendations.  The fuzzy bit is in the word ‘enough.’  When researching answers for an industry, it is difficult to ever feel like you have ‘enough,’ and there’s always more information to get given infinite time.  

But time was not infinite.  We had significant details for most of the recommendations we wanted to make, and had sources for most of the rest that we could consult in a pinch.  Building out our research and getting more information was our plan for the final week in country. Then Murphy struck and the final presentation date was moved from Thursday to Tuesday, and then from Tuesday to Monday. So the last week we focused on solidifying recommendations and completing both the written report and the presentation.  Once again, we needed work through the weekend to get everything done on time.

The day of the final presentation, we went to the office to finalize a few changes to the slide deck and ensure they were translated correctly.  An hour later, the building lost power.  Mr. Murphy strikes again! So we returned to the hotel for what we had hoped would be a few dry runs with our translators before the 3pm presentation. Three-quarters of the way through our first run, we were told that some of our hosts were waiting for us in a banquet room downstairs for lunch.  We would get no more practice on the changes to the presentation.  You win this round, Mr. Murphy.

The presentation turned out well regardless.  Presenting our findings in front of all the stakeholders at once was worth the extra work, because the statements made before and after our presentation demonstrated the commitment from all parties involved to implement the recommendations for improving the industry.  After the presentation, we were asked to prepare another oral report about our program and project for the students at our partner school, Southwest Jiaotong University on Wednesday night.

We returned to Chengdu to make the presentation, completing the slide deck on the bus ride back.  We were thoroughly impressed with the quality of questions and how prepared the students were.  They were passionate about the state of the agriculture industry in China and their questions challenged us on our suggestions for the industry. The highlight came from seeing one of our recommendations being implemented at the end of that presentation when the local president for the China Entrepreneurs Network announced an internship in development in Anyue.

Phase 1 of the project is over in Anyue and we reluctantly leave and return to Thunderbird. We are thankful for the incredible hospitality from all of our hosts in Anyue and Chengdu, and we are leaving humbled in the knowledge that everything accomplished was made possible by a dedicated and involved client and a list of extremely supportive stakeholders.  We now look forward to presenting the presentation on our own campus.  Buckle up and clear the runway, Thunderbird.  We’re comin’ in hot.

It has been exactly four weeks since Xiao Yu, Xiao Bai, Xiao Jin, and Wei Wei arrived in this magical land of hotpot, spices, and strange aromas. During the first week, my senses were awash in all of the new sights, sounds, smells, customs, and of course language. Landing in a new place can be an invigorating experience.  It can also be a disorienting experience. Yet as I’ve grappled with the changes, I’ve come to truly realize what Santiago in The Alchemist means when he talks about “A language of the world” – it is something that connects people separated by actions, perceptions, and the world as they have come to know it.

It has taken time, but I now feel that I am better able to communicate with people here in Anyue.  I have learned to effectively pantomime what I need, and people here have  learned to read my sign language. I have learned that children are inherently curious, and that a smile is universally understood. No matter what the barriers between us may be, somehow, we find a way to connect to that innate “humanness” that resides in each of us.  At some point in time I began to feel that people all over the world are inherently the same.

As we look back at the last four weeks, we realize that there was so much uncertainty in our expectations. From the changing shape of the project scope we prepared for, to the surprises in the new working environment, the most useful preparation we made was to expect that everything we knew would change. From the moment we hit the ground, we have been in the midst of constant change. We prepared our work plan and had a set schedule within the first two days.  We actually managed to follow it closely for nearly a whole week. But time is a fluid thing in China, and with each succeeding week, our timeline was in constant movement to meet the client’s needs.  We hit a few big deliverable dates that had to be met.  But outside of that, we have had to remain extremely flexible.

The most challenging bit of news came this past Tuesday, when we were casually informed over dinner that the client needed to move our final presentation up to two days earlier than in the work plan.  By morning, that had moved again to three days early.  And somehow we took it in stride.  We huddled briefly together, touched base with our professor back  in the states, and calmly nodded agreement.  We’ve worked like dogs through the weekend to finish our presentation and written report.  Come Monday, we’ll present our recommendations.  And then we will have peace.

Through all of the different phases of this project, through all of the debating and battling over specific recommendations, through all of the cultural and environmental stresses, we have managed to carve something definite, something comprehensible and actionable, from the misshapen stone we held in our hands at the beginning. We have given the client an image of what their future success looks like, and a road map to get there.

Anyue itself has also gone from an unknown, mysterious place to one that is familiar, friendly. As each day came to an end, we were often exhausted, both physically and mentally. In this new place, we have been without our usual favorite restaurants/bars where we go to unwind. But we’ve managed to find our favorites where we can go to relax.   Cat Lady’s Noodles behind the hotel where the cat wanders in and out of your legs waiting for scraps to fall.  Rice Guy’s Sidewalk Cafe, serving up chao-fan, egg-tomato, and freedom beer. There’s even a place that serves a decent replica of pizza, if you really need a fix of bread and cheese. These new places provide a comfort zone in a town so far from home.

This trip thus far has been personally rewarding and challenging for me in many ways. Even as timelines were squeezed and the work became more challenging, I have enjoyed the opportunity to put the “global mindset” to test. The global mindset teaches us to be more accepting of different cultures and develop a comfort with being uncomfortable. It helps to understand and appreciate the world in all its diversity in a completely new way. In the midst of an ever-changing project, I have learned to appreciate this new corner of the world for all that it has to offer. But somehow I feel something missing.  The global mindset teaches you to become more accustomed to change, but in my case, as I approach the end of this wonderful journey, I feel a sense of spiritual connection that makes it difficult to leave.

As a veteran of the Business Intelligence and FORAD classes at Thunderbird, I am no stranger to intense group work.  Without fail, in intense projects like these, there comes a point where the novelty wears off and you start feeling the full weight of what you have taken on.  For BI, that point came somewhere between midnight phone calls to India and 6:00 am phone calls to Africa as we scrambled for primary source information a week before our final client presentation.  In FORAD, it came early – exactly half way through the tri – which made for a particularly long and grueling march to the gates of hell, better known as Defense.  In TEM Labs, as we were warned by our professor, it comes right about now.

Normal consulting and simulation projects are stressful, and by the end of our Thunderbird careers, we all have the joy of experiencing one.  Some things are the same for each project – it is stressful, intense, everything takes twice as long as you anticipated, and to varying degrees, by the end you are thankful to not be forced to sit in a small room with the same people day after day.  TEM Labs face these same obstacles with a few small additions.

This is my first time in China, and I speak zero Mandarin.  This means that I have exactly 5 people in Anyue that I can talk to, and I am completely dependent on them for getting around town, eating, and whatever else I want to do.  Also, I am the only girl in the team which adds a unique level of isolation to the mix.  There is definitely no stopping at the pub on the way home to unwind or catching up with other friends via facebook.

On our bus ride back from Chengdu we came across a non-business example of an infrastructure gap.  About two-thirds of the way home, we encountered a traffic jam on the winding roads that snake their way through the mountains of Sichuan.  Just ahead, at the top of the mountain, a truck had stalled in the middle of the road while trying to pass another vehicle and was blocking the way in both directions.  Chaos ensued as a two-lane mountain highway was suddenly expanded into four lanes of trucks, cars, buses, and motorcycles simultaneously announcing their displeasure with horns and jockeying for position as the mass slowly inched its way past the stalled truck.  From our perspective as outsiders, this seemed like a jumbled, dangerous mess.

As we have pondered over the issues we’ve identified here in Anyue, they have seemed at times like a stalled truck on a busy mountain highway.  Access to capital has shown its self to us as a significant barrier for local organizations to make the changes necessary to be able to access new markets.  There are significant voids in the soft infrastructure here to support better lending, such as no method of establishing creditworthiness.  Just as in the case of the stalled truck on mountain, local organizations have come up with an immediate solution.  As outsiders we see four chaotic lanes of family, friends, reputation, and guangxi.  But for many smaller organizations this is the only way for them to guarantee that they have the capital that they need.

In order to fix the problem on the mountain highway we would love to close the road to new vehicles, clear the traffic jam, remove the stalled truck, and send out a construction crew to expand the highway to four lanes so that the path is smoother for travelers in the future.   As outsiders this seems like an obvious solution.  But we don’t have the capacity to affect that kind of change.  We also do not live here and do not depend on the traffic of this road for our livelihood.  For the million-plus people of Anyue county, closing the road would be disastrous.

Likewise, we also cannot clear the complicated capital system that small businesses must use, because there are so many vested interests and so many people who currently depend on that system.  Instead, we are working hard to develop solutions that will function within the current system without placing too much more stress on the financial system.  We need to be aware of all the other vehicles and how we fit as we slowly inch our way around these obstructions.

Thankfully for the people of Anyue, there is a hard infrastructure solution in the works for their road.  Next year, a larger highway from Chengdu to Chongqing will pass through the county.  Building hard infrastructure is a relatively simple solution.  Soft infrastructure is another story entirely.  Especially when the changes required are cultural, and will require time to change customs and behaviors.  For our project, for now, we must inch our way through the mountain pass, figuring out how to improve how the industry operates within the current system.  Business does not wait for the highway to be completed.

Building and following a project work plan is critical to ensuring the timely completion of project deliverables.  Doing so allows you to see the end from the beginning, and understand the importance of hitting the interim deadlines.

On a project like this, we have a finite amount of time to deliver.  We can’t tell the client, “Hey, Task 3 took longer than we anticipated.  We’re going to need to push our final presentation back a week.”

This being the case, we’ve been cramming a lot of work into the limited hours we have here in Anyue.  Our second day in the city, we established a timeline with our client that set our first report and presentation for the morning of Sunday, April 1st.  That gave us 11 days to conduct 15 interviews, build an accurate current state analysis of how the local industry operates, research the same for industries in other countries, and prepare a meaningful comparison of the two.

Hitting the April 1st presentation deadline was critical.  April 2-4 was a national holiday here, and nobody was going to be at work on those days.  Pushing the presentation date would mean losing those three days and reducing the amount of time available for developing our recommendations.  That is the more critical part of this project.

Timetables are further squeezed when you add a layer for the time-consuming process of report translation.  A 15-page report, a PPT, and a few rehearsal runs on translating the oral interview made for some late nights on Friday and Saturday.  We finished the translation work late Saturday, just before midnight.

In the morning, we presented to 12 members of the Lemon Bureau.  Probably the most important element of the presentation was the Q&A at the end.

The numbers don’t make sense, do they? Welcome to our world.

Last week and part of this week were spent traveling the countryside conducting exhaustive interviews in which we could ask directly for any information we needed, and most often, if we phrased our questions right, we would get it. Using this information, we were able to map out the Anyue lemon industry in detail.

This week, we moved into the benchmarking phase of the project. Doing so has required tracking down comparative numbers and organizational details for lemon growers in other countries around the globe. This is significantly more difficult and time consuming when you can’t just ask the man in front of you for the answer. We’ve had to get creative when looking for ways to compare the level of detail gleaned from our interviews to the high-level data available in most research reports on the world wide web. Speaking of which, the internet’s claim of being “world wide” is sometimes put to the test here. It can be choosy in which sites it lets through. But that’s small potatoes. The real problem is that reliable data is hard to find – especially given the fact that our work revolves around a rural industry that has relatively recently started to see major competition. There are multiple sources of contradictory data for the same piece of information you may be looking for. Sometimes we find ourselves in a difficult spot, asking whether our interview data is wildly wrong, or is the U.N. FAO database wrong. Is it the U.N. data that is wrong, or is it the U.S. Department of Agriculture? And why do they include limes with lemons in the numbers? Don’t they know how bad that is going to screw up our figures for Mexico? Even the U.N. FAO data don’t match up with some of the U.N. ComTrade data for the same products. In many cases, we’ve had to collect numbers from a variety of sources, keep those that are most consistent, and discard the wildly different ones. It’s a challenge transitioning from primary data collection to secondary collection. The level of detail just isn’t there, and filling in the gaps takes a bit of numerical wizardry.

By the end of last week, we were exhausted mentally, and were looking forward to some relaxation. But on Friday evening, our hosts requested that we teach some English to the employees’ children. As tired as we were, we all agreed that part of being a Thunderbird is giving back to the community, wherever we may be. We had no idea what to expect. We were welcomed into a room of 20 smiling children, aged 6 to 12, who were very excited to see us. Even the mothers had come to learn. It was like a family event!  Working our way through the next 90 minutes of basic introduction and greetings in English, we could feel the curiosity and excitement of almost 40 pairs of eyes staring at us. As we concluded the session, the children made their way to us and wanted to have their picture taken. The sense of appreciation we got from the parents was overwhelming and we felt special. Improving business operations and profitably is important, but giving back to the community in a positive way is what made us feel the true essence of being Thunderbirds.

What are your major cost centers?  Have you integrated your value chain either vertically or horizontally?  What type of quality control measures do you have in place along your supply chain?  Over the last two years at Thunderbird, these questions have become normal to us, but to an Anyue lemon farmer who has likely never met a foreigner before, speaking another language is only half of it.

We are lucky enough to have one team member who speaks Mandarin, but here in Sichuan the accent is so thick that this advantage is usually negated.  This, in turn, means there are a few extra steps to our interviews and meetings.  First, we prepare our questions and talking points in MBA-speak.  Then, we must go about re-wording and explaining these questions to our translators, who, in turn, ask our questions to whomever we are speaking with.  The process is then reversed and we cross our fingers that at least the main theme of the question and answer were not lost in translation. Luckily for us, our translators, Kevin and Wang Zhi, are great sports and very patient.

It has been very interesting to see the huge range of education and understanding among the people we have met with.  Different ends of the value chain are worlds apart on everything from being able to conceptualize the industry as a whole to technology integration. Some farmers, when asked if they know what happens to their lemons after they are sold, respond with “don’t know and don’t care.”  On the other hand, when asked about his vision for the future, one processor responded with a full point-by-point description of his five-year strategic plan.  Some farmers struggle to find adequate space just to store their harvest, while some companies are operating state of the art facilities.  One company just opened a new 450MM RMB factory with capabilities to produce a full range of products, from alcohols and teas, to cosmetics and candy.

As we pushed through the discovery part of our project, we quickly learned to adapt our questions to match the understanding of the person we were interviewing.  By the end we were getting much more valuable information out of each conversation, and much more efficiently.

The other significant obstacle we had to overcome in our interviews was how to ask questions about ways the government could improve industry support without offending our host or shutting down our interviewee.  After receiving very generic, scripted responses to these questions in the first few interviews, we finally figured out how to re-word the questions to solicit the responses we needed.  Now as we move closer to our first client deliverable, we continue down the learning curve of translating Thunderbird-speak to Mandarin.

Before we left for China, we did a bit of research on what to expect from doing business here.  Banquets were one of the key events that we prepared for.  We learned about seating order (host at the head of the table, surrounded by guests in descending order of importance.)  We learned about eating etiquette (take a small portion from the dish in front of you; allow other guests to finish with a dish before sticking your chopsticks in; turn the lazy Susan slowly to allow others to get food, etc.) We learned that you don’t leave until the host signals that the dinner is over.

And we learned that toasting your counterparts at the table with a spirit called baijiu is a very important part of the ritual.  It is a bridge to building relationships and doing business.  It is a way of testing one another’s mettle, almost like having a wrestling match before getting down to business.  I’ve noticed that most hosts will bring a ‘ringer’ to the table with them, someone who can handle their liquor, and one whose job is to push your boundaries and see how you handle it.  This ritual gives the host an opportunity to see your true self as inhibitions erode.  I’ve experienced these traditions often in my travels here.  However, my extensive time here did not prepare me for the local variations on these traditions.  They vary so much from the bowls of beer I cut my teeth on in Northeast China that I was taken completely unawares by the ‘San Bei’ (three glasses) tradition in this part of Sichuan.  Typically at a dinner when you give or receive a toast the speaker will say ‘Gan Bei’, which means to finish your glass.   This is replaced by San Bei here.  Three glasses of baijiu per toast and your afternoon interviews with other business managers become significantly more challenging.

So our sterile, academic research on the business culture did not really prepare us for the real-life physical demands of the banquet element of our journey.  A week’s worth of lunch and dinner banquets later we are looking back and thinking we could never have been prepared for the wonderful outpouring of Chinese hospitality we’ve experienced here in Anyue.  All the food and drink (and cigarettes) we could handle — with a little bit extra we couldn’t — sounds like a pretty good time.  But we have a bit of work to do in building our stamina.  A week into our deployment, the banquet schedule is just beginning to slow from being daily or twice daily rituals.  As wonderful as the feasting is, the slow down is a welcome respite for our working schedule.

Growing up in American culture, we place high value on time management and adhering to a schedule.  We plan our day and set aside time dedicated to getting work done.  Here in China, we have learned the need to be flexible and willing to drop our plans to go to lunch or to go have a last minute meeting with a company.  Or when you’ve pushed completion of a deliverable into your evening schedule to accommodate the lunch.  Then in the afternoon, you learn that an important official wants to host you for dinner that evening.  It has not taken long for us to realize that flexibility is critical to successfully navigating this culture.  Opportunities often emerge once the way has been lubricated with a little baijiu.  A typical example of the benefits that eating and drinking have brought us came on Wednesday when we conducted a morning interview with the managers at a local lemon co-op.  We had planned to race off to our next interview when the co-op managers indicated they wanted to host us for lunch.  The two-hour lunch shot a hole in our schedule, but we were able to gain further valuable insight into the co-op and the industry as a whole.  The knowledge gained during the lunch prepared us better for the rest of the interviews we would conduct throughout the information gathering phase of our project.

Beyond the scope of our project, the banquets have also been an invaluable cultural learning experience.  In true Thunderbird fashion, we are coming away from each banquet with a deeper understanding of Sichuan food, culture and business rituals.  We have dived into unknown food and drink and come away better equipped to survive and be successful in Anyue.  The lessons from these banquets extend beyond Anyue.  As students in an American business school, we have to fight the incessant urge to get business done.  Practicing patience and becoming as much a part of the local culture as possible will serve us well in any situation or culture that places a high value on relationships.  If you think of the business process as being a river, the American mentality wants to drive a hole through the middle of any rocks in the stream.  The Chinese way is to slow down and flow around the rock.  We have to adjust our mentality and expectations accordingly.

After 27 hours of planes and airports, arriving in Chengdu felt like touching down in heaven.  We checked into our hotel around 2am and did our best to fall asleep at what would have been 11am Phoenix time.  The next morning, as we attempted to hold a productive planning meeting, the physiological challenges of international business came into sharp focus.  It’s as though you are infected with a bizzaro zombie virus: instead of feasting on the brains of others, it feels like someone has been feasting on yours.  Thankfully we had the luxury of staying in Chengdu a second night before departing for Anyue to meet our client.

On the Road to Anyue

Monday morning, our team packed into a van with our partners from SW Jiaotong University and set out on the three-hour journey to Anyue.  It was a breathtaking journey of contrasts.  Many of the big cities in China are very cosmopolitan, but beyond the boundaries of the first- and second-tier cities, the advancements have been slow to arrive.   Leaving Chengdu and emerging into the countryside, the view revealed a life of hard-scrabble agrarian existence.  Seeing the terraced farm fields carved into the hillsides is fascinating, but the fact that there are two different Chinas becomes fairly obvious within an hour from the city.   Rural China feels as though it is locked in a time warp.  As we plodded on toward Anyue, the anticipation for what lay ahead continued to build.  What cultural elements would be waiting to challenge our Thunder-skills, and how would we overcome these barriers?  Turns out the first step was pretty simple.

When Chinese students come to the US, most choose to take on English names to make it easier for Americans to remember them.  For the same reason, we were given Chinese nicknames on our first day here in Anyue.  It’s strange being called by a different name after a lifetime of answering to the one your parents gave you, but it’s nothing that an evening of drinking baijo can’t cure.

You see, the Chinese approach to initiating a project or business relationship is very different from the American approach.  American culture is achievement-based, focused on “doing”.  So for us, sensing that our five weeks here will be a very short time to deliver on this project, there is a strong desire to hit the ground running, to immediately dive into the data gathering with our client.  However, Chinese culture is more of what’s referred to as a “being” culture.  They want to get to know you, to build a sense of trust before initiating the project.  Because of this, our first day of work entailed a formal lunch hosted by the director of the Lemon Development Bureau, followed by a brief meeting to discuss the project timeline.  In the evening, we were hosted at a formal dinner by the mayor of the city.

These dinners are amazingly choreographed affairs considering the amount of alcohol shared among the guests, and you need to be able to stumble your way through the dance steps as soon as you arrive.  This is because the dinners can feel like a bit of a test.  Lucky for our team, this was not Xiao Bai’s first rodeo.  We have also benefited from Wei Wei’s amiable and enthusiastic approach to learning the rituals.  Though far from unscathed, we have navigated this first gauntlet with aplomb, and are excited to move into the data collection phase of our project.