China, the new Frontier....
China firms eye top foreign hires
By Dan Slater 20 October 2003
In a radical departure, Chinese state-owned firms are seeking to hire foreigners for top positions. Shanghai-based Integer Consulting founders Matthew Maslin and Dang Xinhua explain.
What's going on in recruitment in China?
Maslin: Growth opportunities are legion, both with multinational firms and domestic companies. What's really exciting is that recent developments in the state-owned sector mean that for the first time Chinese firms are looking to recruit capable Western executives to run state-owned firms. That's a huge change.
How are you positioned to profit from this?
We are based in Shanghai and focus specifically on the mainland market. That makes us pretty much unique amongst international search firms. We see ourselves as the CICC of executive search, in the sense that like the investment banking joint venture, we provide international standards in tandem with a very strong local partner - in our case the Shanghai municipal government. I worked in Hong Kong for a number of years with recruiting firm Russell Reynolds, as did Xinhua. We are the first company to specialize in mainland recruiting in this way.
Foreign executives being put in charge of SOEs sounds like a radical concept. What's the background to that?
Yes, it is radical and very much a new departure for the PRC. The driver is the government's increasing focus on letting SOEs sink or swim and the newly created state-owned Asset Supervision and Administration Commission (SASAC) that has been mandated to restructure the best 196 centrally-owned companies. Clearly, China is straining every sinew to build 'national champions' - companies that will be able to compete with the best that foreigners can offer as WTO liberalizes the markets.
What will be the role of the SASAC?
The SASAC is a government institution representing the majority shareholder - that is, the state. But it will not be involved in the day-to-day operations of the companies. It will keep an eye on them and will be responsible for appointing top staff. It's with their encouragement that we are conducting the search for foreign expertise.
So you actually have a mandate already?
Dang: Yes, we have a mandate to find the president of one of China's most progressive SOEs and the leading player in a highly product and service driven sector facing intense competition from foreign companies.
What sort of profile are you looking for?
Maslin: We are looking for somebody with 25 years related industry experience in a top foreign company who has already run a comparable organization in terms of size and complexity; in this case a congomerate with 10,000 plus employees. The concept is similar to Japan's Nissan group hiring an outsider - Carlos Ghosn - as President. Ghosn has turned Nissan around. Actually, we are not necessarily concerned with recruiting a grizzled Mandarin-speaking China hand. Rather, we are looking for someone with huge amounts of drive and enthusiasm with the strength to carry out major changes.
What major changes?
Dang: Essentially to bring the company, operationally, up to international standards, prepare it for an overseas IPO and ultimately to expand abroad. This company wants to become a world-class brand in the same way that companies like Haier and Legend are doing.
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