The Fat, Mean Economic Machine

Yes, it’s an economic machine, what with growth of at least 10 percent for four years running.

And it can be mean—witness the way the country violates basic human rights and has played hardball amid allegations it subsidizes exports through an undervalued currency.

But lean it ain’t. A striking feature of both Beijing and Shanghai is the way so many people are working in jobs that seem superfluous.

Private security guards are everywhere, despite little semblance of public disorder. Shops and restaurants often seem to have more people than they need. At one of the upscale Jenny Lou’s markets in Beijing, for example, three people worked at the checkout counter. One rang up sales while two handled items. This labor-intensive process wasn’t well-coordinated—there was some bumbling along the way.

The dramatic Grand Hyatt Shanghai, which is located in the Jin Mao Tower, meanwhile, had greeters at every turn. One female employee stood at the entrance to the hotel’s lobby on the 54th floor, apparently waiting for visitors to stumble out of the elevators.

You can make an argument that at luxury businesses, piles of people help ratchet up customer service. Or perhaps Chinese consumers are used to high numbers of humans staffing their shops. Excess employees may even be a strategy to please government officials, who have reason to worry about unemployment and resulting social unrest.

In any event, it seems China has a lot of fat built into it. This surprised me given the way the country has otherwise embraced capitalism.

An intriguing twist to this topic comes at the leadership level. It makes sense for executive ranks to have a deeper bench than they might otherwise have in North America or Europe, says Hong Kong-based consultant Maura Fallon. That’s because senior managers in China should ideally be spending 40 to 50 percent of their time coaching more junior leaders, she says. Without such a heavy commitment to people development, Fallon says, China operations will suffer, given the tight market for managers properly seasoned to lead in multinationals.

Many organizations expect the same amount of business decision-making on the part of their China leaders as they do elsewhere—which is misguided, she says. "Companies are so lean that the China executives don’t have time to mentor and develop relationships and trust," she says. "In China, you can’t be as leanly staffed as you are in the West."

Workforce Management’s blogs currently do not support trackbacks or comments. However, please feel free to click here to discuss our blog posts in the General Forum within the Workforce Management Community Center.