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Saturday, May 28, 2005

Catching Up, Backdrop: Companies in Asia

No discussion of my last half year would be complete without talking about work. I did start seven companies in less than six months. Finding people wasn't too difficult; once the word spread I had to erect barricades over the doors. Unemployment is higher than they let on in Asia. But little things were tough. Like obtaining a tax opinion. Finding an attorney. Locating outsourced HR and accounting services. Obtaining appropriate certificates. Or even little things like getting documents notarized. Small things add up quickly and end up taking an unbelievable amount of time, especially when multiplied by four different countries. Contrast this to the United States where I can get a company established in a day or two via email. This is one of those cases where familiarity does not breed contempt!

You need assistants. I had hoped to break the custom you find in Asia, where almost all business is conducted by junior assistants working for senior businessmen. I thought I could do it myself. But the time-consuming parts wear you down. After a while, you just break down and hire a couple of flunkies. Now when I say "flunkies" I say that with the deepest respect! Although they are junior, the ones I hired all have advanced degrees. Yet they are willing to go spend an entire day in line at some officious bureaucrat's queue waiting for a single document to be stamped. Then they bring you gifts when they visit! I figure the requirement for having flunkies must be some kind of filter to keep the riff-raff out of the business world.

Boy, it's annoying.

So now I have a payroll of flunkies. They're also happy to show up at the airport when you arrive and carry your luggage. Weird.

Which reminds me... I actually have eight companies I started. There's this chauffer I took a liking to, and tried to hire. Since I'm not in any one country truly full time, he said he'd like to fill the down time with other customers, and then share the revenue with me. So I said ok. Then he bankrolled a friend with the surplus left from the advance I gave him. Instant limo company. That one was easy -- I just supplied a little capital, which was less than I would have paid in rental fees anyhow.

Ok, back to the topic at hand.

One of the most fascinating things I have discovered is the importance of drinking to business negotiation. It's not just joining the fraternity, or learning to trust through drunkeness. No, it's a deeper matter than I had suspected (and wrote about in the group sex and drinking entry last year).

Most of the Asian companies are very hierarchical. Outside of China (where they do not bow to each other), there is a highly-visible Confucian culture of respect. A senior manager could be spouting off the most ridiculous gibberish for a strategic plan, yet no junior employee dare tell that manager that he's a fool.

Now one would think that the companies must collapse under a system like that. No checks and balances, and no sanity-checking... all conspiring to empower stupid top-down ideas and kill pragmatic bottom-up ideas. Recipe for disaster.

But there is a hidden check and balance mechanism... drinking.

When a boss and underling are drinking, nothing the underling says can be held against them. So they can go ahead and tell the boss that the last idea was idiotic. They can say he's a fuckup and has body ordor. And there can be no backlash. This is the pressure release valve in an excessively hierarchical society. It is how a manager learns about what's going on in his organization. It is how an employee gives feedback. And it's under the protective aegis of being drunk and out of control.

Despite the fact that most of these northern Asian countries are slowly pickling the livers of their best businessmen, you cannot give up drinking. It is the only thing that keeps the hierarchical system from exploding violently.

But there is another side effect... alcohol-based honesty also lubricates business negotiations. Many years ago I hated Asian business deals. Often you would present terms, and they would be politely rejected. Nothing wrong with that, except that nobody will tell you what was wrong with the terms. So you end up trying to guess. Which is like diagnosing a patient by amputating body parts until it doesn't hurt any more.

So here's the secret: get them drunk. Then they will share with you the truth of what they hate, and what they'd like to see. Remember, anything goes when you're drunk, so you can say things without losing face. There is plausible deniability. And yet, it is how you get closer to the truth in negotiations.

And it actually works.

Now what this posting really is... is a long-winded justification for all the drinking I've done in Asia. Which is a significant amount. Yes, I'm also pickling my liver for the cause. Rah, rah.

And unfortunately I'm receiving only positive reinforcement for this bad behavior. I have seven companies up and running (ok, eight, but that last one didn't require any drinking, just driving!) They seem to be doing well. And people are impressed with my ability to close deals... well, it's Jack Daniels and me. (Actually, more expensive whiskey than good ol' Jack, but that sounded good.)

By the way, to give you a sense of what a night of drinking will cost... between $1000 and $3000 per foursome, depending on where you go and how long you are out. A "good" night drinking is when each person has consumed about a bottle of whisky.

And oddly, I've lost weight drinking, despite the amazing amount of calories I am consuming in this manner. I assume it's from vitamin deficiency, deleterious liver effects, stomach adsorption, or something healthy like that...

Asia needs livers!


Blogger SBB said...

You need the flunkies. It's slow enough with the flunkies, without them in SEA absolutely nothing gets done.

There's too much paperwork and everything is just too damn slow!

Dying for HK efficiency over here,

6/01/2005 1:57 AM  

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