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Foxconn In Wisconsin: Start Driving, Then Figure It Out

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Mixed messages and confusion over the Foxconn project in Wisconsin continue to fill the news. After Lauli Li of the Nikkei Asian Review crashed Foxconn’s Lunar New Year party, company chairman Terry Gou suggested that people talk too much about whether Wisconsin will have a Gen 6 fab. It sounded like the industry overcapacity problem and other factors that we highlighted two weeks ago was also causing a rethink of plans.

I thought in this context it would be helpful to recount a story about the difference in the Chinese way of planning compared to western ways. This explanation came from an interview I conducted with the senior manager of a company purchased several years ago by a major Chinese manufacturing firm.

He compared ways of working to a journey. Let’s say you are in Chicago (I changed the cities he used). If you tell a western team to drive to Cleveland, the first thing that happens is they ask you, “Okay, why should we go to Cleveland?” That’s because they want to understand why first, and then they start to plan. They discuss the route to take, where to stop for lunch, other details, and only then do they load up the car and go. They do all their planning before they start to drive.

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He went on to explain that in China, it’s the opposite. When you tell them to drive to Cleveland, the team jumps in the car and starts driving immediately. While they are driving, they figure out where to fill up the gas, and whether they have everything they need with them. The reason they jump into the car immediately is that they know after five minutes they are going to get another call from the boss, who is going to ask them, “Have you started yet?” He told me that when he first started working with his Chinese boss, there were many times he felt completely lost and bewildered. But he learned not to discuss things too long – when something was decided, just start immediately and be pragmatic. One has to start without knowing all the details, and figure them out while driving.

He went on to add some more color to the story. What happens quite often is while you are on your way to Cleveland, which is to the east, after two hours of driving you get a call that tells you, “no, I want you to drive to Madison instead,” which is to the northwest, the opposite direction. In the western way of doing things, people want to understand the reason for the change. Somebody has to explain it before anyone will turn. And it may take a while before they turn. They might have to get to Cleveland first. But in Chinese business culture, you make an immediate turn without asking and start driving west instead.

Many people called me after I wrote last week about what is going on at the Foxconn site in Wisconsin. The uncertainty seems to be driving many people crazy. But my Chinese interpretation would be that they have started driving, and now they are trying to figure out the details.