Not delegating or finding a path to delegating wisely is needed in China. Let me paste a piece from The China Law Blog :
Do not delegate. “A lot of experienced China investors have stories about subordinates who colluded with a target company to attempt (and sometimes succeed) to defraud the investor. Be attuned to the dichotomy between the investment funds at stake and the income/wealth of the people on whom you rely for judgment.” Very true. At least half the time when my firm has been brought into a fraud situation, we have to ask ourselves whether the “trusted subordinate” was incredibly stupid or in on the fraud.
I wanted to add one clarification on this small portion of his really good post.
This can get really hard.
1. You can never know the company as well as a trained Chinese person.
2. The “do not delegate” rule would be equally valid in more than just acquisition situations.
So you can do everything yourself, or you can choose to trust people as that helps. But trusting the wrong people is what China Law Blog is noting. A better path is to hire trustable people and then check their work as another set of eyes is always useful.
Hiring for Trust as Opposed to Just Looking for Good Resumes
You must do a lot of due diligence on people you hire in your China business. Resumes are rife with material falsification. You should not have managers that you do not trust. Further, do not blindly choose to trust. You must do due diligence. Trustable people are out there and we need to find and hire them. I do it all the time. Admittedly, it takes much more work than hiring off of resumes and interviews. Nevertheless, it is more than worth the investment in time and energy. See also A Little Lie in China Tells You a Lot.
Checking as a Further Path to Delegating
I need to trust people I hire, and I also need to check. I need to trust them but I should not tempt them. My system should have checks built in. We need to catch people doing right and reward them. And on the off chance people are doing wrong, the system should have that check. If you are acquiring a company, you should go there yourself, but who is checking you? We all have blind spots. We all need someone who can check our work. Build a system with real cross department accountability, and you will be a formidable opponent for all challenges you face. Yes, this also needs time, but your China business needs this. Put the energy into these apparently non urgent matters and unpleasant surprises will go down dramatically. And finally your success will increase.