By Lin Gao and Haiying Yuan
For years, when people thought about China, they thought about the word guanxi, which means “relationships.” And when they thought about doing business in China, they thought about a lavish dinner and excessive drinking. Few people realized that, in fact, there is a profession that’s closely related to guanxi, and it’s called government relations (GR).
Back then, GR was considered to be a mysterious function, with few in a company knowing exactly what they did. The job was mostly guanxi-based, and GR professionals were just the messenger, helping business clients get their foot in the door, but leaving the rest of it to the business people. Many GR professionals got into the role not because of what they knew, but because of who they were. In other words, they were the second generation of China’s top government officials.
New normal, new expectations
Things have certainly changed thanks to China’s rapid development. Government relations as a profession has matured along with China’s economic growth. Furthermore, GR as a function has received more recognition from the business sector. From the Chinese government’s perspective, GR is increasingly being recognized as an effective channel for the government to push certain messages and policies across to the private sector.
However, China’s new normal calls for changing expectations in every company, especially for GR and how advocacy activities are conducted. Now GR is expected to not only deliver the message but also provide strategic advice to the business, solve issues, negotiate for results and even perform a business development role to some degree. GR professionals are not simply expected to translate the policies but are also expected to interpret them in a meaningful way that makes sense to the business. And while relationships are still important, they are no longer based on personal connections – There's been a shift toward policy-based relationships.
All of these new expectations present new challenges to GR professionals. They need to build new skills so they can go from good to great. But which of these new skills do they need to develop and how? To answer these questions, we conducted a survey among AmCham China communities and asked Government Affairs, or GA, professionals and business leaders to share with us the current challenges and their thoughts going forward.
We received 62 responses, mostly from senior GA professionals with a wide breadth of experience. Here were some of our key findings:
1) Relationships are important, but they're not everything.
What we are called in the organization says a lot about what we do. The survey shows that a large percentage of organizations that are switching from the title of “Government Relations” to “Government Affairs,” “Corporate Affairs,” “Public Affairs” or a combination of all of these. Don’t underestimate such changes in terminology – they indicate changing expectations of the function. In addition to the traditional advocacy responsibilities, GA also encompasses areas such as policy analysis, reputation management, crisis management and corporate social responsibility. All of these require an even deeper understanding of a company’s strategic objectives and how GA can support them.
2) Internal communication and stakeholder management are as important as external communications.
Who we report to in an organization is also an indicator of what we do. The survey results indicate that GA professionals whose scope covers the central government tend to report to the GA head in the Asia-Pacific region or in headquarters. On the other hand, those whose scope covers the local government tend to report to the business. Twenty percent of GA professionals have a dotted-line reporting relationship.
What can we learn from this? First of all, it confirms that local government plays an increasingly important role in administrative approvals. In fact, we are seeing greater emphasis on local GAs in multinational corporations (MNCs). This also implies that internal stakeholder management can be quite complicated. Communication and decision-making can be ineffective and slow at times – too many cooks in the kitchen.
Our next survey question confirmed that as well. Most GA professionals said that time spent between internal and external engagement is 50-50. Thus, in order to get the message across, GA professionals need to be great at cross-function, cross-cultural communication, and they also need to communicate with impact in both business and GA language.
3) The priorities of GA
As GA professionals go beyond relationships and dive into a broader scope of work, how can they prioritize their tasks? If the survey results are any indicator, GA professionals are really good at multitasking. Without a doubt, their top priorities include external advocacy and creating and managing external stakeholders. However, business development, policy and regulatory monitoring, as well as corporate social responsibility are equally important to GA.
4) The role of GA – from firefighter to strategic partner
Given so many tasks, we are interested in understanding how GA professionals see their value in the organization, and how they suspect their role is being perceived in their organization. GA professionals see themselves mostly as a strategic partner, policy expert and “firefighter” when the need arises. However, they assume that their business partners see them more as a policy expert and perhaps an occasional firefighter. Therefore, in the survey, we asked the business people the same question. The answers basically confirmed that perception.
What we’re seeing is an expectation gap between what GA professionals aspire to be and how their business partners view them. So, how can we go from firefighter to strategic partner? How do we bridge the gap?
How do we bridge the gap?
The survey results verified our understanding that China's new normal calls for new expectations for GA professionals. In fact, the biggest gap is between what’s been expected in the past and what’s currently being delivered.
Albert Einstein once said, “Problems can’t be solved at the same level they are created.” Basically, you can’t solve a new problem by using the old ways of thinking. GA professionals need to develop new muscles and bring their overall skillset to the next level. But then the next tough question is: which muscles should they focus on building and what is considered to be the next level?
In addition to the survey, we also interviewed a number of GA heads, business leaders, executive search firms and HR learning and development experts for the survey questions mentioned above. Using these opinions, we compiled a list of essential skills for GA practitioners in China today:
Strategic thinking: How to define and execute GA strategies oriented toward business goals
Stakeholder management: How to identify the right stakeholders and build win-win solutions
Communication: How to explain the "non-explainable" and articulate it clearly and confidently
Networking: How to establish useful internal and external networks and mobilize resources
Presenting to executives: How to influence decision-making by selling ideas and setting the right expectations
Analytical skills: How to monitor and read "between the lines" of key government policies
Writing skills: How to write internal briefing documents and external speeches concisely and to the point
In general, strategic thinking and communication are rated on the survey as the most important predictors of success for GA professionals. Of course, every individual, company and industry is different, so there will be a natural variance of preferred skills. And for those practitioners who play a part-time GA role or have some GA within their scope of responsibility, they will certainly have a different set of learning needs.
Through the surveys and interviews, we also have come to realize that there have been few studies of the career trajectory of GA professionals in MNCs. Unlike other professions, such as sales and marketing, there is no specific competency model for GA other than the recognition of it as a very specific profession that requires a very specific skillset. Unlike those in general management who can move into different functions horizontally within the company, the typical career progression of a GA professional tends to be vertical (i.e. they become an expert in a certain area or certain industry, and they move around within the GA circle). When we asked GA professionals what’s next for them in the upcoming three to five years, over 60 percent of respondents said that they planned to continue to be in a GA function in an MNC, 12 percent said they wanted to move into business functions and 9 percent said they wanted to try GA in Chinese companies or to switch to a completely different career.
These findings show that GA professionals are interested in a long-term career. Educational programs for GA professionals are as essential as they are for any highly-specialized, technical professional. Unfortunately, because GA as a profession is still a new concept in China, there are few established educational programs specifically designed for this group of people.
At AmCham China, we are filling this gap with a brand new learning program, one that will help GA professionals, both full- and part-time, at different stages in their careers. We are rolling out the program this summer, and hope you can join us in supporting the professionalization of GA.
While a “win-win” strategy has always been quoted as the key strategy with Chinese government, it is seen as somewhat of a cliché. Many people who have been in China for a long time would agree that finding a “win-win” with the Chinese government is becoming more difficult. We just can’t win the new game with old tricks. GA professionals need to go from good to great by developing new skills. Investing in GA is investing in your company, and, ultimately, in the US-China relationship.
Lin Gao is the Director of Business Development and Senior Trainer at Intellect Associates. Haiying Yuan is the President of Yuan Associates.