What's it like to be Nike?

In the midst of factory angst, have you ever thought to yourself “Man, if I was as big as Nike or Wal-Mart I’d never have these problems—they’re just raking in the money.”? I used to.And, I hate to burst you bubble, but the problems don’t go away. Apparently they just get bigger and more public. I was talking with a friend from Wal-Mart last year and he confirmed, to my dismay, that they deal with the exact same issues that I deal with in China. It’s just that their qtty’s are millions of times bigger than mine.When I got over the shock of realizing that my issues with manufacturing weren’t going away with increased qtty’s, I was actually comforted a bit. Really, I thought, “hey, I’m doing things the right (or at least established) way.” My partner at that time was thoroughly depressed, though. He was thinking that at some point we would be getting out of the problems that we were having.Nike’s recent corporate report focusing on China confirms this to me again. Being big doesn’t make your problems go away. You can read some of the commentary on the report here.In reading this I found three really relative things for small business from the report of problems with global giant Nike.1. “Nike spokesman Alan Marks said the problems highlighted in the report are "consistent with the problems we face globally."” Once again, doing business in China requires that you learn a different language, not move to a different planet.China is not inscrutable. Most of the problems that foreigners have here are two fold. One, they don’t learn Chinese or even Chinglish. Even if you do speak Chinese, the translations of Chinese into English often do not make sense and even more often do not mean the same things to the (Chinese) speaker and the (English) listener. This language barrier is HUGE and often means that people miss cultural issues, have massive factual/technical misunderstandings and basically can/do miss most of what’s going on around them. And since Chinese is a high context language (English is low) I think that this is the source of most problems when discussing project details as well.The second issue is that people physically are not here. They assume that because the emails going back and forth that show both parties are in agreement (big mistake, see problem #1) means the product will be exactly what they expect. Here’s the reality of China: It’s not inscrutable, you just have to be here and confirm everything yourself.2. The report also states that "corporate responsibility is a relatively new, rapidly evolving business practice in China. Adoption and understanding vary widely." Amen. This is one of the biggest deceptions created by the huge and very modern east coast cities. People come into Hong Kong, Shenzhen, Shanghai, Beijing, Tianjin and are comfortable—they recognize the office towers, the Starbucks, the subway. They stay in 5 star hotels and get chauffeured around in foreign brand autos. They talk with managers/owners with foreign degrees or at least assistants with foreign degrees and they assume that because business in China looks like business in the West they’ll be OK. But the adoption of business concepts and theories are years if not decades behind. Sure there are some world-class factories in every industry but they are the exception rather than the rule. And, when the rest of the Chinese industrial environment is working on a different plane even the top level players can have serious problems—e.g. the report from Nike.3. The report indicated that “Problems include: inadequate management, excessive overtime and workers using false documents to get jobs.” Now, I don’t’ know how you deal with the last one here, and for SME’s you probably wont’ ever have too. And excessive overtime is another one that is hard, if not impossible to monitor if you are not living in the factory and counting hours in the HR department yourself. But the first one, inadequate management, should never be an issue for SME’s—meaning for every project you can and should be putting some of your own people into factories to report, count, QC, monitor and manage schedules, people and time. A couple thousand dollars a month to guarantee that the project is done correctly is well worth the cost of delays or mistakes. You can, and we do, almost always negotiate into contracts that we get some living quarters for full-time, on-site QC and part time project manager visits. You won’t be able to supplant the existing management in the factory, but you will be able to get intimately involved with the needs and people involved in your projects. The factory may not be managed well, but you can make sure that your project is—the key? Be there yourself.