China Economic Herald: Sany Heavy Industry's Ten Years of Overseas Experience

Source: China Economic Herald Text/Sun Jingyi
 

Sany Heavy Industry, a Chinese construction machinery giant, has achieved a "marriage" with its long-time competitor, the German construction machinery giant Putzmeister, at lightning speed, shaking the world.
While the industry is optimistic, it can't help but speculate whether Sany Heavy Industry, which has never really set foot in cross-border acquisitions, has a lack of experience in cross-border cultural integration?
In fact, Sany's pace of internationalization has been going for 10 years. As early as November 18, 2001, Sany formally signed a cooperative distribution agreement with Deere Company, a Fortune 500 company, which opened the prelude to international strategic management.
10 years of overseas operation, has it brought enough experience to Sany Heavy Industry?

　
The synergy between overseas bases and elephants

Xiang Wenbo once said: "Internationalization is a tough battle that must be fought, and Sany regards it as the third venture. In the view of Sany Heavy Industry, the first two ventures were enterprise start-ups and company listings.
In the past 10 years, Sany's internationalization has been divided into three stages: the export stage in 2002~2005, the overseas base investment stage in 2006~2009 and the localization stage in 2009.
Sanyi is quite courageous, and it is also the earliest overseas investment in the construction of its own R & D and production base of construction machinery enterprises, but also the construction of more overseas bases, overseas bases put into production earlier.
Since 2006, Sany Heavy Industry has successively laid out its layout in many countries around the world: in November 2006, India built a factory, and the overseas base strategy took *5656 steps; In September 2007, it invested in the United States, and built factories in developed countries with construction machinery manufacturing industry 5,656 times; In May 2009, the groundbreaking ceremony of Bedburg Industrial Park was held in Germany; In February 2010, Sany settled in Brazil, pointing to the entire South American market; In April 2011, it signed a contract with Indonesia to radiate the entire ASEAN market.
It is worth mentioning that these investment projects are completely different from the "small fights" of general enterprise internationalization, and Sany's goal is to establish an industrial park and build it into a fully localized R&D, manufacturing and sales base. Since then, Sany Heavy Industry's overseas expansion has been very different from that of XCMG and Zoomlion.
From sowing to harvesting, the process is obviously longer, and the "slow as hateful" Sany shows patience that is rare than ordinary people at this time.
On October 5, 2009, after three years of preparation, the India Industrial Park was officially completed and put into operation, becoming a comprehensive overseas base integrating R&D, manufacturing, service and logistics of Sany *5658. In the following years, Sany Industrial Park in the United States, Industrial Park in Brazil and Industrial Park in Germany were completed and put into operation one after another, and achieved sales.
After the acquisition of the German elephant, there was speculation that Sany Heavy Industry's overseas development strategy had undergone a major change. But Xiang Wenbo made it clear that this was just a strategic acquisition that could not be found.
After Putzmeister is incorporated into Sany Heavy Industry, it will form a huge synergy with its overseas industrial parks.
Sany will have access to technology-leading "Made in Germany" products and innovations, enriching its product portfolio, as well as a strong overseas distribution and service network. "For Sany, internationalization has advanced by at least five years." Xiang Wenbo said.

Localization platform for expatriate employees

The time to test "localization" has obviously come, and *5656 steps is how to recruit and configure Chinese and foreign "mixed-race" teams.
At Sany Germany, the recruitment process is significantly different. The Chinese approach is like a parallel circuit, and they tend to hire all important positions simultaneously: both marketing bosses and marketing managers, as well as service engineers. The Germans, on the other hand, are like series circuits, hiring the head of the marketing department first, and then empowering him to recruit department managers and service engineers.
Sany Heavy Industry's approach is to make employees as local as possible.
This started with the first industrial park in India. At present, Sany India Industrial Park has more than 600 Chinese and Indian employees, of which 85% are Indian. This principle of course also applies to other overseas industrial parks.
For He Dongdong, chairman of Sany Germany, the psychology of employees in Germany, as a construction machinery powerhouse, is more complicated. They lack trust in the "China" brand, and they inevitably question: Chinese brands, which are equated with low cost and low quality in their impressions, are really ready to set fire to the backyard of traditional machinery powers?
So, "senior executives and key employees will arrange a trip to China as soon as they join the company," Mr. He said. This is done to gain their basic respect, "if they accept Sany's corporate values and culture, communication with each other can be based on common aspirations".
For his trip to China in April this year, German employee Lincolnback was deeply impressed: there were as many as 100 mechanical engineering vehicles parked at the entrance of Sany Heavy Industry headquarters, while large German manufacturers generally only had 5. "Most of my colleagues have been in the industry for more than 30 years, and we all find the company growing at an incredible rate."
In addition, Sany Germany has set up "Twin Towers" to allow "mixed-race" teams to work together. The specific approach is that the main positions are set up in the same position, such as the financial director and marketing director are German, then their deputy is Chinese. These Chinese "deputies" act as a "transformer" between the two cultures, and their responsibility is to "transform" the culture, work logic and communication language of the Chinese headquarters so that the Germans can understand and understand, and then the German colleagues will directly export them to the European market.
It is precisely because of these experiences that on the day of the announcement of the acquisition of Putzmeister in Germany, Xiang Wenbo firmly expressed three points, one is that Putzmeister will continue to operate independently, the second is that the original management team will be retained, and the third is not to lay off a German worker.
Transnational training for Chinese employees In addition to the export trade that began at the beginning, the second and third stages of Sany's internationalization have accumulated considerable experience in the integration of its transnational resources. However, the integration of cultural differences does not stop there.
A Chinese executive at Trinity India was complained by an Indian executive who habitually had a work secretary when assigning work, because the caste system in India made executives think that work should not be communicated by a secretary.
And the German Lincolnback also expressed puzzlement about the "arbitrariness" of the Chinese. Two days before the Mid-Autumn Festival, she received instructions from her superiors on the eve of work to prepare some banners, slogans and huge curtains. "Why can't you tell me a week in advance?"
With the increase of daily international work exchanges, how to effectively improve the cross-cultural work ability of Chinese employees is also a problem. "There must be cross-cultural training for Chinese employees."
In September 2011, Sany launched the cross-cultural exchange training program, specially invited well-known consulting companies to tailor the training content for it, and carried out it in the international area and the Chinese region.
"We started with in-house instructors. Only by cultivating a group of qualified in-house lecturers to teach cross-cultural courses can we improve the training efficiency of employees in different regions. The person in charge of the Sany training department said. To this end, Sany specially conducted training for cross-cultural internal lecturers in the United States, India, Germany, Pakistan and Changsha.
In order to allow students to fully understand the theoretical knowledge of cross-cultural communication and learn the communication strategies in different cultural backgrounds, Sany selects employees who have business contacts with overseas companies to conduct cross-cultural training, and the training scope covers R&D, marketing, manufacturing, business and other systems.
In addition, Sany also pays attention to providing students with practical opportunities. "The U.S.-China cultural exchange training is a good attempt to help participants learn how to design strategies for cross-border negotiations in a virtual setting," said the person. ”