Ferrari: Working in China

What practical advice would you have for me, if I was a young working professional, moving to China, or Asia, to manage a team?

It depends on the role or responsibility; it depends if you are a student or if you are banker. It depends on many things. If I were to make a general comment, I would say that, in Asian countries, especially Japan and China, but China is the biggest one, so let’s take China as a reference, when you come to a civilization like that, I think, for a long while, you should learn. You should come in with a level of humility that, most probably, even if you don’t have, you have to find inside yourself. You need humility to start all over again.

I have two things that I normally say to my managers. The first is that, when you come to China, even if you have a doctorate degree, you should behave as if you have come back to primary school. You are a primary school student, when you come to China, no matter your background or your age. When you come here, your mindset should be, primary school; I’m learning all over again. Then, of course, the industry and the business is the same. I’m not saying that it’s a totally different country, in terms of business and the mechanics of business. But from a human point of view, from the approach to your colleagues, your boss and the people, it is like primary school. Then there is an old saying between the people that spend many years in Asia, and they have the longest periods in China, which is my opinion but is something that is shared between many experienced colleagues in this area. If you stay six months in China, you think you know the country; if you spend one year in the country, you think you are able to write a book; if you spend three years in the country, you shut up, because you understand that it is so complicated to understand, that it’s better to continue learning.

What about any advice to young working professionals around business and what business means to you, what you’ve learned about working at companies like Ferrari and Pirelli?

I’ve worked for big multi-nationals and maybe Ferrari, in relative terms, is the smallest company I’ve worked for. In terms of business, I think that when you approach China, you have to consider China as a continent. In all Chinese, Han is the name of the country. China, in Chinese, is Han. Chinese is an ethnicity. It’s as if you have a country that is Caucasian. Basically, inside China, you have a civilization where you have different countries, under the same ethnicity. You have to approach China with a degree of humility, as I said before, because you are opening a totally different box. But with an awareness of not being in one single country. If you go to Hangzhou, they have their business way, if you got to Beijing, they have their business way and the same applies to all areas. Of course, they are all Chinese but they have many different business practices.

First of all, when you arrive, you have to see where you are in China. How do you approach the market in the areas where you are not present or where you don’t have a stable organization? Maybe the most similar country is the US. It’s not the same thing to be in New York, in Minnesota or Los Angeles. It’s the same in China. When you change geography, the mindset of the people completely changes. Only the flag is the same. You must be extremely careful, from a business point of view. The risk is that you launch a product and you’re doing well. You’re doing very well in the Shanghai area and you think, okay, I’m doing well in China. No. You are doing well in the Shanghai area. Then you have to expand your market in other cities. Maybe it will go well in some cities and in others, it will go badly, because there are different tastes, different business practices, different climate; many things will be different.

This is my business suggestion. Be careful, because there are many Chinas, inside China. The second thing, that is even more important, is that when you come to China, as a company, you may say, let’s go there and try. Now, to be honest, it’s a bit different. That is an approach from 10 or 15 years ago. Now people are fully aware of the difficulties and of the opportunities, as well, but you have to face the China story as a big one. If I am a company and, for historical reasons, I’m not in the US and I have to approach the US or the European Union, or whatever, I have to plan carefully, because I’m coming to Europe and I have the Germans, the French, the Italians, who are all different.

In China, it’s the same story. So when you approach the country, you have to approach it keeping in mind all the different cultures inside the country, but also the fact that you are approaching a continent. Financially, you must be strong enough, if you attack the whole country. Normally, many people come – again, it was particularly true in the past, but it’s still sometimes true – with very aggressive business plans, with the famous story of, if I sell one product to every Chinese, I will become a billionaire. Forget it. That’s not China. China is a conglomerate of different countries, all together; at least four or five different geographical clusters. You are approaching a continent. You must take it extremely cautiously, with humility and be aware that you have great opportunities there because, actually, the people are starting to enjoy life and consuming. But at the same time, you must be extremely aware of the fact that, if you crash, you do it big.