Perkowski sees newcomer American companies all making the same mistakes in China.

Jack Perkowski: Everybody makes the same mistakes. There’s a knack.

You got people from United States, people from China, two completely different types, different cultures, different upbringing, different income levels, different in everything. And then you try to put it together and giving to China’s, even though it’s been at this now for 30 years, that’s still a relatively short period of time, so there’s a lot of learning that’s been going on both sides.

And so, you’ve had a lot of the scrapes; intellectual property issues, somebody is setting up a competing plant; Danone, which is a big French dairy company just got into a very big scrape with their China partner had been very, very successful all these years, and all of a sudden they’re in a big legal battle in both China and the US and other parts of the world.

So those kinds of things still happen because you’re trying to mesh together two completely different cultures. And then, I don’t think there’s enough tendency to really do what I said in the beginning, which is to develop that local management teams.

See, everything changes for the better for us. When I started surrounding myself with those good New China Managers that I told you about, because then they started interpreting for me what was happening in China, and all of a sudden, it started to become a lot clearer because they knew what’s going on. So before that, I tended to have people that were non-Chinese that were, maybe, knew the language or whatever, who were supposed to be China experts. But they didn’t really understand what was going on. You really need the local Chinese to tell you what’s going on. So you need to surround yourself with people and get that kind of an input. And I think most people can kind of get to the point where they trust the local Chinese enough to do that. They always want to second guess than when I think your better instinct is to go with them.

Recorded on: September 22, 2008