Matt Nolan is Senior Counsel for Dow Corning Corporation, now working out of their global headquarters in Midland, MI., where he serves as global commercial counsel to the company’s electronics and lighting businesses. Until recently, he managed governance and compliance for Dow Corning for Greater China, was vice-chair of AmCham’s legal committee, and worked to found a chapter of the Association of Corporate Counsel in Shanghai.
How did you first come to China and into what position?
When Dow Corning Corporation got a new general counsel in 2012, I told him I’d be open to any opportunities that made me better and met a company need, including those outside the U.S. This put me top-of-mind when a need arose, and I took over as Manager of Governance & Compliance for Greater China in early 2014.
Did you have China experience before your posting?
I had one three-day business trip in 2011, during which I spent 90 percent of my time in hotels or conference rooms. Landing for my house-hunting trip and knowing I was going to be living here was something else entirely, and was the moment that it set in that I was really moving halfway around the world and into an entirely different culture. Everything, even the things that are incredibly similar and familiar like KFC and bookstores, just felt so…Chinese.
Many expats who come to China start out confused and sometimes depressed but later adjust and enjoy it immensely. Was there a turning point for you?
We didn’t go through a tough integration phase, partially because I think we’d prepared ourselves for challenges from the start. But the entire experience did start to feel different following our first holiday trip to Southeast Asia, though, about three months in. It was at that moment that we started to truly appreciate how special this opportunity was for us, and that each of the challenges was being repaid in spades in opportunity and experience.
What was the biggest change in your time here? And what did not change?
I spent 24 months in Shanghai, but just in that period of time it was incredible to witness the change relative to the pace of change back in the U.S. We had a clean line of sight from the Lupu bridge to the Shanghai Museum when we got to town, and now that’s all buildings! The traffic got worse, and running as a hobby and sports generally have exploded in popularity. Change is a constant in Shanghai, though, so I wouldn’t say the city really feels “different” over time for us.
What advice did you give your successor? What advice did you give your Chinese staff?
I liked to post quotes on my office door to spur conversations, and those aligned with the advice I gave. I think each person should look to make the company better each day. If that’s our starting point, only good things can come. “Try not to become a person of success, but rather to become of person of value” – that’s one I strive to live by. Other than that, listen more than you talk, and don’t be afraid to ask questions until you really understand something. Success depends on it, and that fails to happen too often.
What was your biggest mistake during your time in China?
I probably didn’t push hard enough with my company to carve out a mandate for the changes I wanted to drive in the region. That’s a tough thing to manage and can create frustration when there’s a lack of alignment. Have the tough conversations up front.
What was your greatest success and what opportunities are there for people just arriving in China?
I feel like the best decision we made, and the thing we did better than anything, was to truly “dive in” to China – don’t stay within the expat bubble, push yourself to try new things, make local friends and recognize that you only get each day here once. Doing that in Shanghai will open more doors than you could ever imagine, and failing to do so has a strong correlation with expats who wish they’d be able to go home a bit sooner. Embrace the experience!
Did your Chinese colleagues make you a better manager or a better person?
Of course. My colleagues’ patience with my poor Mandarin, their willingness to use their time to teach me and guide me, and their insights into things I had no context for previously are all things I benefitted from and will continue to benefit from. Their generosity of spirit and their welcoming of me as a partner in the region gave us a real chance to make a difference.
What did you learn from your Chinese colleagues that you feel could benefit head office culture?
Nobody, not even Xi Jinping, truly understands everything about China. Anyone who tries to tell you differently is an imposter and should have their perspectives heavily discounted. Gather a wide variety of perspectives and seek to listen and understand before you judge, because things are not always what they seem at first. I believe the China divisions of most foreign companies have incredible untapped potential, and that part of the secret to unlocking that potential is having global headquarters flex a bit more toward the perspectives, desires and needs of the local team. Finding the right blend can massively increase engagement and results.
Can China succeed purely on Chinese terms or do its businesses need a hybrid of Western and Chinese thinking and management?
Most innovation and development throughout the course of human history has come from people in one nation, culture, company or group learning about and then incorporating ideas from another nation, culture, company or group, and that’s not going to change any time soon. I don’t think any philosophy that doesn’t learn from all available sources can stay strong in the long term. China and every other country on Earth has much to learn from the others, and that goes for each of our companies as well. Those who listen and incorporate the best will win, and right now China’s doing a pretty good job of that.
Western companies are often concerned by IP infringement in China. What advice would you give to companies coming to China with regard to IP protection?
My advice in China wouldn’t differ from my advice elsewhere, which is twofold:
(A) Never disclose information to anyone, even under NDA or to someone whom you trust implicitly at the time, unless you’re willing to let that information be public at some point in time. Information is meant to be free, meaning you can’t control it forever but you can hold it longer if you very closely manage access and controls;
(B) Consider your business proposition and strategy closely, focus on what is critical for you and what is available under the system, protect as appropriate, and manage your business around those protections and with them appropriately.
Is workplace safety a bigger issue to navigate and implement in China because of the lack of a safety tradition in China and/or complex regulatory structures?
Dow Corning has not found it to be so. We have an excellent safety track record in China, both in our operations and in construction of major chemical facilities, and that comes from setting appropriate standards and culture, and holding yourself to them. Discipline in this area is not optional for us, and our Chinese operations have as good or better (seriously!) safety performance than our plants in Europe or the U.S.
As a U.S.-trained lawyer who worked in China, what changes to Chinese law do you think would most benefit Chinese and Western companies?
I think the most common complaint by Western companies doing business in China is not any particular law, but rather the lack of certainty regarding interpretation and enforcement. Certainty creates trust, and trust is a necessary precondition for investment. China speaks of improving legal institutions with its desire to strengthen the “Socialist Rule of Law,” but despite using the language of the West, the actual direction seems to be headed toward further alignment of the courts with CCP political directives and goals (the word “Socialist” is very key in that turn of phrase). This has the potential to serve as a barrier to the potential growth of the Chinese economy.
What worries you the most about China’s economy, society, etc?
I’m not sure that I would use the word “worry,” but I think one of the biggest challenges that China faces in the future will be managing the incredible differences between the countryside and cities. As urban China continues to develop and link more and more closely with the rest of the world, the gap between those two segments of society continues to grow, meaning it becomes more and more difficult for the Party to set priorities and move forward. Each portion of the populace is at risk of believing the government isn’t doing enough for them.
The cost of democracy is that it’s messy, but the benefit is that change can be more easily managed and assimilated over time, and competing priorities can be hashed out in public. If a day comes where rural and urban Chinese citizens can’t agree on an agenda, or the government isn’t able to meet a plurality of the demands of both, history has shown that change in non-democratic societies is usually much more severe and drastic.
Will you miss China?
Immensely. My wife and I have lived in Chicago (3 million people), then Bay City, Michigan (30,000 people), and then Shanghai (24 million people), and have found a way to be happy in each, but Shanghai is a special place. The unique blend and balance of expats and locals, high-end and low-end, Eastern and Western, and constant change creates an energy and fusion that we haven’t found anywhere else to date. WeChat and email give us a chance to maintain friendships that we hope to maintain for a lifetime. This certainly won’t have been the last time we touch foot on Chinese soil.