Customer Reviews

Managing the Dragon: How I'm Building a Billion-Dollar Business in China

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This is an admiring effort by an American entrepreneur, as fairly reviewed by Victor Mallet for the Financial Times:

"Brash optimism of an American in China

You have to hand it to Jack Perkowski. The working-class Pittsburgh kid who won a football scholarship to Yale, spent 20 years on Wall Street and became head of investment banking at PaineWebber could have rested on his laurels and enjoyed his personal wealth.

Instead he chose in the 1990s to set up a new business in a difficult country and in a difficult industry he knew nothing about. This book is the story of how Perkowski went to China and established a Chinese motor components group called Asian Strategic Investments Corporation, now Asimco Technologies.

Managing the Dragon is not a great work of literature. The memoir Mr China by Tim Clissold, a Chinese-speaking accountant who helped Perkowski build Asimco, covered some of the same ground with more eloquence and wit four years ago. But Perkowski's book is worth reading, both for its insights into business in China and for its self-portrait of a relentlessly optimistic American entrepreneur who has persevered in spite of disasters and disappointments.

From a new vantage point - he spoke no Chinese but understood Wall Street and raised the money - Perkowski describes the horrors that also featured in Clissold's book: bureaucracy, fraud, corruption, competition from Asimco's Chinese joint venture partners, an inadequate legal system and invoices paid with trucks rather than cash.

As Perkowski admits, China is changing extraordinarily fast and most of these events happened a decade ago. But the book's central section - including a blow-by-blow account of how Asimco removed the awkward boss of a rubber products joint venture in Anhui province - make gripping reading for any industrial investor contemplating a move to China.

Clissold wrote that he was "confused" by the optimism of Perkowski - whom he described as "an enormous personality" and an "archetypal Wall Street adventurer" - and it is true that the American, even in his own writing, comes across as guileless and naive. Perkowski seems to crave recognition and at first appears surprised by how different Chinese habits are from American ones. Occasionally he draws lessons so obvious as to be useless, such as: "I have learnt that getting the strategy right is one of the most important things that a company can do."

Yet there is wisdom, too, on dealmaking and management in the world's most populous nation.

Perkowski chose the almost virgin business territory of China when he learnt that other Asian economies were in the grip of a few powerful business families (the subject of Joe Studwell's Asian Godfathers). He sensibly lays to rest the absurd myth that guanxi or connections are unique to Chinese dealmaking, pointing to his own use of guanxi as a graduate of Yale. And, half in jest, he recommends giving a new company eager for recognition a name beginning with A.

The core of Perkowski's argument is that investors in China face a "management gap" between bureaucratic managers reared in state-owned companies and managers so entrepreneurial that they "concocted deals with criminal elements or tried to set themselves up in competition with us".

Through painful years of trial and error, Perkowski and Asimco struggled to bridge this gap. They started with expatriate managers, but that did not work and Perkowski admits he made his biggest mistakes in the early days "when I discounted the views of my Chinese managers". Next, they tried converting the unsuitable "bureaucratic" and "entrepreneurial" Chinese managers they already had into the kind they wanted, but by and large that failed too.

Finally, they decided to find and empower Asimco's own "New China managers", open-minded mainlanders with some management experience, some exposure to modern management concepts and, typically, an engineering background. In retrospect this was as obvious as the need for a strategy, but it was evidently effective.

The question remains as to whether Perkowski needed to go through such agonies to build a company that now has 17 factories in eight provinces in China.

Clissold could not understand why Perkowski did not learn Chinese. This is a sore point for Perkowski. Although he writes that 90 per cent of the mistakes made in China are due to "misunderstanding and miscommunication", he spends nearly three pages justifying his reluctance to try to learn to speak Chinese.

Reading the two books together, one of the most valuable lessons to emerge is that if you want to build a billion-dollar business, it pays to learn the local language."

For more wisdom, I also recommend The Chine Executive by Wei Wang - a great thinker on this topic, in my view.

Managing the Dragon provides very good insights into what was needed in the 90s to bring a successful fund into China to build a world-class Chinese automotive components company.

The author, Jack Perkowski, started out as a successful Wall Street investment banker. After twenty years, he took an interest in China, and moved his family to China, where he focused on raising funds to build a Chinese automotive components manufacturer, ASIMCO. When he went to China in the early 90s, the Chinese government was having trouble finding foreign investors for the auto parts industry, and was willing to give away foreign majority ownership. Seeing the potential of the industry, and Chinese government support, he decided to make his move, raising Wall Street capital while negotiating with Chinese partners to get started. Together with his team, he was able to make things happen, and now has a successful auto components company in China.

Aside from Perkowski being generally very smart, several things come through in the book:
-- He was keenly aware that there were different ways to do things in China, and he did not try to force down only one vision "because that's the way that it's done in America"
-- He did not try to negotiate from a superior position, but instead negotiated as an equal partner committed to China's long-term growth
-- He has a curious mind and is always willing to learn
-- He and his family now live happily in China, which in the eyes of many Chinese, shows his commitment to the country

Perkowski shows that China is really not that mysterious, but it takes time to learn and understand how it works. If one is willing to make that investment, then one day, you will get a good return on your investment.

To get a good view of what it was like doing the deals on the ground for Perkowski, you would be well-advised to read Mr. China: A Memoir.

If there is only one warning I would make, it is that many of the strategies and scenarios Perkowski outlines work well with highly capitalized manufacturing businesses. He had an advantage in dealing with Chinese officials because he had $150 million to invest. For smaller investors say, in the service sector, it would be quite different. Also, after joining the WTO in 2001, Chinese regulations have opened up considerably for non-Chinese investors. As for joint ventures, very few companies consider them anymore, so they are mostly off the table.

This book is the best book I have read on how to do business in China. As a China business lawyer and the editor of the China Law Blog (www.chinalawblog.com), I am often asked what book to read to learn how to do business in China. From now on, I will tell them, Managing The Dragon. It is that good.

One of the reasons I liked it so much is because I agreed with just about every word of advice in there on how to conduct business in China. In addition to being a great primer on how to conduct business in China, parts of it were simply riveting. My favorite chapters were on how Perkowski managed to extricate his company from a couple of joint ventures, once peacefully and once by having to engage in "guerilla warfare."

The Economist Magazine rightfully calls Managing the Dragon a must read:

Managing the Dragon, Jack Perkowski's story of his almost 13 years running Asimco, an automotive components maker, in China is therefore a rare treat--a first-hand account of the struggle to build a business there. Tim Clissold, Mr Perkowski's former colleague, has already described how Asimco's Chinese partners cheated it out of millions, in his riveting 2004 book, "Mr China". But Mr Perkowski hung on, and his wise and ultimately optimistic account should be required reading for anyone starting a business in China. Mr Perkowski is sensible on every issue--from the need to nurture (and listen to) local managers to the relative importance of local over central government relations. Most of all, foreigners must not shun the impossibly cut-throat local market because the price paid for a product in China today will be its price globally tomorrow.

Buy it. Read it. You will not be disappointed.

This is a book about a life and business adventure. I'm not particularly interested in how to do business in China, but I was fascinated by the decisions the author made. This is a wonderful book for anyone considering innovation. It describes how a successful 40-year-old decided to take his life in an entirely new direction, building on what he knew, but also taking chances on things he knew little about. It's people like this who change the world, learning how along the way. He has the insight and writing talent to relate his journey to his roots in impoverished coal country, as well as lessons learned playing football at Yale and working on Wall Street.

This is!

There are three things that make a business book stand out for me among all the many very ordinary books that are published each month. The author needs to know what they are talking about, They need to have something new to say, and they need to be able to write it in an interesting way that I can relate to. Perkowski manages to do all three in a book about business that reads like a combination between a personal biography and a travel guide.

Throughout the book three themes are continuously repeated, if not always explicitly: Connectedness, Trust, and Perserverance.

Perkowski knows what he's writing about. He went to China in 1991 after a successful career on Wall Street, and founded a automotive parts company currently selling over US$500m and 30% of that outside China. His book outlines how he came to make the connections in China that enabled him to start and build his business, and the various challenges he has faced since.

He has a number of new things to say. For example, many people talk about the challenge of enforcing Intellectual Property Rights, (IPR), in China. Local laws do little to protect IPR, and writers often draw negative conclusions about the Chinese character and society as a result. Perkowski, on the other hand, has a purely economic take on the situation. He talks about the sort of products that are regularly knocked off, the kinds of buyers they have, and the distribution systems. His take is that all of these do much more to explain what happens in China than any judgemental comments about Chinese morality. His own business success shows how he has accommodated and succeeded in the Chinese market without compromising his principles. And the something new? Products with the most proprietary content and highest-technology value are probably the best products to take to China and the easiest to protect. (You'll have to read the book).

Other counter-intuitive concepts in the book?

* You don't need a local partner in China, and you might even be better off without one.
* You don't need to learn Mandarin
* The real reason for the Chinese cost of manufacturing, (it's not lower labor costs)

Not every one of Perkowski's plans came out well. He discusses how he went through Plan A to begin his company, (it failed), Plan B, (which also failed), and he eventually settled on Plan C, (the success). The story of his three different strategies and how he learned from his mistakes is a lesson in persistence and humility many leaders can learn from. He describes his journey in China as a marathon.

There is a lot of discussion in the book about baijiu, the local alcoholic drink without which no business dinner seems complete. Many of the stories are funny and entertaining in their own right, and would stand up to inclusion in any collection of witty travel writing. Perkowski also uses them as a platform to about the importance of mutual respect, being willing to share, acting kindly toward others and having a sense of humility. All of the various dinners and social drinking sessions seemed to build supportive relationships that furthered the business without being focused on the business.

Finally Perkowski makes two points in his book that are interesting and easy for me to relate to. Firstly, he debunks the popular notion that China is different because it relies on Guanxi, which can best be described as "a network of influence and supportive social relationships". A lot of foreigners emphasize the extent to which this is important in China, likening it to nepotism or cronyism. In fact, most successful people in any culture rely on networks of influence and social support, and Managing The Dragon describes how China is the same, rather than focusing on how it is different. Perkowski uses his own career story to illustrate how important it is to be socially intelligent, and how he has benefited from the support of others.

The other concept emphasized in the book to which I readily relate is the importance of trust. If employee and customer engagement means contributing time, talent and resources to the organization it is impossible to imagine engaging people without trust. The importance of trust is a central theme throughout Managing The Dragon. The book looks at both the benefits of positive trust, and how difficult business is in the absence of trust.

Of all the business books on China I have read, this is one of the few that looks at how doing business in China is much the same as doing principled business anywhere else. No fancy tricks or "gee whiz" formulas. And at the end of the day, Perkowski sounds like a good guy to share baijiu with.

As an American who has lived in Beijing for the past 13 years and who had never managed to meet Jack until recently, I just have to say that this book was a tremendous read. Jack's enthusiasm, humility, humanity and wisdom permeates the book and it was never ever tedious.

As an executive search consultant who specialized and recruited top Chinese managers long before it became fashionable or at all profitable in the 90's, I can honestly say that his management lessons are spot on. I can't imagine what it would be like to live in China without speaking Chinese, but applaud him for his accomplishments. He may have been a bit too harsh on his expatriate folks which broad generalizations and characterizations (I know some of the personalities involved there, and it could have been wrong selection!!)

His emphasis as well on 2nd and 3rd tier cities is also excellent, though he has the luxury of not requiring bi-lingual employees as do most MNC's.

I recommend this book both as a great china lesson, but also as an inspirational and interesting read that truly flows!

Just released last month, Jack Perkowski's Managing the Dragon recounts his story of building a business in China. In the mid-90's, Mr. Perkowski saw potential in China. So he took the bold step of moving to China and starting a company. It hasn't always been easy going, but ASIMCO, his company, now takes in $500 million in revenue each year producing automotive parts. The book often disagrees with "accepted" knowledge about China. Mr. Perkowski keeps the lessons entertaining with his story telling. The book is also quite candid about what worked and what didn't.

I liked this book. It's another one of those books where the author was a successful W-2 worker for a large US company whom decided to go out on his own and try to build a large company that he could own and run. Last October (2007) I read and reviewed on Amazon Maxine Clark's story that she told in "The Bear Necessities of Business" (ISBN: 0470139056). The instant book being reviewed has a similar feel to me to Ms. Clark's book. I think both books are worth an entrepreneur's time to learn how someone else built a big company. The instant book has the following 19 chapters:

0. Introduction
1. Who is Jack Perkowski?
2. Stay in New York or move to Hong Kong?
3. A blank-sheet approach to China
4. 100 factories in 40 cities
5. Eating, drinking, and sleeping on the long march
6. Developing our new China management strategy
7. Closing China's management gap
8. Guerrilla warfare in Anhui
9. A peaceful transition in Langfang
10. An election in Mao's backyard
11. Building for the long term
12. Decentralization and China's local governments
13. China's different cost perspective
14. China's two markets
15. China's technology gap
16. Establishing a business in China
17. Challenges or running a business in China today
18. Where is it all headed?

The author is CEO of ASIMCO Tech, which is among China's largest automobile components makers with 12,000 employees in 17 plants in 8 provinces. He founded the company in 1994 after being a successful investment banker for Paine Webber. The book is split into three sections:

I. Author's story (1-5)
II. Management issues (6-11)
III. Key themes author sees in China (12-18)

This book is about entrepreneurship, about doing something different, and about being an American starting a business in China. It's a book spoken with clarity, humor, and about the author's adventure that he is still riding. It is a book with lessons learned for the trenches. And it is definitely a book anyone interested in import/expert between the US and China should read.

It is clear, and the author reminds us, that this book is full of practical wisdom about the realities of China today. China has many problems: (1) it doesn't use capital well, (2) it's legal system is not reliable, (3) information doesn't flow freely through it, (4) it suffers from slow technological development, and (5) its economy is highly decentralized and locally driven. 5 stars!

To me, there are 3 distinct parts in this book:
-1- The auto-biography of Jack Perkowski, a kid from the US rust belt that gets to top B-schools and enjoys lots of success on Wall Street. It's OK to read, but nothing particularly interesting.
-2- The description of the investments he made in China. According to his analysis, he was simply struck by bad economic conditions until things go better and his brilliant strategy enjoyed the success it deserved. I was tired of all the bragging through these pages. If you read Tim Clissold's book, Perkowski's company was actually bleeding up to $40 million a year in the 90s, and his investors were not impressed by this performance. But the author subtitles the book "How I'm Building a Billion-Dollar Business in China"... Wow!
-3- Some insights about China business and what drives the Chinese economy. This part is really valuable and unique. You'll learn about the incentives of local officials, the fragmentation of industries, the cost perspective of the Chinese, etc.
Overall an interesting book, but feel free to skim through certain chapters!

Just finished Jack Perkowski's Managing the Dragon, and excellent book in three sections. I was fortunate enough to work with Jack and his team as a consultant for several years. Jack was generous with his time and insight, is able to distill the complex into plain-speak (some memorable phrases in the book), and an excellent listener. All are qualities enbedded in the book. Jack's best advice? Interested in doing business in China, then go there for yourself. This book will serve as a good framework for your fact-finding and due-dlilgence, but keep an open-mind, seek multiple views, and remember: in China, nothing is easy; everything possible. Oh ... and watch out for the mao-tai