Illusory Superiority and Your Above Average Team in China

“87% of MBA students at Stanford University in 2001 rated their academic performance as above the median relative to their graduating class.”

As great of an institution as Stanford University is, I find it hard to believe that somehow these bright minds have redefined mathematics as we know it, to allow 87% of their class to be more proficient than the median performance of their peers. This study, and countless others over the years, continues to demonstrate that human beings routinely overestimate their intelligence, work performance, and even driving skills.

So why does this matter? Well in many cases, the only negative impact our inflated sense of self may lead to is fewer “likes” on social media than we expected, or a fender bender as we try to parallel park in a space too small. For those managing organizations however, this cognitive bias can, and does have serious implications on a company’s profitability and long-term prospects.

Specifically, when looking at companies with teams in Asia, I routinely hear executives praise their foreign staff as though they were worthy of riding triumphantly into Rome in a gilded chariot. Frequent honors awarded in absentia include being the best country manager, a best-in-class sourcing office, and the only manufacturer in all of China sophisticated enough to supply their company. Whether it is willful ignorance or the ill effects of illusory superiority bias at play, these beliefs are causing many businesses to miss out on opportunities to improve supply-chain efficiency, reduce management expenses, and create more profitable and resilient organizations.

To mitigate this powerful and blinding force, business leaders should accept three uncomfortable truths:

1. Not every company can have the best team in China, and more likely than not, your team is not the best (Unless of course you are headquartered in Lake Wobegon) Given diminishing marginal returns, the quest for perfection is not only unattainable, but also quite foolish. Only through a critical examination can you accurately identify your team’s strengths and weakness. In doing so, it is perfectly reasonable to determine that your team is not the best, but is very proficient at certain functions such as product development or sourcing a key product category, and conversely may struggle with project management or continuous improvement. Remember, it is not about trying to have the best team in China, but rather the best team in China for what you want to achieve. This can best be accomplished with a staff that possesses a diverse set of skills.
2. Most teams in China readily accept proposed improvements, but few can actually implement real change on their own. Ever had an Asian supplier tell you they could make a product per your specifications only to later find out they were not positioned to do so? Maybe they lied to gain your business, or perhaps they genuinely wanted to meet your expectations but were simply unable to do so. The same sentiment can be applied to foreign teams in Asia. Whether struggling with communication or accomplishing key objectives in a timely fashion, do not be surprised if when confronted, a team in China acknowledges performance shortcomings, vows to improve, but you still end up facing the same issue months later. Unfortunately, more often than not, a foreign staff’s performance is largely attributed to the personnel that comprise that team. In turn, if a staff does not meet your expectations, do not be surprised if those individuals are not capable of championing real substantive change.
3. No business is too large or sophisticated to not make improvements in China. “Simplicity is genius”, Einstein once opined. Seeing that this humble patent clerk’s Theory of Relativity is still valid a century after being published, perhaps business leaders should take heed. Whether managing a joint venture, a sourcing/sales office, or a supply-chain extending into a dozen countries, all companies can embrace change regardless of size. While structural improvements can often be painful to implement in the short-run, the long-term costs associated with inaction usually far exceed any temporary discomfort. And remember, “Nothing is particularly hard if you divide it into small jobs.”-Henry Ford

At the end of the day, for the vast majority of companies, one’s Asian operations are not scrutinized on a day-to-day basis, and when examined are more often focused on anecdotal feedback. For those comfortable with their overseas business, consider for a moment taking a more pragmatic approach to assessing your global organization, as doing so may lead to building upon your competitive advantages while less in-touch competitors pontificate about their best-in-class foreign teams and how they have bigger hands than the next guy.