David Wolf, President and CEO of Wolf Group Asia, Ltd. draws upon over two decades of China experience and offers specific and straight forward insight on better understanding the China business landscape.
David Wolf is President and Chief Executive Officer of Wolf Group Asia (WGA), a Beijing-based corporate advisory firm. David has a broad range of government relations, strategic counsel, and market-entry management experience throughout Greater China and Asia, in both advisory and enterprise management capacities. His advisory work has focused on government relations, market entry, issues management, scenario planning, market assessment, and strategic advice on business in China at the CEO and Regional MD level. In addition, David is regularly called upon by regional and global media as a commentator on the technology industry and on business in China, and he serves on the Editorial Advisory Board of China Economic Quarterly, and the advisory board of mobile media company 21Communications of Shanghai.
David's clients reflect WGA's systemic approach to the technology, media and telecommunications industries, one which sees the continuity of interests among firms engaged in technology development, equipment manufacturing, content, software, and services. David serves as an advisor to Motorola, Hewlett-Packard, Young & Rubicam Brands, and Foxconn, among others.
Before starting WGA in 2005, David led Burson-Marsteller's Asia-Pacific Technology Practice, B-M's largest practice area in the region and leading a team of nearly 50 professionals in offices in Beijing, Shanghai, Guangzhou, Hong Kong, Seoul, Tokyo, Singapore, and Sydney. David took the Asia-Pacific post after having founded B-M's Technology Practice in China in 2000, growing it into China's largest technology, media, and telecommunications public relations organization and winning a dozen major industry awards for client work.
Prior to joining Burson-Marsteller, David was Managing Director and Chief Operating Officer of Claydon Gescher Associates (CGA), a boutique strategy and public affairs consultancy based in Beijing with a focus on media, entertainment, and telecommunications. He was responsible for daily operations and long-term growth planning. Clients served include Intel, HBO Asia, Reuters, DeBeers/Stockdale, PanAmSat, Turner International, and Irdeto Access.
David's position prior to CGA was Managing Director in China for TV Shopping Network Ltd. of Australia. Originally hired as a consultant to design a market entry strategy and operations plan, the company appointed David soon after to undertake the effort. Within 90 days of plan approval David had launched the 24-hour satellite service in China, with cable-TV affiliates, a telephone center, and the necessary payment and delivery infrastructure to deliver orders within 72 hours to any major city in China. By the time of his departure from TVSN, David had arranged distribution to 11 million cable TV homes in 12 provinces, built a state-of-the-art fulfillment facility in Guangdong with a call center, warehouse, and 60 full-time staff processing thousands of orders each week.
David has lived in China since 1995 and currently resides in Beijing with his family. David holds a Masters degree in International Management from Thunderbird, the Garvin School of International Management, and a Bachelor's degree in International Relations from the University of California, Davis. In addition to English, he is fluent in Mandarin and Spanish. David is a member of the Institute of Electrical and Electronics Engineers (IEEE) (Computer Society, Standards Association, and Professional Communications Society), and is a PADI-certified Rescue Scuba Diver. He maintains a weblog at www.siliconhutong.com
The following is a full transcription of the podcast interview with David Wolf:
CHRISTINE LU: David Wolf is President and Chief Executive Officer of Wolf Group Asia. A Beijing based corporate advisory firm. David has a broad range of government relations, strategic counsel, and market entry management experience throughout greater China and Asia in both advisory and enterprise management capacities. David is regularly called upon by regional and global media as a commentator on the technology industry and on business in China and he serves on the editorial advisory board of China Economic Quarterly and the advisory board of Mobile Media Company 21 communications of Shanghai. David has lived in China since 1995 and is currently based in Beijing. He joins us today to give us more insight on the China Business as a whole and his decades of experience working in China. David thank you for joining us today.
DAVID WOLF: Thank you Christine.
CHRISTINE LU: The introduction, I almost ran out of breath and you know what? It’s not even half of what you have done (laugh). So I am going to just jump right in here. How did you get to where you are today and what experiences led you to make a commitment to China in the first place in your field?
DAVID WOLF: I made a commitment to China very early actually happened in university. Actually half way through school in early 1980’s (I’m really dating myself here). I was going to study the Soviet Union because hey that is what was big back then. I was studying international relations at the University of California, I go to register for my classes as a junior and it turns out that all of the courses that covered the Soviet Union were filled up with seniors and there was no way I could get into one. I was desperate because I had to have one more course to fill up my full-time schedule or I was going to lose my full time status as a student. So I just said what will fill out my requirement for my international relations major and there it was the international relations with East Asia. It was half full. Now no one was really interested in the international relations with Asia. So I took it, and it was the smartest thing I ever did. It was taught by a lady named Joyce Calgran, with a long standing China Hand at the University of California and within the first five days of the class, I’d completely forgotten what the Soviet Union was and was immersed in China. So that took place really early. What got me doing what I’m doing was a bit different. Back in 1997, I’d been in China for a few years. I was sitting at my desk and I was going through the record of a client who had completely blown an opportunity to build a business in China and they’d done it in the presence of regulators and potential partners, and other Chinese parties. And what the question was, “what do you do and what do you want to do in China?” The answer that came back would have been just fine if it had been given in the United States, or senate committee. But it wasn’t it was given in front of Chinese and they blew it. The words were all right but they were just said wrong and I realized right then and there that more then regulation, more then any other single factor. It is miss-understandings that create problems.
CHRISTINE LU: And they start small sometimes. They almost seem like they are no big deal – but it is a big deal isn’t it?
DAVID WOLF: It is the little nuances that people look for. The little things that take people aside and think am I going to trust my career in your company. Am I going to trust my career in you because I am endorsing your application for this, business wise. Or I am going to entrust my life to you because I am going to buy your car. Am I going to entrust my money to you because I’m putting it in your bank or I’m buying your mobile phone. Those sorts of decisions, that trust, that confidence people put in you is based on those little things and it really all comes down to communication. Once someone was talking to somebody, they were talking very much about conditioning the markets. Conditioning eras are more then combining edited differentiation depending on how you position your self in China that can even determine whether or not you are allowed to do business here at all. At that point I realized that the occasion is really - if you want to talk about an evergreen industry trying to get the Chinese better understood overseas is a very important cornerstone. Let me finish your lifetime and career so that’s what I’ve been doing ever since.
CHRISTINE LU: Fast forward then. Can you tell us more about Wolf Group Asia specifically? What is it exactly you guys do and who is it that you serve?
DAVID WOLF: Well what we do kind of has a new bit of edge. We call our selves strategic market. The word strategy and the word strategic get thrown around with absolute reckless abandon. We almost kind of feel a little ashamed to do it, but in realty that’s what we do, I’ll explain how. Primarily focus on companies in what we call the innovative and creative technology but very broadly defined such as IT, telecoms and any other industry that is being disrupted by technology or companies that are actually doing the disrupting and creative industries, anyone who is in the business of creating . They all share a lot of the similar challenges here in China both from a government standpoint is very conservative. We find out which by its nature by both a governance stand point goes from every stand point of life. Companies come to us because they have got a specific challenge. May be its their product, maybe it is what they do. Maybe it’s a certain type of content they want to get into. Maybe it industry that they shouldn’t enter into the first place as a foreign company. They come to us and instead of coming to us for market entry they come to us and say, “okay, well we are here. Now how do we win acceptance by everyone involved?”
CHRISTINE LU: It’s not the start of the learning curve that we always hear about. “Hey, call us up and we’ll teach you how to set up a company.” You are talking about way into the next step.
DAVID WOLF: Very much so, in fact half of our clients have been operating in China for 10 years or more. The other half of them are brand new. The brand new interests have already gone to some of the really great consultants out there who have helped them map out what they should be doing. We help them really specifically when it comes down to really selling and making money and building support among customers and markets and among all those other little audiences you have to please in order to do business.
Well this might sound like an obvious question to us, but a lot of our audience is new to doing business in China. The economies David, of China and the West they connect in obviously so many ways, yet there are so many ways yet there are some major points of disconnect between the two business cultures as we were just talking about at the same time. Can you tell us about some of the projects you are working on now? Or some of the clients that you deal with that are focused on bridging this gap?
DAVID WOLF: Well, I don’t want to talk all that specifically because I operate in a part of the business where clients don’t like us to do case studies. They come to us when things are really challenging.
CHRISTINE LU: Oh I understand.
DAVID WOLF: I can talk in pretty general terms..
CHRISTINE LU: Yes, general terms are great.
DAVID WOLF: One of the places where we see real problems have a lined is when companies come to China believing that they can take their business models, over seas transplant them in China. They usually have to work through the first part of that learning curve, got to figure out, “okay, can’t simply pull up roots and transplant a good business. They actually have to create a local Chinese business.” That’s great and once they’ve done that usually they’ll work a market consultant, or they will figure it out on their own after trial and error. Then they have another problem. Then they actually have to convince people that they are in fact different. To give an example on line we’ve gone through arguably two separate generations companies overseas who have brought good online models. the United States or Europe tried to build them up here. They have had their heads handed to them. So, a lot of people in China are reaching the point – they are believing the kind of Baidu propaganda if you will. Only a Chinese company can really understand who the Chinese humor. So don’t even bother with the foreigners. They have a lot to prove as a growing company. It is interesting so many industries in China – just by being a foreign company, that’s an automatic cache. But in this business, the online business, it’s an automatic albatross around the neck.
CHRISTINE LU: You know you have a great point, because my sector I come from is retail. I remember back in the 90’s when my parents were doing business. All you had to do was slap “famous American brand” on a retail brand and that would actually that would probably bump up sales. But you are saying that’s not the case in your sector.
DAVID WOLF: Its not.
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CHRISTINE LU: That’s interesting…
DAVID WOLF: One of the things that all these sectors are proving – is that just because it’s foreign doesn’t make it better. Now, high tech arguably is an exception. There is a growing nationalism here as well. How do you over come psychological nationalism. How do you overcome a growing preference for local products? That is a challenge for foreign companies coming into China and medium to long term could be a challenge for Chinese companies going overseas as well. The Chinese say why should we buy from you? Those are the kinds of challenges that we work on and we impress and again it is not about doing the businesses. We get brought in very into that part. It’s about convincing other people that yes, we aren’t just saying we are different – we really are.
CHRISTINE LU: You know, it is interesting going back to what you mentioned earlier about some companies literally transplanting their business models. The first thing that comes to me, David is that, okay well, China has been open for the past two to three decades and you do still see the same mistakes being made despite the fact that there are several books on doing business in China, and folks such as yourself who have been on the ground for so long, why are there companies that are still making these same mistakes?
DAVID WOLF: Well, that is a good question and I think the short answer is this: There is no real institutional memory. Many people come to China and don’t do well and wind up going back. Those folks will walk away from China. It will be too hard, they’ll move on to the next thing. Let’s do India, let’s do South East Asia, so there really is surprisingly very little kind of long term institutional memory. People come to China and get their hats handed to them. Mac Purckowpsi the long time China executive, the guy just wrote a terrific book called, “Managing the Dragon.” Had a great quote attributed to back in1995 “China will be the Vietnam war for America. It will be the single greatest cause of the end of promising young careers of anything extraordinaire.
CHRISTINE LU: That was in 1995 you are saying that he said that.
DAVID WOLF: Yea and he has been absolutely right. So what that means is, just don’t have that memory. So people are having to learn this all over again. Now there is a small group of us, you, me probably you know, could probably fit all of us into a decent size ballroom. In any hotel in Beijing, small group of us here who have that memory. We tend to spend our lives bringing people up to speed as quickly as we possibly can. If they can get over that hump. We are the institutional memory of international business.
CHRISTINE LU: It’s interesting because I do feel that there is a bottle neck there though. Now that we have been profiling people such as yourself, and even Janet (who you know) our co-founder. It seems like there is almost no shortage once you offer that. I’m sure you have the same case. There is a lot more people who are looking for someone to connect them and plug them right in then there are people who are doing that it seems.
DAVID WOLF: Exactly, and so the challenge that we all face, I think, one of the ones you are addressing with the site and with the podcast is getting the stuff disseminated as quickly as possible.
CHRISTINE LU: Right
DAVID WOLF: I can’t think of anybody who is in the business of consulting in this regard. Whether it’s what I do, whether its market entry consultants, can’t think of anyone who would hesitate for a minute to give away any basic fundamental information. Because the biggest challenge we have is that we are always doing China 101 and what we need to do is find better more efficient ways to bring people up to a good level of comprehension, basic level so that when they come to us we can be dealing with some very business specific types, opportunities, specifics and that really is a challenge. That is one of the reasons that you blog, that’s one of the reasons why I blog that is one of the reason why we go and speak at these functions. Because really we can’t give it away fast enough.
CHRISTINE LU: Right, you have a point. Now, switching gears a bit. How about China David? With or without the West, it’s economy and business environment keep evolving. How can people outside China better understand what is happening and why it’s important. I’m sure we just touched on it right now just talking about blogging and the different platforms coming up for information sharing. But how would you explain it or what would you say to them?
DAVID WOLF: Well the first thing I would say to them is that there is no such thing as bad reading, bad learning. Anything that you can possibly put your hands on, to read about China whether it is book form or otherwise. I’ll tell you I learned a great deal about China just by reading James Kloval novels back in the 1980’s there is something to be said there. Because, despite the bodice ripping mellow drama that he writes about, he also does his research, does his homework and he gives you kind of a background to what its like to do business here and some of the craziness of Chinese culture. All that is good, but you are going to get to a point where you have to stop and say, “I’m either going to make a commitment to this market, or I’m not.” And some point you have to physically get yourself on an airplane, come over here and spend a substantial amount time in the market. I’m not just talking about mid-level or junior level executives, not just talking about students who have a desire to do very well in this country (although I am talking about them to). I mean really senior executives. If you are a Chief Executive Officer, you have a company and say, “China is going to be 25 – 40% of my business over the next five to ten years.” For God sakes you should be spending 25 – 40% of your time physically right here in the market – and I don’t mean at the St. Regis. Get yourself a corporate apartment and spend the day out among Chinese people. I don’t care if you are selling soap or aircrafts, you have to know this market. There is no way anyone can convey any kind of meaningful knowledge unless we share (all of us) a level of kind of understanding.
CHRISTINE LU: You make such a good point – I’m sorry to cut you off. It makes me think about, you know, I’m based here now in the U.S. and have been for the past 3-4 years, and a lot of these events we have been going to we have been identifying key executives, exactly who you are talking about EVPs of companies, and I almost feel like that they are in their own bubble. Meaning they might be based in New York City, they do travel to China frequently, but when they do its crammed into just a week of their time to do exactly what they are probably suppose to be doing, in terms of a transaction perspective for their company and then they are on a plane back to New York. So, it’s just an interesting point you made up that maybe these same folks that we are speaking to should be spending a lot more time then that, when they trip. I know it’s probably wishful thinking in terms of their schedule, but how else are you going to understand it, is there any other way then?
DAVID WOLF: You know, I have to tell you something… I take a lot of my perspectives from my reading the ________ history. And a good commander leads from the front. If this is going to be an important place to do business. Pick up your flag, pick up your headquarters, and move it over here for a short period of time. Run your business from China, it is possible to do, especially in today’s network world. Actually physically come over here and do it. Why not? Why not have the kuhones to do it. And you know what, if you talk about it and you tell the Chinese – hey! I’m not just coming here for a week I’m coming here for six months so I can really understand what’s going on here. Good Lord, the magnitude it is going to bring.
CHRISITINE LU: Right, it shows a lot. It definitely does. You are right. Now moving right along there then with that Executive in mind, what are some key challenges, and this might sound like a China 101 level question, but again keep in mind those at the starting curve about to enter. What are some of the key challenges one can expect to face when running a company in China or such as yourself managing for as many years as you have. What are some things that time and time again keep coming up that they should be prepared for?
DAVID WOLF: Well I’d say that there are some things that are going to be general for everyone and there are some things that are going to be specific but given that we only have a limited time and format, the easiest thing is that everything is going to be more difficult to do then you thought it was. Everything is going to take more time, everything is going to be far more hassle. There are no silver bullets all the processes here are painful. I’ve heard an old saying about this, in China everything is possible, but nothing is easy. That’s really what you have to keep in mind when you come over here. Nothing is going to be easy, all these processes are going to be difficult, even the most simple things, whether it’s getting an extra phone line or setting up a business or getting a business license. You know you want a business license in California it’s a three day process you want a business license in Beijing at best it can be a six month process depending on what you want to do. So everything is harder, and that’s the first and most important thing you’ve got to keep in mind. If you are ready for that, if you approach everything with that expectation you’ll have more patience, you’ll do everything more philosophically and you’ll solve the problems quicker, so if there is one thing people should remember, it’s that. To be prepared for it to be hard.
CHRISTINE LU: Given that, you might think that would turn someone off a bit, or make them real hesitant. But in light of these challenges then David, why China? What has kept you personally there, what keeps a lot of people still there and what keeps these companies still coming there and staying there for the long haul?
DAVID WOLF: That is a really great question. I have to tell you that for those of us who have been for a long time there are days that we come back to our offices at the end of the day, absolutely exhausted from fighting the battle, look at the pollution and ourselves. Good God what are we doing, and its sometimes it can be pretty hard to come back from those long holidays. But in reality, there is probably three good reasons that we come back here and we stay here. First, you know, this place truly is the middle kingdom. Beijing is certainly, and I can only speak of Beijing because it is my hometown, but Beijing is really feeling more and more like the center of the universe. I mean it’s palpable; we are constantly a being as the states is coming to China. Everyone is coming here because this is where the action is. The excitement in the air, the optimism, the new skylines we are throwing up, the new freeways that go up in the space in six months. New airports everything, the palpable feeling is addictive. It’s like pure liquid adrenaline going into your veins every day, you know, you really don’t feel that if you go some place else, you really don’t feel that if you go something else. Like, central California or upstate New York and got to go I miss it! There is that feeling of being some place where some things happening. For me, I‘ve got two other reasons. First, there are very few places in the world, where giving a bit of good advice can make a gigantic difference. It is so gratifying to me when I sit down with a client and I work them through an issue and it may take a week or it may take a year and everything goes well and it happens far more often, like George Fopart in the A team, I love it when a plan comes together. Plans come together here and that is the best part of the advisory business. But the other side of it is because my industries are developing and its developing so quickly in China that I have an opportunity to affect how it grows how it develops.
CHRISTINE LU: No kidding, David six months away, every time I come back especially in that sector, you know you and I just saw each other at the China SET Conference, I feel that you are gone a few months and you almost feel like you are missing out.
DAVID WOLF: We went away for three weeks, on family holiday and I came back and I really feel like I came back to a different city.
CHRISTINE LU: Right that’s how fast it is. It is.
DAVID WOLF: Yeah truly, truly. And so that is probably what keeps it coming. If you love building something, if you love being a part of the process of creating something from the ground up, there is just no better place to be today. That’s what keeps us all it’s all coming back.
CHRISTINE LU: Now here is one, I know you deal with clients that you’ve mentioned have been on the ground for several years but I’m sure you come across people all the time who are new. And for those that are listening, what are some common misconceptions or misperceptions that you keep coming across time and time again for those who are just entering into the market.
DAVID WOLF: The common misperception, probably the worst one - we will all be the first to tell you, yes China is different. The biggest misperception is that China is totally different from everywhere else. I see so many people come to China, they get off the plane and they act like they left their common sense at home. They go completely “Oh, everything is different I have to do everything different and these are people who end up being taken to the cleaners. And they never come back.
CHRISTINE LU: Or to continue that, because I’m on this site now, they come back and tell their higher ups that the market is not ready, or there is no place for them their and they just hang their hat up.
DAVID WOLF: That’s exactly. The toughest thing to do here and this is almost very Zen so kind of bare with me. The greatest skill you could have here knowing what point say, “It isn’t about what I know or what I don’t know. It’s about what I feel in my gut.” And you truly have to remember to trust your gut here. If something smells wrong, it probably is. If it doesn’t sound right, it probably isn’t. People have to learn how to rely on their sense of right and wrong and don’t have peoplte tell you you have to do this differently in China.
CHRISTINE LU: Yes I have heard that many times. It’s China excuse, what does that mean at the end of the day, you still have that gut, you still have to listen to it.
DAVID WOLF: And if you don’t it can give you problems, and I see this happening all the time. People tell companies coming over here that in order to get press cover you actually have to pay the reporters.
CHRISTINE LU: I will be the first to tell you I thought that too when I was doing the marketing over at TVSN any PR event we had we had to pay them. Taxi money it was called.
DAVID WOLF: Still exactly, taxi money is really six time the amount of money the pay for a taxi.
CHRISTINE LU: Taxi money times fifty reporters I wanted to invite.
DAVID WOLF: Ridiculous and in reality you don’t really have to do it. It’s a different generation. In the old days when all of the media was state supported and it was a matter of all the news that fits, we’ll print. It was the matter of getting yourself with something for the reporter’s time that he would run something. That was a different day.
CHRISTINE LU: It is changing your saying it’s changing.
DAVID WOLF: Reporters now are coming out of school and they actually want to be journalists.
CHRISTINE LU: Wow what a revelation.
DAVID WOLF: How do you get them to come to a press conference? Give them a good story. Give them a “hold the press card.” Instead of doing a press conference do a dozen one on one interview with these guys, it’s cheaper they’ll get better stories, they’ll get the stories that they want and you won’t have to spend a lot of money and then when you want another story the next time, they won’t be coming back for more. It’s another one of those things.
CHRISTINE LU: Well, you are right.
DAVID WOLF: My wife says when in Rome does as the Romans (she is Chinese). When in Rome do as the Romans is the wrong way of approaching China. When in Rome do as the Christians. Come here, see what is going on and stick to your guns and try to push for a better way. Because in the short run it may make things harder but in the long run it’s going to be better for you and better for the people.
CHRISTINE LU: Right… No, definitely that is still a very, very good point. Now last but not least the most important question to wrap up this interview. Where do people go to learn more about you and the company, David.
DAVID WOLF: Well please go take a look at our website: www.wolfgroupasia.com but you know what, I’m a firm believer that chemistry is far more important then brochure where you really want to get to know the way we work and the way we think go to my blog at Silconehotel.com that’s the best place to go because then you’ll get a feel for the kinds of things we think about. The issues we look at, the way we think and that gives you the better idea whether we are the right people to work with or whether you want to go looking further on down the road.
CHRISTINE LU: Oh we definitely will link to both when this interview goes up. David, thank you so much for your time. I really appreciate it.
DAVID WOLF: Oh it has been delightful and an honor to be here.
CHRISTINE LU: Oh we’ll be talking a lot more soon. I’ll be bugging you, trust me. (Laughter)
DAVID WOLF: (Laughing) Looking forward to it.
CHRISTINE LU: Thanks so much we’ve been talking to David Wolf, President and Chief Executive Officer of Wolf Group Asia. Thanks for Listening, I’m Christine Lu.
Wolf Group Asia
David Wolf, President and CEO of 
