An Asian and American balancing act

John Chen, a native Hong Konger and a 53-year-old CEO of a United States software company, finds he has at least one advantage in the western corporate world dominated by white managers: he could read the original Chinese version of the Art of War, the book on military strategy written by Sun Tzu in China 2,400 years ago that has become the bible for many management gurus today.

The CEO and general manager of Sybase, the world's largest independent software vendor specializing in enterprise databases, information management and mobility technology, is one of the few Chinese who holds a top management job in western multinationals.

When talking about management, Chen said he learned about it from many aspects of traditional Chinese culture, not just the Art of War. He sometimes compared a company's management to practicing tai chi, the traditional Chinese martial art and exercise. "Sometimes the right hand is stronger, and sometimes the left hand is stronger," he said. "You must achieve a balance in creating your strategy."

He also compares management with using traditional Chinese medicine. A company that loses money is like a patient whom the doctor needs to cure slowly to help him recover. But if the disease is serious, the doctor needs to use stronger medicine.

Chen is most famous for re-positioning Sybase 10 years ago when it was at its lowest point. When Chen joined the company in 1998 as a CEO, Sybase was losing over $50 million a year. But one year after he took office, it began to profit.

"If a patient's arm is infected, you can't cut it off bit by bit, you have to cut the whole arm to save the whole body," said Chen. And that is what he did at Sybase.

The strongest medicine that Chen prescribed was to cut 1,500 people from a workforce of 6,000. "The employees are very clever," said Chen. "They know if you cut slowly, you will probably cut all of them sooner or later."

Chen says he foresaw at that time that with the cut in employees, revenue would drop, but wouldn't drop faster than the fall in the workforce. Thus he gained time and space for repositioning the company and today Sybase has only 4,000 employees worldwide. In the software world people come and go frequently, but Chen said in his company an employee stays for an average of seven years.

Another important thing to do when he joined Sybase was to build an efficient team. Chen imported what he calls his "one-third theory" in setting up a management team. He brought one-third of the people from the outside - people who know how to operate, but who didn't necessarily understand the company well.

He also employed one-third of his people from other software companies, including Apple and Microsoft, saying that people with experience at its competitors could invigorate the company with their expertise.

He also promoted one third of the Sybase staff, so that they feel they were included in the new leadership.

Each part of the three forces played their roles well since they were neither too strong nor too weak, said Chen.

He also noticed that the company was focusing on software development without paying attention to customer demands. "At that time the company had a lot of good technologies, but they weren't able to consider how to make money from the market," Chen recalled.

At the time Sybase has over 40,000 clients worldwide, and over 85 percent of the total revenue came from 15 percent of them. Therefore Chen chose 1,000 key clients from them, and assigned special staff and software support technicians for each of the key clients.

The improved service soon had clients who had been wavering, regain their confidence in Sybase.

During the fourth-quarter of 1999, Sybase made a profit of $2.6 million, compared with a $1.5 million loss in the previous year. The company has been on the upswing since then. Today. most insurance companies and banks worldwide use Sybase products and/or technology as do most of the major telecommunication companies.

Chen says Sybase's business has been running well, even as the economic outlook worsens worldwide. The company reported a 11 percent increase in revenue and a 20 percent rise in profit for the first three quarters of 2008.

Chen said Sybase achieved this because it offers products that cut costs and help companies manage the crisis.

Success not easy

Success did not come easily for Chen who left his hometown Hong Kong for the US when he was 15. Problems of expressing himself in English made him work harder than most of his classmates, he said, but he managed to graduate from university with honors.

In 1979 he received his MS degree in electrical engineering from the California Institute of Technology. After graduation, Chen took up an engineering job as many Chinese do. But he soon found that most Asians in the US had problems being promoted in companies, no matter how diligently they worked.

He said he asked a boss about it and was told the reason was that Asians were poor public speakers. Though Chen didn't believe that he paid over $2,000 for a public speaking class, or the equivalent of his monthly income as a young engineer.

But as he made a speech, recorded it, and saw himself in the video as the course required, he found that indeed he was not an effective public speaker and that the stereotype that some others hold of Asians is true. So he began to work on his weakness and got promoted and eventually became vice president and general manager of Unisys.

The first major risk Chen took in his career life was in 1991 when he left Convergent Unix Systems Group to go to Pyramid. By the time, the capital of the company had a shelf life of about two weeks and it was facing bankruptcy without a new capital infusion.

But Chen managed to work out a plan, and gained the support of AT&T, which provided the needed capital for the company. After that, Chen focused on large enterprises, and choose the European market as a base for expanding the market.

Chen is also an avid bridge player and said he's been playing it since he was a young man. He compares the game, with its strategy driven focus to managing a business. "The key to playing bridge is that no matter whether the card in your hand is good or not, you have to think hard to play it well, and that's why I'm so interested in bridge and business."

As a Chinese business leader in the western world, Chen said he likes combining both the Chinese and western business systems.

Under the Chinese system, people do whatever the boss says and ideas are often not floated before being implemented. In western society, everything is more transparent, but people tend to care too much about short-term benefits, he claimed.

"No one is better than the other," he says, "and you need an ability to use both and balance them."

(China Daily 01/19/2009 page12)