The “China Market” Excuse and Underperforming Leadership
With the current economic pressure in China, a lot of foreign manufacturing companies are seeing declining performance or facing real challenges in their local business. Of course, the external environment plays a role.
The market is more complex than it was 5 to 10 years ago, and most companies are dealing with similar headwinds. But at some point, it stops being the market and becomes a leadership issue.
I often think about professional sports as a comparison. When a team isn’t performing, leadership changes.
Even if it’s not entirely the coach’s fault, someone takes responsibility and a decision gets made. In business, especially in China, companies often do the opposite.
They hold on.
They wait.
They hope things improve.
Why Companies Hesitate to Make a Change
In my experience, there are a few common reasons.
- The belief that people will change
There is often a hope that with enough time, support, or pressure, a leader will adapt.
But the reality is, someone with 20+ years of experience who is used to operating a certain way is unlikely to fundamentally change how they lead.
- Fear of creating a competitor
Companies worry that if they replace a senior leader, that person may join a competitor or even start something themselves and take key people with them.
It’s a valid concern, especially in China, but avoiding a decision because of that fear often leads to a worse outcome internally.
- “Better the devil you know”
Even if performance is not strong, there is a sense of stability. Replacing leadership feels like introducing risk into an already uncertain environment.
So companies stay where they are. In most cases, the companies I speak to that were hesitant to make a change find that once they do, it’s never as bad as they expected, and they’re glad they did it.
The Cost of Waiting
The longer companies wait, the harder it becomes to recover. What often starts as underperformance turns into something bigger. Teams lose direction, execution slows down, and competitors start moving faster.
From my side, I often see companies only start a search after performance has clearly declined. By that point, the situation is already harder to fix, and it becomes much more difficult to attract strong candidates.
Over time, people internally adjust to it. A lack of accountability at the top leads to lower expectations, less urgency, and “this is just how things are” becoming normal.
In a lot of cases, by the time a company finally decides to make a change, some of the strongest people have already disengaged or left.
And when change finally happens, it’s usually reactive, done under pressure, with limited time, and with fewer strong options.
Don’t Hide Behind the Market
China is a difficult market, but it is still a massive and highly competitive one. There are still companies performing well, and there are still leaders who are adapting and finding ways to grow.
So when performance is weak, it’s worth asking: is this really just the market, or is it how we are operating within it?
In some situations, the market becomes a convenient explanation for problems that are actually internal. Blaming external factors is easy, but in most cases, there are ways to improve with the right leadership.
The Other Side: HQ also Plays a Role
This isn’t only about local leadership.
Many global HQs unintentionally hold their China teams back. Decision making is too centralized, strategies are applied globally without local adaptation, and leadership teams in China don’t have the authority to respond quickly.
Even strong leaders will struggle in that kind of setup.
The companies that perform best in China usually do two things well. They hold leaders accountable, and they give them the autonomy to operate in the local market.
Final Thought
Replacing leadership is never an easy decision, but holding onto the wrong leader while the market continues to shift is often much more expensive.
The companies that succeed in China are not the ones that wait for things to improve. They are the ones willing to confront reality early and act on it.
