“Furthermore, what is included in the meaning of ‘partner’ is the expression of ‘harmony’. So, I believe State Street has been successful because we have worked very hard to understand the culture.” The city of Boston is doing its best to further develop the Hangzhou relationship. It has built, as part of the Chinese city’s Children’s Museum, an exhibit depicting life for the children of Hangzhou, for which State Street built the technology platform. Hangzhou has provided tax breaks and other aids for State Street’s business in China. Elsewhere, with an eye on the bigger picture, State Street has been granted a preliminary banking license by Beijing and is finalizing its application. The asset management arm, State Street Global Advisors (SSgA), which opened a representative office in Shanghai last year, cannot market from within China yet and services clients from Hong Kong. SSgA was instrumental, however, in helping China Asset Management Company develop the country’s first exchange traded fund, in 2004, and maintains a good relationship with that firm.
In 2007, Gartner Inc., an international research firm, wrote a case study briefing note on State Street’s China experience. While noting the various cost savings and improvements in IT efficiency the company gained, it had three key recommendations for other firms: 1) Forge links with local pools of talent and plan for knowledge transfer programs on both sides – the ‘lift-and-drop’ model with little local involvement is not a recipe for long-term success. 2) Invest in cultural exchange and language development programs and use these to spur a questioning culture that values interaction between business and IT.
3) Build different ventures and commercial vehicles for different needs, such as internal versus external delivery of IT service, because one size does not fit all. Meanwhile, as we survey the empty new office building in a reclaimed part of Hangzhou, ready for all the State Street employees, Cristoforo smiles, satisfied. He hasn’t seen the fit-out for a couple of months and excitedly points out to Wei Wei, his executive assistant, where she will sit. The Chinese get things done and there has been a lot of progress in the past two months. He surveys the meeting and seminar rooms, the ‘flex-desking’ facilities and other utilitarian luxuries. Business done, we have lunch and Cristoforo mainly wants to discuss Chinese history. In China, business, culture, history and language are all rolled up into the one package.