Consultant Tracy Colgan of KAI

Win-Winning for High Stakes

by Annie Jonas

Flying high over Zhuhai on the maiden voyage of a four-seater private jet, Tracy Colgan suddenly felt the air pressure drop. As the plane plummeted down, non-functional oxygen masks popped out and as Colgan lip-read the pilot’s frantic (and un-printable) words, she was sure it was all over. But not for Tracy Colgan. The untimely instrument failure may have been the end of the pilot’s career, but for Colgan, things were just heating up on a career rife with risky adventures.

Hailing from Melbourne, Australia, Tracy Colgan is not your typical business expat. Fueled by her interest in Chinese poetry and language, she was first exposed to China in 1987, when she was one of six language students sent to Beijing on a scholarship from Qantas. Intrigued by the “different planet” of 1980s Beijing, Colgan was hooked. She continued her language studies, eventually marrying a Chinese man and settling down in her beloved Beijing. Putting her Mandarin fluency to work, she began her career working part-time with the American boutique consulting firm KAI (then Kamsky Associates, Inc.), but was quickly elevated to full-time, high level work, and by age 28 she was running the Beijing office.

Specializing in strategic consulting and cross-border mergers & acquisitions, KAI quickly pushed Colgan into the heart of China’s rapidly developing business world. As the very first American advisory firm licensed to operate in China (in 1980), responsible for important precedents such as facilitating the establishment of the first wholly-foreign owned enterprise in China, KAI was the perfect place for Colgan to use what she knew and loved about Beijing to help bridge the gap for those who knew nothing about it. “The most important thing I’ve learned about doing business here,” she says, “is that any success has to be based on mutual benefit. Whether you are bargaining for RMB 20 wallets at Yaxiu market or negotiating billion-dollar deals, you have to find the win-win.” While this idea may seem pretty obvious in theory, when it comes to practice, Colgan has seen many China deals fall apart because one side failed to bring enough to the table.

Speaking of tables, Colgan remembers one case in which she employed a hard-line stretch-the-meeting-out-right-before-lunch technique to speed up a dragging negotiation process. It didn’t work out. Her counterparts took revenge by ordering the most stomach-defying array possible of shelled turtles and still-squirming sea critters for the delayed lunch. The transaction was doomed from there. On the other hand, when negotiating a joint venture between the People’s Bank of China and a foreign chemical company to design anti-counterfeit technology for the Chinese yuan, “everybody’s objectives converged, everybody benefited … it just worked,” she remembers triumphantly. Colgan admits it took seven years to get to that point, but understanding timing is another key ingredient in the mix – knowing when to be patient, and when to go for it.

According to Colgan, the global economic downturn is actually go-for-it time here in Beijing. While the rest of the world scrambles for cash, China still has plenty, and is looking for ways to spend it. “The trend of ‘going out’ is really picking up, and we’re working closely with some big Chinese investors to channel these funds into some exciting projects we wouldn’t have been able to do before.” But it’s time to think creatively, she advises, as many firms come to China, cap in hand, looking for funding after realizing China is the most (or only) profitable part of their business. Furthermore, in reaction to the growth of outgoing investment, correlating regulations are changing frequently. These are the kinds of moments that change the game, and you have to shift your thinking quickly to be ahead of that next curve and snag the best opportunities in China’s fast-changing business environment.

Providing creative solutions in those go-for-it moments is exactly what has made Colgan and KAI so successful, after all.

From breaking ground for foreign companies entering the market in the early days to looking for what new ground the financial downturn can offer, Colgan has learned that it can be those moments that scare you the most – where the risks are huge, where the ground is shifting beneath your feet, or the airplane plummeting thousands of feet in the air – that you really have a chance to be a pioneer.

(Published in The Insider’s Guide to Beijing 2010)