Tapping into global talent reserves

Which management god do you worship? Is it the great god ROCE (Return on Capital Employed), beloved of the analysts? Is it the god ROS (Return on Sales), made famous by BTR? Or the god focus, promising guaranteed success with sharpened attention to one area?

What worshippers of all these “gods” ignore is the three dimensional nature of “real life”. There are activities which benefit the monthly figures or the annual figures or bring benefits on a five-year view – but seldom all three.

Companies that can accept it is a 3D world when evaluating their strategy usually also manage to strike a balance that ensures they do not get in too deep before being able to correct unforeseen problems.

But “real life” also has a second 3D aspect as any major decision also impacts in differing ways on the shareholders, on the staff, which for our purposes includes management, and on the customers.

Note the order, then reverse it. The evidence suggests that in the coming global market the survivors/winners will be those companies that have demonstrated they have put the interests of their customers first. Marks & Spencer grasped this early on: cash back and no quibbles on goods returned.

Currently the “customer handling” skills of utilities such as British Gas or the RECs (regional electricity companies), even though they cannot appear in the balance sheet, are being recognised as being of value: collecting the cash, and keeping the goodwill, is ultimately what it is all about.

Backtracking slightly, the phrase global market is one you will see appearing with increasing frequency in those mission statements at the front of annual reports.

It is easy to write the words and pay lip service to this global theme.

But how do you put it into practice? And if you are a small company does it really matter that you now live in a global economy?

It certainly does. We have 24-hour global markets, the world car concept and major brands are following Coca-Cola and Mars to become universal instead of varying from country to country.

But it is the insistence by the multinationals on central billing and central control of cash that has led groups like British Telecom and automotive parts suppliers such as Lucas, GKN and BBA to rethink their whole strategy.

You may say these are big companies light years away from your small business. One man who believes small firms must also embrace the global economy is Iain Dale. In 1972 aged 32 he went into the family firm of Dale Electric, providers of standby power such as the small generators used on building sites. Totally ignoring the fact that although stockmarket quoted it was insignificant in size compared with electrical giants such as Siemens, GEC or Honda, he set out to beat a path to the door of customers in Mexico, Thailand, Nigeria, even Vietnam.

Today Dale is on both the Foreign & Commonwealth Office’s Business Panel and the British Overseas Trade Board. But his current passion is for PIP, the Professional Involvement Project for the placing of international postgraduate students into industry. It would be easy to dismiss this as a worthy project, useful for international relations but useless as far as the future of a company struggling to survive in competitive conditions.

Easy, but quite wrong. PIP has 3D attractions both at profit and loss account and staff-relations levels. But more importantly, in the long term it could represent the key to the very future of many smaller UK businesses. How so? Consider this. By early in the next century, say 2010 at latest, the white Caucasian race – Europe, North America, Russia – will comprise only 10% of the world’s population.

Yes, 80% of China is still untouched by any form of economic development and likely to remain so for some time. But the prospect that the other 20% will produce more people of high net worth than there are in Europe today, and that this is already true of the Pacific Basin and possibly India, has yet to sink in.

PIP enables UK companies to take in high flyers from these overseas areas – not “learners” but highly qualified postgraduates.

Some of them will have levels of skill and new techniques which will contribute to their foster company. Remember the new ideas will be seen by staff as coming from a peer group bottom up source rather than the too often resented top management trickle down.

There are also obvious potential benefits from today’s “placement” laying the foundation for winning tomorrow’s overseas contracts. Or at very least providing the networking contacts needed in overseas markets once returned home and established in a senior managerial position.

But Dale makes another easily overlooked point: namely that much of the new growth is family-based, involving a warmth of friendship and personal contact which we in the West have tended to write off rather than write up in the balance sheet.

Even the best of family-run British businesses, such as Sainsburys, tends to be shy about the dynastic aspect, but there is no doubt that it and also Barclays has benefited from being able to draw on talent from the founding families.

Although Dale is the chairman of PIP the man who has the task of putting the pegs in the right holes is project co-ordinator Gary Hallsworth. He arranged 20 placements last year, expects 40 this year and is looking to see the number rise to 120 a year.

Hallsworth says: “The scheme offers an opportunity for long-term bonding with fast-track individuals. Most placements are made in the autumn, after the end of the academic year. The candidates are expected to have already had three or four years of work experience in their own country. They send in an application form. We look for the right match. Currently we have 200 companies registered to take care of 40 placements. The DTI helps finance the scheme. But companies make a contribution to us of #1,000 a month per placement. Against that there is no cost to them for providing accommodation and no hassle over work permits.”

Hallsworth is based at the British Council’s Regional Services Department in Manchester but works closely with Northern Universities although sometimes he uses consultants to contact various faculties to see if they have promising cases for a placement. So far promotion of the scheme is limited regionally to the North although there is nothing to stop companies outside the area going on his register.

Hallsworth emphasises that the scheme is not about training but about “work experience” at a high level. A good example is Malaysian civil engineering student Masri Bin Ahmad who broke off studying for a Master’s degree in structural engineering at UMIST to join consulting engineers Ove Arup for two months.

During this period he worked on a number of bridge and tower projects.

Ove Arup’s Peter Chamley says: “He had experience of design in his home country. He was able to make a contribution. And the scheme took care of the complex administration details involved in employing a foreign national.”

Are there snags? Dale says: “Well, we do expect them to go home, not work here in the UK. So far that has not been a problem. And we do think the cultural side is important. We do not like the idea that at five o’clock everyone says “goodnight” and they are left on their own. But you can often get a good feel for that if the company concerned quibbles over the #1,000 a month fee. If they want to negotiate on the cost you start to wonder how they are going to treat them once they are on the premises.”

So is taking “placements” on board more than just an offering to placate the gods of longer-term management strategy? “Definitely not,” says Dale: “I look at it as a way in which British companies can keep their doors open to the global market. Many whose present overheads would not permit them to afford the cost or the management time to go to these markets in person can lay the foundation for future business at low cost by taking on a placement. The whole concept of trying to deal with overseas markets through agents is dying out rapidly. Personal contacts are the future way to get market penetration. Someone who has worked with you knows the way you think – and you can learn to think his way. And once you have won their hearts you can expect to have their business for life.”

John Heffernan is a former City editor of the Yorkshire Post and is currently prime warden of the Worshipful Company of Basketmakers.

PIP is contactable on 0161 957 7527 or FAX 0161 957 7319. The address is c/o The British Council, Medlock Street, Manchester, M15 4AA. All a firm has to do to be registered with PIP is identify a project for their post graduate of choice to carry out. A similar scheme is the Scottish International Resource Project. The schemes differ from the academic Chevening Scholarships operated by the Foreign and Commonwealth Office.

Professional placement as a tool for fostering team working

In the immortal words of Sir Graham Day: “Survival is not compulsory”.

We live in an era when the management ethos considered most likely to ensure survival has shifted from the male hierarchical authoritarian towards a flatter management structure, one could almost say a more female caring and coaching culture.

However, behind this happy picture lies the remorseless terror of the monthly figures. How does a manager link the effort put into non-profit contributing activities to the remorseless demand for improved performance imposed by the financial targets?

The answer is that these areas of activities come under the broad heading of “leadership” which can be defined as the exercise of power beyond that conveyed by formal status.

For example, by taking on board a placement a company takes a local annotative that both gives it a global direction and also can be used to enhance the annotative of team working.

Everyone knows that Superman is a fantasy; but most are open to being persuaded that the A-Team can be a reality, and they can be part of it.

Sometimes the introduction of an outsider, especially on a temporary basis, can be helpful in achieving this team annotative, partly perhaps because the staff can then see in the newcomer a mirror in which they see their own reflection and set out to improve accordingly.

For a professional “placement” to be a success careful planning is needed.

So here is our suggested check list for, shall we call it, Project Mars.

Why not? A Mars landing is a long way off, but achievable, and anyway Mars is also an international company with renowned management talent!

1 A shared vision: It is important that the placement is not seen as a top-down management decision, but as a company strategy in which all members of the company are expected to participate as a step towards survival in the global economy – this will possibly grow to 10 times the size of the world’s present economy as countries such as China and India develop economically. Staff can be told to expect that the graduate “placement” will be skilled, practical, methodical and enthusiastic but may well lack team skills, have blind spots, be slow to exercise initiative, and need sympathetic help on details, especially those related to company reporting systems.

2 The placement: It is important to provide a supervisor, a target and a minder. The supervisor answers the question “who is in charge of me?” and should be accompanied by clear instructions on when and how he can be contacted and how often if at all written reports will be expected.

(The reports are there only to make the placement feel comfortable, not to be criticised.) The target is the task to be undertaken and should include details of what constitutes “success”, a budget and a completion date. The minder is a well understood concept – but just in case it must be made clear, this covers advice on what time to arrive, breaks, how to keep in contact, dress code, where to eat. The minder should also then become a team partner/friend and start to refer to the placement as “My Korean”, for example.

3 After hours care: Management should invite help in this respect before the placement arrives. It may often be found that support at this social level comes from unexpected quarters. Ultimately, the progress achieved – on both sides – on the cultural learning curve should prove a valuable contribution to the company’s understanding of overseas markets. Much management de-briefing in Britain takes place in the half-hour in the pub after work has ended. It is very important that the placement be included in this type of social activity. Ideally he would also be made part of a family (not just the “company family”). This would greatly extend the prospects of long-term bonding. We repeat that most businesses in emerging economies are family businesses. So bread cast on the water in a family situation tends to be repaid multifold.

4 The celebration: Placements should come in quietly but go out with a party. Top management must make a point of making sure they are on hand for the placement’s final day. They should deliver approbations for a task well done, hand over something tangible that can be displayed with pride on the office wall back home, and then make themselves scarce while others say their farewells.

5 The long term: If a reason can be found for visiting the placement’s country within six months, before the trail starts to go cold, then it should be done at senior level. Fortunately, most managing directors have a secretary who once given the message will be effective at making sure the placement’s name goes on the Christmas card list (or if that is not appropriate a New Years card should be sent) and on the list to receive the company magazine. The British Councils run an effective alumni system if contact is temporarily lost.

6 The internal debriefing: As much as anything good management is about giving people a feeling of self-worth. How else can you hope to get quality performance unless those who work in the company believe they are quality people? So congratulations are in order if the placement proved a success.

Questions to ask are “Did the customer like it?” (You never know – they might get more out of the contact than you will). “Did we give adequate support?” “From which country do we want our next placement to come?”