Archive for April 2009

Lingua Franca of the Universe?

April 17th, 2009 — 9:30am

Greetings from Hong Kong (where I started writing this post) and Barcelona (where I am currently)! In Hong Kong, I was teaching in an executive program for a very well thought-off global company. The participants, mid-level executives of the company, are from multiple countries across the Eastern half of Australasia, though the bulk were of Chinese heritage and indeed, from China.

The hotel was grand and overlooked Hong Kong Island and harbor; the views were breathtakingly beautiful. The program I teach for this company is always held here and so, the staff that host us know me well. On a prior trip, I had asked how the handover of Hong Kong to China had affected the area’s residents. One of the staff had volunteered that young people were no longer learning English as avidly as they used to.

This time, a letter to the editor in a local English newspaper caught my eye. The writer was arguing that since Hong Kong’s kids would have to deal with Mandarin in everything from official communiqués to advertisements, schools should teach Chinese, not English. Interestingly, the writer’s name indicated that she was of Indian heritage.

Subsequently, I had dinner with a young woman, a manager at my host company. She confirmed with evident dismay that both schools and parents of students were deemphasizing English education. Moreover, the new focus was not even on the more widely spoken Mandarin, but – reflecting the cultural heritage of the region – Cantonese dialect.

The attitude towards English was affecting even her company. Managers in mainland China were increasingly asking that training programs be translated and delivered in Mandarin, despite the company’s success in improving its staff’s mastery of English. They argued that junior managers and staff did not need English to sell to the vast Chinese market. The argument that lack of English would keep the local staff from achieving senior regional and corporate positions and sooner or later, the mere recognition of this inviolable ceiling would cause the best and the brightest to quit, did not change any minds.

Ever since I first encountered this self-imposed linguistic ghetto building, I have wondered about the medium and long term impact on Hong Kong’s economy. Where would fresh English speaking people come from to run its vast financial markets? What impact would the almost inevitable shortage do to Hong Kong’s position as a center of global trade? My dinner companion said that people who aspired to such jobs usually did all they could to get some education abroad, but this is far from an ideal solution.

Hong Kong is not alone. Barcelona is in the Catalan region of Spain and many Catalans do not consider themselves Spanish. Their language, I’m told, can be loosely described as midway between Spanish and French. Catalan is required of every school student and Spanish is viewed with some disdain. Moreover, I’ve heard stories of foreign students coming to study in Barcelona’s universities, and leaving when they realize that their fluency in Spanish won’t count for much in their education. And this is despite the fact that this beautiful city is trying to establish itself as a commercial destination!

Long ago, I used to tell clients that India’s ultimate advantage on the world stage was not its technically educated people, but the fact that that educated Indians learn to speak English virtually as a first language. We may speak it with funny accents, I’d say, but make no mistake, we do speak it well and many Indians even “think in English.” This fact, I used to say, will give India at least a generation’s worth of advantage over countries where English is learnt reluctantly and used only when the local language just will not do. My recent experiences suggest that the advantage may be even greater. (In a future post, I will discuss India’s Achilles Heel — and no, it is not its still weak infrastructure or the poverty in the villages and slums.)

I have nothing against anyone who is proud, genuinely proud, of his or her own language. In addition to English, I speak two other languages, and in fact, use one of these fairly extensively at home. But like it or not, if we ever make contact with aliens from some other part of the universe, in addition to using math and music, we will be communicating with them in English (and their dominant language). In a global world, it would be nice if our politicians, our academics and even ordinary citizens, recognized this fact.

Comment » | Business Environment

The King is Dead! Long Live the King!

April 1st, 2009 — 9:51am

Night before last, I was watching AC 360, the Anderson Cooper news show on CNN. Anderson asked David Gergen, the former advisor to four presidents and current member of CNN’s team of political analysts, and two others, about the summary dismissal of Rick Wagoner. Mr. Gergen was generally supportive of the government’s position, but was critical of the fact that the government had forced Mr. Wagoner out, given that he had made progress in transforming GM.

Well, readers of this blog probably anticipate my reaction well: Firing Mr. Wagoner was not only necessary, but essential. So, let me take on the David Gergen’s argument. Imagine, for a moment, that a President of the US (whom I’ll henceforth refer to by the customary acronym POTUS) was at the end of an eight year tenure and he (think of Mr. Obama for now) had not been able to turn around the economy. Would you call him a failure? Sure you would!

Mr. Wagoner has been CEO for 8 years; prior to that he was GM’s CFO, President of North American Operations, and COO. A comparable track record in US national politics would have been Secretary of Treasury, (a hands on) Vice President and then POTUS. In effect, Mr. Wagoner had many more then 8 years to fix GM. Under the circumstances, the fact that he might have “made progress,” is simply not good enough! He has not delivered on the most important issues – GM’s culture, organization and strategy – and indeed, according to published reports chose to bypass these fearing that they would keep him from improving GM’s cost structure.

One of the other guests on the CNN program, an economist who supported the firing, pointed out that GM and Chrysler are so large that they account for almost 2% of America’s GDP. Consider this data point from a different perspective. We want our POTUS to turn around 100% of the GDP (while battling non-economic problems like wars, natural disasters,) and — by recent public criticism — do it in his first 100 days. Yet, we are OK with a very highly paid executive not being able to turn around a company in eight years that is only about 1% of the GDP?

Focusing an 8+ year role at the top on labor costs is leadership? Not in my books. Labor accounts for only about 8% of the cost of a car and on a global basis, as economist and journalist Ben Stein has pointed, even this cost is not wildly uncompetitive. But wait, he hired Bob “Mary Antoinette’s Soulmate” Lutz as Vice Chairman for Product Development and they turned out a few good cars, did they not? A few cars among how many? And what did GM do on core new technology? Oh yes, it caterwauled about unreachable mileage standards. Surely they were producing cars for Europe, where generally the laws are tougher and an End of Vehicle Life law already exists demanding near total recyclability?

No, the issues Mr. Wagoner chose to bypass – GM’s culture, organization and strategy – are the ones which could have saved the company. Had he broken down the Not Invented Here silos that existed within geographic and brand specific fiefdoms, he would have transferred innovations faster. Heck Saturn’s “no haggling” policy could have transformed the industry, instead of remaining a niche strategy. But that would have meant engaging with GM’s vast network of dealers in a new way. Think this does not matter? Then consider this: a couple of months back Hyundai came up with a brilliant idea to stimulate sales by addressing the fear consumers have about the economy. About the same time, I articulated a similar strategy in a radio interview I did that aired in the Boston market. How long did it take GM to do something similar? Until earlier this week!

The King is dead. I hope the new King – or kings, as I have argued earlier – come from middle ranks or better yet, from outside the industry. Ford’s Alan Mulally, after all, has been making faster progress and has so far, not had to reach for the begging bowl.

Comment » | Business Environment, Company Performance, Corporate Culture, Financial crisis, Leadership, Organizational structure, Politics

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