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13 October 2012

Winning overseas: boosting business export performance (2)

Tag(s): Business

 One of the joys of writing a weekly blog is the feedback I receive. As I write on an eclectic range of subjects that interest me it is heartening to find that they also interest my readers. But a recent blog which I called Winning overseas: boosting business export performance 1st September 2013 attracted a particularly strong emailbag.

A former colleague who went on to enjoy a distinguished career with a major British bank --yes, it is possible- wrote: “This one resonates with me. I have spent more time in Africa in the last ten years than in England. The continent needs everything. Despite our colonial past, the majority of Africans have an affection for the British given our relatively humane approach to occupation. Britain is perfectly placed to take the opportunity presented by Africa but I see us playing a lethargic role while the Chinese, South Africans, Dutch, Germans, French and Scandinavians and others get cracking on the Continent. 

Our High Commissioners, with a few notable exceptions, appear engaged in a form of diplomatic tourism with a few interesting cultural experiences to be enjoyed by their families while the modern commercial German diplomats and others direct their home country's businesses to hoover up the contracts. It’s so sad it's pitiful.

Let me tell you of my most recent example of this. Mozambique is a former Portuguese colony which has joined the Commonwealth. It is a really poor country which is growing rapidly.  I was in Maputo recently for a retirement party. A guy who had worked for me at the bank was retiring as MD after a forty year career. On my left was this young up and coming German Ambassador who was really focused on who was worth speaking to at the event. He was an urbane, smooth, sharp guy on a mission. On my right was the High Commissioner. A lovely bloke, mildly not of this world, interested in the eco system in the seas and coastline which runs for a thousand miles down the Indian Ocean coast. He was learning to dive and his wife was doing a distance learning degree in Portuguese African history at the University of Lisbon. He never mentioned business once and the whole affair seemed to be a bit of a chore rather than an opportunity. The idea that he might be there to further this country's prospects did not appear to enter his head. He was far more interested in his personal enjoyment and the humanitarian stuff, which is no doubt important, whereas the German definitely got that if ' he didn't make it, he couldn't spend it.' 

We need to be much more commercial, more Germanic. Our diplomats should be there to make contacts, spot opportunities and sell what the UK does. Our companies must be must much more proactive in the field to capitalise on the business opportunities that abound in Africa and elsewhere around the world. This is a subject and a cause worth pursuing.  A great competitor of ours once said - 'nothing happens until somebody sells something' - how true. We appear not to be able to sell our way out of the proverbial paper bag!

This subject is worth sticking with. Therein lies our success as a nation.”

A senior member of my Livery Company wrote : ‘Enjoyed your blog which, on this occasion, gets a response.

 

About five years ago I undertook extensive research into the business development skills of British companies that are involved in generating high value high risk revenue streams. The many sectors covered ranged from IT to Aerospace and involved global markets. I discovered a variety of emerging barriers to success, most of which you cover in your blog. However, the one frequently cited by the revenue generators (Directors/VP's with titles such as Commercial, Business Development, Marketing, Sales, etc.) was the lack of ability and experience in their business driving teams. That the manufacturing arm was moving out of the country because of the lack of quality engineers, and in the case of one high tech aerospace company moving to the Philippines, was regarded as regrettable, particularly as they felt that the declining standards in UK engineers meant that it would not return; however, the key concern was the need for rounded people who could generate business.

 

Several referred back to the days of their own white collar apprenticeships which took three years and involved gaining experience in a variety of departments. They decried the fact that this has been replaced by universities that are creating specialists in Marketing, Accountancy, Business Administration, etc. but appear to have no knowledge or experience of the all-encompassing ability required to generate wealth, or even survive, in an international technology market.

 

The outcome of this exercise was that I created a skills profile and audit, plus an outline educational programme (Certificate to Masters) covering the career development of a business development person. Leading business schools and institutes, while praising it, have declined what I saw as a new business opportunity, as "not what they do" and they "do not have the experience to deliver". 

I found this particular insight most interesting as it had not occurred to me. As we send more and more of our kids to University are we in fact becoming less competitive rather than more so? Germany spends less on further education than we do but then, of course, apprenticeships are not defined as further education.

A former customer of mine who went on to perform a number of roles in the public sector sent me a series of questions which I endeavoured to answer as follows:-

‘ I was interested to read your blog. I always read your think pieces but this one particularly caught my attention. There are a couple of things that the article prompts you may want to explore in any further blog on the subject.

Has UKTI concentrated too much on the inward investment part of their brief at the expense of the ‘outward’ role? Of course the former has advantages to employment and can also help the latter - but is the balance right?

BIS handle the inward part and FCO the outward part although of course there are some overlaps. On the whole I think BIS is more business orientated while FCO has a much bigger cultural challenge. Hague is trying to get his diplomats to think in a more business orientated way after the tick box management of the Blair years but I fear it will take time.

 

Is this yet another case of them employing the wrong sort of person, how much should industry experience be in such organisations – including BIS itself. (It amazes me working with DfT that for instance aviation is dealt with by people with no industry experience, you wonder how much that contributes to the Heathrow saga – but that's a whole book in itself and involves the muddling world of politics!)

My own experiences of BIS are good- I work with the Automotive unit and they have had a lot of success in recent years with the restoration of the industry to something like its former glory.

 

Does CBI perform an adequate ‘outward’ role / should it be doing more?

It should be doing more but ultimately the  CBI is just another membership organisation serving the perceived interests of its members. I used to sit on its National Council and was quite disappointed in the parochial attitudes of fellow council members just seeking to protect their vested interests.

 

Is the fact we’ re  being left behind by Germany because they have a better ‘UKTI’ than us or because their individual companies are more outward focussed?

I think it’s more deep rooted in society. Most German students spend part of their study time abroad. Few UK students do. Our universities are teaching our students to be specialists, accountants etc.  There are 13 times as many accountants per head in the UK than in Germany. They still train apprentices and part of the training will be how to service export markets. As our manufacturing has been hollowed out we’ve lost a lot of these skills.

 

What makes our more successful exporting companies be so (e.g. .Weir , Fenner) – what lessons can we learn?

I don’t specifically know Weir or Fenner in detail although both are committed to global markets- there is really not much of a domestic market for their products, but that’s not answering the question.

 I recently joined the Board of a consumer electronics start up set up by some ex-Linn guys. We only started selling this year but already 70% of our sales are export. The difference is we started selling to foreign distributors before we had completed product development. So the market was charged waiting for the product when it was ready. This was very much how Arm developed. Robin Saxby told me that while his first hires were engineers soon afterwards he started hiring sales people in major overseas markets who built relationships with potential customers while they were developing their first chips. In other words they seeded the market well in advance.

How much are we hampered by high wages / generous working conditions – or is that the same for Germany?

Germany, of course, has high wages etc although it went through a round of substantial rationalisation a few years ago. Its productivity is therefore much higher than ours. I think we are hampered by less flexible working conditions that have gradually crept in. These are a big problem for SMEs which is where much of the growth should be coming from.’

It’s a big subject but thanks again for the response and I’ll keep on it.

Copyright David C Pearson 2012 All rights reserved




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