15 September 2016

Wrong Diagnosis and Wrong Prescription, Dr Fox

But the right patient.

by Richard Pooley

photo Robin Boag

photo Robin Boag

“This country is not the free-trading nation it once was. We have become too lazy, and too fat on our successes in previous generations.”

“Companies who could be contributing to our national prosperity – but choose not to because it might be too difficult or too time-consuming or because they can’t play golf on a Friday afternoon – we’ve got to be saying to them if you want to share in the prosperity of our country you have a duty to contribute to the prosperity of our country.”

These were the words of Dr Liam Fox, the new Secretary of State for International Trade, to an audience of Conservative Party activists last Thursday. His message was that British businesspeople can no longer be bothered to try and sell more of their goods and services abroad.

I am a British businessman and I spent over 30 years selling my company’s management and language training services to companies outside the UK. I reckon I have had sales meetings in twenty countries and run courses myself in twenty-nine. More specifically, I was in charge of sales at various stages of my career in Japan, Brazil, Turkey and the Baltic countries. Since switching to self-employment I continue to sell my services outside the UK. However, since I now live in France, my puny efforts are helping to boost French export figures rather than those Dr Fox is talking about. And what courses have I been both selling and delivering down the years? Nearly all involve an element of export sales: How can you improve the way you sell yourself and your company’s products and services abroad? Indeed, I was running a sales course in Riga for a fast-growing Latvian company just ten days ago. And I’ll be doing the same with the sales staff at their London showroom in a fortnight’s time. So, as you might imagine, I feel qualified to comment on Dr Fox’s diagnosis of Britain’s poor export performance.

If this is the standard of analysis that Dr Fox applied when diagnosing the medical problems brought to him by his patients, I can only think the people of Beaconsfield were not sorry when he ceased to be one of their GPs in 1992.  As far as I can see, Dr Fox has never had any business experience of any kind, unless one considers over-claiming on expenses to be normal business practice. His brief time as Secretary of State for Defence – 18 months – took him abroad a lot but I can find little evidence that he spent much time actively supporting one of the UK’s most successful export industries – armaments. His stint at Defence is chiefly remembered for the cause of his resignation: he thought it wise to have his best man, a lobbyist seventeen years younger than him, attend Ministry of Defence meetings and accompany him on most of his overseas trips.

Dr Fox’s remarks were fatuous but his target was the right one. Senior British business people are indeed largely to blame for the UK’s failure to sell more successfully abroad. The charge sheet is long. I will only deal with two of them: their failure to invest in the research and development needed to produce products and services which people outside the UK want to buy, and their failure to employ people with the right skills and knowledge to sell successfully overseas.

The word “exports” conjures up an image of a container ship full of widgets heading for Rotterdam or Shanghai. Most of the UK’s exports are, in fact, services – the work done by bankers, insurers, software developers, lawyers, architects, scientists, academics, doctors, musicians, artists, writers, and consultants of every type and stripe. Even so, manufacturing remains an important share. Yet that share has shrunk. Why? Largely because UK companies are no longer doing the R & D which is necessary to make the gadgets and equipment which the rest of the world wants and needs. Sheffield University published a report in 2013 which showed that the proportion of GDP that the British spent on R & D had fallen from 2.4% in 1980 to 1.8% in 2011. In 1980 the UK had been the equal of the USA and Japan and superior to France (1.9%). In 2011 the USA was equal with Germany at 2.8% and France had grown to 2.3%. Japan was at 3.2%. China had climbed from nowhere to nearly 2% and South Korea was off the chart at more than 4%. If you dig into the data you can see that whilst the investment in R & D by the public sector – e.g. universities – has only dropped a little, it is investment by companies which has fallen the most. The short-term thinking of Britain’s company bosses is what is killing those exports, Dr Fox.

“If I am selling to you, I speak your language. If you want to sell me something, dann műssen Sie Deutsch sprechen.”  So said Willy Brandt, the German Chancellor, many years ago.  British bosses did not listen. Too many British sales people assume that their prospective clients across Europe and further afield will be able to speak English and be willing to conduct sales and negotiations in the international business world’s lingua franca. It is certainly true that purchasing managers and those who have to take buying decisions in many countries of the world will speak good English. I know because quite a few were taught English by my old company! But they would still prefer to be sold to in their own language. And they would prefer to be sold to by someone who has at least a modicum of knowledge of how their business culture works. Yet British companies place little value on the foreign language skills and cross-cultural knowledge of their British sales staff. Nor will they invest in the training needed to turn those sales staff into proficient international sales people. But their foreign competitors do. I know because my old management and language training company would not have survived and flourished if it had had to depend on winning business solely from British companies. 90% of our income came (and continues to come) from companies outside the UK. We were a British export success story, Dr Fox.

Even having English as their native language does not give the British the advantage they think it does. Why? Because they don’t know how to speak English to non-native English speakers, something I discussed in my last article. At some stage in the late 1990s Korean Airlines became one of my company’s clients. One of our trainers got told a revealing story by a senior manager one evening over beer and kimchi in Seoul. The airline had recently wanted to buy some flight simulators. The final shortlist of potential suppliers had two company names on it, one British and one French. The negotiations were long and included practice on the simulators by the airlines senior pilots. It was a hard choice for the Koreans but in the end they awarded the contract to the French. The reason? During the negotiation and during the practice sessions both prospective suppliers had communicated in English, sometimes with interpreters, sometimes not. The Koreans – their negotiators, their pilots and their interpreters – had found it far easier to understand the English spoken by the French than that spoken by the British. Their pilots were going to have to be trained by the supplier in how to use the simulators. Such training was going to be done in English. They reasoned that it would be better to choose the French company, whose trainers and negotiators spoke clearer English than their British counterparts. So, the British lost the contract, worth tens of millions of dollars, because they could not speak English clearly.

My company conducted a marketing campaign in 2005 in the UK to try and persuade companies to speak what we call Offshore English. I even found myself on CNN being interviewed by Richard Quest, someone who continues to make no allowance for the fact that non-native English speakers find him almost impossible to understand (have a look at https://www.youtube.com/watch?v=T-Ph-RgNvxo) The campaign was a great success. But the main buyers of our courses on Offshore English were Continental and Japanese companies who asked us to teach it to their British and American staff. We contacted the British producer of flight simulators. We did not even get a reply.

I co-wrote a book on international commercial negotiation which was published two years ago. Perhaps I should offer my services to Dr Fox’s new department. I hear they don’t have enough civil servants with experience of negotiating trade deals. But I fear any approach will be met with silence. Why bother? I have no problem selling my training services to the international competitors of British companies.

 

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