COVER STORY
February 2004 Issue

Bigger is Better
New research reveals that multinational companies have higher
English standards than local companies, yet multinationals continue to invest more on
language development. As GERRY BALL writes, this is a
problem that Hong Kong needs to solve
Few people would
deny that good communication skills in English are essential for business, and as Hong
Kong becomes ever more a service economy to the outside world, English has become arguably
more important today than at any time in its history.
Research undertaken by Mind Your Language Limited (MYL), which provides
English editing services to over 120 multinational companies, has found that medium-sized
Hong Kong companies lose up to HK$1.5 million every year in opportunity costs due to poor
English. For large multinationals this figure
rises to a staggering HK$2.7 million a year.
This being the case, why doesn't
every CEO insist on improving the English language skills of his/her staff?
The answer lies in the fact that
most managers are more focused on revenue generation than stepping back to ask themselves
what skills or solutions are necessary to help the organisation reduce opportunity costs,
which in turn develop higher gross profit margins.
As part of MYL's research into
the cost of poor English, the company looked at certain sectors of the Hong Kong market to
see which companies possessed the best written communication skills. The results ranked companies from "very
poor" to "very good" depending on random samples of their externally
published English material. The research
looked at four key areas of English writing: expression, punctuation, grammar and
vocabulary.
In the telecoms industry for
example, MYL found that written English was "poor to very poor" at 80 percent of
telecom providers. The research analysed 16 telecom companies' written English that
appeared on company Web sites and standard literature.
The language areas most in need of improvement were grammar and expression. Only half of the companies surveyed were able to
write grammatically correct English and a mere 31 percent were able to express themselves
clearly. The findings reconfirm that English
standards in Hong Kong are way below par for an international service centre.
"The main problem that I
found was that writers are trying to be too clever," John Polley, MYL's Chief English
Editor who helped compile the research says. "They need to be able to express
themselves simply and clearly, but often they over complicate the most simple of
statements."
Poor
English = poor performance
But how does poor English effect company
performance? The research was conclusive in
finding that companies with larger market capitalizations have the best English
communication skills, along with higher gross profit margins. This is not just true of the telecoms sector. MYL's research found that this was also true of
the banking sector too, another high profile casualty of poor English ability. Three in every four banks were found to be
communicating in "poor to very poor" English.
The research found that the larger the company and the stronger the brand,
the more attention was paid to protecting the brand.
Smaller Chinese banks argued
that they had few English speaking customers, therefore English was not important. This may be true, but can this philosophy help
increase a company's English speaking customer base, or allow the company to broaden its
international appeal? Would you invest in a company where they openly admit English is not
important? From the outset, a company with
this philosophy is drastically limiting the appeal of its products and services to the
global marketplace.
Another aspect often over-looked
is that overseas institutional shareholders rarely read Chinese! Therefore a Web site and an annual report written
in good, snappy English can make even the most sluggish company look interesting. Poorly written English can be a big turn off to an
institutional stock market investor.
Solving
the problem?
For companies that doubt the value of providing
English training to their entire staff, one option is to outsource all English
communication to editors. This is something that insurance company Manulife has done to
very good effect. Research that MYL undertook
on Manulife's behalf
found that a disproportionate amount of senior staff's time was spent on
"proofing" colleagues' work. This
was costing the company an estimated about HK$2.5 million in lost productivity every year.
To solve the problem, MYL provides Manulife with a complete 24/7 outsourced English
editing solution that completely removes in-house staff from the editing process.
For companies that prefer a
training approach to an immediate solutions based approach, the investment required to
upgrade English skills is not huge, and the return on investment can cover the outlay many
times over.
The Government's Workplace
English Campaign (WEC) is one very useful source of funding to help employers upgrade
their staffs' English skills. Under the
scheme, employers can obtain refunds of 50 percent of the training and examination fees. It is interesting to note that 90 percent of the
applications that MYL made on its clients' behalf in 2003 for WEC funding were from
multinational companies -- local employers and medium-sized companies (who need the
training most) accounted for just 10 percent of applications.
If senior personnel can see that
better English communication translates into more customers, higher gross profit margins
and ultimately higher company valuations, then perhaps local companies should decide to
invest more in their most important assets -- their staff.
Then and only then can they
start competing effectively with their international peers for the hearts and minds of
customers, and investors alike.
Gerry Ball is
founder and CEO of Mind Your Language Limited. He can be reached at gerryball@myl.com.hk.
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