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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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