Catalysts for change

Updated: 2012-07-13 08:46

By Todd Balazovic (China Daily)

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Catalysts for change

Language barrier seen as major challenge for foreign consultancies

The biggest obstacle for foreign consultancy firms that are looking to establish a toehold in the booming Chinese consultancy market is the language barrier, or the ability of the foreign players to master Mandarin, says Francesco D'Aprile, chair and former president of the International Council of Management Consulting Institutions.

With several Chinese businesses looking to expand their horizons, hiring consultants who can effectively traverse differing cultural terrains is the key to establishing a presence in the rapidly maturing market, D'Aprile says.

"Speaking Mandarin is the key and also a huge obstacle for foreign consultants," says the Italian consultant who has learned first-hand the rigors of establishing a consulting business in China.

In addition to playing a leadership role for the ICMCI, one of the largest non-profit organizations to represent the management consulting industry with thousands of members from more than 50 countries, he is also the managing partner for P&D Consulting, an Italy-based firm with extensive dealings in China and India.

On a recent Beijing visit, he shared his insights into the challenges facing China-based consultants, from the big firms to boutique operations.

He says for companies looking to expand their Chinese clientele, getting quality consultants who can speak both languages and understand the nuances of Chinese business is crucial. "It is absolutely necessary."

With a history of just over a decade, the industry in China is limited to a small number of those with the right experience and language skills. The easiest way to increase the talent pool, he says, is to generate qualified Chinese consultants by schooling them in the best global practices.

"You cannot grow an industry if you don't have qualified people to work in it," D'Aprile says.

Through his work with ICMCI, he has played a crucial role in the development of the industry and also worked closely with Chinese universities and firms to increase the number of certified consultants. In 2005, the Management Consulting Committee of China Enterprises Confederation, China's non-profit representing the industry, officially joined the ICMCI.

The two organizations have worked together to introduce the nationwide examination held in more than a half-dozen cities to expand the number of certified management consultants in China.

Certification, backed by three years of experience, is more or less the global standard required for management consultants.

The tests in China have helped increase the number of such professionals, he says.

Since the joining the ICMCI, the number of certified management consultants has more than tripled as the importance of being internationally accredited is now of tantamount importance for Chinese businesses.

"We started sharing knowledge about the management experiences in Asia, and have brought experts and knowledge from all over the world to China. It is an excellent tool," he says.

From 2000 to 2010, the number of certified Chinese consultants has increased to almost 1,000, out of the 10,000 such professionals globally.

He says access to those who can help guide the management structure as companies expand, more so than pushing product awareness or finding business partners, is the biggest issue facing Chinese businesses today.

"There are hundreds and hundreds of exhibitions all over the world everyday. At these exhibitions all over the world there are thousands of business people meeting each other and seeing products. The problem is not how to link people or how to know a product. The problem is how to manage management connections, management operations. It is how to manage the link between companies coming from East to West, North to South - and that's what we do best."

He says companies with Chinese representatives are likely to stay ahead of the competition due to their ability to seamlessly switch between China and elsewhere. "They link them with the market," he says.

"It's a way that helps the flow of information between the consulting companies and the Chinese clients, which in our industry is key."

While Chinese consulting companies may have much to learn from organizations like ICMCI, it is not a one-way street.

Through its annual events, ICMCI brings its own consultants to global conferences where consultants from all over the world share insights into their respective territories.

With several Chinese firms, including China Stone, the nation's largest management consulting firm, participating, it is also an opportunity for Western consultants to better understand what should be the most crucial market for their industry over the next few years.

"It is not just about teaching Chinese about the West. Western consultants have much to learn about the Chinese market from those who have been operating here since the beginning," he says.

In the end, it is the partnering of both sides of the globe that will be the key to success for not only management consultants but also for businesses across the spectrum, he says.

"In China, the middle class and the rich are the biggest market in the world nowadays. This has drawn interest for the middle-top end producers - but it's not so easy to manage these businesses alone."

"Local partnerships and cooperation with Chinese companies is a strategic issue that everyone knows they have to manage."

For smaller companies, filling the Mandarin gap can be achieved by partnering with local consulting companies, who in turn benefit from the global practice model.

"The global problems related to 'how can we relate to a foreign market' are not just for when foreigners come to China. It is the same as when Chinese go abroad," he says. "It's something the Chinese are doing very successfully at this time."

For the time being, ICMCI is playing the perfect intermediary for these companies - consulting the consultants and championing the industry globally.

"I would push and stress the international role Chinese consultants have to play in the future - being a member of this worldwide family."

(China Daily 07/13/2012 page6)