The fifth in an eight-part series of challenges facing Canada's foreign trade. This week's challenge: Bench Strength
It is often said Canada's strength is its people. But taking on the world requires more "bench strength" than ever before - a team deep in managers, entrepreneurs, salespeople, and those with technical skills. One of the challenges Canadian business faces as it competes on the world stage is finding an adequate supply of talent. Are we doing enough to develop as many people as possible for the greater challenges in dealing with new markets far beyond the United States? Not nearly as much as we like to think, says James Milway, who cites an inadequate supply of university graduates, especially those with business training.
Mr. Milway, the executive director of Ontario's Institute for Competitiveness and Prosperity and its partner organization, the Martin Prosperity Institute, spent years as a private consultant whose specialty was offering strategic advice to business leaders.
Why is bench strength so critical?
You get into a vicious circle. If you set out to be globally competitive, you're going to have to be better managed. By being better managed, you have a better shot at
expansion. Our businesses aren't as internationally expansive as they could be. We need to have better managers, and more managers who are capable of taking us internationally.
How deep are we on the bench?
We did a survey of manufacturing management, drawing on a measurement technique developed by Professor Nick Bloom at Stanford and McKinsey and Co., the consulting firm. How good is our management? We were up there in the top tier, we were as good as Sweden, Germany and Japan. We were all behind the Americans [in terms of management]
But our global leaders [The highest world-ranking Canadian companies]just blew the socks off the best in the United States. What's cause and effect I don't know. But if you decide you're going to be internationally competitive, you've got to get bench strength.
You need to compete before you can improve?
We need to expose more of our businesses to the toughest and harshest of international competition. We still have too many of our industries protected from
international competition. I point to transportation and communications. I point to health care. We're a small market in Canada. We need to look everywhere we can for competition. Nobody innovates until he has to. If you don't have someone breathing down your neck, a tough customer or a tough competitor who is trying to put you out of business, you just won't do it. We need that competition to push our business to be ever more innovative and productive. That's going to require them to have the bench strength.
What high-order skills are needed for international business?
Social intelligence. You need an empathy, an ability to put yourself in the consumer's shoes in India or China, to step out of the Canadian setting and transcend your own culture and understand the consumer, the supply chain, your own suppliers, your competitors. The higher order is this notion of transcending our Canadian culture.
To what extent are we developing those skills?
We know government has pushed hard to get more spaces for science and engineering. It's almost a cliché: every answer is always 'we need more science and engineering.' We produce so many fewer business grads than the Americans , and we hold up the Americans as being an innovative economy; those two points tell me more business students would be a good thing.
Do you need a business education to do international business, analyze consumers, competitors, markets?
You don't need it, but it's like an auto mechanic: I could learn from my Dad how to change oil and how to run a scope, or I could go to school and learn in a concentrated fashion from people who know this better than anybody else in Canada. These are skills that are necessary to succeed in business, and the idea of a business school is that you can teach these skills and knowledge in a concentrated setting.
Why aren't we turning out more business grads?
It's not because our kids don't want to go into business or commerce. The problem is we don't have as many spaces. We did a study where we found that it's harder to get into the University of Toronto's commerce than Waterloo's engineering. Both really good schools in their field.
What about our university system more broadly?
We see advanced education as not as important as they do south of the border. If you ask, 'If you have to give advice to a young person today, what's the most advanced education they should get?'- the Americans' biggest response is a graduate or professional degree. Our biggest response is a technical diploma. They believe more than we do that education is important.
I find it astounding that Americans would have so much more respect for education.
Why? More of them go to university than us. You'll hear lots of Canadians say we're the most educated population in the world. It's true if you mean anything above a high school diploma. But the real differentiator in income is a bachelor's or master's degree. That's where you get your pop in income. Americans have more bachelor's and master's degrees out there in their work force than we do. Why are you surprised that they're more educated?
Well, that they respect it more. I would have thought our society prizes education.
Hell, no. We invest less per student in education in university. We've done the comparison. We compare the spending from all sources in university against large public universities in the U.S. and we're well behind. Then throw in the private universities which account for about a third of the students [in the U.S.] they're just infinitely ahead of us. Americans put way more money into their university system than we do. It's hard to believe the quality doesn't suffer [in Canada]
How does the education among our managers compare?
Only a third of our managers have a university degree; half of their managers have a university degree. If you believe there is something in university education that would help you be a better manager, we know that our companies on average have less to draw on. That would indicate we have less bench strength.
What should we be doing to make better use of our multicultural, multilingual population?
Our business schools have plenty of these kids, and they're typically international students. If you decide you want to compete in India or Bangladesh or you name it, odds are you're going to find a pretty well-connected kid who knows the market you're trying to get into, and now he's a freshly minted B. Comm. or MBA. Holy cow, that's got to be worth something. There's a resource there that business may not be drawing on.
If you've got an organization that's already training people well, you don't need what I'm talking about. Procter and Gamble can take kids out of history or English and teach them what they need to learn. But if you're a high-tech firm and you want to expand into India or China, it may not be realistic to expect that you can hire a non-business-trained kid.
For insights and perspectives on addressing this challenge, read the upcoming solutions article later this week.Report Typo/Error
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