Sent to Party School in China

It is hard to imagine what a multinational company could learn from the Communist party of China.

And yet, Nokia Siemens Networks, on track to become the world’s second-largest provider of telecommunications network infrastructure equipment this year, has set up what it calls the “Party School” to train its executives in China, borrowing the name of the ruling party’s top institution for developing leadership talent.

“Following the establishment of the joint venture [between Nokia and Siemens] in 2007, we felt we had to build local leadership talent quickly, and in a way that would establish a distinctive NSN culture,” says Zhang Zhiqiang, head of the greater China region at the company.

NSN China organised a series of executive education courses that started in early 2009 – the “Party School”. Just like its namesake, the internal “school” aims to identify the most promising and capable management talent, strengthen the bonds between these people and the organisation, and give them the best education it has to offer. But that is probably where the similarities end.

NSN’s executive education programme in China is part of a practice employed by the group all over the world. And while the company has strong views on what it wants to teach its executives, it also works with external teachers and consultants to develop the curriculum.

In 2009 and 2010, NSN picked the Cheung Kong Graduate School of Business, an institution set up in 2002 by Li Ka-shing, the Hong Kong tycoon, to develop and teach some courses. The choice was a natural one since Mr Zhang himself had done Cheung Kong’s “China Country Manager” course in the past.

But NSN’s human resources department likes to choose from a range of external partners. This year, it enlisted Angie Dairou, a Canadian coach and consultant, for the course module that began last month.

According to Mr Zhang, the purposes of NSN’s executive education programme in China are the development of talent, the assessment of emerging leaders, and team-building across functions – an important task in a joint venture company where managers from two different organisations must work as a team.

Therefore NSN decided to divide the courses into three modules, each of which takes up about three days of full-time classes plus three days per month of required reading and other extra work.

The first module is centred on “self-leadership”. It teaches managers basic skills such as time management, conflict management and work/life balance. The second module focuses on strategy, and the third on concrete business impact.

In 2009 and 2010, two modules each year were run by NSN, while the third was developed by Cheung Kong and taught on the school’s campus in downtown Beijing.

“We did one for them on strategic execution in 2009 and another on strategic innovation last year,” says Sandy Zhang, the project manager at the school who worked with NSN.

The school sent a team on a company visit, then worked out a proposal for the module, which was eventually adjusted after discussion with NSN.

Although Cheung Kong offered a custom-made curriculum with case studies from NSN’s own industry, Ms Zhang says: “Of course we will never do what consultants do and try to deliver tailor-made answers to all your questions. We are a business school, after all.”

She adds that NSN also did plenty of teaching in-house.

Some of the topics tackled in the strategy and business impact modules were highly complex. One explored how the company should integrate its research and development operations in China with the group’s global R&D. Another key subject was how to reduce overdue payments – the results of this module have already been incorporated into the company’s day-to-day work.

“The overdues problem is a very complex one. They would find out that maybe in one case, a project in Henan province was very big, so the customer would not start payments until the entire project was completed and we would have to wait until all the civil works were done – although our equipment already sat there ready all the time,” says Mr Zhang. “That would obviously be a case where there was a problem with the contract design. But in other projects, there would be completely different reasons.”

The effect of the courses has exceeded the company’s expectations. “The most visible results have been drastically lower attrition rates and a faster rise of alumni in the company,” says Mr Zhang.

This is important in a fiercely competitive industry where local rivals such as Huawei and ZTE are also prestigious employers and have been hiring engineering and management talent away from their competitors.

Fifteen of the 25 graduates of the first class have been promoted, and among the class of 2010, 40 per cent have already been promoted since graduating only five months ago.

However, as the programme enters its third year, it is far from becoming a matter of routine. As the positions and functions of participants change, the course content needs to be adjusted.

“In the first year, there was a strong focus on sales, with about 90 per cent of participants coming from there, and only a few from central functions,” says Mr Zhang. “Now we’re moving to include others, such as research and development, production and procurement.”

He adds that after all first-line managers have gone through the courses, he will need to spend more time and effort on the programme.

“I knew every member of the first class, but this year, I know less than half of the people and what it is they’re doing,” Mr Zhang says. “So if we want the programme to fulfil its purpose of properly assessing people, I need to be there to look and listen.”