Schumpeter / The English empire

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http://www.economist.com/news/business/21596538-growing-number-firms-worldwide-are-adopting-english-their-official-language-english

Schumpeter

The English empire

A growing number of firms worldwide are adopting English as their official language

Feb 15th 2014 | From the print edition

[1] YANG YUANQING, Lenovo’s boss, hardly spoke a word of English until he was about 40: he grew up in rural poverty and read engineering at university. But when Lenovo bought IBM’s personal-computer division in 2005 he decided to immerse himself in English: he moved his family to North Carolina, hired a language tutor and—the ultimate sacrifice—spent hours watching cable-TV news. This week he was in São Paulo, Brazil, for a board meeting and an earnings call: he conducted all his business in English except for a briefing for the Chinese press.

[2] Lenovo is one of a growing number of multinationals from the non-Anglophone world that have made English their official language. The fashion began in places with small populations but global ambitions such as Singapore (which retained English as its lingua franca when it left the British empire in 1963), the Nordic countries and Switzerland. Goran Lindahl, a former boss of ABB, a Swiss-Swedish engineering giant, once described its official language as “poor English”. The practice spread to the big European countries: numerous German and French multinationals now use English in board meetings and official documents.

[3] Audi may use a German phrase—Vorsprung durch Technik, or progress through engineering—in its advertisements, but it is impossible to progress through its management ranks without good English. When Christoph Franz became boss of Lufthansa in 2011 he made English its official language even though all but a handful of the airline’s 50 most senior managers were German.

[4] The Académie française may be prickly about the advance of English. But there is no real alternative as a global business language. The most plausible contender, Mandarin Chinese, is one of the world’s most difficult to master, and least computer-friendly. It is not even universal in China: more than 400m people there do not speak it.

[5] Corporate English is now invading more difficult territory, such as Japan. Rakuten, a cross between Amazon and eBay, and Fast Retailing, which operates the Uniqlo fashion chain, were among the first to switch. Now they are being joined by old-economy companies such as Honda, a carmaker, and Bridgestone, a tyremaker. Chinese firms are proving harder to crack: they have a huge internal market and are struggling to recruit competent managers of any description, let alone English-speakers. But some are following Lenovo’s lead. Huawei has introduced English as a second language and encourages high-flyers to become fluent. Around 300m Chinese are taking English lessons.

[6] There are some obvious reasons why multinational companies want a lingua franca. Adopting English makes it easier to recruit global stars (including board members), reach global markets, assemble global production teams and integrate foreign acquisitions. Such steps are especially important to companies in Japan, where the population is shrinking.

[7] There are less obvious reasons too. Rakuten’s boss, Hiroshi Mikitani, argues that English promotes free thinking because it is free from the status distinctions which characterise Japanese and other Asian languages. Antonella Mei-Pochtler of the Boston Consulting Group notes that German firms get through their business much faster in English than in laborious German. English can provide a neutral language in a merger: when Germany’s Hoechst and France’s Rhône-Poulenc combined in 1999 to create Aventis, they decided it would be run in English, in part to avoid choosing between their respective languages.

[8] Tsedal Neeley of Harvard Business School says that “Englishnisation”, a word she borrows from Mr Mikitani, can stir up a hornet’s nest of emotions. Slow learners lose their self-confidence, worry about their job security, clam up in meetings or join a guerrilla resistance that conspires in its native language. Cliques of the fluent and the non-fluent can develop. So can lawsuits: in 2004 workers at a French subsidiary of GE took it to court for requiring them to read internal documents in English; the firm received a hefty fine. In all, a policy designed to bring employees together can all too easily have the opposite effect.

[9] Ms Neeley argues that companies must think carefully about implementing a policy that touches on so many emotions. Senior managers should explain to employees why switching to English is so important, provide them with classes and conversation groups, and offer them incentives to improve their fluency, such as foreign postings. Those who are already proficient in English should speak more slowly and refrain from dominating conversations. And managers must act as referees and enforcers, resolving conflicts and discouraging staff from reverting to their native tongues. Mr Mikitani, who was a fluent English speaker himself, at first told his employees to pay for their own lessons and gave them two years to become fluent, on pain of demotion or even dismissal. He later realised that he had been too harsh, and started providing lessons on company time.

Nuance and emotion, or waffle?

[10] Intergovernmental bodies like the European Union, which employs a babbling army of translators costing $1.5 billion a year, are obliged to pretend that there is no predominant global tongue. But businesses worldwide are facing up to the reality that English is the language on which the sun never sets. Still, Englishnisation is not easy, even if handled well: the most proficient speakers can still struggle to express nuance and emotion in a foreign tongue. For this reason, native English speakers often assume that the spread of their language in global corporate life confers an automatic advantage on them. In fact it can easily encourage them to rest on their laurels. Too many of them (especially Englishmen, your columnist keeps being told) risk mistaking their fluency in meetings for actual accomplishments.

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An earnings call is a teleconference, or increasingly a webcast, in which a public company discusses the financial results of a reporting period via an 800 number and on the internet. The name comes from the bottom line numbers in the income statement - earnings per share. The U.S. based National Investor Relations Institute (NIRI) says that 92% of companies represented by their members conduct earnings calls and that virtually all of these are webcast.[1] Transcripts of calls may be made available either by the company or a third party.