February 2018 – View From A Bridge – management, education and personal thoughts

COUNTRIES SEPARATED BY A COMMON PINT?

Moving to San Diego seemed to be one of the easier calls in life. Trading in the English winter for Californian sun was no hardship. And I had successfully managed a move from Essex to Yorkshire, arguably the greatest cultural distance in England, when I was 23. But we are creatures of our environment and subtle changes are worthy of reflection.

San Diego is one of the great craft beer cities in the world and I have been converted from my standard lager to the local product. A lifelong love affair with Stella has become a series of one-night flings with Sticky Henderson, Perky Blonde and Deftones Phantom Bride. These are courtesy of the brewers Resident, Belching Beaver and Thorn Street – just three from the 100+ in San Diego County . But to my great shame I was so distracted by the weather and wearing flip-flops (of which more in a moment) that it took me three months to realise that a pint is not a pint. It’s not even close. People from the country of my birth know that this is one area where size is everything and will be glad to read that history and actuality are both on our side.

Since 1824 the United Kingdom and the Commonwealth have broadly standardised on the Imperial (feel your heart swell with pride at a word which gets less play by the day) pint equivalent to 568ml. In America the standard pint is 473ml – the uncharitable might even call it the ‘Puny’ pint. That’s because the Imperial (had to use that word again) pint is about 20% larger.

The downside is that what I had begun to consider an increasingly heroic drinking capacity was rather less impressive than I thought. However, craft beer often weighs in at a pretty hefty 6%+abv compared to Stella’s 5.2%. Like the shots to goals ratio of an erratic centre forward I have not quite worked out the right balance between volume and potency but look forward to continuing my education.

An offshoot of this discovery is the mild satisfaction of realising that US gallons are smaller than British gallons. So the price of petrol (or gas as I call it when I am trying to fit in) is not quite so extraordinarily low as we have all thought for years. But I am also told that California gas is expensive compared to Pennsylvania so visitors should choose their destination and filling stations wisely.

My second discovery has been that wearing flip-flops is not the work of the devil. Like most English boys from my era my feet have been encased safely in socks and shoe leather from my first pair of Start-Rite’s to my latest black lace-ups. The notion of bare feet in public anywhere but on holiday in some far-away place where the neighbours would never see has been largely unthinkable.

But there is something about constant sunshine and getting very hot feet that lured me into reversing years of tradition, training and toe-trapping. Shopping the Zappos app has become a little like finding Tinder for shoes as I swipe right for OluKai and Chaco and left for Loake’s. Inevitably, the increased exposure of my feet has led me even further down the path towards behaviour my father would have considered slightly troubling. I had a pedicure.

In my defence I was driven by a sense of anthropological enquiry after being told that the ratio of men to women made mani-pedi salons a dating hot spot. I had, after all, been responsible for the PR team that invented ‘love in the aisles’ to suggest that ASDA’s frozen food aisle was Cupid’s home. For those interested I can report that nail salons are as unlikely to light the fires of love as frozen cod fillets. But if baby soft, good-looking feet are a sign of evolutionary success it’s an hour well spent.

This probably gives the impression that my early months have been spent strolling around the neighbourhood visiting bars and obsessing about my toes. I write that as if it would be a bad thing, but it really isn’t given the quality and quantity of local beers and brew-houses. My current recommendations to visitors are The Bluefoot Bar in North Park (for a dive/sports bar), the Queenstown in Little Italy (Sunday brunch/people watching), and 10 Barrel Brewing in East Village (great balcony).

Sadly, the Bluefoot is a place of pilgrimage for Arsenal fans. Matters appeared to come to a head last week when there was a seven-hour stand-off as SWAT teams thought they had a homicide suspect holed up across the road from the bar. I know that the Carabao Cup result was distressing for the Gooner faithful but that seemed a bit extreme…

My third discovery came when crossing the road the other day. Firstly, I managed to look to my left first to check for traffic which is quite something after so many years of Tufty Fluffytail and the Green Cross Code adverts reminding me to look right. It always struck me as one of the stranger journeys for David Prowse to go from child-safety icon, the Green Cross Man, to progeny-maiming dark lord, Darth Vader. But it’s nice to have some perspective by learning that Prowse’s west-country lilt led to the rest of the cast nicknaming him Darth Farmer.

More important though was that I headed for the pavement (sidewalk!) that was IN THE SHADE. Sensibilities built up over years of vitamin D sapping winter weather and overcast summer days dictate that when there is sunshine an English person walks in it. There are days when crowds of people zig-zag their way down city streets to maximise exposure and worship the glowing, unfathomable orb in the sky – it’s like line dancing but from a cult that also invented Morris dancing.

We do it because we know that the sun might disappear any moment – behind a cloud or a building. More worryingly we know that its reappearance is not certain. Certainly not for days or even months. So we act like lizards, soaking up the warmth and the rays to see us through the lengthy periods of dark, cold and precipitation we know are heading our way.

Sunshine or shade. Maybe it’s a metaphor for the distance between the innocent, carefree time of the Green Cross man and the stygian depths of Darth Vader as he embraced the dark side. But that’s for another blog and a different time…in a galaxy far, far away.

China – Pigs in Pythons, Geese Laying Golden Eggs and the Sea Turtles

As we enter the Year of the Dog many international recruiters and university bosses will be anxious to know whether Chinese students will continue to follow the call to the traditional receiving countries. The period after Chinese New Year usually signals the quickening of pace in the recruitment cycle but may bring a summer of sluggish, difficult dog days for conversion. Some may even wonder how things might change by the time of the next Dog Year in 2030.

It is no secret that China has been the rocket fuel driving international student enrolments for the past fifteen years. The statistics show that US and UK enrolments continue to become increasingly dependent. And while the Canadian beaver may be popular and industrious, and the Australian kangaroo is bounding ahead, they look increasingly vulnerable to any changes in the market dynamics.

Table 1 – % of Chinese Students in Key Receiving Countries

NB: Gathering data that is matched in terms of definitions and timescales is problematic. The general point regarding concentration of students is clear but the sources are shown for clarity.

The demographics of China do not seem particularly helpful. The pig has passed through the python in terms of the bulge in University-age students. There are 32million fewer Chinese aged 20-24 than there were five years ago. And in another five years there will be 18million fewer than today. Numbers stabilise and then begin to grow slowly but by 2029 remain below 2017 levels.

Table 2 – China DemographicsIt would be fair to argue that 76million people is still a very big audience to aim at if you are a skilled recruiter prepared to travel around second, third and fourth tier cities (handy definition at http://multimedia.scmp.com/2016/cities/ ) as the move to urban areas continues.

There is also the lure that the Chinese middle-class is growing rapidly. Surely the wealthy middle-class is the goose that will lay sufficient golden eggs to more than make up for the fall in population? Well, maybe, but the concept of a ‘middle class’ seems quite slippery.

In 2016 McKinsey were reporting that, 54% of China’s urban households will be classified as “upper middle” class by 2022. Upper middle class sounds pretty well-off but is measured by McKinsey as household income of $16,000 to $34,000 a year. Just for comparison, the U.S. Census Bureau reported in September 2017 that real median household income in the US was $59,039 in 2016. If you have to pay tuition fees and accommodation in dollars relativity becomes reality.

To give this some further context Table 3 (below) shows the IMF and World Bank comparators on GDP per capita. The Geary-Khamis measure is an ‘international dollar’ that allows a comparison between countries allowing for local cost of living etc. The disparity between the US, UK and China on this measure seems stark.

Table 3 – Comparable GDP Per Capita (Geary-Khamis dollars)

IMF (2017) World Bank (2016)
USA 59,495 57,467
UK 43,620 42,609
China 16,624 15,535

Source: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

Average wage growth in China looks pretty impressive. Trading Economics/MOHRSS statistics show strong growth. But a wage of CNY67569 is worth $10,643 in February 2018.

Table 4 – Growth in China Wages

The real question may be whether the burgeoning middle class will secure enough of the growing wealth of the country or whether the distribution of wealth will increasingly be skewed to a super-rich cohort. The New York Times in 2014 reflected on Professor Thomas Piketty’s book Capital in the Twenty-First Century. Critically, the author notes ‘…income from wealth usually grows faster than wages. As returns from capital are reinvested, inherited wealth will grow faster than the economy, concentrating more and more into the hands of few.’

Table 5 (below) suggests that a key question regarding the distribution of wealth to the Chinese middle class may rest on the extent to which China is more like France than the US and Britain.

Table 5 – Share of Total Income Change in Five Countries

Source: Capital in the 21st Century, Thomas Piketty

It may be, of course, that the growth in wealth is such that it will overcome the decline in demographics and the distribution of income hurdles. But a third challenge is how supply matches against demand in global higher education. In this respect developments in China (as well as other countries in Asia) are likely to bring serious and sustainable competition to traditional providers.

A full analysis is beyond the scope of this blog but recent reports give some sense of the direction of travel as far as capacity, quality and value are concerned:

i) Universities in China have built capacity at a furious rate and as Establishing A Presence in China notes notes ‘at current rates….there will be a university seat for every child in China by 2030’. (OBHE quoted in THE)
ii) Xiamen University opened its first overseas campus, the first Chinese university to do so, in the Malaysian state of Selangor in September 2015. The primary tuition language is English. The campus intends to split its students body equally between Chinese, Malaysian and other nationalities.
iii) The Asian Universities Alliance, launched in April 2017 will boost Asia’s influence on the global higher education stage as well as supporting regional student mobility. Founding members span 14 countries and include Tsinghua University, Peking University, and the Hong Kong University of Science and Technology.
iv) Government investment in Chinese academic research is significant and quality has moved ahead quickly. An example, noted by the White House and reported in the Washington Post (October 2016), gives context in terms of research into artificial intelligence.

Table 6 – Journal Articles Mentioning Deep Learning

vi) The Double First Class Project is reportedly allocating 40 billion RMB ($6.04 billion USD) to a comprehensive project to bring 42 Chinese universities and courses at another 95 Chinese institutions to a “world-class level”.

The move towards a powerful higher education sector capable of serving its own people as well as many other international students seems well established. But, as my economics teacher at school used to tell the class – all decisions are economic. She was in a relationship at the time with the person who became my politics lecturer at College who would tell us – all decisions are political. Education is often just a side show.

In that regard it’s worth considering the initiative commonly known as ‘One Belt One Road’. As one of the largest infrastructure and investment project in history it reportedly covers more than 68 countries, equivalent to 65% of the world’s population and 40% of the global GDP. The extension of soft power through hard cash may become critical in determining the long-term movement of students around the globe.

A self-sufficient China at the heart of a global network will become an even bigger attraction for business and, inevitably, for students drawn to a global economic superpower that is investing so heavily and making travel easier and cheaper. Many Western universities have already ensured that they are partnered with well-funded Chinese institutions and despite the odd wavering over academic freedom we have reached a point of no return. It seems likely that there will be a genuine tipping point where the long-established flow from east to west will reverse. The haigui, or sea turtles, may not need to travel (and certainly not in the volume of the last fifteen years), to secure the education they need for their lives and careers.

In that respect I find myself considering the words of Dr Monika Korte, the scientific director of the Niemegk Geomagnetic Observatory at GFZ Potsdam in Germany. She said, “It’s not a sudden flip, but a slow process, during which the field strength becomes weak, very probably the field becomes more complex and might show more than two poles for a while, and then builds up in strength and [aligns] in the opposite direction,”.

Dr Korte was talking to livescience.com in 2012 about the anticipated flipping of the Earth’s magnetic poles (What If Earth’s Magnetic Poles Flip? February 10, 2012). The article makes the point that the change is not instantaneous, that the period of change is difficult to manage and characterised by a significant weakening of the current magnetic field. But eventually the needle points in a different direction. I suspect that is a pretty good metaphor for the Year of the Dog 2030.

8 million globally mobile students – a myth, based on a rounding error, sustained by wishful thinking?

When a number becomes repeated often enough as a fact it is often difficult to see past it. If it appears to be backed by credible sources like the OECD any sense of concern about authenticity diminishes. That is probably why the prediction of 8 million students studying outside their home country by 2025 entered the HE sector’s psyche. But the emergence of that number and its credibility as a prediction based on solid data is difficult to trace.

It’s important partly because of the scale of investment in the sector based on its potential for growth. Since 2010, over a billion dollars has been invested in private providers of pathway courses – examples include Providence, Leeds Equity, and Bridgepoint deals involving Study Group, INTO University Partnerships and Cambridge Education Group. Shorelight and Oxford International also become new entrants to the pathway landscape in 2013 and 2014 respectively. The title image to this blog is a cropped slide from a presentation at a major, publicly-quoted, pathway provider’s April 2017 Investor Strategy Day.

Universities in traditional receiving countries have also built development plans around growing numbers of international students studying on campus. In the UK alone they are looking to increase international student fee income by nearly 30% in the three years to 2018/19 – a figure even HEFCE politely suggested shows ‘over optimism’. And the Daily Telegraph reported £5.3bn being sunk into purpose-built student accommodation in 2017, compared to £4.5bn the year before and a record £6bn in 2015.

The sector and those who write about it have often used the 8 million as a touchstone. In 2015 the University of Oxford’s International Strategy Office stated, ‘The global population of students who move to another country to study continues to rise…is likely to reach 8 million students per year by 2025.’ In May 2017 a NAFSA flier from one private provider stated confidently, ‘8M students to study outside their home countries by 2025’. The ‘2016 Top Markets Report on Education A Market Assessment Tool for U.S. Exporters’ from the U.S. Department of Commerce also stated that by 2025 ‘…eight million students will be globally mobile.’

Most authors quote the same source for the forecast – the 2012 OECD publication, AHELO Feasibility Study. But the OECD do not appear to have done their own data-crunching. The Study reads, ‘growth is projected to continue in the future to reach approximately 5.8m around 2020 (Bohm et al, 2004) and 8m by 2025 (Altbach and Bassett).’ (OECD, AHELO Feasibility Study Report Volume 2, p.24, 2012). The 5.8m reference is from the British Council’s 2020 Vision document (2004) which was underpinned by IDP’s Global Forecasting Model.

The OECD reference to Altbach and Bassett is credited to an article called ‘The Brain Trade’, in a 2004 edition of the publication, Foreign Policy. In this relatively brief article the authors write, ‘a recent Australian study estimates that the total number of international students will increase to 8 million by 2025’. (The Brain Trade, Foreign Policy, Washington DC pp 30-31, Sept-Oct 2004). That would seem to rule out Altbach and Bassett as the original source although the article does not provide a citation to follow.

In Trends in Global Higher Education: Tracking an Academic Revolution (Altbach et al) for the 2009 UNESCO World Conference on Higher Education the claim is of an even greater acceleration in growth. Page 7 of the full document reads, ‘More than 2.5 million students are studying outside of their home countries. Estimates predict 8 million international students by 2020.’ Confusingly, the Executive Summary settles (on page vi) for saying, ‘Estimates predict the rise to 7 million international students by 2020.’

Neither the source of the 8 million or the 7 million are articulated but the source of the ‘Australian study’ seems clear. Altbach, on page 25 of the main report, says ‘By 2025, research undertaken for IDP Pty Ltd in Australia suggests that roughly 7.2 million students may be pursuing some higher education internationally, an increase of 188 percent over the 2006 UNESCO estimate (Böhm, et al., 2002). The research in question is GLOBAL STUDENT MOBILITY 2025: Forecasts of the Global Demand for International Higher Education (Bohm, Davis, Meares and Pearce, 2002). But the question of how this relates to a prediction of 8 million globally mobile students remains unclear.

The answer may lie in a 2003 update of the IDP research. The executive summary (page 3) says that one key finding is that ‘global demand for international higher education is forecast to increase from over 2 million in 2003 to 7.6 million in 2025’. It seems possible that the 7.6m was simply rounded up to 8m but the consequences are significant. In terms of financial outcomes 400,000 students equates, at a conservative estimate, to yearly fee income of more than $5bn dollars.

What is also striking is that, as noted in the British Council’s Vison 2020 report (2004) the IDP Global Forecasting Model, underpinning the 2003 research, was based upon the UNESCO 2001 World Education Report which relied largely on figures from 1996. Could it be that statements being made in 2017 about 8 million globally mobile students by 2025 are relying on a rounding error from a report using data that is 20 years old?

Table 1. Summary Graphic – How The 8 Million May Have Evolved

None of this is intended to undermine the work of the researchers involved. Forecasting is fiendishly difficult and those working in HE recognise the time delays and complexities which can make source material difficult to manage and interpret. We also recognise that circumstances can change rapidly and make even the most accomplished market analyst look foolish.

As we see in the most recent OECD graphic (below) the numbers enrolled overseas grew by only 400,000 from 2010 to 2015. This compared to growth of 1.2m additional students from 2005 to 2010. It seems likely that quality in country provision, and additional tuition options in English-language, as well as the growth of on-line delivery, is allowing students to study in ways that meet their career and personal aspirations at lower cost.

Table 2 : Education at a Glance 2017: OECD Indicators Figure C4.a. Long-term trends in the global number of students enrolled abroad (foreign students definition)

The extraordinary growth in the first decade of the 21st Century may become seen as the peak moment for increased international mobility. In 2012 the British Council predicted that mobility would plateau by 2020. More recently the British Council has predicted that that the annual growth for global outbound students is projected to average at 1.7 percent to 2027, dropping from 5.7 in the period 2000-2015. It is difficult at this point to see that those presentations which held Emo of Friesland arriving at Oxford in the 12th Century as the first in a wave of international students numbering 8m by 2025 will be correct.

Perhaps all this reflects the danger of International student enrolment being viewed as a cryptocurrency where the uninformed may make investments in the misunderstood for fear of missing a wave of future riches. As Warren Buffet memorably said, ‘when the tide goes out..you discover who’s been swimming naked’.

-Ends-

Rage on the Stage or Pride from the Side

The English Premier League has attracted some of the highest profile football coaches in the world. A combination of money, glamour and opportunity have created the perfect platform for them to work with some of the best players in the world. But these coaches increasingly display even bigger egos than their players and engage in outbursts of anger and unrestrained emotion on the pitch after games have finished. Are there any lessons for management?

It is the tendency to march onto the pitch at the end of the match that has been the most striking development. Maybe they feel they have to express their leadership prowess as a coda to the game and the efforts of their team. Or it could be the ultimate in scent marking, allowing the team to do its best before marching onto the pitch to display their alpha male credentials in front of the world. They know that the cameras are following them and that they will have opportunities in the press room to express their opinions verbally but they cannot resist the opportunity to physically impose themselves on the field.

This weekend we saw Jurgen Klopp of Liverpool being pulled away from abusing the referee after some controversial decisions at the end of the match with Tottenham Hotspur. He had pulled his own players away from the referee so clearly didn’t think they were up to the job. And he suffered the ignomy of being ushered away by a peer (Pochettino, the Spurs manager) who could see how embarrassing Jurgen’s behaviour had become. Jurgen has previous behaviour in using his 6’4” frame to intimidate officials to take into account.
Recently we have also seen the reputedly cerebral Pep Guardiola of Manchester City, a team setting the pace in the Premier League, on the pitch berating and physically manhandling a player of the opposition team. The player, rather than giving Pep the shove he probably deserved, maturely explained that he had been carrying out the plan of his own manager with focus and discipline. It was an admirable demonstration of restraint by the 23 year old Redmond faced with a ranting 47-year old who should know better.

And Antonio Conte of Chelsea has become renowned for cavorting on the pitch after games and celebrating with maniacal energy. Perhaps he is trying to capture some of the glory he misses from his days as a five times championship winning player with Juventus in Italy. Or maybe he is making up for the disappointment of being left out of the Italy team for the 1994 World Cup final.

There is no doubt that these coaches are driven, intense and charismatic characters who are among the best in the world at their trade. I would not argue that they should reduce their passion for the game or their commitment to excellence and winning. But their behaviour after matches tends to make them more of a focus than the teams they coach and does not lead anywhere good by way of example. And that is the antithesis of management.

Perhaps their actions are more a demonstration of their insecurity and need to maintain position. Research has suggested that the motivation to seek or maintain one’s rank promotes aggressive behaviors. Approximately 48% of men and 45% of women identify status/reputation concerns as the primary reason for their last act of aggression, and the experimental induction of status motives increases aggressive tendencies in both men and women (Griskevicius et al., 2009). (quoted in Journal of Personality and Social Psychology, Two Ways to the Top: Evidence that Dominance and Prestige are Distinct yet Viable Avenues to Social Rank and Influence, Cheng JT.

So, is seems possible that the actions of Guardiola, Klopp, Conte et al are not, as they often claim, about their ‘passion’ for the game but a naked outpouring of anger intended to maintain their position as alpha male leading their troupe. It seems likely that the era of the celebrity head coach, and the increasing fear of loss of status if matches are not won, has created a feedback loop where managers feel the need to beat their breasts and roar at the end of each game. And possibly this is because those with the biggest egos and gift for self-publicity get the biggest jobs where being under the spotlight means purchasing top players and fitting them in rather than building teams, creating value and nurturing talent from the rawest recruits.

Those who have had the honour and pleasure of developing outstanding individuals and merging their talents to create a dynamic, focused and winning group understand that feeling of pride and protectiveness. But the best managers I have known have had the knack of standing back at the moment of victory to allow their team to bask in the glory of success. They have also been adept at taking setbacks, understanding the development needs and rapidly refocusing the team on the next challenge.

In that respect I recall a moment at ASDA in the early 1990s when we had smashed the Xmas trading targets and the head office marketing and trading teams were pretty smug at our own brilliance. The ASDA team of that era was filled over time with CEOs and Chairmen in waiting, Mike Coupe (Sainsbury), Steven Cain (Carlton Communications, Coles, Metcash), Justin King CBE (Sainsbury), Andy Bond (ASDA, Poundland), Andy Hornby (HSBC, Alliance Boots, Coral), Richard Baker (Boots Group, Groupe Aeroplan), Ian McLeod (Celtic FC, Halfords, Coles). The sense of self-satisfaction was ended abruptly when Allan Leighton, at that time the Marketing Director but later serial CEO or Chairman across organisations as diverse as Pandora, Royal Mail and LastMinute.com, walked into a meeting with hand-written, photocopied notes to tell us we were coasting through the new year and needed to regroup and step up our efforts. It was a good lesson.

The best managers I have known have absorbed the pressure when their team is struggling but stepped back at the moment of glory. They may share the celebration and mutual admiration in private but their public position is to hand credit to their ‘players’. Of course, they have been prepared to lead from the front when necessary and have been fiercely protective of their people. But generally speaking their obsession was with selecting and developing good people, ensuring integration, enabling performance, setting standards and consistently looking towards the next challenge.

What they have never done is encourage senseless, unstructured fights with authority (which is different to disagreeing with the status quo and planning how to change things); openly displaying triumphalism and hubris; or, acting with anything less than due regard for the quality of the opposition and the danger they present. Those principles have never prevented them being fiercely determined, robust, resilient and committed to victory.