AUGUST 2010 56572 ABOUT THE AUTHOR Sowing Seeds on the Beautiful Journey in 10 Cities: MIN LIU is an Associate Operations Improving Corporate Governance Practices among Officer for the IFC China Corporate Governance Program. She joined IFC in Chinese Companies by Strengthening Local 2003, having previously worked as a lawyer and Capacity for CG Consulting Services university instructor in China. APPROVING MANAGER Corporate governance (CG) is a journey, not a destination. The IFC China Sergii Tryputen, Manager of Corporate Governance Program started its journey in 10 cities of China in the China and Mongolia Corporate Governance 2009 and sowed "seeds" on the ground. Today, some of those seeds are Program. germinating, blossoming, and bearing fruit. This SmartLesson describes what steps we took, including selecting partners, mapping the journey, choosing partners for maximum impact, localizing training, and following up afterward. Background institutions--including management consult- The IFC China Corporate Governance Program ing firms, law firms, and accounting firms-- is a three-year advisory services project that have participated in the workshops. aims to improve CG practices among Chinese private companies through different types of Participant evaluations from the first seven intervention that focus on direct company workshops demonstrated the initial impact of assistance, knowledge management, and the project. Some 37 trained professional capacity building. institutions incorporated the IFC CG methodology into their consulting services to Since its inception, the program faced the 115 client companies, provided CG training to small-versus-big challenge: a small team of 1,103 individuals, and reviewed 125 CG three and a small budget dealing with a big procedures for client companies for country and a big market. How to reach the improvement. Ten of these institutions maximum target companies in China to reported revenue of $259,036 generated from improve their CG practices with limited project CG services to their client companies. resources? How to accelerate program impact throughout China as a whole? Who will be Lessons Learned the program's successors to deliver CG services in the Chinese market after we exit? 1) Select the right partner for the journey. After deep consideration, we designed what It is important to have a strong local partner we called "The 10 Cities Project." Our goal: to to co-organize the training in different regions deliver 10 workshops on the well-established and cities in such a big country. In the IFC CG methodology in 10 cities throughout beginning, we chose a CG research center in China by targeting local professional China that had participated in our CG training institutions to improve their capacity to programs before and showed its commitment provide CG consulting services and to better to cooperate with us as our strategic partner enable them to provide CG services to their for the 10 Cities Project. Later, we discovered client companies in China. that although the center's regional, Beijing- area network was strong, it did not have a Since 2009, we have delivered 10 CG good countrywide network. That meant that methodology workshops in China. More than we had to struggle on our own to organize 280 representatives from over 170 professional and deliver the workshops in different cities. SMARTLESSONS -- AUGUST 2010 1 After some searching and consideration, we identified a good or in frontier regions? Should we hold sessions in large potential partner in the management consulting committee of cities or medium-size cities? the China Enterprises Confederation (MCC), which has an extensive, countrywide network, including 56 provisional We started by identifying the important elements that committees. MCC works as a bridge among enterprises, would form our decision criteria, such as local partners' management consulting organizations, and government. support and market needs. We discussed these elements with our partner and settled on four key criteria: However, convincing this powerful institution to embark on a long journey with a "stranger" was not easy. In the · Sufficienttargetaudience beginning, MCC didn't know about IFC and had doubts about our motives in China. To dispel their doubts, we · StrongmarketneedforCGservices invited MCC's officers to IFC's Beijing office for a field visit and showed them what IFC has done in China in the past · Availability of support from MCC's provisional years. We also invited MCC's director to participate in the committees board of directors training workshop organized by the program. Gradually, MCC recognized our program and · Breadthofimpactacrossvariousregions,withemphasis began detailed discussions and negotiations with us. At the onfrontierregions initial negotiation, MCC disagreed about sharing costs with IFC and also requested that IFC pay it for organizing the Next, we created a list of around 20 cities and narrowed it training workshops. We showed MCC the value of the IFC down to 10 to 15, using the criteria to compare and contrast. CG methodology for its member firms, which are top Finally, our local partner MCC identified a final list after management consulting firms in China; defined common discussions with its provisional committees in the target goals with MCC; and agreed to cover the travel costs of one cities. The route of our journey to 10 cities was mapped out. officer designated by MCC to travel together with us to different cities for the training workshops. Ultimately, MCC 3) Select good "seeds" for sowing by identifying the agreed to help organize the training workshops in different target audience and selecting participants carefully for cities and share the workshop organizing costs, including maximum impact. the provision of resources such as classroom facilities, equipment, lunch, refreshments, and the like. MCC also The objective of the 10 Cities Project is to build and strengthen designated an officer who was responsible for recruiting the capacity of professional institutions for CG consulting target audiences and facilitated local media reporting. services and to improve the CG practices of their client companies through their engagement. Just as farmers select 2) When deciding where to hold workshops, map the their seeds with care so that they can have strong yields and journey together with your partner. quality produce, we realized that we needed to select with care the consultants who would be trained, because they It's a bit of an understatement to say that China is a big would play a key role in ensuring the success of the project. country. It spans a massive swath of geography and is home to more than 600 cities.1 Deciding on the 10 cities was We discussed at some length how to select our own good definitely a challenge. Should we go to cities in rich regions "seeds" for sowing in the 10 cities. We decided to limit the number of participants for each workshop to 20 to 40 people, 1 Cities with a total population of 360 million. 2 SMARTLESSONS -- AUGUST 2010 Training participants discuss the case studies in the Shenzhen Trainers from IFC CG team (left to right - Charles T. Canfield, workshop. Vladislava Ryabota, Min Liu) and we noted that potential CG service providers might come from management consulting firms, law firms, accounting firms, To equip our participants with the skills they needed and investment consulting firms, management schools, and the like. to help them learn how to seek clients for their new We also developed a list of qualifications for participants: offerings, we put a great deal of thought into training design and preparation of training materials to fit the · Educationalbackground,skills,orexpertiseinexecutive Chinese context. To ensure that the IFC methodology management, finance, corporate governance, training would be linguistically and culturally appropriate corporatelaw,accounting,orbanking in China, we localized the training by translating all the tools into Chinese and adding local case studies into the · Generalknowledgeofcorporategovernance training materials. We worked with our colleagues from IFC's CG unit, Charles T. Canfield and Vladislava Ryabota, · Minimumoffiveyears'consultingexperience to develop a comprehensive training model, which includes presentation slides, case studies, sample documents, in- · Clientlistthatincludesaminimumof15companiesthat class exercises, and practical tips. haveusedtheparticipant'sconsultingserviceswithinthe lastthreeyears The training agenda was designed to avoid talking too much about CG in general. Instead, we focused on · WillingnesstoincorporateCGconsultingservicesaspart presenting the tools and how to apply them in China. oftheparticipant'sportfolioofserviceofferings During the 1.5-day training session, we also shared our experiences on how to interview client companies and A pre-training questionnaire was created that contained brainstormed with participants on how to sell CG consulting information on our selection criteria. Using the questionnaire, services to target clients. Local guest speakers talked about we conducted a pre-training survey among the candidate their own experiences in providing CG consulting services participants in each city, which helped select the best for Chinese companies. Participants also had opportunities candidates. It also helped us understand their skills, to discuss ways to localize and customize the experiences, and expectations for the training. methodology. 4) Don't give them a fish for free, but let them pay for 6) Don't ignore your seeds after sowing them, but water fishing tools and teach them how to fish. them regularly for sustainable growth. Lessons learned from earlier advisory services projects showed that the participants might not value what they learned from the training if the training were free. To avoid this situation, we discussed the pricing issue with our partner and agreed that MCC would charge participants for the training and use the fees to cover part of the training costs. After consultation with its provincial committees in the target cities, MCC outlined a low-cost approach to organize the training that included conducting the training in the training room contributed by MCC's member firms in target cities and providing cost- effective food for lunch and coffee breaks. MCC also decided on a two-tier pricing policy that charged $30 to participants affiliated with MCC's member firms and $220 to participants not affiliated with MCC firms. IFC team, MCC team, and training participants in the Dalian 5) Don't forget to acclimate to the local climate when workshop. sowing the seeds: localize your training. SMARTLESSONS -- AUGUST 2010 3 trainedpeoplewillbeinvitedtotheforum to directly communicate with enterprises onCGconsultingservices. Conclusion The IFC China Corporate Governance Program sowed hundreds of "seeds" along its journey in China. Some of these seeds have germinated, blossomed, and borne fruit, while others will need more time. However, the lessons from the 10 Cities Project have relevance for other advisory services CG projects aimed at A training participant in the Beijing workshop improving enterprises' CG practices through presents the group discussion results. strengthening local capacity. Training is not a one-off event. Don't ignore the people trained by the project after the training. Give them sustainable support. Direct Quotes from Participants On the second day of the training, most of "What I learned from the training is not only the the questions from participants focused on knowledge of corporate governance, but also a concerns about follow-up support from IFC set of very comprehensive and practical tools for and MCC. To address the participants' needs, corporate governance advisory services. I will we developed a follow-up plan for the 10 definitely adopt the methodology and provide Cities Project: corporate governance services to my clients in the near future." · Invite participants to suitable CG events. - Mr. Ren Haoqian, General Manager, For example, we invited some of the Chengdu Daoqin Management Consulting Firm trained people to the seminar on board crisesorganizedbytheprograminBeijing "This is the best training I have ever attended in toequipthemwiththeknowledgeofCG the past 30 years in China!" asaresponsetofinancialcrisis. - Ms. Ao Dongyang, senior consultant, Training Center of Shenzhen Qianghua University · Regularly share good CG articles and Research Institute information. To maintain good relationships with the trained people, we "CG is a journey. As a consulting service provider, sent good CG reports, articles, and case we still have a long way to go. I believe my studies to them about every two months consultation will be much more convincing, once by e-mail. Each time, we received many equipped with IFC CG Methodology." feedback e-mails from participants who - Ms. Wu Qingzhen, General Manager, highlyappreciatedourknowledgesharing. ChongDaTongHao Management Consulting Co., Ltd. WealsosentparticipantsaNewYearcard whenthenewyearcamein. "The difference between IFC training and other training I attended from other places is that the DISCLAIMER · DevelopanddistributeahandbookonCG IFC training is more practical. It's amazing that IFC SmartLessons is an awards consulting services. We are planning to tomorrow I can use the tools and skills I learned program to share lessons learned worktogetherwithMCCtodevelopauser- from this training to provide CG services to my in development-oriented advisory clients." services and investment friendly handbook on CG consulting operations. The findings, services for more potential CG services - Mr. Duan Fanglan, general manager, interpretations, and conclusions providers.Thehandbookwillincludesome Tianjin Guanghua Enterprise Management expressed in this paper are those realcasesonCGconsultingservicesinChina Consulting Co., Ltd. of the author(s) and do not necessarily reflect the views of IFC contributed by the trained people who or its partner organizations, the haveincorporatedtheIFCCGmethodology "This training broadens my vision and also Executive Directors of The World intotheirconsultingservices. provides me an opportunity to view CG from a Bank or the governments they different angle. I will combine IFC's CG represent. IFC does not assume · Organize a CG forum to build a bridge methodology into our practice, and I am looking any responsibility for the forward to the results of this combination." completeness or accuracy of the betweenenterprises(potentialCGservices information contained in this buyers) and the trained firms (CG service - Ms. Gao Yuexing, deputy director, document. Please see the terms providers).Weareplanningtoco-organize Financial Department, Shanghai SHENYIN and conditions at www.ifc.org/ aneventwithMCCinBeijingin2011after WANGUO Research Consulting Co., Ltd. smartlessons or contact the program at smartlessons@ifc.org. the handbook is complete. The project- 4 SMARTLESSONS -- AUGUST 2010