Stanley Roth
Building Partnerships for International Education

November 20, 2002 Washington, D.C. --
Good afternoon.

So first, let me begin with the Boeing story. In many ways this is a great example for your conference because in fact Boeing up until 6 years ago made no pretenses about being a global company. Boeing was, to be sure, a company that sold globally to more than 140 countries around the world. But if you asked Boeing to describe itself it would tell you that it was an American company, Seattle-based, manufacturing in the United States that exported products around the world. Our focus was very definitely the U.S., and to a great degree Seattle and the state of Washington. And it was not particularly globally oriented.

Now, I say this with a completely neutral value tone. I don't want to suggest that there was anything wrong with it because the first thing you learn as a businessman is, "did it work?" A very simple question and the answer is: it worked rather well. You had a world, particularly in our industry, that didn't really require international knowledge and international presence to any large degree. Why was this?

Partly it was unique to Boeing, partly it was because we had managed to drive out some of our American competitors by the superiority of our products in the 1980s. So we become the only American manufacturer of commercial aircraft by the end of that decade. You no longer ride around in Lockheed commercial aircraft and there are very few McDonald-Douglas commercial aircraft still left.

Partially it was that we had done very well with our engineering products, partially it was because the Russians obligingly collapsed, we no longer had to face them on the market. Who in their right mind was going to buy a Russian commercial aircraft with the instability in that country after the collapse of the Soviet Union? Not a situation, by the way, that's going to last forever in the future, but we have that window.

And third, because our main competitor, Airbus, did not yet have a comprehensive product line, and particularly not in the wide-body long-range aircraft. So they couldn't compete with us in a lot of the markets, particularly in the Asian market.

So Boeing had a terrific situation. We could go out there, send a team from Seattle and say: "Here we are, what would you like to buy?" That didn't require a whole lot of international knowledge, it didn't require you to have a lot of language skills, it didn't require you to have a lot of ex-patriots living at high cost in the country, it didn't require government relations offices overseas. It was a very nice model.

What happened? I tell you this because I think it's relevant, not just to the Boeing experience, but to many American companies: the world changed. How did the world change? Two very important ways for the Boeing company.

First, we got a real-life competitor. Airbus, of course as you know, has a very full product line and is competing with us everywhere in the world for every part of the market. It's not longer a question of just showing up from Seattle and saying, "What would you like to buy? Here's the list of where you can get your planes." Now we're competing and we're competing very vigorously. One has to have a different approach, that requires you to have a different presence and a different attitude overseas. That is, in a sense, the less profound of the reasons why Boeing changed.

The more profound of the reasons is that our then new CEO, approximately 6 years ago, woke up and said, "Gee, we're not going to meet the expectations of the market if we only stick with commercial aircraft." Two things: first, commercial aircraft has, since 1916 and the founding of the Boeing company, been cyclical. You sell a company a lot of planes, it tends not to need anymore for quite some time, then it buys again. It's very dependent on the economy, sales up and down. The market isn't too pleased with companies, particularly Fortune 50 companies, whose sales are up and down. Second, we looked at the 20-year projections, and while in dollar terms they were enormous for the growth of commercial aircraft, in growth terms they were 4 to 5 per cent-way below the double-digit rates of return that "the Street" (as we refer to Wall Street) has come to expect from a major company.

So, suddenly we said, "Where is our competitiveness? How are we going to grow? How are we going to stay attractive?" It's not going to be by staying only in commercial aircraft, based in Seattle. So we went out and we diversified into aerospace, broadly defined. The result was the merger with McDonald-Douglass, which made us one of the top defense contractors in the United States; it was buying the satellite portion from Mews, making us the largest satellite manufacturer in the world; a couple of smaller acquisitions. The net result was that we became the world's largest aerospace company, but with a very different customer set.

Instead of just going around the world selling commercial airplanes-a big enough task-we now were selling military goods, were selling space products, in a very different world. Instead of "just" selling airplanes, something Boeing had excelled at for four or five decades, suddenly we were dealing with governments. Because you're dealing in the military case 100% to governments, in the space case frequently selling to governments. But even if the customer is a private customer, say a telecommunications company, the export control issues, the technology transfer issues, the frequency issues-all kinds of issues--require governments.

Well what's happening, as the world becomes more democratic, a happy phenomenon: you're no longer dealing with just the head of a foreign country, or the head of their foreign ministry, you're frequently dealing with a range of institutions, just like the U.S. So you want to sell military aircraft in Korea, something we went through earlier this year. You have to get the budget approved by the Parliament; the Parliament is influenced by the media; the media is influenced by community relations: how is the company perceived in that country. And suddenly merely sending a salesmen-usually one of the best, by the way-from Seattle either to live in the country or to visit the country twice a month, not necessarily with any language skills or any knowledge of the country, of the culture, wasn't enough. Suddenly we needed to do as a company what a lot of countries were doing in Washington: working the system. Having someone who knows the language, who knows the players, who knows the culture, who can tell you what works, what doesn't work and let you be an effective player there. A far more complex environment than we had had before.

To show you how come-lately we've been to this process, when I joined the company 19 months ago, our top person in China spoke no Chinese, our top person in Japan spoke no Japanese, our top person in Korea spoke no Korean. It wasn't quite as dismal in Europe, with the knowledge of European languages but still not 100%. But you get the point. We hadn't had to do it in the past to compete, so we didn't do it. Now we have to. International knowledge is critical for the Boeing Company if we are going to continue to compete and if we are going to continue to prosper.

That is why, about two years ago a new unit was created at the corporation called International Relations. It's headed by Ambassador Thomas Pickering, the most heavily decorated ambassador you might say in the history of the foreign service. Literally has headed more embassies than anybody else in the history of the foreign service and has come to the Boeing company. I've joined him to work on the Asia piece, but it's less than two years old. That shows you that the Boeing company recognizes that it needs international education to be able to operate.

Let me just stop to make a point, that may be obvious to you as educators, it isn't frequently obvious to people. I'm talking about a lot more than language skills. You can have language skills and still be a complete idiot in a country. If you're knowledge is entirely from a classroom and you've never set foot there, and you have no idea about the customs and you have no idea about how things are done, you can really get into a lot of trouble really fast, even if you have a perfect accent and a terrific vocabulary. We're really talking about country knowledge in a profound sense, much more than door-opening-which is the other misunderstood approach. Yes, it's terrific to have someone well-known in the country-we try to hire people who are well-connected and who can help us meet people-but again, it's not in the trivial sense of one person can open every door and if they speak the language we're home free. You really need to have a system that lets you work in an international environment. That's how Boeing began to approach the problem.

Let me talk to you about some of the specifics of the solution part of the equation of what Boeing has done. The first part I already hinted at: you really need to have a vision. You have to recognize that you have a problem and that you have to make a change. For Boeing that was a big deal when we decided to become a global company, when globalization became a feature of every major corporate presentation. Somebody has got to start the turnaround, whether it's Jack Welsh at GE or Phil Condit at the Boeing Company-there are many other examples, but leadership at the top is crucial and I suspect it's going to be very relevant when we get to the education piece.

The second thing you need to do is get the right people. If you have the most talented people in the wrong jobs, it's not going to do you any good. One of the things we're trying to do at the Boeing company is develop a cadre of people with an international background. One piece of that, the part I'm immediately a part of, is to do it from the top-down, to hire people with expertise in a specific international arena and to have them help you as you attempt to restructure your overseas management and become more global. What we've done is hire several people in Washington and a lot overseas, country vice presidents every one of whom is an expert, many of them foreign rather than American, but that's not universal (in some cases you still need Americans to represent you, rather than locals), but we've picked people with tremendous experience. We have a foreign minister and ambassador in Australia, a former ambassador to the U.S. in Italy, a leading businessmen-academic who had spent 17 years in Japan, and married Japanese and "gone native" as it were in the best sense of the term. We have created a real talent pool to run our operations around the world.

Another piece, and what I think you may find more relevant is the training and education that we've done at what we call the Boeing Leadership Center, in a sense it's the Boeing School, outside of St. Louis. This school was not originally founded to deal particularly with globalization or international knowledge. It was founded to deal with some of the other issues Boeing was working on: business skills, financial acumen, management skills, labor management and the like. As the companies did this course correction that I described, focusing on globalization, the leadership center was asked to help. We've done several things at the center that you might find interesting.

The first, of course, is to change the curriculum (sound familiar?). We've added a globalization course. That may sound very elementary to you, but it was very interesting. Originally we thought we wouldn't get anybody to attend. They really would be much more interested in getting the MBA type courses or the labor management courses-why did they need to take globalization? Now we have people banging down the doors to get in, as they see that most of the company's profits are coming from exports; succeeding internationally has now becoming important. This one-week course, which is just an initial dose of the world as it were, has become very popular.

Another thing that we've done is create something called the Global Leadership Program. What this is that we take groups of approximately 20 Boeing executives and we send them to a country overseas for 30 days. They're divided up into three teams and they're each given a business problem to work on. This is not a pure financial exercise by any means. They're given an intensive course both before they leave and in the country, on the culture of the country-they meet the leadership, they meet the business leadership, they travel around to some of the historic sites to give them a bit of a feel. It's a very intensive 30-day period.

You might say, is this just luxury, giving somebody 30 days off from work to travel around the world and visit someplace nice. You realize the need for it as soon as you start talking to the individuals. Take a company like mine, tends to hire brilliant engineers. A lot of them: no overseas travel, minimal overseas travel. I was asked to lecture to the group that was going out to Australia, right after I joined the company last year. The first question I was asked was, "What do I need to know about Australia? What do they eat? Can I drink the water? Is it safe to walk in the streets?" This was about Australia, one of the world's most developed countries, speaks the same language (more or less), one of the easiest places to get around. But the anxiety level in this group, about half of whom had not been overseas, was extraordinary. I became an instant convert to the program. The notion of actually exposing people to the day-to-day experiences of living overseas, as well as the formal education has been terrific.

You have the vision, you have the people, you do some of the training. Another thing that you need is overseas experience. A lot of what we're trying to do at Boeing is work from the bottom-up, not just the top-down. You're not going to be able to hire enough people like me to parachute them into the company and to run all the businesses. Essentially you need to develop an international cadre. I think a group of people who are comfortable working internationally, who like working internationally, who have the skills so that they can be sent to Italy on this assignment, and then sent to China on the next assignment, come back and run a factory in Seattle and maybe move to world headquarters in Chicago afterwards. But we need to have people with this kind of eagerness to do international and ability. And here I think GE has been a tremendous leader, recognizing that if you haven't punched the international ticket, you're not rising to the top of that company. International is a fundamental position of getting to be a successful executive in a company. Whereas in the past in many companies it was out of sight, out of mind. If you're posted overseas, you're history. Frequently it's your last assignment, maybe it's felt that it's a cushy thing to do. You get a house, you get a driver, finish up your career someplace nice. Or else if you're more unlucky and you get it more in the middle of your career, then you have to fight to get something when you come back. But it's very rare that it's built in, that this is a plus. That you take this job and when you come back: here's your promotion, this is what you're going to do, you're a star.

If you're going to be a global company international education and experience has to be high on the list.

Finally, the piece that I alluded to before is language. And while I made some comments suggesting that language isn't everything, it is still important. The ability to communicate easily in the language of the country, to go to the media, to conduct your meetings with senior corporate colleagues or government officials, is invaluable. It's a dilemma, particularly when you're talking about some of the world's harder languages, where training can take a year to two years, you can't afford to educate large numbers of people. We're still trying to figure out how to do it. Part of it is recruiting people with language skills, and fortunately particularly with the immigrant base in the United States there are a lot of people with language skills, and partly it's people who have developed language skills in their first career, in the military or wherever. Whatever the case, we're trying to figure out how do we either hire people with language skills, what type of training can you do, particularly in the harder languages to help create this international cadre.

Those are the pieces that Boeing is trying to use to come up with its solution to the problem of needing international education. Finally, let me just give a couple of brief thoughts about how can we bring educators and business together to try to promote greater international knowledge. I urge when you think of this not to merely think of industry as check-writers. All to often, it's: we need finance, we have to have a study, we have to have a coalition, we need a lobby. Whatever the it is, and you look to business to finance it. Yes, that's one role for industry, but I think that would be trivializing the issue to just think of it that way. I think a partnership can be much more.

To my mind, the fundamental issue is creating demand for international knowledge in the schools. Because I believe that once there's a demand in the schools, the education will follow, not necessarily easily, but I think it will happen. From my point of view, what one needs is a coalition that's broader than education and business, but it's government, it's parents, it's industry and of course it's educators.

I think that in government, we've seen it during the Cold War, that government for language studies and area studies can be extremely important in steering people in those directions. Now we're seeing it again after 9/11 as the shortage of people with certain languages and certain area specialties becomes painfully obvious. I think that there is a role for government to play. I think there is a gigantic role for parents to play, particularly as we have prosperous immigrant communities that are just filling their oats and are not longer just keeping their heads down as they adjust to life in the United States. The notion that the curriculum should have something to say about the world doesn't seem entirely unreasonable. And just as we're seeing very early stages of political mobilization in some of the Asian-American communities-the Indians come to mind for example doing things that Jewish-Americans have done, that Greek-Americans have done, that Asians largely haven't-but there's the beginning of political mobilization. I think it needs to have that mobilization when it comes to education as well.

Then I think industry has to play a role, because who are the people we need to employ? When we get those graduates who are coming out of-more likely graduate school than college these days-but wherever, what skills do they have? Do they have any business training? Have they taken any finance courses? Do they have some international knowledge? Do they have any language skills? What is the caliber of the graduates coming out? Industry needs highly skilled graduates, we can't do all the training ourselves. We're a logical partner.

Then of course there's the educators. I think rather than looking at it as a narrow coalition, if we can mobilize all of these groups together than that is the best chance for putting together a powerful force for international education.

Thank you very much.

Stanley Roth is Vice President of Asia for the Boeing Company and supports the company's international work in Asia. Prior to joining Boeing, Roth was staff director of the Subcommittee on Asian and Pacific Affairs in the House Foreign Affairs Committee, and later served as Assistant Secretary of State for Asia and Pacific.

LINKS

The Boeing Company