Volker Kleinn is a management expert with a degree in business administration from a German university that he says is about equivalent to MBA. He has held senior managerial positions in American multinationals such as Digital Equipment Corporation (known as DEC which was acquired by Compaq which in turn merged with HP in 2002), Apollo Computer (a leading manufacturer of network workstations until acquired by HP in 1989 and gradually closed down over the next eight years) and Autodesk (Still a major multinational software manufacturer) in Europe and the Asia-Pacific. Retired from an active career more than a decade ago, Volker, nevertheless, finds time to help companies in the developing world to improve their management. He has been visiting Nepal regularly since the early 2000s through the Senior Expert Corp (SCE) programme of the Swisscontact and has helped more than a dozen Nepali companies from different sectors. Volker talked with New Business Age when he was in Kathmandu recently for a similar purpose. Excerpts:

You have been helping private firms, particularly in the developing world, with management issues. How and when did you start this?

After I retired, I decided to work on a voluntary basis with entrepreneurs and enterprises in the developing countries. This way I wanted to give something back to society. My idea was to contribute to reduce the migration pressure by helping companies in the developing countries to maintain or create employment. So, I registered with the Senior Expert Corps of Swisscontact and through them I came to Nepal.

Could you share with us the common problems faced by companies in the developing world?

In the industrialized countries with predominantly market economies, business management talent has been developed over a long time and therefore there is an established talent pool for management. In the developing countries (especially in Eastern Europe), market economies did not exist for a long time and therefore there still is not a big enough talent pool for management. Any management role requires creativity, initiative and drive. A manager needs to accept responsibility, accountability and I am glad to note, that there are more and more people here in Nepal who are willing to step up to this requirement.

Which Nepali companies have you already helped to improve their management?

Let me not mention names, but I have been working in several industries, such as IT, Communication, Trading, Media, etc. and I also have been giving management training courses at different organizations.

What problems do you find in the Nepali companies which you have already worked with?

For me management is a continuous cycle of Planning, Organizing, Monitoring and Controlling. I have identified Planning as a major weakness in most companies. Operational plans and budgets often do not exist. Since I am convinced that you can only mange what you measure, it is very difficult to evaluate the success of any business if there is no goal or plan to compare performance to. As a consequence, management is in most cases is re-active rather than pro-active, which means that managers are not rally managing but rather getting managed by their environment and circumstances.

The second area that needs a lot of improvement in most of the companies I have worked with is Management Information. I think it is common knowledge that you do accounting not only for shareholder or tax purposes, but also for management purposes. I have experienced, that most companies give priority to tax requirements. Also, a lot of record keeping is still done manually. These facts make it often very difficult to use financial information for management purposes.

In addition, I am very concerned about the sustainability of my efforts to help. I have often observed what I call ‘the rubber band syndrome’. This means changes are initiated while I am here, i.e. when the rubber band is under tension, but as soon as I leave, i.e. the rubber band is released, things flip back to the old position. One has to keep in mind that the human brain is change-resistant. That means it requires a constant flow of energy to make changes sustainable.

It’s apparently been nearly a decade since you started advising Nepali private sector companies on management issues. What do you think of Nepal’s private sector?

The private sector has made the economy function under what are not very favourite conditions. Everywhere in the world, you can see that the biggest roadblocks for development are corruption and unreliable legal system. Both factors have an impact on the business opportunities that the private sector can pursue.

What are the strengths and weaknesses of the Nepali private sector?

The private sector is divided into two major categories. On the one hand, there are family-owned businesses, which are mostly hierarchically (or paternalistically) organized. These companies tend to maintain limited transparency. On the other, there are newly founded companies which are trying to be more open, but sometimes lack the courage for the degree of openness as Western companies normally practice. This means that I consider the lack of delegation of authority, i.e. empowerment of senior managers as a weakness of the private sector.

What are the areas that the Nepali companies need to work on to improve their overall management?

I have experienced a big gap between shareholders (owners) who are often also the most senior managers and the managers who are not owners. This is often because of the lack of confidence and trust. It would be helpful if professional managers were trusted more to contribute in terms of planning and execution. Empowerment of people is important throughout the organization, but it is more important with regard to the top professional managers. I believe that the time is over where information was considered as power. I am convinced that information creates responsibility and therefor owners should be encouraged to be more transparent vis-a-vis their managers with regard to information about strategy and performance.

In almost all companies I have worked in, I was told that it is difficult to find competent mangers. I know that there are a lot of Nepalis working as expatriates abroad and gaining international management experience. It would be helpful in my opinion if a campaign is started to offer senior positions for expats who want to come home. News- and job-portals could create a special section to attract experienced people to return. On the other hand, it is alarming that most of the college graduates aspire to leave the country. This represents a skill drain which will have a long-term negative impact on businesses here in the country.

What is your impression of the spirit of entrepreneurship in Nepal and the Nepali entrepreneurs?

Based on my observation, the environment in Nepal is not very conducive to entrepreneurial behaviour. Starting a business here is still burdened with bureaucratic requirements. I believe that this is one of the major reasons why well-educated and talented people are leaving the country.

How do you rate the work culture in the organizations you have worked in? What improvements have you usually suggested?

Empowerment of employees is not very common. The organizations are mostly very hierarchically organized and people rather ask their superiors for taking a decision than deciding for themselves. This is very often a sign of insecurity and lack of self-confidence, but it could also be caused by the unwillingness to accept responsibility.

How can private sector companies incentivize the performance of their marketing folks in Nepali context?

When you say marketing folks I assume that you mean sales people. Sales people around the world are normally incentivized by an incentive compensation plan that rewards good performance. Good performance means meeting or exceeding your target. In the organizations that I was responsible for during my professional career, I had always implemented a plan that rewarded over goal performance proportionally. I was always proud when the best sales people earned more than I did.

What sort of good HR practices need to be evolved in the Nepali private sector? Do these practices differ from sector to sector?

There are certain basic HR practices that should be common in every company. These practices relate to work ethics, loyalty to your employer, confidentiality and attendance discipline. There are other areas where practices would differ, especially in sectors with shift work or other special requirements like workplace security. Attendance discipline is obviously difficult to implement with the frequent bandhs where a few people hold a whole country hostage. This has an enormous negative impact on the productivity and therefore the competitiveness of the private sector.

What sort of socio-political environment you find in Nepal in the context of the growth of enterprises? What are the impediments and how to ameliorate the situation ahead?

Let me just mention two points that come to mind immediately:

-- The lack of a functioning mail system requires hand delivery by messengers of a lot of documents, such as newspapers, letters, invoices, etc.

--Cashless payment systems are not very efficient or customary. This again employs a lot of messengers, who have to collect often cash and sometimes cheques. This keeps a lot of motor bikes on the roads all day.