Case study: BT

Beal: cultural differences have had to be taken into account

In 2005, BT made what was, for some, a controversial decision to select Chinese manufacturer Huawei as one of the preferred suppliers for its 21st Century Network (21CN) project to IP-enable the UK’s national network infrastructure.

Much of the controversy was because the decision was widely seen as the final nail in the coffin for UK telecoms equipment firm Marconi, which was broken up soon after.

Matt Beal, now director of strategy for BT Design, was head of the 21CN programme at the time. He acknowledges that opting for the Chinese firm took a lot of thought.

“Any carrier that has contemplated using a Chinese supplier has had to think about what that means,” he says.

“There were quite a few discussions about what would be involved in introducing a Chinese supplier into our supply chain. Are there concerns about where and how they play in the network? These were real debates and discussions for us that we had to contemplate, as well as perceptions of critical customers,” he says.

Much of the negative perceptions were overcome by a realisation that the nature of the telecoms industry was changing.

“We cannot guess that any one country or region will in future be able to source all their own technology needs,” says Beal.

“We felt it was inevitable that eventually you would have a heterogeneous global supply chain, and figuring out how to time that was critical to both companies.”

Beal says that cultural differences between the UK and China have had to be taken into account during the project.

“Occasionally they are too deferential and not as assertive as I might wish. But the flipside of this is a bit of a paradox, because I respect them in that some other vendors are more aggressive in saying they can do something, but when we get down to it they have underestimated the difficulty,” he says.

“The Chinese culture reaches the point much earlier to say: this is what we can do and there is no point promising more because we know you would hold us accountable for it. I have seen both behaviours, and it makes for both strengths and weaknesses.”

It is important to be aware of potential differences and the risks they could bring, says Beal.

“Some of the concerns we had were deemed sufficiently real that both we and Huawei have had to make mitigation plans. I do not want to give the impression we went through the change curve and now it is all OK,” he says.

“We are still going through that and we will continue to do so for some time. In the meantime there is a perceived risk, so there is a mitigation plan. This is a reasonable approach to take, and we still enjoy the benefits we expected from Huawei.”

Beal says that a key priority is to establish a working relationship that is honest, open and complete: “We are used to a directness and we value that. But when giving negative or critical feedback, occasionally Huawei can be too indirect.”

And you must be clear about the role you need them to play. “They are intent on giving what you ask for, and might not have the experience and perspective of the environment we work in to steer you if you are asking for something that could have unintended consequences. Being able to express what you need and what success looks like is critical,” says Beal.

There are lessons for both sides of any potential cultural divide. “As you become more global you have to stretch culturally, and the Chinese are responding,” says Beal.

“But we have seen the stress and strain occasionally, and our high profile has probably heightened some of that. We both have learning pains.”