Better support for Mongolian exporters
Chambers of commerce play a critical role in supporting their members to overcome risks, costs and informational constraints preventing them from competing in international markets. As key advocates for business with policymakers, chambers throughout the world pave the way to a more enabling business environment, by ensuring that private sector views are heard during the policy process. At the same time they help businesses better understand and respond to new challenges in national and international markets.
To perform these functions as effectively as possible, chambers of commerce need to be equipped with specific skills and knowledge. These include clear strategies and an understanding of their clients’ needs, well-defined service portfolios and good governance, paired with accurate results measurement that enables corrective action and demonstrates their worth to stakeholders.
The Mongolian National Chamber of Commerce and Industry (MNCCI) goes beyond traditional roles and supports enterprises to internationalize – something that in other countries is typically done by publicly funded trade and investment promotion organizations.
ITC has been working with the MNCCI to assess its operations and upgrade its ability to enable Mongolian businesses, especially micro, small, and medium-sized enterprises (MSMEs), to successfully compete in international markets.
A 2016 benchmarking exercise rated the MNCCI’s operational performance as just above average compared to peer organizations elsewhere. A misalignment between the chamber’s organizational structure and its stated goals of providing advocacy and business support services undermined its effectiveness at achieving either good. The chamber did not have a clear strategic vision about what kinds of businesses to prioritize when providing support.
In addition, the exercise found that the MNCCI did not systematically organize the services it provides on the basis of customer needs and modes of delivery. This was mainly due to a lack of information about who their customers were and what they needed.
Results measurement was impaired by the lack of a coherent and quantifiable set of key performance indicators. As a result, for example, responding to clients’ business needs often overlapped with efforts to increase and track membership revenue, with the two goals competing with instead of complementing each other. Furthermore, internal MNCCI processes were largely undocumented; the absence of systematic knowledge management made it harder to learn from past experience and build institutional memory.
As part of its AIM for Results approach, which involves assessing business support organizations’ performance, developing plans for improvement and then measuring progress, ITC and the MNCCI cooperated to formulate and implement a plan to respond to the identified weaknesses. ITC then repeated its benchmark exercise to evaluate how the MNCCI had improved.
The re-benchmarking exercise, conducted in 2018, revealed that the MNCCI had improved on several fronts. It had better matched its operational structure to its organizational strategy, improving efficiency, reducing overlaps, adapting staff to new roles and identifying gaps in its workforce.
Strategy formulation itself has become a continuous process within the organization, with operational and managerial staff actively involved in determining how the organization should best allocate its resources. These decisions are made on the basis of actual client needs and expectations, which the chamber now regularly assesses.
The new strategy process is reflective of the MNCCI’s new customer-centric organizational culture. Clients are now segmented using a matrix that takes into account their level of export maturity, allowing the MNCCI to serve them in a manner that best responds to their needs. Separately, membership loyalty is rewarded, with businesses classified into five categories from ‘classic’ to ‘diamond,’ with the latter receiving special privileges and access.
The MNCCI is now systematically measuring client satisfaction to better meet customer needs. The organization has also created a new client relations department and is using its new customer relationship management system to engage with different segments of MNCCI stakeholders at the governmental, institutional and enterprise levels.
In terms of results measurement, the MNCCI now has a framework linking organizational results to staff performance, with a full set of key performance indicators at the corporate, department and individual levels. Staff report satisfaction that individual contributions to organizational objectives are being recognized, lifting morale and productivity.
The MNCCI has also developed a framework for managing risks such as financial shortfalls, political change and information loss. This has enabled more effective operations, as evidenced by the MNCCI’s accreditation to an ISO standard for document management.
The MNCCI’s overall benchmark score has improved from just above average to a ‘good’ performer. Further improvements are likely as it continues to implement reforms.
The improvements in internal efficiency have accompanied an enhanced ability to support Mongolian businesses. At the October World Trade Promotion Organization Conference in Paris, the MNCCI received a special award for its work to raise incomes and create jobs in rural areas through product diversification and value-addition in the seabuckthorn (a berry used in food, cosmetic and medicinal products) and sheep wool sectors.
ITC is working with other chambers of commerce to apply the approach used with the MNCCI. Regional workshops in East Africa have laid the groundwork for member-based organizations there to become more financially sustainable and offer better value to clients. ITC is sharing best practices across chambers through case studies, with a workshop planned for the World Chamber Congress in Brazil in June 2019.