Learned Helpfulness

The MCQ International Story

Like many dot-com entrepreneurs, the chief executive and co-founder of MCQ International, Scott Gazzard, had not run a business before he started his company in 1998. Gazzard had studied psychology and was very interested in information technology. In the mid 1990s, he had become excited by the idea of electronic learning while doing research for his doctorate.

The concept for his company evolved from an academic project that allowed Sydney University students to log-in from home and practise for exams by doing multiple-choice questions over the web. The students and departments at the university were enthusiastic about the system.

However, academia did little to prepare Gazzard for the new challenges of the business world. He says: “Academic research is relatively unstructured in that you can look into things that are interesting to you. In business, however, you have to be much more structured in your approach, much more disciplined about planning ahead. Things like writing down what your plans are and communicating those plans to others are critical. When you are dealing with clients and working in a team environment, you have to constantly communicate.”

Gazzard also discovered that a good product does not always produce instant sales. “We thought that customers would be lining up to buy our commercialised offering but we underestimated the work required to build a brand. The internet was young, so there was a lot of education of the market that we hadn’t anticipated.”

MCQ International now has three main product lines, all focused on automating business processes: online learning, online assessment and online human resources tools. It has customers in the financial services, government and academic sectors. Gazzard says MCQ International advocates blended learning, combining both online and face-to-face training methods. He says the web is best used for teaching factual information such as policies and procedures.

The company has had some big growth spurts despite hiccups caused by the tech wreck of 2000 and the terrorist attacks of September 11, 2001. Those events produced great uncertainty in the world economy, prompting many clients to put their IT projects on hold, often for 12 months or longer. Smaller projects helped keep the business afloat as did income from licence fees, which have been central to MCQ International’s business model.

Some of the company’s biggest headaches have been caused by growing too quickly. Gazzard says: “In 2002-03, we started to encounter management problems in keeping tabs on everything. We hadn’t put in effective procedures to guide our growth. We lacked policies, we lacked mechanisms for managing our customer information and our accounts. So we had to play catch-up. It all sounds fairly obvious now but we were a small company that had grown organically. We now have a full set of policies in place, very good project management procedures and dedicated project managers, all of which we lacked in the past. It has made a huge difference. We have more effective risk management to minimise unexpected cost or budget blowouts. We also make sure that our understanding of a project’s requirements match very closely with our client’s understanding to avoid hidden surprises.”

Gazzard stresses the importance of maintaining regular communication with clients. He advises quarterly or six-monthly reviews of contracts and service agreements – rather than reviews at the end of three-year contracts - because relationships with clients can slip. “You might find at the end of those three years that the people you were dealing with have left the organisation so it’s tougher to maintain that relationship.”

Gazzard says businesses that plan to start new training programs or other initiatives should market them to staff first. Staff members should be told that the new service is coming, how it will help them, and what it will mean for the way they work.

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