The India way of doing business
(from Incite ezine 71)
A recent review of the book “The Indian Way” caught my eye. India is one of the BRIC nations, and is fulfilling its role as one of the economic powerhouses of this century. The book by four professors of management promotes the way Indian business are applying fresh practices of their own in running successful companies. So instead of adopting management practices that dominate Western businesses, Indian business leaders are applying fresh approaches in strategy, leadership, talent, and organisational culture.
The authors claim that their story holds lessons for those who do business in the U.S., and no doubt in Ireland also.
Exploding growth. Soaring investment. Incoming talent waves. India’s top companies are scoring remarkable successes on these fronts and more.
In The India Way, the Wharton School India Team claim to unveil these companies’ secrets. Drawing on interviews with leaders of India’s largest firms, including Mukesh Ambani of Reliance Industries, Narayana Murthy of Infosys Technologies, and Vineet Nayar of HCL Technologies, the authors identify what Indian managers do differently, including: 1) Looking beyond stockholders’ interests to public mission and national purpose; 2) Drawing on improvisation, adaptation, and resilience to overcome endless hurdles; 3) Identifying products and services of compelling value to customers; and 4) Investing in talent and building a stirring culture.
Business leadership
India has a way of doing business that brings together business leadership with national leadership and societal leadership. Many heads of business are deeply involved in matters from climate change to child nutrition, and they find it entirely appropriate and even necessary to make their views on such matters public.
Some of this has to do with a need for development. The heads of many Indian businesses believe that national growth is essential for their own profitable expansion. Also, India has a long-standing tradition of business largesse, with many companies committed to social betterment through philanthropic giving and investment in infrastructure near their facilities. But the melding goes well beyond private profit and public charity. Indian leaders care as much about national purpose as about financial results.
Thus the co-chairman and former chief executive of Infosys Technologies, Nandan Nilekani, has accepted a call to direct India’s mammoth effort to provide a unique digital identification number for every one of its 1.1 billion citizens, which will make possible more effective delivery of social services across the country. And thus Hindustan Unilever has launched Project Shakti, which has used the principles of microfinance to create a sales force in some of the subcontinent’s most remote regions. And big-name businesses have built community hospitals, grade schools and virtual universities across the country.
The research
This India way of doing business has fuelled an economy that even in perilous global times remains a dynamo, driven by big companies that are bent on growing at prodigious rates. India’s gross domestic product has been expanding more than twice as fast as the U.S.’s. Infosys Technologies employed 10,700 in 2002, but more than 100,000 just seven years later.
They have conducted a study of some of the country’s largest firms, of businesses that have played a leading role in India’s rapid development and have come to serve as models of business enterprise for entrepreneurs and managers throughout the nation. Their aim is to understand the qualities of the India way that have made it so vital to the nation’s growth.
They interviewed the people at the top of the pyramid, the leaders of these largest firms, because they make the critical decisions at the most important companies, including the strategic choices that have helped define India’s distinctive approach to business. They went to 150 of the largest publicly listed companies by market capitalization, and secured time with more than 100 of their executives.
Act in Indian
The essence of the India Way is best expressed by those business leaders themselves. We “think in English and act in Indian,” observed R. Gopalakrishnan, the executive director of Tata Sons, the holding company of the Tata Group. The Tata Group comprises some 98 enterprises that employ 290,000 and book annual revenue equal to 3.2% of the nation’s.
For the Indian manager,” Gopalakrishnan explained, “his intellectual tradition, his y-axis, is Anglo-American, and his action vector, his x-axis, is in the Indian ethos. Many foreigners come to India, they talk to Indian managers and they find them very articulate, very analytical, very smart, very intelligent – and then they can’t for the life of them figure out why the Indian manager can’t do what is prescribed by the analysis.”
They reveal from the two-year study of Indian business leaders that their “x-axis” is defined by four distinctive elements of managing:
1. Holistic engagement with employees. Indian business leaders see their firms as organic enterprises, where sustaining employee morale and building company culture are critical obligations and the very foundations of their success. People are viewed as assets to be developed, not costs to be reduced.
2. Improvisation and adaptability. Improvisation and adaptability are also at the heart of the India way. In a complex, often volatile environment with few resources and maddening red tape, business leaders learn to rely on their wits to circumvent the innumerable hurdles they recurrently confront. Anyone who has seen outdated equipment nursed along a generation after its expected lifetime with retrofitted spare parts and jerry-rigged solutions has witnessed this in action.
3. Creative value propositions. Given the enormous and intensely competitive domestic market and the country’s discerning customers, most of them of modest means, Indian business leaders have of necessity learned to be highly creative in developing their value propositions, delivering entirely new products and services with extreme efficiency. A case in point: Tata Motors now produces the Nano automobile at a sticker price of just $2,500.
4. Broad mission and purpose. Indian business leaders place special emphasis on personal values and on having a vision of growth and strategic thinking. In addition to serving the needs of their stockholders, like CEOs everywhere, they also stress broader purpose. They take pride in enterprise success but also in family prosperity, regional advancement and national renaissance.
Bundled together, these principles constitute a distinctly Indian way of conducting business, one very different from other countries, especially the U.S., where the blend centres more on delivering shareholder value.
Company managers in the West, they conclude, can usefully learn from India’s example. Whether this is a good moment to invest in the subcontinent they leave to those more versed in the ways (and caprices) of the financial markets. But they believe the time is right to better understand what is driving the Indian economic powerhouse, the company practices they call the India Way.
A different opinion
An alternative, less academic and leader centric perspective on the Indian way is provided by Gautam Chikermane of the Hindustan Times is his article ‘The Indian way is littered with inefficiency management & culture” see link
www.hindustantimes.com/The-Indian-way-is-littered-with-inefficiency-management-amp-culture/Article1-541438.aspx
The authors (Peter Cappelli, Harbir Singh, Jitendra Singh and Michael Useem), are professors of management at the Wharton School of the University of Pennsylvania and are the co-authors of The India Way: How India’s Top Business Leaders Are Revolutionizing Management (Harvard Business Press, 2010).
The article on the book is from Forbes.com, and was originally shared in Incite 71