JANUARY 19, 2003
 Letter From The Editor-In Chief
 Overview
 Features
 Trends
 Sectoral Snapshots
 The CEO Listing
 Code-Jock Factory
 The Lever Legacy
 Letter From The Editor
 Columns
 Brain Distillation
 20 For The World

Two Slab
Income Tax

The Kelkar panel, constituted to reform India's direct taxes, has reopened the tax debate-and at the individual level as well. Should we simplify the thicket of codifications that pass as tax laws? And why should tax calculations be so complicated as to necessitate tax lawyers? Should we move to a two-slab system? A report.


Dying Differentiation
This festive season has seen discount upon discount. Prices that seemed too low to go any lower have fallen further. Brands that prided themselves in price consistency (among the consistent values that constitute a brand) have abandoned their resistance. Whatever happened to good old brand differentiation?

More Net Specials
Business Today,  January 5, 2003
 
 
The Global Indian Executive
Attribute it to cultural variables, a fallout of India's colonial past, a function of our burgeoning population, or pure dumb luck, but Indians are increasingly becoming exec-fodder material for global corporations.

There's Asok the intern, obviously a corruption of Ashok, and hence an Indian in comic strip Dilbert.

There's McKinsey CEO Rajat Gupta, the first non-white, non-American to hold down that position in a firm renowned for its East coast hauteur.

There's Anup Gupta, Bill Gates' Man Friday on matters technological.

And there is the newest of them all, Arun Sarin, who has just been named Chris Gent's successor to the CEO's post at Vodafone, the world's largest mobile phone company.

The accelerating trend of Indians becoming chief executives or holding down senior positions in global corporations shouldn't surprise anyone.

Vodafone CEO-designate Arun Sarin is the newest Global Indian Chief Executive

Beginning the 1960s, the best and brightest from India's finest engineering schools-notably the Indian Institutes of Technology-have headed for the United States to study, work, and often enough, stay back, sometimes entire batches of them. "I was part of the class of 1968 at IIT Kanpur," recollects Saurabh Srivastava, Executive Chairman, Xansa Systems and President of the New Delhi chapter of The Indus Entrepreneurs, tie, a technology mentoring network founded by some Silicon Valley Indians. "Out of the total class strength of 200, 150 went abroad." McKinsey's and Microsoft's Guptas are from IIT Delhi. Arun Sarin, from IIT Kharagpur; Rono Dutta, the ex-President of United Airlines, from IIT Kanpur. It takes between 15 years-people who achieve this are very very good, or very very lucky, or both-and 25 years for an entry level manager to make CEO. The first wave of Indian techies who went to the United States to study got into research or academia, or came back after a few years. It was only in the 1970s and the 1980s that Indians entered the global corporate mainstream. Expectedly, it was in the second half of the 1990s that a clutch of Indian execs was named CEOs of global corporations. "As IIT graduates progressed," explains IIT-Kanpur, HLL, PepsiCo India, and Reebok India alum and now Reebok International's brand head Muktesh Pant, "there was a beneficial rub-off on all Indians." "Today, as a single ethnic group, I think Indians are the most respected professional managers."

Post 1991, when India took its first tentative steps towards an open market, and, to some extent, even before that, multinational companies operating in India had realised that there was a motherlode of executive talent waiting to be mined in India. Today, PepsiCo's global system has close to 15 managers who have moved from its Indian subsidiary; Unilever's, over 60 managers who have moved from Hindustan Lever Limited; and GE's, over 100 managers who started off with one of the several GE subsidiaries that operate in the country. There's Reebok's Pant. And Reckitt Benckiser's operations in the UK and Ireland are headed by an Indian, Rakesh Kapoor, who joined the Indian operations as a Regional Manager (North) in 1987. Every Indian who enters the global network of his or her company and performs well increases the chances of those coming later; "I was the first Indian manager in our bank," says Aman Mehta, CEO, HSBC Corporation. Now, there are around 75 Indian executives in HSBC's global operations.

Technical expertise, command over the English language, and a hardworking nature make Indians successful globally

At Home Abroad

Some credit for the globalisation of the Indian exec should go to the culture of meritocracy (recent, still) in most global corporations where the best person, irrespective of colour, caste, religious affiliations, or social networks, gets the job. But the Indian executive comes armed with several traits that guarantee acceptance and success in a larger, global context. "The cultural outlook of India bestows Indians with a liberal outlook of life," says L.M. Singhvi, who served as India's High Commissioner to the UK between 1991 and 1997. "They are more at home at other countries than other immigrants." A study of ethnic minorities in Silicon Valley shows that Indians are far ahead of Chinese and Taiwanese in terms of managerial and executive positions occupied: 67.5 per cent of the Indians surveyed were in such positions as compared to 55 per cent of the Taiwanese and 22.9 per cent of the Chinese surveyed. "Despite their relatively short stay in the United States this indicates that Indians may have advanced relatively rapidly up the corporate ladder," says the study's author Rafiq Dossani, a senior research scholar at Stanford's Asia/Pacific Research Centre. "Though both Indians and Taiwanese work primarily in managerial positions, Indians appeared to have risen higher; this may reflect language difficulties for the Taiwanese, or their relative lack of MBA degrees." Umang Gupta, the Chairman and CEO of Keynote Systems, a Silicon Valley-based internet performance management systems hotshop agrees with that analysis. "Our technical expertise, command over the English language, hardworking nature, and the fact that we were difficult to discourage made a big difference." Some credit for this should surely go to the IITs and the Joint Entrance Examination (JEE) they conduct that ensures that, on an average, one in every 52 applicants gets in.

There are other factors that make Indians ideal global exec material: the ability to learn and adapt; the capacity to deal with uncertainty; and the facility to work in teams. The Chinese, for instance, make poor team-members. Nurtured in a command and control culture they'd rather take orders (or give them).

Founding a company was seen as the only way for Indian techies to break through the glass ceiling

The Techpreneurs

It is safe to describe a people as having arrived when a significant number make the difficult shift from executive to entrepreneur in an alien culture. There have always been the UK Indians, traders, essentially, whose sons and daughters went on to build professional careers for themselves. There have also been the rare trading conglomerates such as the one run by the Hinduja brothers. But Indians were not really considered entrepreneur-material until the emergence of a large (and still growing) population of technology entrepreneurs in the United States.

The techies did it because they saw founding a company as the only way to break through the glass ceiling. As Kanwal Rekhi, Chairman, The Indus Entrepreneurs, a serial entrepreneur himself and now CEO of Ensim, a California-based web hosting automation software company puts it, "Indians were seen only as good techies and it was very clear that they would not be promoted to top management." "I would not call it racism; it is just that there was no precedent."

People like Rekhi and Vinod Khosla, one of the co-founders of Sun Microsystems and now a partner at venture capital firm Kleiner Perkins Caufield & Byers-some 40 per cent of its portfolio is made up by Indian-led or founded businesses-were the pioneers. Those who came later benefited from their experience, and their networks.

Indians are not known for their network-mindedness, but the Silicon Valley branch seems to have transcended this genetic shortcoming. As University of California researcher Anna-Lee Saxenian wrote in a study titled Silicon Valley's New Immigrant Entrepreneurs, "These networks are not simply local. Silicon Valley's new immigrant entrepreneurs are building far-reaching professional and business ties to regions in Asia. They are uniquely positioned because their language skills and technical and cultural know-how allow them to function effectively in the business culture of their home countries as well as in Silicon Valley.... Silicon Valley's Indian-born engineers have played a more arm's-length role, linking technology businesses in Silicon Valley with India's highly skilled software programming and design talent. These long-distance social networks enhance economic opportunities for California and for emerging regions in Asia."

The great tech meltdown may have spoiled the Indian-entrepreneur-in-the-Valley dream some, and several of the names that made the headlines as high profile Indian CEOs of global corporations-Rana Talwar at Standard Chartered, Rakesh Gangwal at US Airways, Shailesh Mehta at Providian Financial, and Jim Wadia at Arthur Andersen-may no longer be around, but the great Indian dream lives on. It hasn't been a fairy-tale ending for most: as London Business School academic and renowned management guru Sumantra Ghoshal puts it, "the record of those who made it to the CEO's post isn't very good." And several Indians have achieved global entrepreneurial success out of India, primarily in the area of technology. Still, there's nothing like a Indian CEO of a global corporation like PepsiCo-Chief Financial Officer Indra Nooyi may have a shot at that post-or McKinsey when it comes to good PR.

 

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