Why more and more global companies are hiring Indians as their top brass.
By Sifat ishtiaque Hossain
Bollywood. Cricket. Spices. Curry.
These are possibly the first few words that would come to anyone’s mind while talking about India’s specialty. Here is the catch, it just doesnot end there! In recent times, many executives of Indian descent have taken over major Fortune Global 500 companies as the Chief Executive Officer. Google’s new CEO, Sundar Pichai, is the latest to enjoy a meteoric rise. In just 11 years at Google, he turned Chrome into the world’s most popular Web browser, ran the company’s Android division and most recently served as product chief. Pichai’s promotion is the latest in a series of appointments in the last decade or so where Indians have been thrust into the top job at global firms. He joined Satya Nadella, the Indian-born head of Microsoft, who got the top job there last year. Not to mention, Chief Executives of Indian origins like Ajaypal Singh Banga (CEO of MasterCard), Indra Nooyi (CEO of PepsiCo), Shantanu Narayen (CEO of Adobe Systems), Sanjay Kumar Jha (CEO of Global Foundries), Sanjay Mehrotra (CEO of SanDisk Corporation), Nikesh Arora (CEO of SoftBank Corp), Rajeev Suri (CEO of Nokia), Rakesh Kapoor (CEO of Reckitt Benckiser), have or continue to run major global firms.
While India may not win many Olympic events, if medals were awarded for appointments at major global companies, it would be one of the world’s top contenders. One of the main reasons China, which is great at squeezing Olympic gold out of its citizens, doesn’t produce as many global CEOs is the basic income arbitrage. China’s best and brightest have more opportunities at home and can get paid as much as they would make almost anywhere else. No matter where movers and shakers are from, they need some financial incentives to move away from family, friends and favorite foods. Chinese director-level managers in technology companies on average already make around $130,000 a year, which is not far off the $160,000 they can make in the U.S. In India, the director-level managers only make $35,000. That’s not to suggest that India’s world beaters usually leave executive positions at home for big jobs abroad. Most of India’s corporate hotshots leave India after college and don’t come back. They get their degrees from reputed business schools abroad and then climb their way up corporate ladders outside of India.
It’s obviously more than just income arbitrage though. While the dysfunctional parts of the Indian economy do boost the brain drain, there are lots of other countries with low salaries and few opportunities that just don’t provide as many international corporate leaders as India does. English, of course, helps. India was primarily ruled by the British in 19th and first half of 20th centuries. Consequently, most of India’s elite speak English from childhood and it’s the language of choice for global companies.
As Indian CEOs operate in a negative business environment with lots of red tape at home, when they move to a global environment they find it a breeze. Maybe being raised in a democracy, where individuals are encouraged to speak their minds, also gives Indian job seekers an edge in the cut-throat world of capitalism. Apart from the famous Indian approach of being frugal on resources and capital, most Indian companies are run as family businesses where capital and resources are sparingly given to the professional CEO. Hence, Indian managers have a “bifocal approach” – they can manage both daily cash balances and long-term vision.” The big differentiator for Indian managers is their focus on RoE – Return on Equity. They have a value-orientation and a keen focus on RoE, which is obviously learnt in family-run businesses, which are niggardly in the allocation of capital. Whatever the model is, it seems to be working.
Again, Indians grow up in an atmosphere where cultural diversity – of language, faith, and caste, among other things – is a given. Global companies, which operate in a multi-cultural environment in their quest for talent, markets and resources, find Indian managers more willing to adapt and lead. Handling diversity needs high EQ – emotional quotient – and an understanding of cultural differences in various work environments. Also, Indian CEOs have to ensure delivery of business results to their owners, and hence work towards execution. They thus learn about all sides of the business. In some global companies, there is no organizational view even at the directorial level. The Indian CEO is groomed to work till the job is done. They have good talent and a good view of the whole company. One study, by the University of Southern New Hampshire, says that Indian managers are more successful because of “a paradoxical blend of genuine personal humility and intense professional will”. It is not by chance that Nadella started his first email to Microsoft employees as chief executive by saying: “This is a very humbling day for me.”
Also, emerging markets are a big target for tech companies as they see them as possible growth avenues and their future cash cows. Therefore, it is smart to have individuals at the top who understand the problems of countries like India deeply. Tech companies, like Apple, Google, Microsoft, Facebook, appreciate engineers more so than people with marketing and business administration backgrounds. Hence, more and more global firms are handing their most crucial post to Indian executives, most of whom are coders and engineers at heart with sharp business acumen.
However, Indian residents might want to reconsider how exporting these talented executives reflects the country’s failures before basking in the glory. India needs to produce a business environment that nurtures and provides incentives and opportunities to high-performing executives like Nadella or Pichai, leveling the playing field with Western multinationals. The country also needs to foster a more innovative and competitive work environment which will ignite a proclivity amongst the young business students to stay in their homeland and take the Indian corporate culture to the next level. By when the country will be able to create such atmosphere only time will tell. Till then, make no mistake, we are definitely going to see a few more Indian to join the league of Nadela and Pichai.
