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Friday, July 3, 2009

Bangalore business blast!

After 6 weeks of intensive yoga practice in Goa, on March 16th a 24 hour train ride took us to Bangalore for a few weeks of high tech business networking. It proved to be a stimulating shift from our yoga journey, reconnecting me to my professional life and the high tech business.

From Goa yoga..................................................to Bangalore business blast!

For years I had been thinking of India’s main high tech hub as a place to discover and perhaps some day even live and work in. Friends and team members had given accounts about the high energy level, the fast growing companies and the job market frenzy. I had read Friedman’s “The world is flat” (book @
http://www.thomaslfriedman.com/bookshelf/the-world-is-flat, video @ http://mitworld.mit.edu/video/519) and developed some assumptions that I needed to check first hand, mainly around the scarcity of managerial and leadership skills in young, successful, high growth businesses.

My friend Elaine from Colorado (
http://www.yarbroughgroup.com/) invited me to co-facilitate a diversity workshop at HP there and for me to do some on-site preparatory work for her. That would have been a motive for going there to network, but the workshop was cancelled. Discovering Bangalore and networking with business executives still attracted me, though without a gig I would have to build my network from scratch. With Kamala’s encouragement I decided to tackle it: go to an unknown city, in a foreign culture, set up meetings with people I had never met, to initiate a personal network and assess the market for my skills and services.

Relying on a handful of ex-colleagues and friends to introduce me to their contacts, I started reaching out over phone and email. By the time we left Goa, despite difficulties getting people’s mindshare from afar, a few had agreed to meet me over email. At that point, only one firm date had made it on my schedule for a business lunch.

To prepare myself I revamped my resume and acquired some appropriate business clothes. I had to learn again how to tuck a shirt in properly, wear a belt, socks and shoes for the first time in over a year....
My hair style did not need nor would tolerate any grooming: I had no hair to style!
 
 


Bangalore, we're ready for Business!............... Anshuman and Madhura, our guardian angels

Anshuman, now a good friend, helped us find a “serviced apartment” that impacted our first impressions of Bangalore. With a living room, dining room, kitchen, two bedrooms and bathrooms -that worked-, plus filtered water, it was a striking return to modern commodities and made our living conditions relaxing and fit for a productive and pleasant stay…


Gayatri pride residence .......................... Feeling good in business clothes again

Living in an all Indian neighborhood, with its partially paved streets, little stall shops and “Sagar” eateries where we ate out, while being just a couple of blocks away from a main shopping artery, we discovered what an interesting mix Bangalore is: a typical spread out, small-neighborhood Indian city and a cosmopolitan, global, vibrant high tech business and commercial center. We loved the tree bordered avenues and the presence of parks and lakes throughout the town. We generally found the traffic to be no worse than in any other Indian city.


 
Musician beggars and their beautiful cow in the street below us

Our 18 days in the Bangalore business world were an exciting shift from the yoga journey, and passed so quickly that before we knew it we were heading to Rajasthan, then off to Nepal. _____________________________________________________
Write-up on the business situation in Bangalore.

India in a nutshell
- India counts about 1.2 billion inhabitants, 4800 babies being born every hour.
- In 2007 it passed the $ 1 trillion GDP, became the world’s 12th largest economy.
- Depending on estimates, GDP growth was above 9% in 2007, currently around 6% and going towards 4 to 5% for 2010.
- Domestic GDP is strong, at around 86%, meaning the Indian economy is relatively self sufficient.
- Exports are lower than imports, respectively at 14% and 21% and both growing at around 20% annually. - GDP per capita is around $800 annual with extreme inequities.

Based on first hand salary information, a construction laborer in the Himalaya foothills or a restaurant waiter in Kerala both earn around $50 per month, while an entry level engineer in Bangalore earns between $6 000 and $20 000 a year depending on the specific industry and skill set, that could double with 10 years of experience. A senior executive salary would be around $200K+.

- Between 2007 and 2009 internet users grew 62% from 129,000 to 207,000.
- There were about 362 million cell phone users in India in February 2009.
- 15.4 million new cell phone subscriptions in the month of January 2009 alone.

Bangalore in a nutshell
- Bangalore’s population was below 3 million in 1981; above 6.5 million in 2001; estimated at around 8 million today.
- Registered vehicles went from 660 000, in 1991, to 2 200 000 in 2005.
- Hindustan Aeronautics Limited and National Aerospace Laboratories, established in Bangalore in 1940, strongly influenced it becoming the high tech competency center it is today.
- Altitude: 3000 ft. Bangalore’s climate is one of the most clement in India; the coldest it gets is around 60 F(15 C), the hottest is around 95 F (35C).

Executive summary of business meetings
· Timeframe: March 18th to 30th 2009
· 15 meetings: 13 Indian nationals, 2 Americans.
· CEO’s, Managing Directors, HR Directors, HR Consultants.
· Companies represented: Wipro, Synopsys India, Microsoft India, Aperian Global, Cisco India, Manipal Medical Systems, Intuit India, M2Square, Cobalt investments

Themes developed below
· Marketplace
· Job market
· Cultural traits and challenges
------ Rural to Urban
------ Soft skills
------ Matrixed is foreign
------ Global mindset
------ Indian culture in business context: strengths and limitations
------ Corporate versus local
· Leadership
· Human Resources
· Learning and Development / Consulting

The following summary is a mix of opinions expressed in my interviews, and my own personal comments.

Marketplace From high growth to the first impact of global recessionMany companies in Bangalore have experienced exponential growth and investment in the past 5 years. As an illustration, Wipro, one of the worldwide leaders in Business Process Outsourcing, grew 35%+ revenue each year from 2005 to 2007, doubling employees between 2004 and 2008 from 41 000 to 82 000 (
http://www.gartner.com/it/page.jsp?id=741012). In the past 5 years, multinationals such as Cisco, Microsoft and Synopsys grew in Bangalore from some one hundred employees to several thousand, becoming in some cases the largest corporate entity outside of the US.

This growth has drastically slowed down in the past 6 months; figures are evaluated week by week to reflect the continuing reductions in customer deals and investment budgets, repercussions of the worldwide recession.
· As a result, cost reduction initiatives are becoming common with frozen salary increase budgets and reduced variable compensation payouts.
· Measuring and reporting productivity is becoming a central theme as corporation headquarters make investment choices between competing low cost country locations, mainly India and China but Brazil and Eastern Europe are also in the mix. How to best compete internally for headquarter investments and demonstrate productivity ratios remains a concern for Research and Development entities.
· Immediate return on investment is the priority on any new programs/initiatives.

A different reality is just appearing in Bangalore, where leaders and employees will need to acknowledge a new set of rules relative to the slowdown. We can expect to observe some usual symptoms of denial, complacency and a lacking sense of urgency in addressing the issues in a timely manner, but would also anticipate seeing the energy, reactivity and adaptability of the Indian culture in action. For many managers who grew up in a thriving growth environment this will mean playing a new role and focusing tightly on performance. Prioritizing, resizing, de-layering are the name of the game. The intense focus on growth and on acquiring talent concealed so far internal issues such as lack of efficiency, performance, management capabilities, employee engagement and skills development that are now becoming visible and requiring attention.

Job Market
The IT job market in Bangalore is softening though it is still churning in certain areas. The hiring and retention situation is highly contrasted between Multinationals and Indian market leaders on one side with high retention rates, and the bulk of midsize and smaller Indian companies competing for talent on the other. However the main disparities are per industry sector and job family. On an average, engineering counts a 20% annual attrition rate while call center jobs rotate at 40% or more, with recurring issues of junior employee retention in lower qualification environments. Job hopping is however less common than a couple of years ago and employees are starting to manage their careers rather than just focus on increasing their base pay.

Cultural traits and challenges
From rural family life to the urban jungleMany young Indian graduates join a company fresh out of college, after having spent a childhood in rural India, surrounded by their extended family, and having benefited from a well structured environment in college. Once on the job, they find themselves as young adults in an unknown, urban environment they often consider as hostile, without the local support network they had at home and in college. Some companies have hired dozens of in-house counselors to assist employees with personal problems that stem from this cultural shock and impact their behavior and performance.

Soft Skills
A common theme in our meetings was the lack of social, soft and managerial skills. The Indian university system is focused on producing technical excellence -and does this with very high standards that are on par with western universities- but falls short when it comes to preparing its graduates to take on managerial responsibilities or interact with other cultures. While going through college, very few Indian students will hold a job; in fact it would be seen negatively by their peers as a lack of financial resources. When they join a corporation they have practically no professional or management experience. And because the high tech industry has been in a high growth mode, the brilliant young graduates will be promoted to manage twenty or thirty people after a couple of years in the company, based on their technical abilities. And as the growth is ongoing there is little time to focus on developing these young managers. And attrition rates increase. And as growth spurs more promotions, management levels end up with incompetent team leaders. This is a familiar pattern for many of us in HR, anywhere in the world and was one of the assumptions I was here to test. Confirmed.

Matrixed is foreign
Many western corporations and some large Indian companies have matrixed reporting structures where power of authority alone is not enough to make things happen. Influencing others to engage and work on our goals is a given; bartering for resources and mindshare is learned early-on in our business environment. But for the Indian culture, based on respect for seniority, family position, socio-economic level, caste and authority, it remains a big challenge. Learning to navigate the informal influence structures of western organizations is somewhat counter-nature and takes time and experience to learn, and is not necessarily taught in multinationals. Beyond this cultural gap, it also requires developing the soft skills discussed above: interpersonal communication, presentation skills, understanding national/ethnic/gender diversity, global etiquette, virtual team behavior, managing by influence…
Global mindsetThe executives I met were very keen on the imperative to develop global mind sets and skills in their immediate teams and across the broader organizations. With the increasing role of Indian companies in the global game –business process outsourcing (BPO) as well as software product design and development-, every manager and leader interfaces nowadays with customers and teams around the world. Those who were educated abroad or worked for multinational companies have worked across cultures and developed a global mindset. And though others may be strong performers in a local management team or customer situation they lack experience with diverse cultures, values and behaviors.

Some of India’s best known companies (Wipro, Infosys, Jet Airways, Aricent…), have integrated foreign members in their top executive teams to bring this needed diversity. Other industry leaders (Tata, TVS, ABG…) have an exclusively Indian leadership team, remaining more traditional in this sense. Smaller Indian companies are highly challenged to become global and will achieve this by attracting Indian nationals having lived abroad and wishing to return to their mother land -or by creating formal training and exposure programs for their workforce.

The lack of Global mindset and skills is certainly not an Indian exclusivity. Many organizations and professionals in California or elsewhere claim being “Global”, when they have a couple of sales offices or production entities based outside the US. I have noticed few “global” behaviors such as having an accurate awareness of one’s own culture and what differentiates it from a local one, how to thoughtfully and effectively operate across these cultural differences, etc... Though in Silicon Valley, the level of diversity in the workplace and the interaction with teams across the world is such that the environment itself develops this awareness over time.

Aspects of the Indian culture in the business environment
Strengths/Differentiators
Openness: used to cultural and religious diversity within the Indian subcontinent
Resilience: brought up in the struggling, resilient Indian society, have had to adapt to difficulties, constraints and challenges; have learned to count on themselves…
Conceptual, Creative, Open, Adaptive
Reactive, Multi-tasking
Highly technical and analytical mindset
Responsive to defined rules and processes when well directed
Willingness to learn new things
“Collective” culture: team player, naturally collaborate/cooperate, ask for help

Limiting factors
Tendency to over-think, to remain at conceptual levels,
Re-invent what has already been defined
Create short cuts to do less work, circumvent process steps if not well directed
Hide bad news until it blows up
Denial: avoid dealing with a problem, pass it on, procrastinate, hide it
“Collective” culture: lack of personal ownership or accountability for follow up, drop the ball, delegate without maintaining responsibility on delegated task
Corporate versus local cultureIn the multinationals, corporate cultures dominate how business is conducted and how/what communication takes place. A “universal business culture”, - admittedly most often North American-, appears as the 80% cultural baseline, giving employees the exposure stated above, while 20% remains local culture, more specifically in personal interactions how employees relate to each other and to their managers. American expatriates tend to congregate and generally don't mingle with locals. In the Indian companies there is a greater challenge to expose employees to occidental ways of communicating and working, which becomes increasingly critical in international customer-facing roles.
LeadershipLeadership and bench strength development are two essential areas for these fast growing organizations to sustain their success and competitiveness. Interviewees found that at least concerning senior leadership this should be the prerogative for the Board of Directors. As stated above, developing soft skills, cultural awareness, basic sound management practices and leadership skills is paramount to enable these growing companies to build an organization with sustainable performance. But senior management teams seem to have other challenges. The appearance of “collective culture”, such as appearing very connected socially by spending time together, having senior team lunch or coffee does not equate to demonstrating teamwork and seeking alignment on common goals. A newer CEO model of “peer among peers” is emerging in some highly respected Indian companies, departing from the more traditional, hierarchical, hub and spoke concept of the role, so there are signs of progressive practices that will over time pervade the organizational levels. With the Western economy meltdown, perhaps India will find alternative economic development models that we don't and can't imagine today.
Human ResourcesTop Indian universities give future HR professionals a solid training in what they call HRD (HR Development), but due to the pace of growth, the volume of graduates can not meet the demand, resulting in a tense HR job market, especially for seasoned HR managers and directors with international experience. The HR function is pretty much similar to what I’ve observed in the US, the bulk mainly reactively serving immediate business needs, and in the multinationals and larger Indian corporations attempting to move towards a more proactive, higher added-value business advisor role. While many opportunities are advertized, senior HR roles are less visible and require personal relationships and connections within specific business networks.
Learning and Development / ConsultingThe best Indian companies have a track record of focusing on T&D and management development, but in the context of fast growing, young companies and fresh engineer graduates, leaders have yet to acknowledge their needs for employee and management development and allocate the appropriate resources to address an issue that is even stronger now that the slower growth is revealing internal problems.

My purpose in Bangalore was to discover the marketplace, check my assumptions, see if there was a fit for my international profile and inquire about potential consulting possibilities. My insights proved to be right-on, and my offer of global experience and leadership development best practices was validated by most of the people I met. But the timing was off, given cost restrictions and predictable downsizing activities to come, due to the global recession. I was told that just a year earlier I would have easily created an activity there.

I was very motivated to take more time, jump in and give myself time to start a consulting activity, but our visas were expiring and we were shortly returning to Europe. As I write, I’m still working on building my consulting activity in the near future and will certainly go back to Bangalore to reconnect with this network of stimulating business men and women, and explore opportunities,... perhaps once business starts picking up there. After all, 13 months experience in India and a local network are strengths to build on.

Bangalore is a place to keep an eye on, with such wealth of competency and entrepreneurial energy. And if the downturn is now affecting the business there,count on the Indian resilience to see the place bouncing back perhaps faster than elsewhere.


To close, I would like to very warmly thank all the people who took time to make my Bangalore exploration possible, and who referred me to further contacts. Your open, welcoming attitude told me a lot about the culture of this pulsing city. I will be back.

My next blog, “A Taste of Purity”, will cover our trek around the Annapurna in Nepal just before we flew back to France. Then there will be a couple more coming; one on organizational alignment and yoga, the other on my intercultural experience in India.