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The Indian MNC. Really?

Fifteen years ago, it was a proud moment for corporate India when the first Indian advertising hoarding went up in the middle of Paris. Titan watches was on offer literally at the centre of the fashion capital of the world. That took courage of a different order. Had Indian design arrived in Europe?

The bourses cheered when Tata Tea snatched away Tetley in a fiercely fought acquisition bid against no less an adversary than Nestle AG in 2000. Could we grow inorganically in the West? Jet Airways was the first Indian airline since privatization to go international in 2006. Could our aviation business regain Air India’s original glory from the 60s and early 70s?

Since these watershed events, much water has passed under the proverbial bridge. Corporate India no longer believes that it is confined to market leadership in India. However, most of our multinational capers from Amtek to Zain Telecom have struggled to make any headway.  

But is India alone? Toyota was the first Asian brand to break into the top ten of Businessweek’s most valuable brand table. But Toyota and other Japanese automakers struggled in the US market throughout the 70s and early 80s. 

Did anyone make it? To really understand the challenges of succeeding in mature global markets, it might be worth looking at the Indian companies who made it. 

What did a Tata Motors get so right with a dead duck like JLR? First, it was considered a trusted acquirer. Second, it didn’t take an Indian view on the future. Or an English view for that matter. It just decided to go out and create a new product for the most attractive automobile market in the world that is China. The Evoque single-handedly turned the company around. 

This might be difficult to swallow, but long before we could even pronounce ‘cross-border acquisitions’, Air India was considered to be the gold standard for punctuality and cabin service across the world. One popular story has it that Geneva airport set its clocks by the arrival of an Air India flight!
Are there some fundamentals that we are missing here? From available experience and material, there seem to be three broad themes that will make or break our globalization efforts: they can be summed up as engagement, standards and compliance. Let’s consider each of these.

Engagement: I have seen any number of articles on how we need to build truly global brands to create an MNC. Certainly necessary but not sufficient. One chairman we worked with on an $800 million cross-border acquisition insisted that only an Indian CEO would be able to understand what he wanted out of it. To be a global company, we need to first develop a truly multinational mindset.

Standards: Since the advent of total quality management in the early 90s in India, the notion of having a quality standard became de rigour. But the true spirit of what Demming and Baldridge taught us is yet to take root. Decades before ISO was known, JRD Tata used to personally check the quality of the meals served on board an Air India flight. His letters to the catering department, so well documented in Russi Lala’s tomes, are now legend. How many Indian CEOs are that particular even in their domestic market?

Compliance: This is one area in which jugaad does not and should not work. Ask Ranbaxy or  Rajat Gupta. Respecting each of your operating environments in letter and spirit is fundamental to being respected in that market. Being seen as a good corporate citizen is only a by-product. 
I don’t doubt we have what it takes to build products and services for the world. But it’s time to think about world-class organisations as well.

The author, Ramesh Jude Thomas can be reached at ramesh@equitor.com

3 comments:

paritoshzero said...

While you have chosen to deal with 'Compliance' at the tail end of this discourse, I suspect it is a case of saving the best for last. In every area of our lives, we are conditioned, even encouraged, to take the shortcut, no matter how illegal it might be. We carry that conditioning into the workplace and are almost offended if someone calls us out for being boorish, or worse. I am a compulsive stopper-for-the-red-traffic-light, no matter what hour of day or night. This morning, I stopped at a red signal on Mumbai's Gokhale Road at about 7:10 a.m. First, the bloke honked incessantly trying to get me to move. When it became clear that I wouldn't budge until the signal turned, he reversed, overtook me, berating me for my stupidity as he ran the light.
I regret to say that this is nearly genetic for most of us. Even people who have led well-behaved, disciplined lives abroad for many years, come back and revert to type without missing a step.
Short version (call me a pessimist): The Indian MNC will remain as commonplace and as real as a sighting of the Yeti for at least another generation.

Ashish Bahl said...

Hey Ramesh, Very nicely done. I think we have the world's best talent here but really bad work ethic and even worse attitude to boot. And when we begin dominating the planet we are almost wary and apologetic about it. But having said that India is like 35 countries put together and the companies that do well here are probably the shining lights on this planet and if they do stop the temptation to commodotise themselves and focus on brands and values they would do themselves and India a favour. After the Tatas sulked into the horizon there is really no massive Indian force is there. The real brains are there they just have to drop their masks and embrace their true selves

Once again you write very well...
best. Ashish Bahl

EQUiTOR said...

Dear Ashish

I completely agree with your comments. And thank you for your generous praise. Keeps me encouraged.

Check out " Worldwide is not World-Class " too. Let me know what you think

Ramesh