Many of the world’s top CEOs are from India.
What is it about India that creates so many business leaders?
Listen in as Dez Morgan explains why it is that CEOs are India’s greatest export.
Hello everyone and welcome to part 2 of the D2B India Special Report.
A recent story in Time magazine asked the question, what is India’s greatest export? Well what do you think? When I read that question I thought of maybe rice or I know India has a couple of oil rich regions so maybe oil. Then I thought of the computer software and telecom industries. This may surprise you but India’s greatest export is CEOs of multinational companies.
So let’s do it, let’s get D2B Down to Business with Indian CEOs: How did they get to the top and why are they so successful when they get there?
In a recent study of S&P 500 companies, there were more Indian CEOs than any other nationality except Americans. Let me give you a few examples. Both Harvard University and the INSEAD Business School have Indian Deans. The third in command at Google; Nikesh Arora is Indian as is Vikram Pandit, the current CEO of Citigroup. The richest man in Britain Lakshmi Mittal is the Indian CEO of the steel giant ArcelorMittal, which admittedly started out as an Indian company but is now truly multinational. These are just a few examples from a very long list but I think you get the idea.
The first question I asked was How did they get to the top? The answer to that starts with the Indian education system. Education is highly valued in Indian society and is seen as a key to social mobility perhaps even more seriously than it is in North America or Europe. At the top of the system are the state funded Institutes of Technology and Management. How difficult is it to get into one of these institutions? Well there are typically 300,000 applicants for just 2000 places. It’s not unusual for children to start studying at the age of 7 for an exam they will take 10 years later and even after all that study a place is not guaranteed. So are these Institutes all shiny glass and high tech equipment? Far from it, typically they are housed in shabby buildings with tiny dorm rooms that are often shared. However what they do have is some of the greatest minds in India and an unparalleled global network of graduates.
So that answers the first part of the ‘How did they get there?’ question; they got a solid prestigious education but what happened next?
A study by the Hay Group recruitment agency found that once Indian managers started to work their way up the corporate ladders they were far more likely to seek employment with multinationals within India or to look at opportunities abroad. In contrast in China many senior managers are political appointees so it is seen as more prestigious to lead a Chinese company than a foreign one. This desire to look outwards coupled with a global network of alumni answers the second part of the ‘How did they get there?’ question.
Now we can look at the question; why are they so successful when they get there? Firstly we need to look at India and Indian business. India is a multicultural and multilingual society where religious and minority groups exist side by side. The experience of being raised in such a society is invaluable to a modern CEO dealing with different cultures and markets.
As Asia appears to be the growth engine of the world economy going forward, a CEO with experience doing business in Asia is seen as a distinct advantage. The fact that this business is more often than not conducted in English favours the Indian CEO over most other Asian countries.
In an earlier show Skip and I talked about the revolution that took place in 1991 that made it easier for businesses to operate in the Indian market. That is not to say that it has been made easy though, typically to get something done in China you just need to talk to the right bureaucrat but in India you might need to talk to a myriad of different agencies or government departments. As the old Asian business adage goes ‘The Chinese roll out the red carpet; the Indians roll out the red tape’. If a manager can negotiate the bureaucracy of business in India then this knowledge will be invaluable to a CEO dealing in the rest of Asia.
A further advantage that Indian managers have is linked to the disadvantages in infrastructure that India suffers. Typically a business would need to have a backup and then a backup of the backup of any data to survive India’s still frequent power failures. Taking this example it is common for an Indian manager to need to have a plan B and plan C in place to guard against possible failures. In an ever changing business world the ability to be flexible is invaluable.
This is not an exhaustive list of course and every CEO, be he or she Indian or not, brings a personal wealth of knowledge and experiences to the table. This may however go some of the way to explaining the dominance of Indians at the top of some of the world’s major companies.
Now it is time for me to get D2V Down to Vocabulary with India’s greatest export; the multinational CEO.
To begin I have the adjective shabby which means when something is looking old and not well looked after. In the story I talked about how the buildings of the Indian Technology and Management Institutes are rather shabby or in poor condition especially considering their high status in society. If you wore the same suit to work everyday your boss might have a word with you as a shabby worker doesn’t present a good corporate image.
Next is a further adjective prestigious, which is also often seen in its noun form prestige and means when something is held in a high regard by society. In the story I talked about the prestigious, or well regarded education, that Indian CEOs had attended. In some companies to have a parking space at the office is seen as prestigious if only the upper management are entitled to one.
We will move on to our next word which is the noun appointee which is directly linked to the verb to appoint. An appointee is the person chosen or appointed to a position in a company or in business. In the story I mention that many of the Chinese upper managers were appointees chosen by the government rather than having risen on their merits. A further example is many people are wondering who will be the appointee chosen to follow Warren Buffet at Berkshire Hathaway when Warren either retires or dies.
Now we have another adjective myriad which means an uncountably large amount of something. In the story I talk about the myriad or huge amount of government regulations that need to be followed to do business in India. Another example would be the myriad of junior gold and silver mining companies all hoping to find a huge gold deposit and hit the big time. Unfortunately not many of them do so, so investors should beware.
That ends our vocabulary for today.
All that leaves me to say is thanks for listening as always and please visit the website at www.downtobusinessenglish.com and download the audioscript. If you have any ideas for future shows please drop us a line at firstname.lastname@example.org or leave us a note on the Down to Business English Facebook page.
As always thanks for listening and see you again soon. Bye.