Leading the Enterprise

Improvisation and Adaptability

What Western Business Leaders Learn
from the Indian Way

If people management constitutes a defining quality of the India

Way, so too does a distinctive style of executive leadership. The
unique approach derives from the India Way’s emphasis on broad
mission and purpose, and it builds on the stress on improvisation
and adaptability. Business leaders think broadly and act
pragmatically, setting grand agendas and then testing through trial
and error what works and what does not. While that approach has
served Indian business leaders well, the global business
community has remained remarkably unaware of its impact and
unfamiliar with its most noted practitioners.

The overwhelming influence of U.S. business leadership and

precepts could be seen in the number of foreign students seeking to
enter American MBA programs. From a steady trickle in previous
years, foreign admissions had grown to a torrent in the late 2000s,
with Indian students leading the way. Just eleven Indian students
finished the Wharton MBA program in 1990; by 2008, that number
had grown tenfold, well ahead of China or any other nation (see
figure 4-1).5
The number of Graduate Management Admission Tests taken
during the 2000s, a necessary step for entry to most American MBA
programs, showed the same pitched trend. GMAT test taking rose
during the decade by 74 percent in Asia, by 161 percent in China,
and by 341 percent in India (see figure 4-2). Not all of the test takers
were heading for American business schools, but they were submit-
ting 70 percent of their test scores to U.S. programs.
Given these trends, it comes as no surprise that many principles of
business leadership are virtually identical in both the United States
and India, and indeed are valued in virtually all countries.7
Managers worldwide are looking to absorb best practices from
wherever they have been developed, and inevitably, the U.S.
experience has served as a major source of ideas. But while Western
management principles are well known, Indian executives report
they are not necessarily emulated. Rather, over the past two
decades, Indian business executives have evolved their own
leadership style and developed ideas that reflect a unique cultural
heritage and history.

Improvisation and Adaptability

Indian business leaders, we found, had no great desire to reinvent
the wheel when it came to strategic thinking. For the most part,
they would have been content to follow well-established Western
practices, but the on-the-ground realities of establishing and
nurturing companies in a dynamically changing and unique
business climate left them little choice but to write their own how-to
manuals. Rather than being imposed from above, their course
involved making numerous operational bets, watching what
worked, and then codifying the tangible successes into a more
systematic frame- work: the trial-and-error path from good to great.
In traveling this frequently tortuous and oft-changing path, they
found that flexibility and resilience proved essential. In setting
direction, Indian executives have understandably developed a more
inductive and customer-tested approach. Given the unknowns
about what customers really want to purchase and given the
convulsive growth in many Indian markets—the country had
fewer than 11 million mobile-phone subscribers at the end of 2002
and some 347 million by the end of 2008—executives viewed their
decision-making process as a matter of recurrently testing the
waters.11 Through trial, error, and trial again, they built their
product and service lines from the bottom up, focused on
emerging customer demands and ever sensitive to the crosswinds
moving customer preferences in one direction or another.

Trial and Error

In setting direction, Indian executives have understandably
developed a more inductive and customer-tested approach. Given
the unknowns about what customers really want to purchase and
given the convulsive growth in many Indian markets—the
country had fewer than 11 million mobile-phone subscribers at the
end of 2002 and some 347 million by the end of 2008—executives
viewed their decision-making process as a matter of recurrently
testing the waters.11 Through trial, error, and trial again, they
built their product and service lines from the bottom up, focused
on emerging customer demands and ever sensitive to the
crosswinds moving customer preferences in one direction or
another.
Flexibility and Resilience
When asked how they most differed from Western business
leaders, a number of Indian executives reported being more
adaptable, more flexible, and more resilient—characteristics
partially explained by the pre reform Indian business
environment.
Vivek Nair, vice-chairman and managing director of Hotel Leela
Venture Ltd., was reminded of the importance of personal
resilience both during the aftermath of 9/11 and its devastating
impact on the travel and hotel industry, and during the major
rebound that followed several years later. The months after 9/11
proved extremely stressful for the hospitality industry, even in
India, with suddenly empty hotel rooms necessitating drastic wage
reductions and cost cutting. Not long after, though, business travel
to India re- bounded, with annual increases of 6 to 7 percent,
and foreign tourism shot up by some 25 percent. A vital capacity in
weathering the storm, in Nair’s view, was his ability to flexibly
respond to such huge swings in demand. During the downswing,
it had been essential, he said, to “inspire confidence” among the
hotel’s employees that “it was not the end of the world.” He
worked hard to reassure them, meeting with many individually
and in groups. In time, the employees became more ready than
would otherwise have been the case to get back on the hotel’s
“high-growth path”—
Jugaad and Adaptation
Vijay Mahajan, chief executive of BASIX Group, a microfinance
organization, argued for many in offering his appraisal of the
power of jugaad, an ability “to manage somehow, in spite of lack
of resources.” It constitutes a cornerstone of Indian enterprise, in
his view, and the “spirit of jugaad has enabled the Indian
businessman to survive and get by in an economy which was until
the late 1990s oppressed by controls and stymied by a lack of
widespread purchasing power. Adjust, of course, is the English
word, but spoken in various local accents. It is used in a wide
range of situations, usually with a plaintive smile. One can use it in
a crowded bus, where three people are already seated on a seat for
two, requesting them to ‘adjust,’ to accommodate a fourth person!
Or it is used by businessmen when they meet government officials,
seeking to ‘adjust’ various regulations, obviously for a
consideration, to speed up the myriad permissions still required to
do anything in India.” Mahajan’s ideas in many ways reflected the
entrepreneurship that existed across business enterprises of all
sizes—the ability to navigate a complex environment, find
innovative ways to do business, and adapt to unfavorable business
conditions.

Broad Mission and Purpose

Many Indian executives placed special stress on articulating a for-
ward-looking vision while instilling shared values to anchor their
companies. Many further emphasized the importance of aligning
their vision with long-term company values, while still energizing
and exciting the company’s current employees. Here the difference
with American executives appeared to us to be more a matter of
content than kind. Both offer long-term pictures of the path ahead,
but rarely did the frequent U.S. mantra of double-digit growth in
earnings per share appear in our interviews. For Indian business
leaders, the long-term pictures were more a matter of reaching mil-
lions of customers with new kinds of products, or helping to lift
vast numbers from poverty, or giving people of limited means what
had only been available to the affluent, whether air travel, mobile
communication, or auto transport. While such agendas may create
equivocal or even adverse reaction among Western investors, In-
dian business leaders used them to help create unequivocal and af-
firmative allegiance among company employees.

Vision and Values

Subodh Bhargava, chairman of Videsh Sanchar Nigam Ltd. (VSNL,
renamed Tata Communications in 2007), told us that the
maintenance of “shared values and shared vision” was critical to
his own leadership. The company has made many course correc-
tions, even strategic changes, over the past twenty-five years, he
said, but the values and vision always served as the “first anchor.”
.” Bhar- gava emphasized the importance of his line managers
“walking the talk”—living by those values and vision. Among the
specific values held constant by him over the past quarter century
have been per- sonal integrity and ensuring that company decisions
are apolitical, fair, and “secular.” He stressed “extensive
communication and ab- solute transparency” within the company
as a way of ensuring that those values are widely embraced by his
managers.
Similarly, Kiran Mazumdar-Shaw, executive chairman and man-
aging director of Biocon Ltd., emphasized the importance of com-
municating clearly and truthfully to help shape organizational
values: “If you are honest and up-front,” she said, “people trust you
and never lose that trust. I think people need to trust you to be in-
spired by you.” B. Muthuraman, managing director of Tata Steel
Ltd., emphasized “being a visionary” as a vital leadership quality.
“By being visionary,” he explained, “I mean somebody who is able
to make people envision their future” and then “energize, enthuse,
and empower them” to strive toward that goal.

Expansive Thinking
Expansive thinking was placed by many of the executives at the
top of their personal list. Far- sighted judgment springs from many
sources: experience, intuitive judgment, as well as detailed analysis
of the most promising oppor- tunities ahead.
Azim Premji, executive chairman of Wipro Ltd., de- scribed broad
thinking as combining “intuitive judgment and professional
evaluation” with an “ability to see around corners.”
For Manvinder Singh Banga, former chairman and CEO of
Hindustan Unilever “The most important role for a leader today,”
he said, is being able “to make sense of all the different trends that
are there in the market, so whether it is consumer trends, political
trends, eco- nomic trends, technology trends—add them up and try
to work out a searchlight that illuminates the path to sustainable
profitable growth.”
Rajesh Hukku of i-Flex Solutions, a provider of information
technology services to the banking indus- try, defined farsighted
judgment as “not just to think differently to show some difference,
but think differently in terms of how you can change the lives of
your customers.”

Communicating Vision and Values

As important as it is to have a guiding vision and values, broadly
communicating vision and values was seen as even more critical.
Consider the unique challenges faced by Subir Raha, former
chairman and managing director of Oil and Natural Gas Corpora-
tion (ONGC), when he joined the company in 2001. Publicly traded
but still majority owned by the Indian government, ONGC was
responsible for more than three-quarters of the country’s oil and
gas production. Though demand was up, ONGC was not. “The
com- pany was stagnating in every aspect of performance,
operational [and] financial,” Raha observed. The firm’s results were
negative, employees were demoralized, and its public image was
poor.
To remedy the situation, Raha set forward a new long-term vision
for the company, with a set of accompanying benchmarks for as far
out as 2020. “This created a perception,” he recalled, “among em-
ployees and external stakeholders that we intended to be around in
the long haul and that we were not going to close out the company
in three years or five years.” By going public with the goals on a
twenty-year time frame, he said, “people had their confidence re-
stored!”
Transformational Leadership
Transformational leadership—or as it is sometimes popularly
known, charismatic leadership—is a very different process through
which the leader in- fluences the interests and needs of
subordinates, inspiring them to care about the goals of the
organization: you should identify with the success of the company
because its mission is important, and you should work hard
because you care about that mission.
Leadership style is in part defined by the behavior of bosses toward
their subordinates and the efforts made to motivate and influence
those who report to the top.
Improvisation and adaptability, mission and purpose—together the
foundation of a more transformational style—were repeatedly
stressed in our interviews with the Indian business leaders. For
illustra- tion, we turn to India’s largest nonstate-owned financial
institu- tion, ICICI Bank, and the role of its long-serving
transformational chief executive, Kundapur Vaman Kamath.