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08/01/2011

Diversity and Chaos

INDIAN TOP MANAGERS. Indians conquer the executive floors – not only at Deutsche Bank. What drives them; where do they get their competence from?

The new owner didn't mince words. Ratan Tata, head of the diversified industrial Indian Tata Group whose auto division also includes, since 2008, the British luxury brands Jaguar and Land Rover, made it clear what he thinks about the work ethics of his employees in Great Britain: "At three thirty on a Friday afternoon, you won't find anybody at the office", he criticized in an interview with the London "Times". In China, Indonesia, Singapore or Thailand, Tata went on to complain, no engineer would dare leave so early for the weekend and thus accept delays in production. That attack was very much in keeping with the tycoon's style: clear edge, gruffly worded. The otherwise perfect gentleman at the top of India's largest enterprise freely speaks his mind even if he thus rubs people the wrong way. That's a characteristic he also shares with many of his compatriots who made it all the way to the top in major international corporations. As opposed to their colleagues from China or Japan, Indian top managers do not shy away from conflicts or confrontations. "India is a nation with many religions, a long history and ancient culture, as well as a caste system which still has its effects today. At the same time, the country is the largest democracy on earth which, in many areas, is still characterized by the British colonial rule", says Gerald Boess, partner at the Düsseldorf-based consultancy Kerkhoff Consulting and responsible for international investments. "Indian top managers have learnt to handle the chaos resulting from such diversity." The Indian subcontinent's top people frequently coming from wealthy families are self-confident, often charismatic, well educated.

But there are still many other reasons for the Indian business elite's inexorable ascent to the executive floors worldwide. Money is one of the reasons. With the German fashion group Escada, for instance, an Indian had been the rescuer in 2009 – Megha Mittal, daughter-in-law of the steel baron Lakshmi Mittal. The new owner likes to show herself in Escada robes but keeps out of the operative business which she leaves up to her German CEO Bruno Sälzer. Her strategy is working: With Mittal's millions and Sälzer's concept to bank more on everyday fashion, Escada is picking up momentum again. Not only the offspring of Indian family business owners like Tata or Mittal are internationally successful. Social climbers from the middle social strata also make their way to the top level more and more frequently. One of them is Anshu Jain, the designated deputy CEO of Deutsche Bank. His father had been a civil servant in the North Indian Jaipur. His cousin Ajit Jain is also on the point of making it all the way to the top: He is head of the insurance division of Berkshire Hathaway, the investment company of U.S. billionaire Warren Buffet. He had been the one to bring Jain on as his successor.

Indra Nooyi is already there. The CEO of the U.S. beverage giant PepsiCo worked her way up the career ladder – after positions with Boston Consulting and with the mobile phone manufacturer Motorola – to the executive floor of the soda pop empire. But she remains well grounded: "I'm first a mother and only then a CEO", says Nooyi who is married and has two daughters. Nooyi and the Jain brothers aren't the only Indians who have gone far in the globalized world economy: Deven Sharma is head of the international rating agency Standard & Poor‘s; Narayana Murthy as chairman heads the technology group Infosys; Rajeev Suri is CEO of Nokia Siemens Network.

BRITISH HERITAGE

What all of them have in common: They feel at home in international circles. Their good English language skills and their European socialization are legacies of the British colonial rule: "The educational system with its British influence and the English language are a real career advantage in international competition", says Kerkhoff partner Boess. In addition: "The Indian society is very people-oriented." Its managers spend a lot of time establishing personal networks, and successfully so. All of which makes them flexible and more adaptable than other Asian people: "In discussions, Indians are on the same wavelength as their western partners", says Joachim Betz, India expert at the GIGA Institut für Asien-Studien [Institute for Asia Studies] in Hamburg. Unlike in consensus-oriented societies of China or Japan, conflicts would not be excluded from the start in India. "Indians are generally more open than Chinese; but even in India, it's rare to hear an unequivocal 'no'", says consultant Boess.

If necessary, however, the manager caste of the Indian subcontinent can also be tough. Proof is not only Tata's dressing down regarding British work ethics. Investment banker Jain can also be disagreeable if he is not satisfied with the figures of his London team. Just how tenacious Indian managers may be was recently demonstrated by Amit Mehta of Tata Capital at an international investors convention in Düsseldorf. He wanted to know from funds managers who would pay the bill for the debts incurred by investment companies in the boom years 2005/06 for financing takeovers. He could not even be discouraged by silence or evasive answers. Mehta asked his question again and again as soon as another group of financial heavyweights took their seat on the dais.

OVERBOARDING BUREAUCRACY

Indian managers learn in their homeland not to be detracted from their goals even by adverse circumstances. For example, by an overboarding bureaucracy: "In India, everything takes three times as long as in Europe", says Boess. That also puts its mark on the economic environment and the managers operating in it: "Indian executives have learned to stand their ground and prevail over numerous competitors in a confusing economic system", says Tobias Engelmeier, founder of the German-Indian consultancy Bridge to India in New Delhi and Munich. A flourishing private sector is actually developing in India as well – with career opportunities and attractive salaries for smart people. But apart from that, the business scene is still marked by hierarchically structured state-owned entities. And there, it's not competence that counts for a career but rather seniority, caste mentality and nepotism. According to insiders, even higher-ranking employees are forced, because of their bad pay, to increase their salary with dubious sidelines. In this environment, survival is possible only for those with a lot of talent for improvisation. Indian managers are world champions in this respect.

But with all that talent for improvisation – at the end of the day, Indians will score because of their expertise and competence. "Indian managers are highly educated and have top mathematical skills in particular", says Carl-Peter Forster, CEO of Tata Motors. The former head of Opel should know – his boss is Ratan Tata himself.

peter steinkirchner