Your New Management Role Model: India

Last Updated Apr 27, 2010 12:29 PM EDT

Indian companies are managed differently than their Western counterparts. That difference, argue four Wharton professors, has helped fuel double-digit growth over the last two decades for many of that country's leading businesses -- despite the recession. In their book, The India Way: How India's Top Business Leaders Are Revolutionizing Management, authors Peter Cappelli, Harbir Singh, Jitendra Singh, and Michael Useem reveal the secrets of Indian powerhouses such as Infosys Technologies, Reliance Industries, and Tata Sons. I recently spoke with Harbir Singh about the principles that guide Indian businesses, what Americans can learn from them, and why every manager could use a little jugaad. BNET: What exactly is The India Way?

Singh: It's a mix of organizational capabilities, management practices, and company culture that set Indian enterprises apart from firms in other countries. The Indian business is characterized by greater employee engagement, an ability to improvise and creatively deliver value to customers, and missions that extend beyond delivering shareholder value.

BNET: How do Indian firms connect with their employees?

Singh: People are viewed as assets to be developed, not costs to be reduced. For example, Tata has a long history of investing in employees. The training function is much more integrated into the overall strategy of the firm; the head of HR is often part of the senior management team and may be on the board of the company. Career planning and training -- helping employees find paths to advancement within the firm -- are more prevalent than they are, for example, in the U.S., where things began to change during the reengineering craze of the 1980s. In many cases, shedding employees can be the right thing to do, but in the U.S. there's been some throwing the baby out with the bathwater. Of course there are exceptions -- companies where employee engagement thrives, such as Google, Apple, and Cisco. More employee engagement means more innovation.

BNET: What's behind the Indian corporation's ability to innovate?

Singh: It's not that Indian managers are inherently more creative than other managers. But they operate in a complex, often volatile environment with much red tape. They serve a large and intensely competitive domestic market made up of value-conscious consumers who are typically of modest means. Indian business leaders are used to finding ways around obstacles, including a lack of resources. It's a mindset captured by the Hindi term jugaad, which refers to a willingness to persistently improvise creative solutions.

BNET: Can the India Way translate to business climates elsewhere?

Singh: The Indian context is unquestionably different. But there are practical steps a leader can take to borrow from the India Way. For example:

  • Empower your employees to come up with solutions and trust those solutions enough to give them a try.
  • Don't lose sight of the fact that it's easier to engage employees around a social mission than around the goal of making the shareholder rich. Home Depot reported positive effects on employee morale as a result of its sponsorship of U.S. Olympic athletes.
  • Ask yourself whether you're a role model for your employees, not just in terms of how hard you work, but also in terms of how you deal with others in the organization.
While these practices aren't novel, they are notable because they contrast so sharply with contemporary business practices in the U.S. and elsewhere.