By Prabhat Sinha, Founder CEO
Business entry in any global market is a challenge, and India would not be any different.
Seeing the business landscape in varying world cultures, particularly those in the advanced world it would be naive as an Indian to wonder how a company from NY, London or Paris would connect with their Indian counterparts.
As a young executive of 22 I was struck by this facet during a meeting of my seniors (all Indians) and another overseas team from Toronto sometime in 1983, for our client , a global shoe brand of the mid-nineties. In the meeting room of
Ernst & Young, my employers then, I wondered what an engaging debate was about when both the Indian and the team from Toronto were making views alike. I was meant to be in the meeting as a trainee, yet I took the courage to intervene; a few glaring eyes from my seniors left no choice for me but to go all the way with my thoughts successfully.
As compulsion is the greatest motivator, the fear in me died and I followed almost as a Chairman on Board until someone said "Exactly", and just when I heard the Indian voice "Absolutely", I knew I had won a rare challenge whether or not I would be follow up with a Sacramental penance.
Working on the West and East barriers
The early experience captivated my interest further and I considered that a unique worth a pursuit. Since that was at an early stage of my career, it gave me a long time to build upon the knowledge, and the proverb "you get what you wish" worked magically for me: through my careers with
Ernst & Young, , , I got a range of opportunities to convert the talent into a leadership art. The real reward was the first hand learning of rare insights into the experiences of executives from
, , , , , , , , years before they turned their Indian operations into a full time local office.
As I grew knowledgeable in that role; particularly as a top management executive in trans-national business, I began to know better the Londoner’s blotch from the brill, or the American Neat-o from Now you're on the Trolley; Go for Broke the Aussie way, or the French l'emporter sur and as the Germans exclaim Der Rubel rollt.
How an overseas businessman would find his way with the regulatory framework in India, what would be the 'market insight' to explore, how would one pick the best out of the brilliant, what words to pick and what expressions to capture, where lies the gap between the data and the depth, how to drive a negotiation out of conversation, what would the Indian consumer pick out of the box, how to make the learning curve less geometric, and further, how to sail the cross-cultural challenges continued to be my most intensive engagements. That helped me develop innovative models: tested and accepted.
SMG turned the Cross-Culture knowledge into a Trend Setter in
When I founded SMG in 2002 my learning quite obviously turned as the best capital.
Although India entry as a vertical emerged much later for SMG, the start up team gave SMG the vision to drive the Indian business closer to the global standards and practice, and developed innovative formats to engage the overseas business owners or executives with their Indian counterparts. Considering the limited exposure of the Indian business communities with the global business landscape, we were conscious of sensitising the Indian community as a starter. As a result, SMG conceptualised cost-efficient tours for established global expos, conclaves or summits, that included leisure as well. In about a year's time, however, we developed our own customised versions of Business-to-business Meets with the view to deliver real business possibilities.
SMG’s business events captured the imagination of the emerging entrepreneurs of India; in Bollywood's (the Indian movie industry) parlance, most of them turned blockbusters!
Several Industry Bodies, Chambers of Commerce and business news media such as CNBC, Bloomberg, Hindustan Times, Business Standard and NDTV Profit sought SMG's partnership to convert strategically designed summits; either with the view to make the events deliver business for the delegates or to expand the participation among a wider segment of professionals or business owners.
(I have included the last couple of paragraphs on the background of SMG to share with you how India Entry vertical evolved much later, based on substantial real experience.)
The foreign investments that drove the 2000-2010 decade mostly comprised established multi-national companies having the advantage of Indian counterparts of their global business advisors and consultants.
The early stages of the business endeavours in India relayed various scenarios.
India got noticed by the Wall Street around 1994, coincidentally I took my first role in India Entry around the same time as a British media company, Carlton Communications Plc, now part of ITV Plc. to steer their USD 300 mn venture in South Asia. The phase between 1995 and 2000 was inconsistent, or rather patchy in character.
More western companies visited India influenced by promotional road shows than as a wilful decision. Yet, a few looked deeper. The typical process started with excitement or buzz, then sighting a jumbled road, the common most stage was 'don't know what to do' or, 'don't see the reasonable basis for a sound business plan'. Some gave 'NO-GO' to their headquarters; a few did that more because they feared the compulsions of living in India. Amidst all the various options, several exit routes were also planned after significant investments.
If I take India out of me, I do not think I would have done any better.
However, more companies headquartered in the USA than UK or other European nations checked India as their global location, the number, however, built more consistently and at a greater pace after 2005: Foreign Direct Inflows that averaged about USD 1.72 Bn annual between 1990-2000 moved up to USD 2.85 Bn in the 2001-2005 phase but gradually built to a healthy annual average of USD 17.93 Bn during 2005-2010. Therefore the expectation of growth in the region at USD 30 Bn a year can be easily considered realistic.
India’s current FDI Confidence Index is 3rd at 1.64 following China’s 1.93 and that of the USA at 1.67.
The Indian attraction has not become a compelling one just yet.
From an investor’s point of view, however, as the levels of investments build, as most expect, the cost of entry could turn into a barrier over time.
At the current levels, many cross-border companies have succeeded to carve their routes, and most multi-nationals are already well established. Some are past their midterms and some have flourished higher than their charts predicted. It is important to consider that working on your charts sensibly often converts better returns than following the industry or the market charts.
Tweaking is another art worth a learn – tweaking the real bits work and deliver smarter in the Indian context.
Database in India often is a few paces behind the realistic market trends, not as a result of poor methodologies, but more as a factor of moderation against unusually high figures of growth. That is understandable from the Indian perspective – large population rapidly growing economically and socially yet the growth is based on several unplanned factors; therefore curves could be inconsistent, and further independent of the global markets. Therefore it is difficult from a Western perspective to accept figures of 15 or 20% annual growth over a 5 year term, that may be termed fictional. In reality, when a vertical moves into its take off stage, like the automobiles, food, telecommunications, and most recently aviation, the industry segments grew at that pace, and still maintaining 15-20% annual. The smarter Indian businessmen or groups tend to stay ahead of the market curves decisively, and several have surprised the markets with that strategy. Following the market may return you just about and may make you complacent; on the other hand, if you play the game well, you may be wiser in getting better.
At the early stages, an overseas company would be better jotting down its learning than the interpretations, and move along. Yet open up for a wider opinion, that is so useful in India: it would be a huge plus in the longer run. Then you would pick a few brighter elements, closer to your way of life and make the business look promising without compromises.
India is an economy where many Board Directors follow a day of luxury in their grandeur cabins, and know they have the tasks well divided among those who would have to take the ask. If however you have an appetite for being in the thick, that may work a little better – see and tweak a bit more yourself and stretch that a little further, you could well bet on expecting better. That may change the game to a higher plane and you will have the possibilities to knock a few fundamentals out of your way.
The range of opportunities that India offers is unparallel in the world market.
In every scenario, India clearly offers opportunities that are rare in the current world market: it offers options that will make your dollar work faster and better – some prudence, a few extra bits, little patience and decisively firm with your goals.
Mind not the things that go wrong, live the spirit to take the next opportunity and never lose the opportunity to maximise are a few good motivational terms.
Plentiful Abundance.
At the core of the complexities in India is a reality: India is plentifully rich – everything that you see in India, is in plenty. People, trades, industries, professions, food, weather... Plentiful with diverse variants makes that complex, while the extremes in the plenty are perplexing. Best and the worst of lawyers are both in plenty. Best or the worst of advisors is an invisible reality. Words said and words kept are both in plenty. Honesty and sincerity may be available in plenty, yet the list of being led the wrong way can run frightfully long. There would be several having turned complacent addicted by the plenty, yet there would be countless who are just in for a race to fetch the plenty.
If India has the best Intellectual Property laws, the cases of violations are no less. It has one of the finest Constitutions among democracies, yet following the Regulatory or Statutory course can be challenging. If it has a strong judiciary, getting legal judgement may be a timeless journey. English is a commonly understood language yet its way of life may not be cultivated. India’s leadership in technology revolution is shadowed by teasingly sluggish governance. Rapidly emerging global entrepreneurs protracted by complex Governance regime.
Wealth grows despite that and lives get better for the most. The benchmark for prosperity may not be established. Let that be at its level of wonder.
Some adventure, the heart to take humour, get over rigid deadlines, being firm with your goals uncompromisingly, make your way with people, patience, an eye for opportunities, take the extra mile – if you can plug in these key skills, there would be rare chance of not crossing the extra milestone. I quite enjoy that and am passionate about sharing the knowledge with an equal player. Building a rapport out of a relationship between an Indian and the Western business perspectives is my professional commitment, yet taking that to a new high fires me better.
I have and continue to believe India still lives its past image of a land of miracles, albeit in a whole new form; and predictions and turning predictable real is something you must drive – let the market dance to its own tunes. India indeed is a blessed land, or God’s most precious creation. Howsoever logical or reasonable predictions are, outcomes have more often surprised the charts than go hand in hand.