Is India the management and innovation hub of the future?

India’s economic rise has been dramatic. But as the growth slows, what does the future hold? The London Business School’s Lynda Gratton, a leading global management thinker, offers her personal view of a country, one with which Qatar has recently strengthened economic ties and relies upon for a substantial part of its blue and white collar workforce.

My first professional visit to India was more than 15 years ago with the late Professor Sumantra Ghoshal, to put together the newly launched Global Business Consortium (GBC). The focus of the programme was on globalisation, and the plan was to take six senior executives from six companies to India to see this rapidly developing country. Many of these executives had never been to India and watched in awe, in some cases bordering on horror, at the sheer frantic scale of Mumbai and Bangalore. We visited factories, government offices and universities, speaking to economists, chief executive officers (CEO) and non-governmental organisation (NGO) leaders.

What we saw was a country defined by diversity, energy and potential, but also a country defined by inequality, poverty and crisis. In many ways, India has changed dramatically since then. The diversity, energy and potential that I saw on my first visit have become the foundation of some of the most interesting cities in the world, which in turn are home to some of the world’s most sophisticated organisations. India’s ability to match speed and scale has granted it growth rates that the industrialised nations of the world have not seen for generations. Even though India’s economy has slowed of late, while the rest of the world recovers from crisis, it is still an impressive seven percent.

This growth is partly fuelled by India’s demographic dividend. With half its population below the age of 25, the country’s unmatched vitality is quickly producing an expansive and globally connected network of entrepreneurs. Add to this growing connectivity, and India’s working population is set to overtake that of China by 2030, giving rise to the most formidable national talent pool in the world.

20% The percentage of Qatar’s population that hails from India, according to recently published Qatar Statistics Authority data.

However, that population bulge is both a blessing and a curse. Some of the underlying problems I witnessed 15 years ago persist. India is still a land of inequality, poverty and crisis. Its physical infrastructure of roads is vastly underdeveloped and has left many rural areas excluded from the exciting economic activity of its urban centres. As a consequence, regional economic disparity is still a crippling problem, with the average income in Bihar less than 15 percent of that in Goa. Illiteracy is high, with only 75 percent of Indians over the age of 15 able to read or write.

India’s working population is set to overtake that of China by 2030, giving rise to the most formidable national talent pool in the world.

FUTURE OF WORK

Since the GBC days I have become ever more involved with India, in part as the director of the Future of Work Consortium (FoW). In this research and development consortium, executives from more than 50 companies from the United States (US), Europe

and Asia have come together to learn, think and experience the future. In workshops in New York, Singapore, Mumbai and London we have explored how the forces of technology, globalisation, society, demography and resource constraints are shaping and defining organisational structure, leadership and work. One of the innovations of the consortium has been the development of a three-day virtual ‘Jam’– an online platform designed to bring people together from across the world to debate a number of issues.

We have run six of these ‘Jams’ with topics ranging from the leaders of the future, to complex collaborations and the impact of technology on productivity. We have also designed a series of surveys to get a deeper understanding of organisational practice. As a result of this we have written more than 60 case studies about innovative management practices. I have also kept a blog (lyndagrattonfutreofowork.typepad.com) in which some of my perceptions of India are described.

What has been fascinating about this consortium is to see first hand the trajectory that companies around the world are taking as they prepare for the future, and indeed to benchmark them against each other in their future proofing capabilities. In particular it has been very interesting to take a closer look at the Indian companies that have been members of our consortium — the information technology (IT) service firms Tata Consulting Services (TCS), Wipro and Infosys and the manufacturing companies Mahindra Group and the Aditya Birla; and companies such Unilever, Randstad and Standard Chartered Bank that have a significant Indian footprint.

Natarajan Chandrasekaran, chief executive officer of Tata Consultancy Services (TCS), which has also been working with Gratton and the Future of Work Consortium to develop India’s business management leadership potential. (Image Corbis/Reuters).

Looking closely at the trajectory of these companies and their employees, three aspects strike me. First, that there are some unique aspects of the India talent pool that I believe will create long term competitive advantage for the country. Second, that some of the most exciting innovations around people are taking place within Indian companies. And finally, when it comes to supporting the societies they operate in, some Indian companies are really stepping up to the challenge in a way that the government has been unable to do. Growing up in developing countries like India is essentially a daily lesson in tolerance of ambiguity.

DEEP TALENT POOL

The sheer scale of population growth in India means that, although it lags behind Europe and America in terms of per capita educational attainment, the country produced twice as many people with advanced degrees in engineering and computer sciences as the US. Yet India is also facing a managerial talent shortage, for although the educational infrastructure is growing fast, the development resource needs of companies are growing even faster. Since the 1950s in the West, multinationals such as GE, Philips and Unilever have played the role of ‘talent factories’, systematically developing many managers who both stay and go onto the wider ecosystem of the company to create new businesses. With the exception of Tata and Hindustan Unilever, India has historically had no such talent factories. As a consequence, leadership and managerial skills in India are rare because, in effect, India was a closed economy until the early 1990s.

But India could become one of the world’s most important leadership talent pools. At the FoW we asked executives about leading in the future. Two core competencies emerged: the capacity to tolerate the ambiguity that many will face in this fast changing world; and intercultural sensitivity as the joining up of the world brings greater numbers of nationalities into the frame.

Both competencies are fiendishly difficult to develop, since they go way beyond the theoretical framing of much executive development and are both fundamentally experience-based competencies. It is almost impossible to become tolerant of ambiguity if your life has been structured and predictable, and it is hard to become inter-culturally sensitive if you have only grown up with people just like you. It is interesting to reflect on to what extent structure, predictability and homogeneity is the day-to-day experience of many young adults growing up in the developing economies, and to what extent this narrowness of experience could potentially stunt their potential as future executives? I remember puzzling over the challenges of developing executives for the future as I sat with a senior team of Infosys in their campus in Bangalore. I began to realise that growing up in developing countries like India is essentially a daily lesson
in tolerance of ambiguity. In Mumbai, the choking traffic makes the concept of punctuality almost impossible; the power cuts in many Indian cities mean that it is tough to plan with precision; while the growing chasm between the rich and the poor forces every executive to confront the ambiguity of the distribution of riches. Under these circumstances ambiguity is
rife, and tolerance the most adaptive response. And it is not just tolerance of ambiguity that developing countries such as India may have a lead on. It is also cultural sensitivity. For example as we toured the campus of Infosys, our guide told us that the canteen serves more than 40 different types of Indian food.

When young people join the campus of Infosys or Wipro or TCS from across the subcontinent they are put with people who may look superficially like them, but in reality are very different — and it is in working with these differences that cultural sensitivity emerges.

What this suggests is that as companies look for places where future leaders may be developing, it would be wise to turn to developing countries such as India. It is in these places that life’s daily experiences of ambiguity and diversity may well be creating the crucibles of experience from which the next generation of CEOs will emerge.

The call centre at Indian technology company Wipro in New Delhi. As part of the Future of Work Consortium programme alongside Infosys, Wipro has been working with author Lynda Gratton in examining unique aspects of the India talent pool that she believes will create long-term competitive advantage for the country. (Image Corbis)

INNOVATIVE MANAGEMENT

Our benchmarked research with the FoW consortium also suggested that some of the most interesting management innovations are coming out of India. In our consortium we have seen how Infosys, for example, has virtually connected more than 50,000 employees to discuss the future strategy of the company.

Many Indian organisations are also experimenting with different ways to manage and develop leadership at scale. At the Mahindra Group, for example, young managers are given the chance to address real-time business problems by shadowing those at the most senior levels. Since 2003, Mahindra has been running shadow boards
for high potential managers under the age of 35. In each of the group’s divisions and companies, between eight and ten young managers representing a cross-functional team are brought together and given the responsibility and resources of a senior management committee.

Over a two-year period, these young managers are encouraged to deliberate on a number of projects of their own choice, and make recommendations to their senior management mentors, who are usually the managing directors or functional heads of the division. The mentors provide cohesion and feedback, and hone good ideas that emerge from the shadow boards.

BUSINESS AND SOCIETY

In a country as large and diverse as India, the challenges of infrastructure, education, poverty and resources are immense. What has been interesting is to see how some Indian companies face these challenges. Indian companies have a huge potential skill gap. While the technical education in the Indian Institutes of Technology is excellent, general education standards across the country are poor. For India’s rapidly growing IT sector this could be a disaster. Yet instead of accepting this, these companies have reached out into communities across the continent to significantly impact the development of millions of youngsters. We have seen, for example, how executives at Wipro are working with tens of thousands of colleges across India to train teachers to develop IT skills, build state-of-the-art curricula and encourage students to become what they term ‘work-ready’.

The challenge India faces is not just about building a talent pool; it also faces some of the world’s greatest societal challenges. Often it is women who are at the intersection of poverty, illiteracy and unemployment. Some Indian organisations have already started to develop strong links into the society. Ma Foi, which is a business within the Randstad organisation, is the largest human resources services provider in India. It has a significant footprint in India, with more than 85 offices in 52 locations.

The Ma Foi Foundation was started to bring sustainable change to the lives of women, youth and children in the communities where Ma Foi operates, and is heavily integrated into the broader company. For example, one of the foundation’s activities, Project Sornam, aims to improve financial inclusion of the poor, with particular focus on empowering women as a way of helping an entire family. Ma Foi’s role is to identify leaders for these groups, provide practical assistance and give overall guidance and mentoring support. After the initial incubation time, groups can usually manage to sustain themselves through the development of their projects. The new ventures provide a monthly income to group members’ households. After six years of work, Project Sornam has close to 2500 operational groups impacting more than 35,000 women.

Every January and September for more than a decade I have visited India to see friends and to run a series of workshops with Indian executives. The contrasts I see now are as profound as they always were. In a 2011 blog I wrote of seeing a small child sleeping in the middle of one of Mumbai’s busy pavements, commuters stepping over her as they rushed to their offices. That same trip I visited the campuses of Infosys and Wipro and saw the extraordinary rigour and professionalism of the many thousands of young employees as they went about their daily working lives. Both images have stayed with me. They represent the challenges and the hopes of modern day India. I cannot wait to see what happens in the next decade.