Wednesday, 14 October 2009

"Isation"

Business Leaders who can see far far ahead are an extreme rarity. Usually a business leader’s definition of long term is the next quarter. Occasionally, there comes a business leader who plans for the next couple of years. Rare is the leader who sees decades ahead.

Two such examples are the subject of this post. The surprising thing is that their names are completely unknown – I don’t think there are more than half a dozen people who’ll even recognize their names. After all, business has short memories and business history is virtually an unknown science. As a demonstration of this, can any of you recall who was Jack Welch’s predecessor at GE – he was a titan in his own right; honoured with the title of the Businessman of the Decade; but who remembers him now.

Back to these two men. One was the Chairman of this famous company in India , a subsidiary of a global company headquartered in the UK. He was chairman only for three years or so until ill health forced him to return back to the UK. The other was his boss, the head of the global business outside of Europe. Their names were Steve Turner and Andrew Knox.

Consider the environment. Late fifties. India had just attained independence. Just shaken off the colonial yoke. There were only a few multinationals in the country. This company was by far the largest of them. As was the norm, everywhere in the world at that time, managers from the parent country would be sent to run subsidiaries across the world. It would be rare to find a brown skin, or a black skin in a senior position in Asia or Africa.

But this company was different. These two wise men, wise beyond their years, and absolutely without parallel in any other company, decided that Indian business was not to be run by foreigners. They decided that Indian managers would now be entrusted to run the company. For those times, this was a positively majestic step.

Steve Turner, in his short tenure, and Andrew Knox, did many far seeing things. But one of their greatest contributions was that they groomed and decided to hand over the chairmanship of the company to an illustrious Indian. The company never looked back. Generations of outstanding Indian business leaders have graced this company . And the company went on to become a star, outdistancing its competition combined until the turn of this century. All because a few very wise men foresaw that to succeed in business in India, you have to let Indians run it. They called it "isation”. Indianisation. And then replicated it in every other country in the world.

The reason I muse about this, is that here we are in the twenty first century. In China, I still see expats running many of the foreign companies here. Many senior posts are occupied by expats from Europe and North America. They talk of the same issues – lack of senior management talent, trust, etc etc. And then I marvel at how wise they were in this company in the 1950s. They were “men of substance”; men, truly way ahead of their times.

10 comments:

J said...

Fascinating post and article. Do you see a path to China-isation (doesnt quite roll off the tongue!) from where you sit? It took a couple of decades from initial idea to implementation in HLL. Will it still take that kind of time given issues of human trust or do you think after years of globalization, we are mentally ready to isate(?) faster?

Exkalibur666 said...

Great post enjoyed reading it. Business leaders from emerging economies are making the world take notice. I guess the change in mindset for westerners is not easy and there is quite a bit of resistance. But eventually they just would have to accept the reality that ability and business acumen is not dependent on skin color.

A said...

I wonder why there is resistance against wanting a local at the helm of affairs, it takes a lot of careful thought and planning and letting to to let them run the show..
in a previous post too you had mentioned that there are expats gracing senior positions in China.. my question to you is, why is there so much resistance? what is stopping the expats from handing over reins?even in this time and age of being global and all that?

thethoughtfultrain said...

Natives will always understand the local culture better and hence their ideas will be more tuned for the local flavor. Your account of Steve Turner, Andrew Knox and Prakash was just fascinating!! I admire their foresight and yes I admit HLL is one of the best companies in India !! Sachin always has golden words for HLL after his short stint there. The work-life balance is admirable as is the way they do business.
Was a lovely read!! And a pox on your net nanny for messing with you! :-)

Srivats said...

I got to second thethoughtfultrain comment. Yes natives would undestand local culture better, but I get why companies still send expats to work in other countries. May be they want to maintian the uniformity in process, business ways and office culture everywhere just like the head office, which is easier said than done. I am equally amused, by your ability to see things which other didnot see, to write about facinating stuff out of otherwise mundane business(to me) news. Take my word in this, your writings would go places and someday I would take your autograph :)

Ramesh said...

@J - Thanks. The problem in China seems to be one of trust. Part of the reason may be cultural and language issues (people like PL Tandon could hold their own with the Queen, but very few in China can). Its hapening very very slowly in China and that remains a mystery to me.

@Exkalibur - Thanks. The west seems to be much more comfortable with an Indian manager than a Chinese one. Mere English fluency cannot be the only reason, although it is to a large part. I think somehow the West sees Indians as culturally closer than the Chinese.

@AJCL - I am struggling to understand this too. Perhaps one more reason is that many Chinese seem to be perfectly happy with expat leaders, unlike most Indians who would barely tolerate a firang.

Ramesh said...

@thoughtful train - Thanks for fighting my corner with the net nanny !! Didn't know Sachin was a HLL alumni - hey Sachin when and where were you there ??

@Sri - I am blushing. I have to take your autograph man - look at that brilliant travelogue you are writing.

thethoughtfultrain said...

Hey Ramesh ... Sent ya mail ...

Deepa said...

This was from a very different vantage point. Very thought provoking and encouraging as well. One just can't miss the importance of 'Accepting' and 'Being accepted' in this write-up!

Ramesh said...

@Deepa - Yes, well said. Although it must be said it was a different world those days.

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