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May - 2001 - issue > View From the Top
When in India, Do as Indians Do
Monday, November 17, 2008

India is India. I have to remind a lot of people in my company that India is a 5,000-year-old civilization, as opposed to America, which is only 225 years old. It is a deep-rooted culture that has evolved over centuries. I tell my colleagues, rather than teaching India to play by your rules, let’s try thinking about how to play by India’s rules. If you decide to venture into India, you have to change and adapt — don’t expect the whole country to change. Work in India, as Indians do: That is the only way for business to succeed in India. As long as you understand that each culture works differently, and show respect for it, you are going to be fine.
To begin with, it is not easy to go to a new country and set up operations there. We have been in India for the last 40 years, so it is not new for us to work with India. What is new is to have an office in India and operate physically from there. In 1995, we began our country operations there, keeping in mind the huge potential India represents. The last six years have been a learning experience both for Boeing and me, as President of India operations. I have learnt many lessons, some of which I would like to share here.

Any discussion on this issue is incomplete without an acknowledgement of the fact that the economic climate of the country has changed beyond recognition since liberalization began in early 1990-91. Though some critics may argue about the pace, nobody can argue about the direction. In the few short years after these changes were initiated, foreign investments in India have begun to pay off, luring more and more MNC’s to set up operations in India.

But every MNC has to remember that India is a place for long-term investment, not an initiative that you do for a year and expect returns. In third-world emerging markets such as India, you will never make it if you are craving instant gratification. It just does not happen. This logic extends to all industries, not just airlines. In every case, you have to invest and be patient. Patience is a great requirement for doing business in India. SEE THE SYSTEM FROM THE INSIDE
It is important to be perceived as an insider, not a mercenary outsider. If the community sees you as one of them, you’ll have a better chance of success. We have tried to make the most of every opportunity to become a part of the Indian social and economic fabric. The idea is to give back to the community and economy. You have to build inroads into the local industry and tap into local talent. We did a fair amount of work in India by having HAL in Bangalore build doors for our 757s, and some parts for 747s, and some sections of tail for the 777s. We gave them the technology and trained some of their people. The message was loud and clear: We may be Boeing, but Boeing India is part of India. That is the important message you can communicate. That said, since we were in a specialized sector it was easier for us to get acceptance. Things may not be so easy for the Cokes and KFCs of the world. In high-tech, the policies and attitude are pretty liberal. CUSTOMER FOCUS
Involve yourself with customers and cater closely to their needs. When you sell someone a brand new airplane, they need a lot of help in the beginning, if they don’t have as much experience working with the airplane. We have posted experts in India, who are there every day — every minute of the day and night. In any business, whatever the problem is, you need experts close at hand, not thousands of miles away.

You can’t just be talking on the telephone all the time. In most industries, customers need face-to-face dealing because it makes them feel more comfortable. The more interaction there is, the better people understand each other. Often, when dealing with such huge distances, miscommunication is easy. Clarity in communication is often critical — there is very little a customer can do if they get a prototype and then later find out that it’s not what they had in mind. THINK OUT OF THE BOX
Each climate creates its unique needs, and thinking out of the box is your only solution. One has to be flexible, resilient and adapt to succeed in a foreign market. What worked in other parts of the world may not necessarily work in India. When we first started putting airplanes into India, we recognized that the only people applying for airline jobs were retired engineers and pilots from Air India and Indian airlines. We quickly recognized that we needed skilled manpower in order to flourish. We had to be proactive in this instance: We spent over a million dollars to train over 300 engineers in India, in engine and airplane maintenance, radio and electrical systems — all of this free of cost. They were licensed by the Director General of Civil Aviation (DGCA) to work on the airplanes. This training would normally cost between 40 and 50 thousand dollars per person. That investment has served Boeing well. Today, there are just two domestic carriers — Jet and Sahara Airways — and their entire suite is Boeing 737. We now have 100% market share with private airlines, which proves us right.

In retrospect, it was a great investment to make, and a good thing to do for India. With the airlines becoming self-sufficient now, we have come to a point that they don’t need this free training. They buy new airplanes from us as they need them, and they get this training as part of their entitlement. They can now afford to do it, which was not the case six years ago, when they were first starting out. DO IN INDIA, AS INDIANS DO
Sometimes people can start off on the wrong foot, when there is no appreciation of the others’ culture and spirit. Here, I am not referring merely to dress and religion. Culture has a two-fold aspect: work culture and local belief systems. The work culture differs remarkably in India and the U.S, even though MNC’s are taking with them their western way of working. For instance, in India, being late for a business meeting is not a big deal. In western countries one is rarely late for a meeting. Also, it is absolutely okay in India to call people at home, or even to call them at night. I sometime get calls in the middle of night from my business associates in India. For me, that shows the level of comfort in the relationship but that is not something that would be acceptable in America. A person who is not of Indian origin will find the same situation very rude. You just have to understand that it is a larger cultural issue. That is what I mean by respecting the culture and having tolerance for the little quirks each culture invariably embodies.

Besides social and cultural empathy, handling the political situation can be quite a challenge. For MNC’s to be effective in India they have to understand the political climate. MNC’s should always wear a neutral hat, but at the same time better know what is going on in the political arena to understand what it means for their company. If you don’t understand the political environment you may be in for a rude shock. We’ve gone through the government-approval processes on a lot of airplanes we sell. They all require approval all the way up through the Cabinet Committee of Economic Affairs, so there is a lot of political involvement. You have to learn to adapt your functioning to the political apparatus in place. Try to work with the system, rather than find faults in it. That’s how you become successful in India. Develop empathy for the processes at work there, and facilitate them.

I agree, it is not easy to accept everything. For instance, the level of productivity differs dramatically in the two countries. Even though the IT model functions quite like the US model, when it comes to other industries locally, like banks and such, it’s a fairly different environment. In my mind the productivity per person is lower because of the numbers of people who need to be employed in India. The productivity of an employee in India is lower — and so are the wages. In the end, if you look at the total cost of getting a job done, it seems to balance up. But, is that good? I don’t think so. This is where India can enjoy a huge advantage. If we increase the productivity of our people and can get the same job done at a lower cost than anyplace else in the world, industries in India can then grow at a faster rate. PERSISTENCE
I think the first challenge, when you decide to move your operations to India, is to stick with it. Don’t let everyday frustrations bog you down. You are not going to reap rewards within the next year or the year after that. Go to India only if you are there for the long haul, not for one or two years.

You have to be very careful in selecting your people. The success of your company depends on them. If they don’t understand or don’t want to respect the local system, you will forever hear, “It’s not going to work in India.” Take people with you who can adapt to diverse situations easily. You have to march on with realistic expectations and goals. That means that you don’t want to paint a very rosy picture and commit yourself to unachievable goals and targets. You have to very carefully manage the expectations of your superiors and your headquarters.

Overall, India is a great destination, and it will continue to grow. The only question is how fast.

Dinesh Keskar is President of Aircraft Trading at The Boeing Company

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