IIM – Has the time come ?

Pardon me if I led you to believe that this piece is on the B school brand. I will leave that to the erudite.  The “Indian Instincts of Management” is what I am trying to figure out here.  For years, one has been fed with theories and stories about the American Way and the Japanese style of management.  The success of American brands in the post capitalist era and the Post war economic miracle in Japan made the world sit up and notice and assiduously look at the reasons for their success.  Thereby emerged the distinct management styles being adopted by American and Japanese companies.   At a time when we are the 3rd largest economy and poised to overtake Japan in terms of GDP by 2032, do we have a distinct Desi Management style which can be touted as our success mantra?

To answer this question, I would like to quickly re-cap the salient aspects of the American and Japanese styles of management.

American:

  • Highly capitalistic
  • Innovation driven
  • Time is essence – Quick decision-making
  • It’s all about marketing and packaging baby!
  • Contract culture – Hire, Fire, Hire and again fire
  • High risk appetite
  • Flexible
  • Outsource and Outsource ( and coin new words – Shanghaied, Bangalored…! )
  • Long term one is sold or dead, let’s discuss about this quarter!
  • Quick to embrace anything new

Japanese:

  • Low Risk Appetite, Risk mitigation key in any decision-making
  • Go for the long haul, Short term profit can wait
  • Lifelong employment
  • Slow but methodical decision-making
  • Product spec, Quality and price is everything, emotional connect? – wrong number
  • Flexibility is a disease
  • Continuous Improvement
  • My Japan, My Japanese – is the best
  • Logical to the core

Post liberalization India is now home to many multinational subsidiaries. But for the sake of this discussion, we are looking at the home-grown successful Indian companies and how they manage their business to see if a pattern of a distinct management style emerges.

So here we go:

Desi (Indian):

  • Business is a family. Employees are like family members. Firing doesn’t come easily.
  • In business, relationships matter.  Building trust becomes critical to build relationships.
  • Decision making may not be logical but most practical.  Again decision-making may not be methodical but largely instinctive
  • We are most flexible. Being flexible in our approach prevents us from getting overwhelmed by any serious business situation or challenge.
  • We Plan. We Execute. But execution may not be as per the plan.  So cost over-runs, delays in completion, Quality compromises, mid-course changes are all part and parcel of our execution.
  • Tom Peters in his seminal management work “In Search of Excellence” talked of “Stick to the knitting” as one of the 8 themes which is – staying with the business you know. Our own management guru the late C.K.Prahalad goaded organizations to develop their “Core competency”. However if you see the cream of Indian corporations from Tata, Birla, Godrej, Reliance, TVS and now to the new kids in the block like Adani, Sahara, .. their core competency is “Not sticking to the knitting” and they have all been mighty successful!  This I feel is an important aspect of Indian Management which shows that we have very high risk profiles, quick learners, flexible and very pragmatic in decision-making.
  • Crisis management comes natural to us.  Added to it is the skill of working in adversities, navigating our way through complex situations,.. I’ve to mention here about the new entrant in the Oxford dictionary namely “Jugaad” – which loosely means “the gutsy art of overcoming harsh constraints by improvising an effective solution using limited resources”.( Courtesy : HBR Blog network )
  • What others see as complex issues – we handle it with our left hand. Things like taxation provisions, governmental procedures,.. which spins the head of other nationalities are like kindergarten stuff for us!
  • Indian companies’ attitude towards Ethics reflects their flexible outlook and pragmatism which I’ve outlined above. For most Indian companies, following ethical practices is borne out of convenience rather than conviction.  Follow ethics if you have to or when you will get caught!
  • Though I’m not too sure of this but I would like to mention this here about Innovation and Indian companies.  My two cents on this is that Indian companies at the outset are skeptical about innovation.
  • Marketing is not our forte, but we are not bad either.  We are yet to throw globally recognizable brands except a few like may be “IIT”, “Yoga”, “God’s Own country”, ..But we are getting there.

Having said all this, has the “IIM” arrived?  I guess not yet. But it’s not too far either.  For Desi style of Management to get into the case studies of Harvard or IIM, it’s vital for the Indian corporations to emerge visibly successful in the global arena. That’s why it’s imperative for the NANO to be a “big” hit or Arcelor Mittal to stay solid or for that matter Aditya Birla to “shine” worldwide.

Incidentally I just read today that the “5th P of Marketing” – Philip Kotler on a visit to India yesterday says, “The World awaits Indian dream” !!

I can only say “Amen”.

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41 thoughts on “IIM – Has the time come ?

  1. Saurabh says:

    Excellent Blog Anand – I really enjoyed reading it. A few other features of the “Indian Style” –
    – make do with less
    – make do with what ever is available and when ever
    – borrow and then innovate for the indian masses
    – good at dealing with red tape and govt institutions
    – patience
    – retain control at all costs (few truly widely held businesses in India)
    – awareness to social responsibility – minimal at present

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  2. Gokul says:

    Thanks Anand. Its a nice read and reminds me of the movie “Gung-Ho”. The movie potrayed the American and Japanese Management skills and their differences.
    As for IIM’s and IIT’s – do they really make too much of a difference !! They hire the best talent and teach and groom them. Something which a talented person will anyhow gain by himself if he/she has the drive to do so. Rather in my opinion they should try to make something out of the nothings and prove themselves 🙂 Something we can always argue about 🙂

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    • Gokul, Thanks for the feedback.
      You have a point there. But – better the coffee powder, better the coffee decoction and better the coffee itself ! The fact that only a small % can get in, ensures a certain output quality.
      When Nehru conceptualised Institutions like IIT,.. he had certain larger vision in mind. Whether these institutes are serving that larger purpose is a ?. But today IIT is a brand and that with a very positive spin on India. You must have seen this video clip before
      http://video.google.com/videoplay?docid=-6694143975371488739#

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  3. Rohit says:

    Just read your blog on “IIM”. It seems a large part of it has come from your experience of working with the Indian Companies(Godrej), Japnese(Brother) and American(Printronix).

    I can vouch for the what you have mentioned for the Japnese. Infact there have been numerous occasions when I have felt it personally and have even shared with the some of the friends…

    Enjoyed reading this blog.. Looking forward to many more such interesting blogs..

    Like

  4. Ramesh says:

    Worth reading.. In my line of business, I can see CG-Global buying a lot of companies -In Europe to create a global transformer company… But I am yet to see them as a leader. The leaders are still the European companies.. Perhaps as you have said waiting for the Indian dream…..

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  5. Venkat Roy says:

    Good One Anand. This is really thought provoking. If one has to add Korean and Chinese styles of management to the American and Japanese ones listed by you, i get an impression that the “IIM” defined by you is a fine mixture of these styles with the Indian Masala (Jugaad).
    So are we :
    1) Learners – who can manage a 25-30 yrs work life in the four major forms of the companies that surround us for almost everything.
    2) Teachers – who can teach these companies (JACK) how to do better business in our land by teaching them all they need to know about doing business in India.
    3) Doers – who can ” Some Day” start “Doing” our own stuff.
    Would wait for your “IIM” to arrive. In the meanwhile i would stay glued to your blog. Keep it coming !!!

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  6. Uday says:

    Hi Anand, nice collections of different styles of managing profits. Japanese go in for too much detsils and most of them enjoy PDCA process for each detail. While we are dicussing some of these foreign styles , we may look at “desi” styles like – Lala , Baniya , Marwari, First Generation Entreprenur etc..
    Keep sharing !

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  7. nareshnayak says:

    American and Chinese Management differ a lot. American management is scientific, balance sheet based. The American manager understands his balance sheet better than his business!

    The Chinese do not have a concept of balance sheet. They operate as small units and have extensive links with other small units. They prefer growing their net asset value over growing their profits. This is because they need to fall back on assets during a recession or a sudden hike in interest rates. As you know developing countries have high volatilities in exchange rates and interest rates which can potentially wipe off profits in a split second. Why have cash profits when they can be reinvested into assets? This is dilemma not faced by the united states since it has a stable economy and low interest rates (until now).

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    • The fixation on investment in physical assets to shore up balance sheets is a trend with Indian companies as well. In India real estate investments is always treated as a safe bet so far !

      Like

  8. I think this is an amazing piece of writing. Agree to most, seeing how most of the big corporate houses work. But haven’t the whole thing just been about big private corporations? Why not tell the reader about the management practices followed in the public sector, which I believe could be quite different from this. Or maybe I am wrong, i don’t know.

    About innovation, I don’t think its quite true. Yes, technological innovations, I don’t know or think our management baba’s have risen upto the level of the American or Japanese managements, but that’s not to mean Indian businesses aren’t innovative. They are highly innovative, in a weird beautiful way, mostly.

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    • Thank you for taking the time to read and comment on this post. As far as Innovation goes, Its my belief that we are great in innovating and coming out with innovative solutions in times of need ( necessity is the mother of all inventions perhaps). However not sure if we have been innovative in terms of “Big” ideas ! Thats my submission.

      Like

  9. nirmalya biswas says:

    Oh Anand – thanks for posting this on fb today.. I had missed this blog. As u’ve posted on fb this blog has actually outclassed all the blogs that have appeared earlier. Ofcourse I do my ranking on my own. In terms of ranking this blog has just become no. 1 as till now it was being equally shared between Nehru place and its not a car.
    Well as far as this blog is concerned, I think I can relate to this so well and every word of is true. While reading this it gives mixed emotions. And one wonders which experience is/was more fulfilling. But superb anand, keep them coming. Waiting for the next one!

    Like

  10. Ha..ha…good article Anand! You have captured the essence of it so well. I have experienced both the cultures being a Desi. I would also add that the Desis have an uncanny way of adapting to many different cultures and bring in their own flavour to succeed.

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  11. janakiraman rajamani says:

    Super…bang on relating to Indian context….very thought provoking…good case study for organisation diagnostics

    Like

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