A company will operate in a unique way in one country only because the economic, business, cultural, and geographic distances from its home market are such that it has little chance of succeeding if it doesn’t. Does that mean it would be willing to do things differently in Vietnam or Mozambique? Probably not; the size of the prize has to justify the cost of operating differently there.
To succeed in big markets like Japan, China, and India, companies need to be willing to find a good balance between standardization and local responsiveness. In my experience, I have found that means thinking through four issues that make up the India operating model.
1) What is the strategy that will help us win in India?
2) How do we get the whole company engaged in executing it?
3) What is the most appropriate structure to execute this strategy? What is the right empowerment framework; that is, what decisions are best made locally? What decisions must be made at headquarters? What decisions should be made jointly and what is a good process for that?
4) How does our culture at headquarters need to change to support the strategy?
The first order of business is to get the entire company to develop and execute a shared strategy for India. The structure and other elements of the operating model flow from that.
Most multinational companies are matrix organizations; people are responsible for product divisions or business units, geographies, customer segments, and functions. Everyone has at least two bosses. Implementing anything requires the consensus and commitment of a broad group of people, especially the global product divisions that are often the dominant axis of organization. Getting functions and product divisions or business units aligned around a country is often difficult, but it’s powerful when there is a framework that helps make it happen. That’s when things actually move very quickly, as we saw in the case of GE turbines.
In the absence of such a framework, every small thing becomes a negotiation and an act of persuasion, which is time-consuming and draining for everyone. People have to negotiate every discount and justify every hire. E-mails fly back and forth, frustration grows, and emotions rise. It’s no one’s fault; everyone is simply doing his or her job and company, except there is no alignment around what will help the company win in India.
Developing an operating framework isn’t easy, but the process must start by creating a three-year plan for India. I have seldom seen any company achieve a major transformation without senior leadership committing to a multiyear plan. Ensuring that the company draws up such a plan and getting the whole organization behind the three or four drivers of its success are the principal responsibilities of the country manager in India. With a framework and three-year operating plan that has the blessing of executive management, the bureaucracy becomes a strength. Everyone executes his or her part which is what global companies do well.