Monday, 27 August 2007

India Week – A Week of Thoughts, Ideas and Observations About India

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Given that I have spent the last week and will be spending the next week in India, I thought it might be useful to you if I shared some of my thoughts and observations. I think you will see and feel that the observations are pretty universal, although of course with a local twist.

We will look at why BPM does not resonate in India, some of the issues around creativity and innovation, some of the problems with Indian Management style and philosophy, why there are bad times ahead for the Indian IT Industry and more importantly why it is not too late, why there are great opportunities and here about some of the many successes that there are here in India.

As anyone who has spent time with me here in India or heard me talking about my experiences in India will know – I love the place! I especially love the people and truly appreciate their great personal qualities and their individual strengths. As we will see later in the week it is just a shame that this same love of individuals is not always shared my Indian Managers and CEO's. They would do well to remember better the lessons of their teachers and of the deep cultural and spiritual heritage.

The thoughts I am sharing are not shared as a criticism, but are shared so that people can see the effect of many of their actions and to think about how it feels to receive the results of some of those actions. The thoughts are also shared in order that I hope I can help or persuade more businesses to focus on doing business in India. I would especially love to see more of the Indian companies focus a lot more on their home market.

Whenever you speak with people here about why they do not try to generate more business locally and to use the local market to learn about business and how business actually works (not how it is taught in the thousands of Indian Business Schools), you almost always get the same answer – "Mark, you don't understand the market is not big enough and there is not enough money." Well I have news for you all, this is just a joke and people are just kidding themselves. Let's consider a few facts about India.

Yes, we know the population is around 1 Billion and growing at the rate of around 50,000 people per day. We know that there are many poor people and that there is great poverty in the country. But, consider also the following numbers – India can be divided up into three main groups or categories of people a) The Consuming Group – India 1 b) The Serving Group –India 2 and c) The Rest – India 3. Would it surprise you to know that the Consuming Group is said to account for 14% of the population, or around 140 million people – a consuming class that is around 2 ½ times the entire population of the UK – sounds like one heck of a local market opportunity – and these are considered the group with money to spend on cars, houses and all the rest of the trappings of the west. Then we come to the Serving Group, said to make up 55% of the population or around 550 million people, who while they certainly do not have as much money to spend are still spending in ever increasing amounts and seem like a growing market sector opportunity. Finally we have The Rest – these people are vital to consider too, for they number around 310 million, although they do not yet have the money or resources to be seen as much of a market, they will actually be the ones that control the fate of India Inc. For either the other 69% of the population will work harder to help them and to improve their lives, or the entire democracy is likely to come under threat – it sounds like an exaggeration but how many democracies do you know – bearing in mind it is about the government of the people, by the people, with the will of the people – that could survive with 31% of the population feeling disenfranchised?

So we know that there is a large number of potential consumers we can sell to, but can they afford to spend? Yes they can! Another habit that is plain to see in India is two tiers of pricing – one price for Indians, say 30 or 40 rupees and another for non-Indians, say 50 or 100 rupees. At a simple glance this sounds fair India 3 or even India two does not have the money and many of us from elsewhere in the world do. But, India 1 as we can call them are earning salaries on a par with many people around the world doing similar work and can afford the higher prices too. A recent study in a business magazine here on the equivalent spending power of managers showed that a senior Indian managers is actually greater than their counterparts in the UK, Canada, Denmark and many other so called developed nations. We also know that there are many very successful large international companies coming out of India, and we know these too do have the spending power. So there can be no issues that the money is there in the market to buy, use and consume. So it must be something else that holds things back.

Based on my (limited) experience, it is not just one thing that is holding back market India, but many things, as we go through the week I will attempt to peel back some of the petals of the lotus flower and we will see if we can get closer to the jewel that we know lies within.

Thoughts for the day

  1. Are you really making the most of the opportunity that is India?
  2. If you can't demonstrate how you can help transform an Indian business then why I should I believe that you have the skills and knowledge to help transform a non-Indian business?
  3. Do you really not have the money to but the knowledge and skills you need or are you just stuck using the same old mantra in the same old way and just pretending?


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