An Executive Conversation with former Chairman of Microsoft India Ravi Venkatesan
At the recent Executive Conversation held at the GCSP, former Chairman of Microsoft India, Ravi Venkatesan, shared insights with diplomats, journalists, academics and executives. He argues that the challenges of doing business in India are not insurmountable, and that mastering them is of strategic importance for any global business.
As Chairman of Microsoft India, Ravi Venkatesan helped build India into Microsoft’s second-largest territory and one of its fastest-growing markets. "Adapt to the market, don't expect the market to adapt to you" - is one of the lessons from Venkatesan's book, Conquering the Chaos: Win in India, Win Everywhere. The subtitle is based on a quote from Tim Solso (now Chairman of General Motors), with whom he worked at Cummins, verbalising the mind-set necessary for global companies to make it in India. For example, along with creatively flexible delivery times and locations, Amazon delivers groceries from local stores in addition to its own arsenal of products. The famous McDonald’s hamburger and other beef items would be anathema in India, where the cow is considered holy – but the world’s largest reseller of beef adapted its product line, and has established itself as a big player.
"Many traits and competencies are needed for success, but five are extraordinarily good determinants of successful leaders: entrepreneurship, courage, a higher purpose, learning agility, and people skills or emotional intelligence."
Other than adaptation, a long-term view was another key factor for success. After facing just about every headache a global company could fear, the CEO of Vodafone told Mr Venkatesan he was delighted by the company’s continuing presence in India. Learning to be profitable on calls that cost 1 cent per minute provides long-term strategic benefits. In India, the top of the economic pyramid is the size of the population of Switzerland; the affluent section is the size of Australia; the rising middle class the size of Western Europe; and the lowest, 7-800 million people, who survive on less than two dollars a day, is the size of Africa. The middle class market will grow significantly over the coming years – numerically, and as a percentage of global purchasing power. Tapping into this market is a necessity for any global business.
Even beyond this strategic positioning to win the large Indian market, lessons learned in India can be applied to other emerging markets, most of which look more like India than China. As more emerging markets open up, and the global middle class looks for products and services to cater to their new needs and desires, companies that have successfully adapted to the chaos in India can repeat this process elsewhere.
So according to Mr Venkatesan, the many challenges of doing business in India are not daunting, and should be welcomed as early experience of the emerging new world of business. Neither is this limited to MNCs. Over the past two years, startups have spread across India, supplanting the 50-something-year-old expats on corporate packages with 20-something expats building their own businesses and seeking to capitalise on new markets. The companies that do not succeed in India should not blame the market, but reconsider the mind-set of their own headquarters.
Beyond examining how companies adapt, Mr Venkatesan looks at the connected issue of agility in leaders. In his book, he identifies learning agility as one of the five “extraordinarily good determinants of successful leaders” (the others being entrepreneurship, courage, a higher purpose, and emotional intelligence). This is also at the core of GCSP’s Executive Education: strengthening leaders’ ability to succeed in radically new environments, by helping them to develop their skills for learning in real time and applying these insights to situations unlike any before.
Although the straightforward title of his book might not be a silver-bullet mantra for instant global success, Mr Venkatesan showed that, if a company can succeed in the chaos of India, those lessons learned should enhance the resilience of their business strategy when adapting to other markets.