Books; People; Ideas : These are few of my favourite things. As I live between day-to-day compromises and change-the-world aspirations, this is the chronicle of my journey, full of moments of occasional despair and opportune discoveries, of connections and creations, and, most of all, my quest of knowledge as conversations.
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Building Global Business: Five Sideways Reflections
Talking global is easy. In fact, it is not easy NOT to talk global. In this age of Internet, Facebook, Venture Capital, WTO, scale is the mantra: And, global is the only scale that really matters.
When I started working in England in 2004, I worked for a couple of interesting E-Learning companies for the first few years. They had good products and good people. I was greatly impressed by what they did, and with the sophistication of their technology and approach. They had large projects covering their cash flows, and were strategically poised to expand. But when I brought up the question of going global, given that I had first hand experience globally and thought these services would be quite compelling, the answer I got was "No Thanks!" These companies did not want to go global but rather service the small e-learning market in the UK that they knew well. They did not see the benefit of taking on the extra complexity and was afraid of 'global'. At that time, new in England, I treated this as a very English peculiarity. I got wiser afterwards.
In fact, soon afterwards: I was doing well in my job but I couldn't resist when I was solicited by an Irish businessman who wanted to set up a global training and recruitment chain. I jumped at it, because, at the time, that was what I really wanted to do. Looking back, that might not have been the wisest career decision I took, because I loved the technology environment and did not enjoy the culture of a recruitment company. But, since then, my work was almost always very globally focused: Its theme almost always was about taking concepts and ideas to new markets. And, unlike my experiences prior to 2004, when I worked for a large company going global, these were medium size firms and start-ups, who were in pursuit of scale. Some of these projects worked and became very successful: Others did not. But nonetheless, they all held lessons, which I now summarize along five broad themes.
But, before I talk about those five lessons, a personal note: I am at a point of time in my career that the novelty of air travel has truly worn off. Now, I claim, I get global. I have only worked in a handful of countries and not in all regions of the world, but I have been an eager student and now I know what works when someone is trying to get into a new country. My repertoire has some basic things, like respect, empathy and honesty, and I see that working everywhere. I am still fairly deficient in my global skills (when I can pause my life again, I would go back to reading Polish novels and practicing eating with chopsticks) but at least know what they are. I have come a full circle, falling in and out of love with the conversation about 'scale', the silicon valley way! From my experience, I know that the only way one can really 'scale' is by scaling one's mind, but that is almost impossible because global talk is, strangely, inimical to global thinking.
And, as I try to go local, here are the five lessons I learned while trying to play global:
First, Global Talk is usually reflected arrogance. While companies accept that the cardinal principle that all product development should start with the customers, they implicitly mean that this only applies to their home country customers. Large companies may have learnt the perils of this approach, but smaller companies, who need this even more because of their weaker brands, believe that such an approach is a large company thing: Being flexible hampers their dream of achieving scale quickly enough. Instead, they get into the missionary mode, and make the assumption that global customers don't know what they want. But without the magic and marketing budget of Apple, that's one wrong lesson to take from Steve Jobs.
Second, it is difficult to be Global. This may offend all those pursuing global dominance, but my favourite data point is that only 7% of S&P 500 directors are foreign-born. Given that we are talking about multinationals with huge global businesses here, this may surely reflect the difficulty of being global. In the small company setting, this is even more acute: The strength of familiarity that allow founding teams to work effectively also bars diversity. And, indeed, it is a strange phenomenon that while companies can't globalise internally, they constantly talk about global dominance outside. This mindset indeed comes from the mindset of capital, where a few elite bankers can dominate the global capital flows, but real businesses are far more messy than the value-neutral business of investing.
Third, some businesses are inherently more global than others. Capital flows are a great example, which can, under the current setting, can flow across borders pretty easily. Money has no colour, indeed, though most will want to keep it green. However, other real life businesses are different. We already know products may have to be different: McDonald's only succeed in India by designing a new range of products. Sometimes, it comes at the cost of efficiency: Subway creating separate counter for Vegetarians in India surely breaks their usual business model but they made that trade-off because they won't have a business otherwise. The businesses that require people may have to understand the cultures fairly deeply, including, as Devdutt Pattanaik will claim, the mythologies of the place, the 'subjective truths'. And, some of these businesses, including Education which I am involved in, is value-laden: Here globality is actively resisted. This is not just about cultural difference alone: Deep down, people don't want an education which clashes with their other values. Cultural mash-ups are easier to do than value mash-ups, and education, as it invariably becomes about values and attitudes, reaches an intensely local territory.
Fourth, being global means accepting variability of regulations. The globalisers usually treat regulations as an annoyance, a distraction, preferring to take a direct-to-consumer approach. This is indeed borrowed from the culture of capital, and the thinking system it has created. However, regulations are there for a reason, and in a large part, they may reflect a collective preference, though not an active choice. My favourite example is India's Foreign Education Providers' Bill, which has not got passed for over 15 years. This piece of legislation does not get passed because no one really wants it: It is not legislatively important, it does not change anything much for the students wanting education. Also, Britain's draconian immigration rules, which has affected the education industry there, broadly reflects people's social attitude. The Chinese censorship exists because the Chinese mind it less than we do. And, I am sure people in Dubai know how to access porn though we may be blocked out of them through filters. Law in many countries stand for different things than it would be in
Europe and North America, and the right response isn't to dismiss the
legal structure and focus on bypassing it. For me, being global is not about bypassing or dismissing the regulations at all, but understanding and respecting them - which may not necessarily mean following them blindly - and pragmatically adapting for them in the design of the business.
Finally, to put all of this together, being global means accepting the business model as a conversation. Business model, by definition, is not a spreadsheet, but a way of creating value and capturing a portion of that value for profit. Since the mechanics of creating value is different in different markets, the learning and conversation becomes of paramount importance in global businesses. And, as I see it, the world is converging on one plane, the culture of money, whereas diverging in other, the culture of living. Acknowledging this diversity, internally, in product design, in assessing the nature of the business and creating responsiveness to local regulations, are primary building blocks of successful global businesses.
So, in conclusion, the point is not to say that small businesses can't be global or global universities aren't possible (though I pretty much said that here). Indeed, one could argue that to follow the above suggestions would mean bidding good-bye to scale: However, to achieve 'scale' one has to 'scale' one's thinking. It remains perfectly possible to create a network of local engagements and relationships based on common values and weave it together in a global model: That, indeed, remains the only sustainable and scalable model of global business, one that's based on listening and engaging, and not preaching.
A friend has recently forwarded me a quote from Lord Macaulay's speech in the British Parliament on 2nd February 1835. I reproduce the quote below: "I have traveled across the length and breadth of India and I have not seen one person who is a beggar, who is a thief. Such wealth I have seen in this country, such high moral values, people of such calibre, that I do not think we would ever conquer this country, unless we break the very backbone of this nation, which is her spiritual and cultural heritage, and, therefore, I propose that we replace her old and ancient education system, her culture, for if the Indians think that all that is foreign and English is good and greater than their own, they will lose their self-esteem, their native self-culture and they will become what we want them, a truly dominated nation."
The email requested me to forward me to every indian I know. I was tempted, but there were two oddities about this quote. First, the language, which appeared …
Business gift giving has always been common and contentious at the same time. Business gifts are usually seen as an ‘advertising, sales promotion and marketing communication medium’ (Cooper etal, 1991). Arunthanesetal (1994) points out that such gifting is practised usually for three reasons: (a) in appreciation for past client relationships, placing a new order, referrals to other clients, etc.; (b) in the hopes of creating a positive, first impression which might help to establish an initial business relationship; and (c) giving may be perceived as a quid Pro quo (i.e. returning a favour or expecting a favour in return for something).
The practitioners of gift-giving generally argue that doing business is often an aggregation of personal interactions and relationships, and gift-giving should be seen as a natural way of maintaining and enhancing these relationships. ‘Business gifts, especially one given in the course of the festive season, is …
In most societies today, making profits are accepted as moral, if not especially praiseworthy. This was not as obvious as it appears today – people used to be embarrassed about making a profit not so long ago.
Crazy as it seems today, it is worth thinking why it was so.
Profits, as economists will put it, is the reward for risk-taking, for putting a business enterprise together in the pursuit of an objective. In this definition, remember, profits are not what it is commonly understood to be – the gross middle-line towards the bottom – but a figure net of entrepreneur’s earning [wages for his labour], dividends and interests on borrowed capital, and provisions for building and other physical assets [a sort of rent, offsetting what these assets could have earned if leased out]. This pure profit – surplus – accrues to a business as a reward to its organisation, for the act of entrepreneurship itself.
Economists were divided on how this surplus comes about. The conventional wisdom was, as I …
This has been the best and worst of the times for Higher and Professional Education. While people pursuing Higher and Professional Education has attained a new peak globally, new questions about its relevance and cost have arisen too. The expansion of formal education has crowded out the ecosystems of informal learning, in effect depriving societies with one of the tried-and-tested coping mechanisms for social and technical change (see my earlier post on this), but it has offered little in its space. Its claims on the territory, in various avatars of Lifelong Learning or Massive Open Online Courses, have underachieved, being too structured, too bureaucratic, too content driven and too top-down. Finally, its claims of being able to assess everything overshot its capability, and created dissonance with employers as they struggled to work out hard measures of the 'soft' skills.
However, among all these debates and questions, one that attracts maximum attention is the one about …
There are two reasons why I am writing this post, which is really a retake of an earlier post - Should Britain Apologise? - which I recently shared on Social Media.
The first is that there is a renewal of this debate. The recent political twists and turns - Brexit and emergence of Hindu Nationalist India most importantly - have brought the question of British imperial folly to the forefront, engaged in animated debates and denials (see here).
The second is a renewal of interest in history itself, made possible by the deliberate wrecking of the Post-War world system by Conservatives in America and Britain. After being presumed dead, history has been regularly invoked in claims, particularly by British and American politicians who are good at pointing follies of other nations. Hollywood made a film about Holocaust denial, though the question of American imperialism in the Pacific was never deemed worthy of retelling. The British Secretary of International Trade, Dr Liam Fox, recently …
I remember this awkward dinner conversation. I was with my colleague in Northern Ireland, and a friend of his joined our table. After we were introduced, he wondered at my name and asked me what religion I belong to. I went for the simpler answer and kept my doubts aside: "I am Hindu", I said. That made him even more confused. "What's a Hindu?" he said, "Is that some kind of Muslim?"
When I tell this story to my friends in India, they are usually outraged. What an ignorant person, they would say. Particularly treating Hinduism as a branch of Islam, when Hindus love to believe that everyone was originally a Hindu, upsets them. I have also reflected upon this conversation later. It may indeed be that he did not know. He was particularly ignorant, just as ignorant as the lady, who, standing inside the Irish Bar at Mumbai's ITC Grand Central hotel, asked my colleague - the same person as it happened to be - where Ireland was. But the confusion about …
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To start with, Clayton Christiansen's idea that the universities of the Twentieth Century needs to evolve from its current 'value chain' model - wherein its value lies in its processes - to a form of User Network, where its value emanates from its community, still resonates with me. The Value Chain model, with departments, examinations, textbooks and degrees, that we know the university for, is very much a late Nineteenth/ early Twentieth century formulation. And, indeed, one can claim that the universities were always communities, and its value came from being a member of that community rather than its end product - the degrees - for much of history. It …
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This may be overtly optimistic and there are a number of things that can go wrong in India. For a start, we now have a nationalist turn, and the 'not-invented-here' syndrome has become all pervasive. That r…
The inspiration behind this post comes from several conversations with my colleague Pratik Dattani, the former UK Director of FICCI, an Indian trade body. Pratik, in a regular column he writes for Dainik Bhaskar, pointed out India's meagre tally of 30,000 odd foreign students, against 450,000 in China (which is growing at 10% annually), is a huge missed opportunity, in terms of foreign currency earnings, 'soft power' and diffusion of foreign cultures and ideas. And, besides, number of foreign students in India may be going down rather than up, and several factors, not least anti-African sentiments in some Indian cities, are contributing to it.
Pratik and I have collaborated on a number of projects over the years and I have been closely involved in a Conference, now in its fifth edition, that he organises on Education Innovation in London and in India. We both agreed that India's continuing weaknesses in attracting foreign students is something we want to put on the a…