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How to win a business assignment in India

by: Nadir Karanjia, Associate Partner of Hofstede Insights

 

Why should I read this document? 

 

Not knowing the nuances of a culture one wishes to work in or sell to, is akin to giving a speech to an audience in a language they do not understand . The objective of this document is to provide insight into some aspects of doing business in India, so that the target audience can appreciate and understand what it is that you have to offer.

 

Important! 

 

Five most important things to know about doing business in India (if you read one thing this is what you should read) 

 

  1. Relationship, Relationship, Relationship: India is a business culture that very much works on building relationships and warming up to each other . It makes it easier to trust and trust is key to concluding business. Collectivist and Long Term Orientation .
  2. Price, Price, Price:  Profitability is a key driver for an Indian business and at the end of it, relationship or not, the margin between profitability and more profitability is a very thin one.  Be prepared for hard negotiations on price.  
  3. Caution, Caution, Caution:  Exercise FULL caution while working with Indian businesses .  Clarity in terms of business are of paramount importance, or you could end up making very costly assumptions. Do not assume anything. Communication is very important .
  4. Verify, Verify, Verify:  Do not take anything for granted. Keep checking in with the client/buyer/supplier, especially on timelines for delivery and quality of product or service .  Situations change and reality changes too.  
  5. Brace, Brace, Brace:  Buckle up and brace yourself  - it is going to be a bumpy ride .  Prepare for uncertainties and for unpredictable twists and turns on this ride. Be adaptable to ground reality as it unfolds. Rigidity will be your undoing. Be prepared for that famous Indian habit and expectation… be ready to “adjust”.

 


Short Introduction

 

Culture does not find its way into a balance sheet; it is not listed as capital or an expense, it does not show up in a profit and loss statement nor does it feature in the company annual report. Yet, it is very much the “X factor” in all the key elements that determine a successful and profitable venture. In order to do business in any culture it is imperative to understand the nuances of that culture to some extent. India is a very complex country with many variants to “Indian Culture”.   
 

 

 

One fully appreciates the vast complexities of Indian culture when one has the opportunity of working with a larger company that has a national presence. The contrasts in preference and working styles is often very stark and demands quick reactions and thinking on one’s feet. One size most certainly does NOT fit all, and particularly in Indian businesses where bosses are powerful and subordinates… well, relatively subordinate in their attitudes and behaviour. While all inherently “Indian”, the North, South, East and West differ immensely in behaviour, attitude, business conduct and perceptions. A company is often spread across the country with zonal and regional organisation structure that often imbibes the preferences and perceptions of the geographic area that is it’s theatre of operations. For example, the South appears to be extremely cautious, and the North very cavalier, the east seems very laid back and the west tends to come across as more urgent - all this adds up to different responses and approaches needed when dealing with each demographic.  

 

Yet there is an overlying similarity that can be explained by the dimensional model of National Cultures of Professor Hofstede.

 

To further put it in perspective, imagine walking onto a stage to give a talk, and while you are somewhere in the middle of your speech, it is painfully apparent that not everyone understands the language in which you are speaking. What is the chance of that speech being successful? In much the similar manner, any business approach to India has to be tailored specifically to the individual and the regions you are working in. You have to learn to work in that style. That still does not mean that certain facts are not omnipresent - such as Power Distance; Collectivism; Masculinity; medium Uncertainty Avoidance and a Long Term orientation.

 

Using this knowledge is always to your advantage in the eventual goal of winning the business in India. Some examples:   

 

PDI (Power Distance Index Score: 77) 

 

The culture is Power Distance - this translates to different equations in different circumstances linked to market conditions. Is the product or service supply oveted? Is the advantage to the Buyer or the Seller? Are there other suppliers or buyers? Essentially, one must work out who is the power holder in the equation. If you are a buyer in a seller’s market, then the seller is the power holder and vice versa if it is a buyers market. While that may or may not end up closing the deal, it will provide you with some idea of the extent to which you may be able to negotiate or not in a situation. Meaningful negotiations mostly take place at the highest levels only. What is said at the mid or lower levels cannot be what you base your decisions on.

 

IDV (Individualism Score : 48) 

 

India is a collectivist society. This translates to the necessity to build relationships and take the time needed to make that personal connection. In such a culture, it is the small personal things that matter a lot. Showing respect for the elder members of the team, identifying the power holders and honoring the group traditions with respect to that structure. Respect for the religious customs and traditions of the people around you and, if the opportunity arises, taking part in small traditions that you may encounter along the course of your visit. It is often advisable to carry token gifts as a symbol of respect and accepting invitations for a meal or a visit to a colleague’s home, which is an honour and in keeping with the tradition of hospitality of the collectivist culture.  It also always helps to use any opportunity to make that personal connection - remembering birthdays, for instance, gives the impression that you consider your partner in India important enough to remember him or her.

 

Do not disagree with a power holder in front of others. Any disagreements must be discussed in private because otherwise the power holder is backed in a corner and must assert himself or herself to be respected by his or her subordinates. A Saving Face strategy in a potential conflict is an important aspect of building relationships and being part of the circle of trust.

 

Masculinity (Mas score : 56) 

 

The culture covets the symbols of success. When there is too much informality from the counterpart, in way of dressing or the trappings of success, it is viewed with some guarded skepticism. The good watch, clothes, pen, shoes, etc. will be noticed and go some distance in establishing that you are a successful player in the game. Too much is not appreciated either - it has to be just right.  

 

Closing the sale or doing the deal is a very powerful force driving the Indian. It may result in some tall claims being made or false promises out of over enthusiasm; evaluate and re-calibrate your expectations constantly. Take nothing for granted and be very clear in your objectives and goals.

 

 

Short case study 

 

This is a case study showing the importance of relationship building in the Indian business context. How the national culture drives the business process; how relationship investment and management can dethrone that cruel king - price - to win the business at the end of a hard fought battle; and battle you will.

 

It is a case that the author was front and centre managing and running for more than 1 year. It involved one of the most valuable companies in India, interaction at the highest levels in the organisation, building trust and credibility that cut across all lines of confusion, and won the day in the end.

 

A very large technology company was floating a global tender for a comprehensive network security end-to-end solution for all its offices and subsidiaries all over the world. The company was part of a very large and venerable Indian corporate group, with a turnover of close to US $ 108 Billion in FY 16-17. The organisation is global and the technology company that floated the tender was responsible for implementation not only within itself and its business partners, but also to roll out the network and information security policy across the whole group. The contract would be worth approximately US $ 500,000 over 3- 4 years and then progressively increase as the roll outs happened on a group level.   

 

In the industry at that point in time, this was one of the biggest contracts to be awarded in the then fledgling field of network security; and everyone who was anyone and their uncle’s parrot were vying to win. 

 

There were other corporates, cooperatives of dealers and suppliers, consultant companies who were fronting the approach and outsourcing silently to those who had the expertise, there were brokers, fixers, dealers, influencers and several other vested interests, trying everything under the sun to win the bid.

 

Who Won 

 

The company that finally walked away with the much coveted prize, was a medium-sized operation with the capability of supporting the customers needs competently. The relatively smaller company that had invested in expertise, knowledge and skill set and that had a truly committed culture to serve its clients needs to the fullest.

 

It took 4 months for the lead sales person to establish contact with the head of operations and decision making in the organisation. Strategically, the power holders were identified and the lead sales person worked his way up the ladder. It was not easy to get the ear of the key person(s) and each stage required proof of commitment by providing excellent service and support, with no expectations. 

 

When finally the lead sales person broke through to the operations head, he brought in the power holder of his own company, who became the lead contact for the Head of Operations. Power Distance Index score of 77 makes Indians appreciate designations and authority. When two levels of decision-makers meet, it is vital for them to be on the same level in their respective functions for any meaningful progress to take place. It became then a personal connection between two heads of operations - one could pick up the phone and call the other. One was the head of a small company, one the head of function of a giant.

 

Many times services and support were provided immediately to resolve queries and assist with testing of solutions and softwares. Impromptu service calls were prioritised and constant polling of the customer was conducted. Specific teams of experts were assigned particular departments and divisions of the company and gratis support was provided 24/7 to build relationships and trust and credibility at all levels.   

 

All this was happening even while many other organisations, with much larger resource bases and branding, were vying leaving no stone unturned for the contract.   

 

Turning Point 

 

The key “incident” that propelled the smaller company into prominence as a serious contender was when a critical subsystem was under attack by external forces.   

 

That separated the wheat from the chaff because many of the bigger names in the game failed to live up to their previously made claims. Some were tardy in response, some were proved incompetent and lacking in knowledge and skills, some were hedging and delaying their responsiveness, and others simply did not take the single call for help from the client seriously enough.   

 

However, the future winner did. They deployed their full strength of experts to the potential client. One phone call was all it took to commit fully to the breach. 
They spent full days on site - no charges discussed or negotiated;  just focussed on assisting the organisation’s internal teams to resolve the crisis based on one phone call from the Head of Operations to the head of the smaller contender. 

 

Once the crisis was resolved successfully; there was no turning back. In the balance, months thereafter that the negotiations and tendering processes took place, many times the smaller company was out maneuvered by the big guns on prices. In India, a price sensitive market, that makes all the difference. However, the trust and credibility developed, both at the highest levels, as well as in the trenches within the organisation with the work teams deployed to assist in the crisis saw the contract finally awarded to the smaller company that provided the quality of service that built and nurtured the relationships within.

 

This is not always what happens, many times people want to see a purchase order or they begin to wilt in terms of enthusiasm. In a highly competitive bidding process, where a few percent difference in pricing can be the definitive factor, whether a death knell sounds or victory gong is heard, people tend to ask “what’s in it for me?” before they put themselves out on a limb.

 

Relationship Beat Price 

 

When one reflects on the key learning points of this case, one can understand why that cruel king price was dethroned by the usurper, relationship.

 

Power Distance: best illustrated by the passage in the Rudyard Kipling epic poem “The Ballad of the East and West” wherein the author says:  

 

 “....They have looked each other between the eyes, and there they found no fault.
They have taken the Oath of the Brother-in-Blood on leavened bread and salt:
They have taken the Oath of the Brother-in-Blood on fire and fresh-cut sod,
On the hilt and the haft of the Khyber knife, and the Wondrous Names of God.”

 

In this above passage is encapsulated the key issues of trust and credibility as well as mutual acceptance of equality. The poem ends with the epic passage:

 

Oh, East is East, and West is West, and never the twain shall meet,
Till Earth and Sky stand presently at God's great Judgment Seat;
But there is neither East nor West, Border, nor Breed, nor Birth,
When two strong men stand face to face though they come from the ends of the earth! 

 

Build relationships; in India it can be the great bridge across culture.