Buzz around expat CEOs again after Vishal Sikka's exit

Retail is one of the sectors to have had many expats as top executives

Expat chief executives, from Vivek Paul of Wipro to Rakesh Sarna of Indian Hotels and Bharti Retail’s Andrew Levermore to Reliance Retail’s Gwyn Sundhagul, have often been associated with sudden exits from companies in India. It could be anything from a cultural mismatch to un-met business targets. Vishal Sikka’s resignation as Infosys CEO and MD last week has again got the industry talking about why expats at the top of Indian businesses have not been really a success story while home-grown executives are at the helm of many multinationals across the globe.

According to Abraham Koshy, professor at Indian Institute of Management (IIM) Ahmedabad, cultural and people orientation are among the most critical requirements for very senior positions. 

"These are unwritten and shadow capabilities to assess CEOs." It’s possible that an expat who’s not exposed to the Indian environment of business and is not flexible may find it difficult to head a company here, Koshy said. "There’s a lot of more collectiveness at the Indian workplace compared to overwhelming individualism in the West." But he added that it’s not a case of expats versus Indians. A lot depends on the type of job and the skill sets one has.

When asked if expats continued to be a misfit for top jobs of India Inc, a leading investment banker said, "I hope not. Else we can forget being a globalising economy." 

 

Why then are there so many examples of expats either having a short stint or quitting unexpectedly even when they are brought in with much fanfare? "That is because Indian companies hire foreigners or expats when they are in a big mess anyway," the banker argued.

Whether or not in a mess, global search for top executives has been a norm for many large groups in India, especially in the tech space. However, some companies need Indian CEOs to navigate the complex regulatory and political environment across states, an official with a top business group said. 

Among prominent expats, Vivek Paul, an India-born American national, who joined Wipro as vice-chairman in 1999, put in his papers in 2005 after what was believed to be a clash of ideas with the old guard. In an interview then, Paul had said Indian managers were "in a cocoon". 

The retail sector has seen many expats as top executives. It lent itself to global talent while the industry and its business model was still evolving – there were no templates to work from, said Preety Kumar, managing partner, Amrop India, an international advisory and executive search firm. 

Reliance Retail, for instance, appointed a large number of expat executives in 2009. Gwyn Sundhagul, chief marketing officer and director at Tesco Lotus, Thailand, became the chief executive of Reliance Retail’s value retail format. However, two years later, Reliance hired Rob Cissel, former chief operating officer (COO) of Walmart China, as CEO of value formats, replacing Sundhagul. 

In another expat appointment, Bharti Retail got Andrew Levermore as CEO, but it was a short stint and he headed back to his home country, South Africa, soon enough in 2011. Levermore had a four-year stay at HyperCity Retail before that, where he joined in 2008. Tata Motors is among the rare companies which has had three expat/foreign MDs so far. From the Tata group again, Indian Hotels has had Rakesh Sarna and Raymond Bickson as expat chiefs who quit unexpectedly.    

"Top executives' choices are getting more and more complex, and both we and clients need to be making decisions carefully. Right resume is only a base level criterion, yet there is still a tendency to hire a resume,” said Kumar. In our experience, expats are often found to be more successful in functional or technical roles – if they come with high-level domain expertise along with appropriate leadership capabilities, especially in emerging markets,” she pointed out. “The decision for an expat CEO has to be very very careful. Here is what not to do – do not hire this combination in Indian companies - someone for whom this role is first-time CEO role; no exposure to the Indian/emerging markets; no exposure to a majority owner(s). It is like a triple whammy," she said.  

Naushad Forbes, former president of Confederation of Indian Industry (CII), said getting the right person for a role is critical, and that nationality is immaterial. There have been highly successful expat CEOs in India, just like Indian CEOs have led international companies such as Micrososft and Citigroup. He named Steffen Berns who headed Bosch for long as one of the success stories of expat CEOs in India. Others named Laurent Demortier, who headed CG Power and Industrial Solutions (earlier Crompton Greaves) as yet another case of successful expat CEO. So was Martin Pieters, the India head of Vodafone for more than five years.

But, as Gurcharan Das, author and former Procter & Gamble CEO, pointed out, "There’s a jolt to professionalism in India Inc after Sikka’s resignation. There’s a sense of sadness."