Indian companies have rapidly increased the pace of globalising their sales and operational footprint in the last decade. The role of corporate centre in terms of its location and talent is a question that has become increasingly prescient for such companies. In the first wave of international expansion, firms traditionally relied on two contrasting approaches — exporting senior talent from India to these new markets or hiring senior local talent to augment the majority Indian operating team in international locations.
Both these approaches were useful in the early phase of globalisation and helped in maintaining relationship-based trust between the India-based corporate centre and new countries. As scale of international operations have increased, this approach is no longer sufficient to drive growth in these markets. A few companies have taken the next step and questioned themselves on new structure for corporate centres in a new reality where international revenues form a major part for their respective turnovers.
Companies will need to make two choices. The first is global platforms — what global platforms do they need for future success and which of these need to be located outside India. Typically, scale oriented platforms are better suited for an offshore location, but in many areas like innovation and product design, global platforms are best placed in places closer to major markets. Leading Asian companies like Samsung have successfully embraced this approach by leveraging Europe for developing design capabilities. Indian companies need to identify which ones need to be supported with centres of core capabilities in global markets.
The second choice is selection of talent for top leadership and their physical location. The corporate centre increasingly manages a proliferating number of locations, target markets, product variations, and partners. New age leaders need a truly global mindset, and a more collaborative and adaptive approach. Hence, talent and experience rather than origins should become the defining criteria for corporate leaders. This will necessitate that Indian companies become inclusive as they target leadership.
Many people believe that in the new 24X7 connected age, location doesn’t matter since leaders are available all the time. But there is still value to senior management immersing themselves in target markets, living and breathing the set of issues that their clients face. It is imperative that key decision makers place themselves in core markets and add local context and nuances in their decision making and behaviours. Many Indian companies have embarked on this journey and demonstrate success. Cognizant is an example where the firm has built a global leadership team that spreads majority of its time in key customer markets. Globalisation is a long-term journey with complex facets but firms can start with selection of talent and their location as initial point.
Navneet Vasishth
Partner & Director, The Boston Consulting Group