|Classical Management theory is culture-'insensitive'. The challenge is to develop a new theory.|
|"I have a product that offers fewer features than competition, is priced at a premium to competition, yet outsells competition 2 is to 1. I know I need to professionalise, which means I need to define my brand. But I am worried. While defining we may identify ten things my brand is and miss out on just that one thing that is making the difference and I might lose the only thing that's working for me. How do I avoid this?" Innocent though the question was, it was an interesting one posed to me by an Indian entrepreneur when I pitched for his business recently.|
|A western colleague was shocked to learn that an average Bollywood film is often made without a final, bound script in hand. The director has a broad story and vision in mind and the film evolves on the sets as he goes along making the film. (Maybe much like how a painter develops his piece of work.) He gets each of the individual specialists to do his bit independently and then brings them all together in a final film. It is perhaps not the most cost-efficient way to work but it does deliver magic and everyone around is comfortable working that way. It provides leeway for "star" egos and creativity as nothing is cast in stone till the final edit is sent out.|
|At a recent SME (small and medium entrepreneurs) conference, three leading Indian businessmen echoed a similar thought. Their choice of industry was not something that they knew anything about, but consciously one that they knew nothing about. They reflected that this was because it ensured they worked hard to learn and listen to others and perhaps their "naivete" ensured that there was enough innocence left to provide for innovation. This goes against classic western business management theory of driving business by core competence.|
|All three cases reflect an Indian system of management different from what one learns at business schools. It's more about "instinct" rather than "intelligence", a certain level of "madness" against "method". This might be disconcerting for the average "westernised professional". John Wright sums up Indian management interestingly in his book Indian Summers when he says, "This was India; it might not happen straight away, but it would happen. In the end, things just fall into place often without you quite understanding how or why. To lose patience is to lose battle."|
|Just as western marketers have realised that global marketing mixes do not work automatically when moving across borders, there may be enough reason to consider a different set of management principles. If consumer drivers are culture-specific, so too could be worker drivers and employee drivers.|
|The purpose of business is about return on investment for shareholders""the higher the better. It pre-supposes that the only thing driving human beings is material comforts and so money. Mental, emotional and spiritual well-being are points not to be considered! It is already documented that Japanese companies live by a different principle and elements like market share and innovation are placed higher than pure financial RoI. |
The average Indian may also have similar different expectations. And this needs to be factored in.
|In his book The Singularity is Near, Ray Kurzweil says: "Productivity (economic output per worker) has been growing exponentially". These statistics are in fact greatly understated because they do not fully reflect the developments in quality and features of products and services. It is not the case that "a car is a car"; there have been major upgrades in safety, reliability and features. Certainly, one thousand dollars of computation now is far more powerful than one thousand dollars of computation ten years ago (by a factor of more than one thousand). Looked at materially he is right""however, if one were to put in the human factor, then the same statistic is understated the other way. After all, as society has developed and material comforts have increased, the emotional strain caused by desire for such comforts has taken a human toll and that too needs to be quantified along with the added features.|
|Again, Al Ries has always propounded that strong brands need to be single-minded and build association with one category. Sony makes PCs and many other products; Dell makes only computers. In a comparable ten-year period, Dell made a net income after taxes of 6.1 per cent while Sony 0.8 per cent. However, Sony has great stature and is seen as a technologically advanced brand. India has umpteen examples of brands that have successfully traversed categories and built themselves on values""Tatas, Godrej, Nirma, Reliance, to name a few. Clearly, this is a different and yet effective school of brand management. Brands are about values, not benefits or categories. (A corollary: The only core competence an Indian businessman has is management of money, resources and people and not knowledge or functional skills.)|
|Gert Hofstede in Organisations and Cultures says that organisational structures develop based on not market needs but by a culture's comfort on two parameters""uncertainty management (what rules and procedures will be followed to achieve the desired end) and power distance (who has the power to decide). The Germans, for example, have low power distance and are uncertainty-averse""and so a "well oiled machine" works for them""where rules and processes are well-laid-out and management intervention is kept to the minimum. The Asians, on the other hand, are high on uncertainty management and high on power distance""and so a family model works best""the owner manager is the omnipotent father and everyone is permanently referring back to him. He in fact goes on to say no model is better than the other in absolute terms""it all depends on the culture of the people involved.|
|These are just four illustrations of how business management in India could be different from the western theory of management. Clearly culture needs to be considered as a dimension when developing management principles and theories.|
|Rather than blindly adapting western principles and attempting to bring "method" to Indian "madness", the challenge is to find method in the Indian madness and develop new a new theory. Something worth thinking about.|
|Madhukar Sabnavis is Country Head- Planning and Discovery at Ogilvy and Mather, India. He can be contacted at|
Madhukar Sabnavis: How relevant is 'Drucker'?
Madhukar Sabnavis |