American or European Corporation?

As another Indian moves into the corner office adding to the growing tribe of global Indian CEOs, especially amongst US tech giants, much has been written about the traits of an Indian professional manager that make him a preferred choice for these global transnationals.

But this piece is not about that. It is in fact about what are the “traits of the enterprise” from two distinct and different geographies that prompt them to include Indian professional managers in their global ExCom’s and corner offices. Where does the Indian professional manager have the best shot at reaching the top. Whether an American company is more favourable or is it that a European company gives his career the wings to fly.

The global Indian professional manager is of two types. The much talked about “PIO” Manager or the “Person of Indian Origin global manager” and the lesser talked about “HGI” Manager or the “Home Grown global Indian manager”. The PIO Manager is the one who has moved abroad after his graduation, typically to the US for higher studies, done his masters in science or business, joined an organization thereafter, worked his way up the ladder, got his citizenship along the way and has now taken up the high operating role. The lineup of CEO’s amongst US tech giants is from this pedigree.

The other type is the HGI Manager. He begins his career in India, joins the MNC locally, many times at an entry-level as a management trainee or in frontline sales or operation, earns his spurs locally, gets recognized and elevated to a country or a region position and then takes his chair at the global high table.

While most PIO managers take the predictable route of studying and working in another country, the HGI manager begins his career locally in India and ultimately makes his presence felt on the world stage in his company.

It may seem surprising to many but there are more HGI managers in global positions in European companies than in American. From London to Paris to Geneva it is quite common to come across Home-Grown Indian managers occupying the high table and that too across diverse sectors like FMCG, pharma, financial services, engineering and not just technology. Does this healthy smattering across European companies indicate that a European MNC is better suited for the career of an HGI Manager?

The answer may lie in looking at and mutually contrasting the local India operation of companies coming from these two geographies. It may offer some insight on how HGI managers are nurtured in the system and how that impacts their career graph.

At its root perhaps is the way these organizations are structured. American companies tend to be more matrix driven. Product, divisional and functional verticals are globally aligned for their strategic intent with the Indian arm acting as the operating arm. By contrast, the Indian arm of the European companies follows a more conventional linear structure with overall strategic and operational responsibility vested locally.

Even the way the local Country Head is appointed, and his role defined, highlights this contrasting structure. The American firms seem to prefer an ex-pat or at best a PIO manager at its helm and that too for shorter stints. Even if they appoint an HGI manager the global matrix structure allows him administrative control rather than strategic. European companies, by contrast, seem to prefer CEOs who are HGI managers that have risen through their ranks and who have overall strategic and P&L control of their market.

Add to this the operating style. While corporations from both these geographies are process-centric and compliance-driven, the American style appears more business-like whereas the European more relationship and long term oriented. The former may be the result of volatile and perennially fluctuating expectations of Wall Street of these companies that get translated to local India operation sometimes in the form of frustratingly short Q2Q review cycles which makes the local C-suite feel like tenpins in a bowling game! The European firms tend to be conservative without this overt bourse pressure as many are privately owned and therefore allow for a longer rope but with a sharp eye on cash flows in the short-term and healthy project IRR’s in the long-term giving the local manager a wider room to manoeuvre.

These contrasting structures and operating styles create two distinct nurturing environments for the HGI manager. The American way develops an HGI manager with a high level of process-centric execution skill. This skill is handy in addressing their scale requirement in different markets around the world in a cookie-cutter format. But it does get tiring given the constant Q2Q review pressure. Probably that’s the reason not too many “lifers” are seen from amongst HGI managers. By contrast, the European structure and style allow for more holistic nurturing. That includes more functional rotations, overall control of local strategy, patience with investments, long term stakeholder relationships, leeway to operate with local flavour etc. Local operations of European Multinationals even seem more “Indianized”.

Capability and expertise being a baseline, trust, familiarity, culture alignment etc. are key traits for consideration when booking a room at the top. And these traits get nurtured only over time and with the richness of operating and strategic exposure. As it stands today, in the context of Home-Grown Indian managers in India, the European companies come out tops and perhaps that’s the reason for the larger number of HGI managers in their global offices at the highest level.

There are two other loosely connected reasons that may be working in favour of HGI managers in European corporations. Higher education and History. There has been a preponderance of people going to the US than to Europe for higher studies, especially for their master’s degree. It could be that if there was an equally strong flow towards Europe then we may have found more PIO managers even in European companies. Second, and because of historical reasons there has been a familiarity between Europe and India for a long time and so there is a sense of comfort that European corporations have with the HGI manager.

Either way in the emerging order, as the world of business, gets geographically democratized, corporations around the world and not just Europeans will increasingly depend on the vast talent pool of Home-Grown Indian Managers as they bridge many mission-critical dimensions with ease. Even the Americans who have experienced Indian managers largely through the PIO route will begin accessing the pool of HGI managers.

These corporations will have to learn special skills to select the best from this abundant talent pool and conversely the home-grown Indian Manager will have to learn to deal with diversity and in the context of American companies even learn how to be a Wall Street Rockstar!

In the end and as will be the case with such topics, exceptions and contrary opinions will always be there. This overview is based on my experience of dealing with diverse corporations for close to three decades but yet I submit E&OE if any are entirely mine.