<div>As a global hub of skilled talent, India’s attraction as a destination for research and development activities across industries continues to grow. A phenomenon that started in the 1980s, when the first multinationals explored the country for their R&D centers, has today gained significant momentum with one third of the top 1,000 global firms having a presence here. From the discovery of “zero” till date, several examples abound of the culture of innovation ingrained in the Indian mindset. After the 2008 economic reset, there has been renewed interest in R&D in India. Over 220,000 Indians today work in multinational R&D centers, which have invested $7-7.5 billion on their headcount in India in FY2011 alone. <br /><br />But what, exactly, are we creating? Scratch the surface, and we realise that many MNCs leverage their centres for low-value activities and operational support to headquarters, rather than driving innovation out of India. There are several reasons for this, but let’s take a step back and analyse the objectives (commonly referred to as Charters) that MNCs have, while establishing R&D operations in the country.<br /><br />Charter definition can be defined at various levels, depending on the market, ecosystem, competency, leadership and partnerships. The charter for a functional unit within the center can range from managed services leadership from India, social media support, IT leadership for Asia to all non-US English support. <br /><br />Similarly, the charter for a product unit that operates out of India can include reduction of engineering costs, extension of sunset products, competency-based leadership or even product leadership for the global market. However, the charter for an R&D center as a whole should be more holistic and should drive long-term engagement. This can range from innovation, to strategic outsourcing, or establishing connects with the vibrant startup and university landscape in India.<br /><br />The right charter can allow India centres to spearhead technology innovation, become a business driver and enhance the top line as well as bottom line. An ideal Charter outlines an organisation’s vision to leverage disparate business units and work cohesively to build solutions, develop a common technology platform for the organisation or contribute to the product roadmap through core research. Organisations are thus able to incubate adjacent/orthogonal global business units, build products for growth markets and influence revenue in specific regions.<br /><br />The next factor is getting the much needed buy-in from the appropriate and primary stakeholders within the global organisation. This can range from the CTO, followed by leaders of individual business or engineering units for technology-defined charters; the CEO, chief strategy officer and business leadership for business-focused charters and the CFO for organisations that take a bottom-line approach to the R&D vision.<br />The maturity of the R&D center also plays a critical role. Centres at the lowest levels of maturity could be chartered with engineering support and aim for module leadership, while more mature centers have engineering leadership and product leadership as their vision. <br /><br />A well-defined charter is inspirational as well as ambitious and provides a common direction for talent to work towards achieving clear goals. It sets the context for increased innovation, successful products and ultimately, better business outcomes.<br /><br />Having said that, to have a clearly defined vision is one aspect, but leadership to make it happen brings it all together. Unfortunately, this is where the biggest gaps lie in India. Only 26 per cent of Indian MNC centres have a global role, despite consistent efforts towards building competency over the last decade. We also find that leaders who have grown up the ranks of the company are typically able to scale up both headcount and value than external hires. The need today is for inspirational leaders: they who have global influence and impact; and are able to articulate and drive the organisation’s vision towards higher-value contribution to the overall organisation.<br /><br /> <br />(<em>The author is CEO, Zinnov, a management consultancy company)<br /></em></div>
