The collision of transaction culture with relationship culture shows how NOT to succeed in India

It is a frustrating pattern. The eager business team arrives in India on their first trade mission, they race from meeting to meeting and sign lots of MOU’s (Memorandum of Understanding) and appoint agents. The three day trip has been a roaring success!

Then, nothing happens.

What is going on here? The collision of “transaction” culture (the west) and “relationship” culture (India) has taken place yet again, with predictable outcomes.

From the Indian side, a high sense of courtesy and a culture that cannot say “no” means the visitor feels great progress is being achieved – while the Indian is also positive, feeling that a valued relationship might develop. Classic misunderstanding.

What is the alternative? Take a long view of India – at least three years – and wait for genuine relationships to develop. Go to India many times, not just once or twice. Put quick transactions aside and build trust. Learn how to relate to a culture that thinks differently.

Given that around 600 million Indians are under the age of 25, the future is bright and you should be there. Just go about it the right way next time.

20 essential tips for doing business with India

 

Doing business with India? Enterprises in the west are looking at collaboration and business links with India – but it is not easy, requires patience and a lot of understanding. Even NRI’s can find the landscape different. Here are some tips that might help your experience, but keep in mind you will find many variations and contradictions of these points in the very diverse and exciting India market:

The language barrier is real – even English

India has some 26 major languages, but your Indian counterpart will almost certainly speak English, which itself can be a problem – it creates the illusion of communication and understanding. Many of us speak English and think western – your Indian partner speaks English and thinks Indian, so take care to build real understanding. Also keep in mind there are “many Indias” with many different languages and ways of thinking.

You are in a different culture

Visitors to most of Asia and China are visually reminded all day that they are in a vastly different culture. But often, especially in offices, India can appear quite westernised and individuals also give that impression. Better to open your mind and see things and people more clearly, looking beyond the surface level “westernisation” – exploring cultural differences expands your horizons and you will find many charming similarities. 

Dealing with surprises

Indian culture provides masses of room for non-conformity, hilarious and stimulating exchanges and lots of surprises. Diversity of dress, styles of doing business and differing reactions to personal contact are to be expected over there. A major CEO or Government Minister might change their schedule just to see you – on less than one day notice. Your host might want to talk about diet or spirituality instead of your product and it is wise (and fun) to go with the flow, enjoying the surprises of India.

Be patient and you will get there faster

Adopt a patient long term view and for investors India is a 5 to 10 year game. It is very easy to get MOU’s (Memorandum of Understanding) signed with fanfare in India but too many do not produce any outcome. One way to improve our cultural dexterity would be to take a long-term view and apply lots of patience.

Businesses should not start out on market entry unless they are prepared to commit at least five years to making it work. Governments need the same longer-term perspective. Rushed trade missions, political announcements and photo opportunities amount to very little – we see them as an achievement, but they are just a beginning.

Relationships take time – but they are everything

India is a collective culture which means relationships are the number one factor in success, and building relationships takes time. Many who see India as not a short-term transaction opportunity can find success, but not for long as someone with a better price comes along. A better strategy is to aim for longer success through a focus on building relationships. The first trade meeting in India can be exciting and positive, but from the India side this is just seen as an introduction and they will wait to see if the relationship grows. Trust and relationship take time.

“Yes” can mean “maybe” or “no”

See beyond the politeness: Indians are among the most courteous and generous hosts on the planet. On top of this, their culture demands that they never provide an outright rejection or “no” statement, even when this is clearly the only answer. The dumbest question for a business to ask in India is “can you help me with market entry for my products?” The answer will always be “yes” and you will sit idle for a long time back home until you realise this is not the right question. Within Indian culture built so solidly on relationship above all else, the word “no” is a real relationship breaker and is rarely or never used. “Yes” can in fact mean “maybe” or even “no” and you need to look for the signs. Like most of Asia, Indians are indirect communicators.

Avoid stereotyping

India might be the most diverse country on earth. Religions, beliefs, languages and culture all immensely varied. Keeping an open mind will help you avoid jumping to the wrong conclusions. Your host could have spent many years in the USA or the UK, and have a global outlook – or never have left India and have a regional view.

Prepare for the collective

Most westerners come from a culture of the individual, but the Indians they meet are firmly placed in a collective culture.  A visitor to an Indian company will often find four or five Indians in the meeting, and often it is not clear who is in charge. Many Indian leaders will not speak up or even speak at all in these meetings – in the collective someone else does the talking while they do the evaluating.

It will be slow and fast

Modern India can be slow or fast and it is hard to know which you will encounter. Sometimes delivery seems to take forever, yet on other occasions it is faster than the west. This means to succeed there you need incredible patience, so don’t send your least patient executive to India. Being able to respond positively under both slow and fast delivery is the key.

The visitor can be shocked and unprepared for the speed of modern India. Businesses need to go prepared to deliver on a product or service right now, not just having some idea for a future opportunity. Trade missions from around the world arrive weekly, so they have plenty of choice. Fast and slow, east and west – India is a living and dynamic paradox.

You might find yourself in the queue

The world is knocking on India’s door. Even if you represent a major company, you are not necessarily that important to Indians – the rest of the world is chasing them too, so they have choices. While most western executives are under head office pressure to complete the deal, their Indian counterpart faces no such demand and can walk away in most cases, so be prepared to go that bit extra if you want to create the relationship so necessary to doing business.

Watch out for religious holidays

A simple point often overlooked – check the calendar for holidays and although they are often fun and informing, it can be a hard time to do business. A holiday listed for one day might run for four, so check it out first. But don’t be totally put off by India’s schedule – my own experience has been during both Diwali and Holi in India I was able to get all the appointments I wanted and joined in the celebrations.

holi
The vibrant colours of Indian smiles at Holi

Work harder for specific outcomes

Indians have acceptance of change hardwired into their psyche – they thrive on it. It also means they are less specific in plans and contracts, which can be disturbing for newcomers. Getting the specifics set down can take a long time – but be careful about speaking too bluntly because this can be seen as insulting in a culture of relativity and relationship. And once you have “finalised” the deal, expect a continuing run of re-negotiation (in India things are rarely “set in concrete”) which is consistent with the Indian view of the world and life as constantly changing and vastly unpredictable.

India is many countries in one

Differences are not just seen in the North, South, East and West, India is truly many countries in one and you need to be ready for cultural diversity. While Mumbai is the fast and flashy financial capital, it is also a tough place because everything is done on grand scale and at great speed. New Delhi is more formal and stuffy, also more liveable, and is more than a political capital – it is a powerful business city. Chennai is one of my favourites, embracing that slower southern pace and the values that shine in southern businesses. Regions have varying strengths, so research is the key. Recent moves to allocate Smart Cities across India can provide insights into alternative gateways for you. 

Be prepared for many internal flights

Wherever you are based in India, expect to travel, because there are at least 55 cities of over one million where you can do business, and that’s just the beginning. Plus, the importance of meeting face to face is especially the case in India. Personal and organisational logistics can become overwhelming, so find ways to keep your India developments within control.

Indian airport

Start and end the day late

Indian breakfast meetings can be set for 10am or even later – they are late starters (even though PM Modi has instructed Ministers to be at their desks by 9am). But your dinner meeting at the end of the day might not start until 9pm or later. Hours are long and weekends are for working because “work is life” is the mantra. 

Things will change at the last minute

Despite your expectation, India runs to its own rhythm. One westerner tried to break convention by running an early (6.30pm) dinner meeting, and his guests showed up at 9.30pm anyway. Often you will be called minutes before a meeting to change time or venue – going with the flow is an asset over there.

Expect to be interrupted

Indians like to do several things at once, so expect your presentations to be interrupted by other visitors, cell phones, papers to sign and other distractions. At formal conferences and lunches, cell phones are rarely switched off and often answered at full voice. Western focus and single-mindedness is not an asset in India. My experience is that although my Indian host might seem constantly diverted and interrupted during my presentation, not much has been missed as Indians thrive on multiple tasks at the same time, contrasting with the western single project orientation.

Be more formal

Addressing people by a title and their last name is a good policy in a country where status and formality underpin good manners. Australians, driven by egalitarianism, need to be reminded to focus their attention on the most senior (often also elderly) person in the room and avoid in-depth chatting to junior staff. Casual forms of address can come later, but only once you have really got to know the Indian partner very well. On the other hand, things are changing so fast in India…

Shaking hands with women

Conventional wisdom is no physical contact whatsoever in a business context, but few people over there seem to really worry. A good policy is to wait and see if the woman extends her hand, but if you hold your hand out first it is not such a big deal. Indians are amazingly flexible in these matters, but it is wise to show care.

Don’t read anything into the handshake

In the west we tend to read a lot into handshakes – too soft, too firm, too long and so on. Most of your handshakes in India will be pretty light by western standards, but it is not a sign of lack of interest or indifference. It’s just how it is done over there, almost like a formality to get over and done with. You might think about learning how to do the “Namaste” when greeting Hindu colleagues.

namaste

Navigate through the spider web

While the west strives for simplicity and certainty, Indian business leaders know that life is like trying to find your way through a spider web – where does it begin, where does it lead, who can tell? Consistent with this view, most Indian corporations offer an incredibly diverse range of products and services – whereas western business tends to focus on just one area. In most cases Indian companies are willing to buy from you but are also looking for the deal to include some intellectual property sharing arrangements – think about these before you head over there.

Learn the art of flexibility and patience

Being patient and flexible is an asset, even if you come from a country that likes to be blunt, direct and structured. Most Indian communication is indirect, so it can take some time to work out what the real issues are. India is full of surprises and you cope best through being flexible. Dropping any “one rule for all” approach is a good start.

If you are thinking of going, India’s great thinker Rabindranath Tagore (pictured below) can be your inspiration: “You can’t cross the sea merely by standing and staring at the water.”

Tagore

India expecting a good monsoon

Good weather news for the Indian economy – rainfall is likely to be normal during the June-to-September southwest monsoon season.

monsoon2

This would be the third consecutive year India will have a normal monsoon, with positive outcomes for the agribusiness sector.

Few westerners realise just how reliant India is on the monsoon. We know it is not a great time to travel there (I have, and the bumpy flights can be really challenging).monsoon4

The next major assessment of the monsoon will take place around mid-May when everyone is hopeful it will hit Kerala in the south and make its way north.

The onset of the monsoon in June is the trigger for planting of rain-fed “Kharif crops”, which include rice, maize, sorghum, millet, various pulses, soyabean, oilseeds and cotton.

To show how important the monsoon is, India receives 70% of its annual rainfall in the four-month period, which in turn irrigates over half of its farm lands lacking assured irrigation.

 

Why you have to PRAY for success in India

Prayer1

While the west sees the “Asian Century” as a huge opportunity, we are clearly lagging when it comes to India. For most, trade with China is many times greater than trade with India.

India is now much better for business and investment and things are improving at a great rate – so, my advice is to take another look, have another go.

But you also need to follow my PRAY formula for India!

P – Patience is needed

R – Relationships are the key

A – Adapt to culture

Y – Yes means “maybe”

Prayer3

Patience

Adopt a patient long term view and for investors India is a 5 to 10 year game. It is very easy to get MOU’s (Memorandum of Understanding) signed with fanfare in India but too many do not produce any outcome. One way to improve our cultural dexterity would be to take a long-term view and apply lots of patience.

Businesses should not start out on market entry unless they are prepared to commit at least five years to making it work. Governments need the same longer-term perspective. Rushed trade missions, political announcements and photo opportunities amount to very little – we see them as an achievement, but they are just a beginning. Our business executives and even many diplomats do not build patience into their strategies.

Relationships

India is a collective culture which means relationships are the number one factor in success, and building relationships takes time. Many who see India as not a short-term transaction opportunity can find success, but not for long as someone with a better price comes along. A better strategy is to aim for longer success through a focus on building relationships. The first trade meeting in India can be exciting and positive, but from the India side this is just seen as an introduction and they will wait to see if the relationship grows. Even our companies and governments take too short a view when sending people to India – a two or three-year stint there is just not enough. Trust and relationship take time. Others prefer to manage the India relationship from offices in Singapore or elsewhere – this is seen by the India side as evidence you are not committed to India.

Adapt

See beyond the politeness: Indians are among the most courteous and generous hosts on the planet.  To succeed, our businesses and governments need to dig deeper and fine the reality beyond the politeness.  The dumbest question for a business to ask in India is “can you help me with market entry for my products?” The answer will always be “yes” and you will sit idle for a long time back home until you realise this is not the right question.

Realise that language and thinking are different: One of the big problems in our relations with India is what makes it seem easy – Indians speak English. As a result, whereas our businesses and government when dealing with China, Japan or any other non-English speaking nation will have interpreters and consultants, in India the use of English creates the illusion that communication is taking place. Yet when we deal with other English-speaking nations, we factor in their thinking as well – we know Americans speak English but think differently from Aussies. Our biggest mistake is assuming that Indians think like we do.

Yes

Within Indian culture built so solidly on relationship above all else, the word “no” is a real relationship breaker and is rarely or never used. “Yes” can in fact mean “maybe” or even “no” and you need to look for the signs. Like most of Asia, Indians are indirect communicators. Problems are rarely addressed directly and unless you have an ear for indirectness, you will miss the warning signs. In addition, indirect communication creates misunderstanding because the Indian side will always have to agree with whatever you may be asking.

These barriers have kept westerners and India apart while seeming to be quite together. Hence it negatively impacts diplomatic, defence, investment and trade ties. If we can adopt a caring, humble and inquisitive approach – learning cultural dexterity – we will build the relationships which are the key to success.

And of course, you have to PRAY.

Prayer2

 

Frontier Advisors puts India ahead of China for investors

China has led for decades – but now investment advisors are putting India ahead. The latest is from Frontier Advisors as reported by Investment Strategy.

In summary, India is a long-term investment – a 10-year-plus horizon – with favourable demographics, population growth and an emerging middle class.

Here is how they saw both markets and why they favour India:

indiagateThe report says about China:

  • economic growth is likely to continue to slow as credit growth and investments, such as in infrastructure and property, fades
  • reforms in excess capacity sectors and deleveraging is occurring as authorities switch focus to “quality” of economic growth rather than the pace of growth
  • monetary policy is tightening despite an unchanged benchmark interest rate
  • environmental issues are being addressed, and
  • economic transition is taking place as the Government focuses on higher value sectors.

It says there is a risk that China deleverages too quickly and destabilizes the economy, “but a hard landing still seems unlikely”.

Meanwhile the new US restrictive trade policies heighten uncertainty.cropped-investingindia3.jpg

On India, the report says:

  • India is a long-term investment – a 10-year-plus horizon – with favourable demographics, population growth and an emerging middle class
  • Its economic growth path will likely be different from China’s: while social inequality is a problem, education is seen as crucial to alleviating this; demographics suggest it has multi-decades to “harvest” a return from this, while China’s was shorter because of the one-child policy
  • valuations in listed equities are not cheap, “but they seldom are”
  • Government bond yields look attractive, although higher inflation is a risk, and
  • there are opportunities in real assets, such as the “National Corridor Project”. But its history has been poor and there is a reduced capacity for liquidity

https://www.investindia.gov.in/

 

India’s urban growth and 100 Smart Cities provide opportunities for all

Urbanisation in India is one of the major economic and population changes in the modern world – but making the most of this business opportunity requires a new approach from governments and business.

The Indian urbanisation boom is in two areas:

  • In existing urban areas for upgraded infrastructure and utilities
  • In 100 “Smart Cities”

The sheer size of these projects mean that individual companies going over could get swamped or lost – while countries such as Canada, South Korea, Japan and Singapore are taking fully coordinated solutions across – from finance through construction to management. The Indian government expects international money to fund 80% of the Smart Cities projects.

The needs are in areas most western cities are good at – efficiencies in water and electricity, new and improved transport provisions, and better waste management and sanitation, design and management, roads, public transport, upgraded utilities, management and municipal services and solutions to meet current environmental challenges.

Urban Development and Governance 

Municipal and state governments are key stakeholders alongside the private sector in the development of new urban areas. The introduction of e-governance for the delivery of administrative services is a rising trend across India that aims to reduce administrative delays, corruption, and improve analytical capabilities of cities.

Transport

Transport infrastructure will increasingly focus on areas such as ring roads and commuter train services alongside the basic logistical needs of a growing Indian industrial base – road and highway infrastructure is one of the largest infrastructure investment priorities, as well as traffic management solutions, electronic traffic management systems, centralised traffic light control, and digital signage.

Water, Sanitation and Solid Waste Management

The new Indian government has pledged to achieve ‘24×7 Water and 100 per cent sewerage’ by 2019 through the CLEAN-India [Swachh Bharat] initiative.  Water conservation is a significant issue in most major cities in India, and water shortages are a major threat to future urban development.

Energy

It is expected that efficiency gains can be made with the use of smart grids, improved demand management systems, implementing energy conservation building codes, and streetlight management. A sustainable energy mix will include more renewable energy sources, with solar and wind energy developing fast.

Finance

Financing of urban infrastructure in India comes from a number of sources including national, state and municipal budgets as well as the private sector. Of note has been the trend for countries such as USA, Singapore, Canada and Japan to present to India a consolidated program incorporating the finance and project implementation.

Conclusion

Opportunities abound as a result of urbanisation in modern India. The keys to success will be identifying the best opportunities and collaborating with a targeted solution – meaning businesses and their advisors need to get together and involve government as well.

On just one day – from Gandhi and origins of free India to the economic growth story

A lot can happen in one day, especially when we are dealing with India where change is super fast.

My day began with a visit to Melbourne’s Immigration Museum (in the last two centuries over 9 million migrants have made Australia home) and saw the wonderful Gandhi exhibition. It focuses on the early development of “Ahimsa” and “Satyagraha” and showed peaceful protests such as the salt march. Clearly the colonial power, England, had no idea how to respond and the march to freedom stepped ahead.

GandhiSteve

After such a peaceful visit, I thought to check the business news out of India – and saw 5 stories in one day that show what is happening there and perhaps why you should be there.

Economic Growth

As per the World Economic Situation and Prospects 2018 report of the United Nations, the Indian economy is projected to grow at 7.2 per cent in 2018-19 and 7.4 per cent in 2019-20. The report indicates that the outlook for India remains largely positive, underpinned by robust private consumption and public investment as well as ongoing structural reforms.

Solar Power on Target

The country’s 100GW solar mission target will be achieved ahead of its target in 2022, Minister for Science and Technology Harsh Vardhan said today.

“The government has set a target of 175GW of renewable power by 2022 and out of it 100GW should be in solar. It will not be a problem,” he said.

solar2

Foundry Casting – 2nd largest

India has overtaken the United States to emerge as the second largest producers of casting, behind China from last year, a top functionary of the Indian Institute of Foundrymen (IIF), said here today. The production in the country stood at 11 Million tonnes, valued at 19 Billion U.S Dollars in 2017, behind China, which produce 40 million tonnes, IIF president Amish Panchal told reporters here. Stating that the foundry sector needs to grow at least three-fold in the next 10 years, he said the industry employs about 2.5 million people.

Port traffic grows

The major ports in India have recorded a growth of 4.77 per cent and together handled 679.35 Million Tonnes of cargo during the period April 2017 to March 2018 as against 648.39 Million Tonnes handled during the corresponding period of previous year.

indiagateNine Ports – Kolkata (including Haldia), Visakhapatnam, Paradip, Kamarajar, Chennai, Cochin, New Mangalore, JNPT and Deendayal also registered positive growth in traffic. Cochin Port registered the highest growth of 16.52 per cent, followed by Paradip 14.68 per cent, Kolkata (incl. Haldia) 13.61 per cent, JNPT 6.2 per cent and New Mangalore 5.28 per cent.

Railway modernisation continues

Indian Railway has inducted three numbers of 09-3X Dynamic Tamping Express machines, the state of the art integrated track maintenance. These machines were inaugurated and flagged off by Shri M.K. Gupta, Member Engineering, Railway Board at Faridabad. Seven number of such machines are planned to be included within next six months in the present fleet of 874 track maintenance machines over IR for deployment on heavy density Routes.

Indian rail