"Global Tilt" by Ram Charan

I completed reading this book, "Global Tilt, Leading Your Business Through The Great Economic Power Shift," today, 04 January 2016.

Arriving in Delhi, you might be forgiven if you thought you had woken up into a scene of post apolcalytic Los Angeles, in the film, "Blade Runner."

Ram Charan was a first year business policy (BP) teacher at Harvard Business School when I was there in 1969... not my BP teacher... I took first year BP from John Glover.

I recall when at HBS being surprised at how many Indian professors were teaching there. There was Charan. There was also my professor in Managerial Economics, Reporting, and Control (MERC), S. K. Bhattacharia. And others, whose names I don't recall.

I didn't realize it then, but later came to understand that these high powered Indian educators were the predecessors of a growing Indian talent juggernaut (Hindi term!) that would launch India into becoming a world economic power. Charan's book is about how global thinking businesses must play in the Indian and other southern markets, to survive. Playing in northern markets alone won't cut it according to Charan.

Charan: Northern markets are sagging and Southern markets are surging... and "you ain't seen nothing yet." Two billion middle class customers, all of whom live below the 31st parallel, will enter the world consumer market in the next decade. If you focus on short term gains desired by Wall Street, eschew the vagaries of foreign markets on the verge of a consumer purchasing power surge, you will die as a business.

New buzzwords too: "multicontextuality." CEO has to master multicontextuality to succeed. Ie. the ins and outs of each market are different. Different plans, skills and strategies will be required for each. There is no cookie cutter, Northern solution to operating below the 31st parallel.

The book contains practical tips on what you'll need to do to succeed in the south. Hire doers and not talkers, for example. And, without a knowledge of local context, it can be hard to discern one from the other.

From fly leaf:

To survive let alone thrive, in this new, fiercely competitive and hugely diverse international arena, everyone needs to adapt. Businesses need to seek broader horizons and embrace fresh strategies. They need to develop a profound understanding of the nature of the global landscape, with all its complexities and local variety. In other words, they need to tear up the old rule book and write a new one.

I enjoyed the book... particularly in the sense that I was a pioneer as an overseas, South world (India, Philippines) Citibank executive for six of my fifteen years working outside of the United States. I had to deal with many of the cultural issues about which Charan speaks. I laughed out loud as I read Charan's descriptions of how the guys on the spot in the foreign market had to deal with the "ignorant, unhelpful doofuses" (my term, not Charan's) at corporate headquarters. Been there done that!

True, I was at the operational level in my southern market work days... and Charan is talking to strategists in the book. Later in my career I operated at the strategy level so Charan's framework for action was not totally unfamiliar. I enjoyed reading the book and recommend it to anyone wishing to better understand how to capitalize on the massive, looming business opportunities awaiting in "the South."

Problems and Challenges

Delhi is polluted. 
Arriving in Delhi, you might be forgiven if you thought you had woken up into a scene of post apolcalytic Los Angeles, in the film, "Blade Runner." The occluded atmosphere is here. Only the fire belching smokestacks are missing. There is one auto or motorcycle for every five Delhi residents. Delhi, now the largest city in the world with 20 million people, has a car induced pollution problem.

City authorities instituted an odd/even tag number driving scheme on January 1 and early reports say that compliance is not bad. 2000 drivers were fined on 03 January 2015. The fine is Rupees 2000, or, about $30.00. Fines are far more severe if you are caught doctoring or substituting a tag.

There are a myriad of exemptions to the tag scheme. A woman driving alone can drive every day, notwithstanding her tag number (see "violence against women" paragraph, below). CNG cars are exempt. Tourist cars are exempt. Still, four days later, after implementation of the scheme, people are talking about how Delhi traffic has been significantly reduced. There seems to be an upbeat reaction to the scheme four days in.

The real LA solved the pollution problem in the 70's. Now, the Indians will take their turn.

India has other problems to deal with.

Violence against women.
In 2012 in Delhi there were more than 600 reported rapes. Only one resulted in conviction. Read a daily paper while here. There will be an article or two about a rape trial. The issue was brought to world attention after a well publicized account of a brutal rape in 2012. The good news is that the issue is finally "on the table" in public discussion.

Bureaucracy/red tape.
Even before the BJP political party assumed national leadership in 2014, the Congress party initiated a program of economic liberalisation along with a number of education, health and other social-reform initiatives. By 2006, India had become the world's second-fastest growing economy (after China). The BJP has promised to double down on economic, regulatory and red tape reform.

There is a lot of work to be done still.

On the way from Delhi airport to the Triton Hotel in Gurgaon, the bus driver had to stop to pay a commercial bus tourist tax. The driver assistant had to get out of the bus and go to an office near the side of the road to pay the tax. Total time: 15 minutes wait. I imagined the bus assistant waiting in line, and then having to watch a clerk input a bunch of data, by hand, into a cumbersome ledger book. I've seen the pattern in India so many times before.

Twice, flying domestically in India, in the past year, I have had to show my boarding pass to an airline employee while deplaning. What?

Such seeming unnecessary bureaucratic actions, and the petty corruption accompanying, pervade Indian life and stultify economic growth.

1% says he won't believe in Indian seriousness about eliminating bureaucratic hurdles to doing business until Walmart is permitted to do business in India.

Communal tension.
In 1992, Hindu extremists destroyed a mosque in Ayodha, Uttar Pradesh. Hindus claimed the mosque was situated on a holy Hindu site. The Hindu revivalist BJP, then the main opposition, did little to discourage the acts, and rioting in the north killed thousands.

In 2002, when 58 Hindus died in a suspicious train fire, more than 2000 people, mostly Muslims, were killed in subsequent riots. In 2008 bombings in Jaipur, Ahmedabad and Delhi were attributed to Islamic anti Hindu groups.

Tensions seemed to be cooling in 2010, when a court stated that the Ayodha site would be split between Hindus and Muslims and the response was peaceful.

85% of nearly 1.3 billion Indians are Hindu. The Moslem population is 11%. The rest are made up of Sikhs, Jains, Buddhists and Christians (there are 20 million Christians in India)! By and large India has been more successful than most countries today making multiculturalism work... but, tensions lie beneath the surface.

Kashmir.
The predominately Muslim Kashmir valley is claimed by both India and Pakistan. The majority of the territory is currently administered by India. The impasse has plagued the two countries since Partition in 1947.

Aside: TIMDT, FeeBee, and Mwah (sic) arrived in India in the fall of 1971, just after the end of the third India-Pakistan war. My Citibank boss, Ajit Grewal and his wife Royina, invited us to join them at a post war cocktail party, sponsored by McDonnell Douglas, a customer of the bank, in honor of victorious Indian general, Sam Manekshaw. TIMDT and Mwah (sic) met the general and his wife. Sam Manekshaw was on the cover of Time magazine the week we arrived in India.

There are hopeful signs about resolution of the Kashmir impasse. Just last week, Indian Prime Minister Modi made an impromptu, surprise stop in Lahore to visit with Pakistani Prime Minister, Sharif, on his return from a state visit to Afghanistan. Modi's visit to Pakistan was the first visit of an Indian Prime Minister to Pakistan in ten years.

Islamic Terror.
Perhaps one reason for a hoped for rapprochement between India and Pakistan is the two countries' shared concerns about the rise of Islamic terror.... a threat to both nations.

Well known is the 2008 attack by Islamic terrorists from Pakistan on the Taj Mahal Hotel in Bombay. In 2012, when TIMDT and her friends were visiting Hyderabad, they were confined to their hotel room for the duration of the visit due to a bomb explosion authored by Islamic terrorists in a nearby neighborhood. During our stay in India this time around, there was an attack by Pakastani based terrorists on Pathankot Air Force Base, near Delhi, which resulted in the deaths of five Indians in addition to four of the terrorists.

A columnist, writing in today's Hindustan Times, speculated that the terrorists were responding in anger to Indian Prime Minister Modi's recent visit to Pakistan. It is not in the interest of Islamic terrorists that India and Pakistan present a united front in the war against Islamic terror.

Poverty and Illiteracy.
Still, today, some 400 MM Indians are illiterate and living mostly in Indian villages at day to day subsistence levels. Sustained 8% economic growth over time will be required to bring this large population into the economic mainstream. Its one thing to lift out of poverty and illiteracy those that are already there. There are also those to come. India adds "an Australia" to its population annually.


The Good News

How can a country with so many people, states, languages, cultures, religions, traditions and opinions get its act together... particularly in the face of the problems outlined above?

There are some good signs.

Business leaders are projecting an 8% economic growth rate for the country in 2016 (The US is trumpeting how "successful" it is with its 2% growth rate). The economy seems to be responding to the economic reforms introduced by the Modi BJP government.... notwithstanding ongoing bureaucratic deficiencies.

By the end of 2016, 850 million Indians are expected to own cell phones.

In Charan's book, reviewed above, the author points out that during that next decade will see two billion new middle class consumers below the 31st parallel. 25% of these customers will be Indians.

There is energy in India. Young energy. The population is getting younger and dynamic... not older and stultified as is happening north of the 31st parallel. The young Indian population aspires. They want education, they want to work, they want to marry and have a family. That India remains a religious, spiritual country largely, i believe explains its aspirational qualities.

India is not burdened with a welfare apparatus which encourages lassitude and dependence. If you don't work, in India, you might not eat. Cultural and religious messages reinforce productivity, self-help, and education. You can see enthusiasm in the faces of people everywhere you go. Everyone is busy.

There is a real pride among Indians about their country and its future. It's palpable. Its one of the reasons I like coming here. There is an aspirational quality about India that is missing north of the 31st parallel.

Despite all its chaos and complexity, India is a country on the move... order out of chaos is coming.

Buy.