Why Microsoft and Everyone Else Loves Indian CEOs
Here is the conclusion from this insightful and fascinating article by Leonid Bershidsky for Bloomberg.
Yet there must be a reason why so many Indians, and not, say, Brazilians, Russians or Chinese, have made stellar corporate careers. The answer might be found in studies of the Indian management culture.
According to research from St. Gallen University in Switzerland, Indian executives are inclined toward participative management and building meaningful relationships with subordinates. "The leadership style traditionally employed in India fostered an emotional bond between superiors and subordinates," the 2004 study said. "The feeling that the company genuinely cares for its employees, provided a strong bond of loyalty that went beyond financial rewards."
In the "Indian club," there are no executives known for a dictatorial management style. Nooyi says: "You need to look at the employee and say, 'I value you as a person. I know that you have a life beyond PepsiCo, and I'm going to respect you for your entire life, not just treat you as employee number 4,567.'"
When Nadella replaced Steve Ballmer at the helm of Microsoft, his high standing with the company's rank-and-file was cited as a major reason for his promotion.
A 2007 study by researchers at Southern New Hampshire University, which compared Indian managers to U.S. ones, found the South Asians more humble. It is not by chance that Nadella started his first e-mail to Microsoft employees as chief executive by saying, "This is a very humbling day for me."
The study also found Indians to be particularly future-oriented, focused on long-term strategies. Narayen of Adobe says: "If you can connect all the dots between what you see today and where you want to go, then it’s probably not ambitious enough or aspirational enough".
In his email, Nadella paraphrased an Oscar Wilde quote on the same point: "We need to believe in the impossible and remove the improbable."
Perhaps most importantly, the Indian managers get to the top because they persevere. Most of those I mentioned had the patience to rise through the ranks at their companies, learning their business thoroughly from every angle. Nooyi joined Pepsi in 1994, Jain took his first job at Deutsche Bank a year later, Menezes has been with Diageo since 1997, Narayen was hired by Adobe in 1998, and Nadella's appointment crowns a 22-year career with Microsoft.
There is nothing specifically Indian about empathy, humility, patience and an ability to dream. Yet it is these qualities that appear to have created the "Indian club" of overachievers in global business.
David Fuller's view
In the USA and most other western countries, perhaps we have been over influenced by sports heroes. Our stereotypical CEO is tall, has good hair and a chiseled jaw line. He is also a confident, forceful A personality type. Some of CNBC’s American Squawk Box personnel even talk about people having ‘CEO hair’. Obviously these are not necessarily faults, but they can be if the CEO is also narcisstic. Importantly, they are about image rather than the brain. Most quiet, unassuming and even nerdy CEOs either founded the company or quietly worked their way up to the point of becoming irreplaceable.
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Email of the day
On Tim Price’s Letter:
“There was no link to Tim Price’s letter today [3rd Feb].”
David Fuller's view
Thanks for mentioning this as it may have affected other subscriber’s as well. There are still a couple of minor bugs and mysteries in the updating software which have yet to be addressed, although they are certainly on the programmer’s list. Interestingly, Tim Price’s excellent letter was posted but it was certainly not the fault of you or any other subscriber for not noticing it. However, had you clicked on the blue portion of ‘Commentary by David Fuller’, just to the right of the little photo and date, you would have seen it. However, I have also reposted it, this time just above my comments on Tim’s Letter, as had been my original intention. I think it is well worth reading.
My personal portfolio
Two new trades opened.
David Fuller's view
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Mapping World Consumption 2014
My thanks to a subscriber for this comprehensive and informative report from Deutsche Bank.
It is posted in the Subscriber’s Area, and mostly in tabular and graphic format, but here is the Summary opening:
This report is an attempt to map out the landscape of global consumption. The idea is to provide the reader with a broad overview of consumption indicators ranging from macro-aggregates and sales of specific products, to market penetration and market shares.
The available data sources were often found to be inconsistent/ incompatible, and sometimes even contradicted each other. We have, therefore, tried hard to make the datasets as internally coherent as possible. We also had to make important choices about presenting the information in a simple, intuitive format that conveyed the essence of our findings without distorting the picture. For instance, we have generally used current US dollar prices to convey the size and shares of different consumer markets even though we know that such a measure is impacted by exchange rate movements and inflation, and does not account for purchasing power parity. Readers should treat the data accordingly and refer to notes accompanying the tables/charts.
While it is difficult to generalize for such a broad overview, a few points do become clear from the data. First, the US is still a formidable consumer market even if it is slowly losing market share. It remains the single largest market for most categories and in a few segments, such as healthcare, retains global dominance (although critics will argue that excessive spending on this category reflects inefficiencies in its healthcare system).
Second, Japan and Europe have lost ground in most categories to emerging markets, most notably China. Indeed, China has displaced even the US as the world’s largest market in a few important segments such as automobiles. Nonetheless, Brazil, Russia and India are individually still small compared to China, US or Japan.
David Fuller's view
I found the graphics particularly interesting, not least the pie charts showing consumption trends among nations. What one would expect and the text above mentions is that the USA remained the dominant consumer nation throughout the 1990 to 2011 period measured. We also know that the USA economy continued to expand throughout most of that period but its percentage of global consumption diminished in all categories.
The flip side is that China’s consumption surged, while the rest of the world (RoW), other than the ten countries shown, expanded in all categories measured. Developing Asia Pacific is leading that expansion in consumption but it is also growing worldwide.
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