Paytm, Jio, InMobi, Ola India’s most 'exciting' companies says HBS Dean Nitin Nohria at New India lecture in New York

Paytm, Jio, Inmobi and Ola are among India’s most “exciting” companies today, Harvard Business School Dean Nitin Nohria said in New York at a wide ranging talk on the triumphs and frustrations of corporate culture in India.

Nohria was speaking at the ‘New India Lecture’ series - an idea conceptualised and implemented on the double by the Indian consulate in New York led by Consul General Sandeep Chakravorty and now hard coded into the calendar for the fourth Monday every month. Next up will be Hussain Haqqani on March 26. Haqqani served as Pakistan's ambassador to the United States from 2008-2011.

Nohria’s talk steered clear from politics of the government variety and instead dwelt on firm level processes that inform doing business in India and underlying reasons why foreign investors often get “frustrated”.

From left: Bobby Ghosh, HBS Dean Nitin Nohria and Consul General Sandeep Chakravorty

From left: Bobby Ghosh, HBS Dean Nitin Nohria and Consul General Sandeep Chakravorty

“Too often, our conversations tend to focus on the extremes. It’s like punditry on the Indian cricket team. They’re either so good that can’t get beaten or they’re in their worst form. We need to be able to focus on the middle. So, my comments on jugaad culture should not be misunderstood as pessimism. But then, jugaad cannot take the place of established systems and processes either…”, Nohria said to an eclectic NY audience in uptown Manhattan.

Prodded by moderator Bobby Ghosh to pick his best bets among Indian corporates, the Ludhiana-born HBS Dean winnowed the list down to a handful of “exciting” companies - Paytm, Jio, InMobi and Ola.

“If there’s a company that has the opportunity to be the next Infosys and the next TCS, Paytm has the ability to be that. Look at China, people have begun to use all forms of electronic cash payment to circumvent….If Jio ends up being successful, not just unto itself but in inviting (complements to connect via its platform), then companies like Paytm will (also) make the grade (by riding on a platform like Jio).

“There is enormous creativity in the value proposition that Indian companies embody. The single best case study that we have examined for several years both at (IIM) Ahmedabad and elsewhere is how Nirma took on Unilever. You can look at it again and again and you can see that’s now being done with Jio. There was Vodafone and all the others and then somebody has this vision to offer free data services for six months and see if customers stay. This is an extraordinary value proposition and it showcases enormous creativity…”, Nohria said.

In under 40 minutes, Nohria covered a wide genre of themes drawn from contemporary Indian corporate culture from the firm level view. Jugaad, Dhanda, how the Parivaar (family) casts long shadows on the org chart - all these terms headlined the second New India lecture Monday.

Top quotes from the talk are collated below.

"Jugaad is a remarkable capacity..."
“Findings of a study on how Indian CEOs practice leadership are very compelling, and connect with my own experiences. The thing that Indian CEOs are best at is improvisation or jugaad as we call it. This is the unique quality in India, it’s a remarkable capacity.”

Business as Parivaar
“In the US, the relationship between employers and employees is very transactional. In India, so many family businesses dominate the Indian landscape that the employer- employee relationship becomes one of familiarity. They (employer) begin to think of the business itself as their Parivaar.

"Very difficult to operate in an environment without time commitment"
“For many Indian business owners…these are people whose mission for the company is more than just to create shareholder value. American leaders are preoccupied with creating shareholder value. In India, the firm is seen by most people as an instrument for society. This is the argument they (the researchers doing the study) made. Each of these ideas are presented in their work as virtues. I think at some level, these are virtues. But each of these have a bad side too and that makes doing business in India frustrating. See the vast differences in FDI between China and India. The reality is that FDI is a very good proxy for external-rating economic development in the country. I think there are micro economic reasons as well for low FDI, which is how hard it is for someone to operate in this world of jugaad, parivaar and dhanda. If you are a US company that wants to operate in India, your experience of Jugaad is that everything is Chalta hai. So people find it very difficult to operate in a system where there is no time commitment. Just in time means there is time! It’s almost like you don’t want to have processes ( in place) and only want to rely on jugaad even when that job could have been done in the normal course."

On personal feelings of employer affecting performance appraisal
"In terms of parivaar, (sometimes) performance evaluation becomes much more a function of what is your relationship with the promoter…For professionals, it becomes a tough environment in which to operate in which the personal feelings of the promoter end up having a very large impact on who is considered is considered good. It makes you worry whether the best talent gets the best opportunities or not. There is value in having a sustained strategy a consistent value proposition over a long period of time."

"If you don't care about shareholders, how do you get FDI?"
Yes, it’s important to have stakeholders beyong shareholders but if you don’t care about shareholders, how do you get FDI? So if you look at variability of shareholder returns in India, it is much much higher than shareholder return in America. Private equity investors will tell you that variability of returns on investment much higher in India than in the US. They’ll have some spectacular ones and some terrible ones. In most cases where they don’t get their due is where they essentially got cheated by the promoter. There are extraordinary gifts that Indian leaders have and those same gifts have a dark side. There’s no reason why there must be a dark side.

"Indian IT companies did well because of extraordinary training programs"
The quality of the 7-8 people in any Indian company is as good as the quality of the top 7-8 people you’ll see anywhere in the world. Many of them are people who have come from India’s top institutions and many have just been successful after learning from hard knocks. There are very very good people at the top. But if you go two levels down, the drop-off is precipitous. Why is it that way? It’s not about the education system. These are people from reasonable schools. The challenge is that they work without systems. The problem with jugaad is this - doing work in an ad-hoc way, where everything waits till the last minute when everyone begins scrambling. The contrast is most vivid in the IT industry where processes have been applied. Take any of the great Indian IT companies. Part of the reason they did so well is that very early on, they had to put in place processes such that jugaad did not have such a big role. Infosys and Wipro have extraordinary training programs which then puts backward pressure for the supply chain to deliver the goods that are pegged to some benchmark at the very least. If you have nothing that is process oriented, then what do you train people to do?

This post will be updated with additional quotes.
Disclaimer: Jio, mentioned in this story, is a wholly owned subsidiary of Reliance Industries Limited. Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.


Updated Date: Feb 28, 2018 00:03 AM

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