Interview with Martin & William Pallante | 20/20 Management Consulting LLC
First published in M+V`s India Insight in July 2016
Convincing US companies to invest in India is at the top of the agenda for Indian Prime Minister Narendra Modi, and recent estimates by USIBC suggest US companies will invest $ 45 billion in the next 2-3 years. Maier+Vidorno is very pleased to announce our partnership with 20/20 Management Consulting, LLC, a highly respected management consulting firm with extensive international experience supporting North American companies. We talked to William and Martin Pallante of Twenty Twenty Mgmt Consulting, LLC about the differences between India and USA.
What are the biggest cultural differences between how business is done in the USA and in India?
Like India, the United States gained its independence from Great Britain. However, whereas Indians embrace a collectivist, very family oriented culture, the US developed as an Individualistic society with personal recognition and monetary achievement as its strong motivating forces. In the States, employees are motivated by upward mobility and individual success with little long term loyalty to their employer. Rather, their loyalty is to their profession and individual professional success which is often measured by one’s position in the corporate hierarchy. Consequently, Americans are more driven to get things done, be recognized, and move to the next challenge. In contrast, in India an employee’s primary loyalty is with the family not their employer.
Another differentiator between the US and India is the hierarchy mentality that exists in India wherein power lies with the boss and employees are not typically empowered. From a Western perspective, it is seen that the Indian hierarchical order is so dominant that employees will follow orders even if they believe otherwise and Indian’s are seen as being reluctant to say ‘no’ when discussing possible solutions to a problem. The opposite is true in the US, where power is shared from the board room to the shop floor. Lastly, Indians appear to be politer than most Americans. This can be both good and bad: good in the sense that everyone appreciates politeness, but bad in that some Indians tend to be over-polite, even to the point that graciousness and repeated ‘thank you’s’ can become irritating and seen as non-productive.
How do companies from the USA view India?
An over-riding American preconception of India is that it is rife with bureaucracy and inefficient business systems, and dreadfully laborious decision making. The depth of this belief is typically directly dependent on the American company’s knowledge of and interaction with Indian business people. If the US enterprise is experienced with more savvy Indian businesses, they will have a very good opinion of India. If their only experience is with less sophisticated businesses or only through limited telephone conversations, their view of Indians may not be a positive one, and in fact, often is negative. Also, many American companies do not fully appreciate the economic potential of the Indian market. While they all know the tremendous size of India’s population, many do not understand that its middle class and resultant consumer base is growing at a relatively rapid pace. Nor do most understand that India has surpassed China as the fastest growing emerging market.
While most Americans are reasonably aware that Indians are a well-educated, intelligent, capable people, we often suffer from misconceptions perpetuated by the U.S. media regarding India’s caste system and the wide disparities between the ‘haves’ and the ‘have nots’ . Indians are less direct in communication than Americans which can cause communication problems. That said, Indians are often more flexible than the Japanese and Chinese which is positive in many ways. American companies entering the Indian marketplace must appreciate that there are definite differences in how business is done in India and be prepared to succeed in that environment.
Which segments are the most outward-looking?
The medical industry is always outward looking. The same can be said for the electronics industry wherein obsolescence is about six months from product introduction. The auto industry is firmly engaged and is always looking to expand their market as the American one is reaching capacity given falling birth rates and increased product life. Appreciating the congestion on the streets in India and the enactment of new emissions standards, manufacturers of two and three wheeled vehicles as well as fuel injection systems for smaller internal engines are looking to India as a major market.
Construction and infrastructure related industries have been and remain highly interested in the Indian market. And, based on geo-politics as well as regional necessity, the aerospace and defense sectors are of keen interest, often driven by off-set demands.
What are the challenges US companies face in India?
Almost everything about doing business in India can be a challenge for American companies. Most companies in the US exploring doing business in India, have already expanded into advanced economic regions, and they have likely targeted other emerging global business centers. Therefore, these companies understand that in order to truly be global, they must think and operate geocentrically while acting locally.
Consequently, they are attuned to coping with cultural differences, but will be seriously challenged by interventionist governmental rules and regulations relating to permits, work practices and taxation. Practically speaking, all US companies should understand that it is critical for them to have the professional guidance of local specialists experts in all areas of business from permits to paying taxes, to hiring and selling to invoicing and collection in order to best succeed in India.
Thank you Martin and Bill for this interview!