After a meltdown in the US financial landscape led to the worst recession since the 1930s, global business has been searching for an alternative to the shareholder-led model of the Western world. One answer, Harbir Singh and three co-authors (all professors at the Wharton School) argue, could lie in what they call "The India Way"—a model that hinges on value for all stakeholders rather than just financial value for shareholders. Edited excerpts from an interview Singh gave BT's E. Kumar Sharma:
What made you and your co-authors look at lessons from corporate India?
We were curious about the distinctive capacities of Indian business leaders. Most explanations for the boom in the economy have focussed on the ready availability and low cost of human capital. Our own experience over many years of exposure to Indian companies suggests otherwise, that there are unique characteristics of Indian management that help explain the nation's exceptional business performance after the early 1990s. As a team of four colleagues—Peter Cappelli, Jitendra Singh, Mike Useem and me—we were able to bring an array of specialisations to identifying what really made the difference, including strategy, leadership, governance, culture, and human resources.
In the book, Indian CEOs come across as much better leaders than the general perception of them in India is.
We faithfully produced a picture based on our field work, interviewing over a hundred leaders of the largest enterprises in India. We did not set out to admire or critique them. Rather we sought to identify the distinctive management capacities that help define why Indian business has prospered in recent years. We have not found other assessments of Indian business leaders that are grounded in a similar source or scale of data.
Are your conclusions true for a majority of leaders in corporate India?
Our portrait is focussed on only those who lead the country's major enterprises; we welcome others looking at medium and smaller companies.
What can Indian CEOs learn from their American counterparts?
Two important ideas. The first is decentralisation of authority and responsibility to lower levels in the organisation. The second is the ability to engineer fast organisational change and restructuring, a hallmark of many US organisations.
What next now; any plans to take this study further?
We would like to focus, for instance, on the contrasting leadership and governance styles among state-owned firms, business groups, and free-standing public corporations. We would also like to better understand qualities of business leaders in other rapidly growing economies, such as China. I will conclude by noting that Indian business leaders have much to be proud of.