Category: May Term 2012
Doing business internationally
I think we got a pretty good feel today of what it’s like to conduct business internationally. Our wake up call was at 4 am, so that we could be on the bus by 5 am to be at the airport at 6 am to take the 2 ½ hour flight to Bangalore to take a 1+ hour bus ride to Infosys for a tour of the facility and a presentation on the nature of the IT industry in the heartland of the IT industry in India….just like real business people do.
The Infosys campus is one of those “islands of excellence in a sea of chaos” that one reads about in India. Going through security, one enters a campus that now contains 50 buildings, with 25,000 young people (the average age is 26, and the standard deviation appears to be +/- 2). Well-educated and better trained employees (the company hires around 25,000 a year, and offers training for 13,000 at a time on the 100 acre Mysore campus). Although there are 140,000 employees in 64 countries, the bulk of the top-end work, I believe, is done in Mysore. Though Infosys started in Business Process Outsourcing (it used to be call center), it has, like many of the Indian backroom companies, moved up the value chain. The man who spoke to us is part of a project team working with Boeing to develop lighter and fuel efficient airplanes.
The campus is one of the most pleasant places in the work world; as they explained, the facilities are geared toward a younger generation, but the buildings and setting are definitely world class. The company started with 7 men and a total of $250 in Pune (a city north of here), and gravitated to Bangalore because of its reputation as a center of scientific research, partly because in the Raj days it was one of the major air force encampments. That led to aerospace research, which led to (a favorable state government helped), and as a result, most major multinationals, including the Indian ones, have some presence in Bangalore, usually in a gated community, many in the Electronic City (as is Infosys).
When I asked about Corporate Social Responsibility, I got an interesting answer: the company has attempted to make itself sustainable (the recycled river through it is the only place in India I’ve seen where I’d consider canoeing—or even touching!), with green buildings. It has also turned that focus into a for-profit unit, advising other countries on how they might handle the challenges of limited resources on a frail planet.
Perhaps the most impressive feature was not just the rich culture we saw, but the confidence Infosys employees have in the future of India and their company. The company pioneered the Global Delivery Model, which was based on taking work to the location where it could be done best—most cheaply and most efficiently, and has become a 10$ b company. One of the founders of the company, Nandan Nilekani, you may recall from Friedman, The World is Flat. It was in Nilekani’s office that Friedman developed the idea that the world could be flat. It’s also a measure of the “India Way” that Nilekani, retired from the company, is heading up India’s efforts to create a unique identification system.
Although it was nice to have the rigor of doing international business (flying somewhere and getting off the plane and doing business), it was nice when we got the hotel around 5 p.m. and were able to have the night off. As I tell my students, they ought to admire people who do this regularly. Now they know why.
Don’t you wish you could have a day like this one for YOUR birthday?
That was not true of Old Delhi, started by Shah Jahan, he of the Taj fame, who moved the capital from Agra to Delhi, and built two landmarks. One
was the Red Fort, a twin more or less to the Red Fort in Agra. The other was the Jama Masjid, the Friday Mosque that is one of the largest in India. Built in the familiar red sandstone characteristic of the period and the place, it still encompasses the bazaar between it and the Red Fort that was a characteristic of the Moghul city. It was mobbed with people shopping for clothing and shoes, which we were able to observe from a safe distance in our cyclos, a bicycle driven rickshaw that I am sure we will see again (in Beijing for sure). I think during the week it may be a more general market. I remember when I was there a section of Tibetan refugees, selling the goods more appropriate to Tibet (or as the British called it in the last century, Thibet). The one thing I learned this time (and it surprised me), is that the British closed the mosque in 1857, following a rather brutal suppression of the Sepoys; it reopened after Independence.
The Taj Mahal
The Time Machine in Delhi
Where are we? Oh, in New Delhi
The second visit was to a company named Britannia (how’s that for indicating India’s heritage as a country which had been ruled–certainly in
terms of its foreign policy–by the British, who linked together British ruled India as well as Pakistan and Bangladesh and Burma with states run by maharajas and sultans, depending on whether Hindu or Muslim) into the “Jewel in the Crown”). The conglomerate, which also owns an airlines, has a major share of the biscuit (again, a British term—for cookie) market in India. We visited a factory, which for many of our students was their first exposure to any manufacturing facility. The 800 employees make several lines for north India, which the company trucks take to 14 warehouses for further distribution to the variety of retailers; India is, by and large a country of small businesses. Laws have blocked the emergence of multi-brand stores, a synonym for Walmarts or Carrefours (French) or Metros (German) or Tescos (British) or Lottes (Korean) or Mitsui (Japanese), so common elsewhere. When I asked students what they saw, they remarked on how labor based the production was. Telling for me was “quality control”—where men (the facility was mostly male) stood looking for the ‘non acceptable’ cookies—whether because of shape or shade or size or broken—and physically pulled them from the line. Men physically put the cookies in sleeves and packages, then put the packages into boxes for reshipping. The factory manager told us—and this is typical of what I’ve seen of manufacturing in India—that ¾ of his employees are contract labor, who are seasonal workers, going back to their villages when not needed. Though the manager assured us that the contractors get the same benefits as the regular employees, they do give some flexibility to management in a system that has been working to become more “free trade” since 1991, when the License Raj—very government controlled or regulated—system collapsed. The company practices “kaizen”, a Japanese process which encourages employees to make continuous improvements, sort of a “suggestion box”, but routinized; throughout the factory, we saw pictures posted of the changes that indicated Japanese manufacturing practices are world class. One other corporate initiative I saw—and questioned—was to go international and reposition cookies from baked goods to healthy snacks. The cookies are already exported, mostly—and this is typical for Indian companies—to the Middle East and nearby SE Asian countries. The health is partly aspirational, and partly new ingredients. I am munching on fiber cookies as I type.