John Sculley, a former president of PepsiCo Inc. (1977-83) and former chief executive of Apple Inc. (1983-93), was in Mumbai recently to attend a leadership summit organized by the information technology (IT) lobby Nasscom. Sculley, who is managing partner of Pivot Acquisition Corp., a venture capital and consultancy firm, spoke in an interview about how India can deal with rising negativity in the US about offshoring, and how it can grow beyond its image of a back office destination. Edited excerpts:
How do you see India today?
I have been coming to India every year since 1997, and I have been watching India through its change going back to 1991. India is now on the global stage, and the more successful companies are on the way to being recognized as global brands.
There is still a perception that India is primarily a back-office country. Can that change?
There is a lot of controversy about India’s offshoring industry. A lot of it is misunderstanding, as most jobs in the US were lost through automation and productivity increases and not offshoring. The best way to change that perception is for Indian BPO (business process outsourcing) firms to start to help solve some of the major problems we have in the US. One example is education. We are 17th in the world in math and science education. This can be done online, which is happening. That is one perception change, that India is not about taking jobs away, but about increasing the skills of American workforce.
Second, if India is going to be perceived beyond the back office, it has to move to the front office too, with end-to-end systems and face-to-face relationships. Having a presence in North America is going to be more and more important.
Has India’s contribution to the leadership talent pool in America also made a difference?
Absolutely. If you go to Silicon Valley, if you look at the C-level executive teams, company after company is populated by Indians. Indians assimilate and move up extremely well, particularly in the IT industry. The concern we now have actually is that this talent pool is going back to India. The US government has been very misguided in their visa policy, by restricting H1B, L1 visas. A lot of the talent that has been in our technical universities is returning to India—that is a huge loss to the US. But the leadership success stories are many, and they are highly admired for their executive skills.
How will the politics of anti-offshoring play out?
Part of the problem is that only 5% of Americans have passports. America is a country that travels within its borders. Our politicians really have very little experience outside the US. They don’t get a global perspective of what the global economy is really all about. And their view about offshoring is not backed up by facts.
Do you see this understanding improving?
No. I wish I could say yes, but no, given the political influence of special interest lobbies. There are 535 Congressmen with 13,000 registered lobbies, and 85% of campaign funds are raised in Washington. The special interests get the most important voice.
When it comes to innovation, do you see a gap?
It is a huge gap. You can trace it to the fact that India is very strong with the left brain, which is about frugal engineering, execution, adapting to processes, etc., where it has built a huge reputation.
But innovation takes both right and left brain thinking, and the right brain is about taking risk. You cannot do the kind of innovation of a Google or an Apple unless you are willing to take risk.
Perhaps, it is not as culturally acceptable here as it is in the US. It is not a lack of talent, it is more cultural.
There is more to Apple’s success though than just risk taking. When I joined Apple, the vision was set by (co-founder) Steve Jobs. It is identical to the vision I learned working with him—go for user experience, end-to-end systems. Apple has been masterful at creating an experience-centred business. The most important decision at Apple is not about what to put in but what to leave out.
Most companies are thinking about what new features to put in their product to help them differentiate (their products from other companies). It is the reverse at Apple. It is about design, experience, simplification, of not just the user experience, but the supply chain, the way it is sold.
There is still this perception that Apple neglects India, that the country is not really much on its radar? And how dependent on Steve Jobs is Apple?
When I was at Apple, it was a long time ago, it was difficult to do business in India. If this attitude that you talk about is there, I have no idea why. I don’t know. Steve is the most admired CEO, so his health is obviously a matter of concern, a very private matter. I have no special information, but these products, the iPhone, the iPod and the iPad, will be giving incredible growth for Apple for a decade or more. He has laid out the roadmap, so I would imagine Apple is in very good shape.
What are the trends that you are seeing?
On the one hand, there is this compression of adoption, where new devices and technology are being adopted rapidly—smartphone, tablets, etc. On the other hand, the faster they are adopted, the faster they are commoditized. So a lot of IT strategizing is about how you make money in this scenario.