To be or not to be—expatriate leader in Indian companies.
Is this a valid enough topic on which to conduct in-depth research at Amrop Partners was a question we raised internally as well as with a panel of key stakeholders connected to the subject—the leaders of Indian companies and expatriates themselves. And the answer was an overwhelming “Yes”. Amrop was encouraged to probe various layers of this phenomenon and come up with output that could assist Indian companies and potential expatriate employees in building a superior experience of working with each other.
The first-of-its-kind research produced some surprising insights. Are Indian firms ready to bring in expatriate leaders?
Both sides agreed on a clear and positive value proposition. The core reasons for the win-win proposition is that Indian companies are seeking a steep improvement in their competitive performance and aiming to benefit through the superior market knowledge and domain skills of expatriates to build new businesses, drive global expansion and become world class. While these were completely business-driven reasons, research also found a strong desire to induct expatriates for their “leadership culture”. Indian firms talked about a growing imbalance between the pace at which the performance context for them is fast becoming global and more complex and the ability of the local leadership talent to cope with that.
Exchanging skills: File photo of Chinese employees of Infosys Technologies Ltd working with their colleagues in Bangalore. Namas Bhojani / Bloomberg
The need for “superior and right leadership capability” is encouraging Indian companies to consider going across the nation’s borders and find leaders of a higher order than available locally.
Very few however, articulated the need to develop a multicultural organization which was geared for the longer term and hence, in many ways the foundation of the need appears to be slightly short-term. As the research moved on to study the fitment and hence the ability of the expatriates to be successful in these companies, some of this short-term approach seems to impact that experience.
Firstly, expatriates are by and large employed on fixed-term contract, which fundamentally has a short-term relationship context. Both prefer it. For expatriates, working in India signifies an “unknown territory” with an uncertain impact on their future career. For Indian companies, this contractual relationship leads to considering the expatriate leaders as “short-term assets” meant for transfer of skills and localisation of their value proposition.
This contextual short termness, in actual working experience, leads to perceptions of uncertainty around these expatriates, which overall leads to lower trust and hence, lowers empowerment, making the expatriate less effective.
Do we understand the cultural adaptability required by the expatriate and also by us, and are we ready to support it? This is a key question which, the research discovered, was not well understood.
Expatriates talked about a significant work culture disconnect in Indian companies where they found lower orientation to productivity and quality, respect for personal time being low as well as several ad hoc processes and decision making.
In general, all expatriates thought that while Indian companies have great international ambition, they don’t demonstrate a matching international mindset. They found the “bright Indian talent” also more analytical and theoretical and much less implementation-focused.
Our research on the delivered value proposition of expatriates seems to present a slightly different angle. On a scale of 0 to 10, Indian companies talked of level 6 as value delivered, lower than what they expected. Interestingly, Indian companies also see a cultural disconnect between the expatriate work behaviour and their own culture. The cutting-edge experience and skills for which the expatriates were inducted actually fell short of employers’ expectations and the cultural disconnect further lowered the value of experience.
There are many subtle but key underlying questions around this process of expatriate fitment:
• If Indian companies have to adapt to an international leader, then are they adapting to a person or are they adapting to global practices? Given the short-term focus on this relationship, the answer appears the former while it should be the latter, as the perspective of adaptation to global practices will create a long-term purpose and hence put the adjustment in a more positive light.
• Who is expected to adapt—the expatriate or the company? The research finds that expatriates are expected to adapt. The companies seemed to be in the comfort zone of their own DNA or their own adaptation seems to be a more complex issue and hence not addressed.
• Who is responsible for this transition? The hiring manager, the chief executive officer or the expatriate? The research found the transition process itself less studied and less developed and hence the question itself is not asked.
• Another key question— should the induction of the expatriate be done on the business of the company or culture of the company? More often it was on the business of the company.
• Should the induction also be done on the social context of the country so that expatriates are allowed to adjust to the India experience? The expatriates and their families are left to discover it for themselves.
Most interestingly, the repatriate Indians are not emerging as an answer to the problem. The demand for repatriate Indians is higher than for expatriates as they represent an ideal mix of international capability and Indianness. But in reality, this simple equation has not led to a successful experience. The repatriates seem to have greater trouble in adapting. So, is there a way forward? The answer is “Yes”.
The research presents several solutions starting with the right hiring matrix and ensuring that the right kind of expatriate leader is inducted— someone who has genuine international experience, a differentiated global edge and the leadership adaptability to lead in India. The answers also lie in the preparedness of Indian companies to support the mutual adjustment required in having a successful experience in hiring expatriate talent.
Finally, the top management and, more importantly the CEO, has to anchor the cultural transition to globalization, which includes expatriates as one of the dimensions. The other dimension is building a cadre of global leaders inside a firm and also anchoring with the government to build infrastructure which is more suited for international corporate leaders.
This column has been written by Amrop Partners: (from left) Ramesh Bajpai, Preety Kumar, Prasad Medury and Atul Kumar.