That is the question facing the visitor in India. At the airport, he gets into a taxi and and soon, the cabby starts asking questions. “Where are you from? Is this your first time in India? Which hotel should I take you to?” And later in this inescapable conversation, which is actually more of an interview, he wants to know: “How many children do you have?” The Indian cabby assembles a profile of the foreigner and uses the gained knowledge to determine the answer to his true question: Is the visitor leading the cabby or is the cabby leading the visitor?

Does this foreign guest come from a well-known, affluent western country? Is this his first time in India? Does he have a reservation in a five-star hotel? Also, is he unmarried and does not have children? If that is the case, he is a customer with a potentially high sales volume. Because in India, a country that is just now carefully starting to adjust to stipulated pricing, this enterprising Indian citizen will adjust his pricing according to the spending and negotiating power of his customer. The foreign, undiscerning passenger can’t determine the most direct way to the hotel. He has enough money and, since he is not married and has no children, is therefore inexperienced in life. For better or worse, he will be lead by this taxi driver, who is familiar with the local surroundings and has experience with leadership and life.

Now, if this passenger is the kind who has been to India several times, his family awaiting his return at home, the taxi driver knows what to do. He understands that he is dealing with a guest who cannot be lead. He turns on his meter and drives the most direct way towards the hotel.

It is not surprising, that leading celebrities belong to the inventory of a country, which determines hierarchy without dread or shame. People, who over the course of time have rendered their services with heroism and leadership, are now honored as shining role models. Based on the occasion and purpose of the event, they are being quoted and serenaded. Their statues can be found in many streets and locations in Indian cities and towns. Their pictures are hung right next to the displays of Hindu gods and many hospitals, schools and airports are named after them.

India has indeed produced many leaders who are still being admired today. One of those, for example, is Chandragupta Maurya (died around 297 BC). He was the ruler of almost the entire Indian subcontinent. He combined many small and large kingdoms and principalities into one large one. His closest advisor was Kautilya, who created the famous work Arthashastra. This lecture book describes and justifies the meaning of power and affluence. Indian men and women are proud of the nation’s unity and feel inherited by Maurya.

Ashoka (304-232 BC), Mauryas grandson, brutally and indiscriminately enlarged the kingdom through his further conquests. This generated a lot of suffering and misery in the country and catapulted Ashoka into an ethical crisis. He converted to Buddhism and relinquished all future conquests. Instead, emperor Ashoka dedicated his time to peacekeeping and welfare issues. He prohibited war and demanded that all his people become vegetarians. Many Indians see an example in Ashoka. Practicing a non-violent life does, by no means represent resignation or failure, but helps people to achieve fame and respect.

Another admired ruler was the mogul emperor Akbar the Great (1555-1606). He realized that India could only be ruled successfully if the diversity and complexity of all inhabitants was being respected. He abolished political and economical privileges that were solely based on religious denominations and he encouraged his people to strive for a marriage outside of the communal borders. He himself proceeded to do so by marrying a Hindu wife. Akbar is seen as a pragmatical ruler.

Another example is Mohandas Karamchand Gandhi (1869-1948). Not only was he India’s leader for political independence but also for the mental liberation of mankind. To achieve freedom and independence, Gandhi advocated for a deep spiritual awareness and that mankind must convert their material weaknesses into spiritual mental strength. He devised Gandhi Satyagraha, a strategy of nonviolence.

To turn the enemy into an ally, mankind needed to learn to accept their pain and suffering. Gandhi was confident that violence only leads to more violence.

Therefore he advised to always appeal to the opponent’s feelings and conscience instead of threatening him. Up until today, Gandhi is regarded as the country’s saint. Together with other personalities, he led India from the European colonial powers into freedom. His birthday is celebrated as a national holiday.

These four exemplary Indians are inter-connected by the unity in the core elements of a believe system. The Indian population does not see their actions as heroic acts, but rather the personification of spiritual values. Maurya created unity and harmony, which Indian philosophy regards as the highest virtue. Ashoka stands for the path of nonviolence. By overcoming the communal borders, Akbar created harmony as well. Gandhi represents the core values for truth, nonviolence, enlightenment and liberation.

Even in modern days, these and similar philosophical and spiritual teachings can be found. They are part of India’s contemporary culture. A culture lived by more than one billion people, looking back to a history of five thousand years forming culture and mindset.

Their spiritual legacy did not see any dramatical changes throughout historical upheavals and no revolution ever took place. Europe, on the other hand, has collective memories of the achievement of reformation, the age of enlightenment and the French Revolution. Even though both world wars threatened the European people to fall back to barbaric times, they learned a lesson as well. Since those times, the German term for leadership – Führung – has been lined with suspicion; especially in the German language. Luckily it is common to borrow words from the English language!

The cultivation of civic rights, which was strengthened in Switzerland through direct democracy, changed the European man into a quiet leader: inconspicuous and discreet. He does not force his will or opinions upon others. He skillfully tries to convince and to motivate. Whenever he finds someone leading offensively, he dismisses this as an improper way of striving for power and will, if necessary, criticize. If God is mentioned as well, he will react suspiciously, even angrily. He is too disappointed in with the religious institutions.

Everyday life in India is populated with holy cows, mendicant friars, temples, mosques and churches. All standing side by side with shopping centers, modern airports, sleek office buildings and sterile looking microchip factories. India manages to effortlessly combine a world of gods and goddesses, money and luxury and poverty and affluence. The Indian people maintain a direct link to their favorite deity to seek comfort, refuge and guidance.

The same manner, in which a boss and a co-worker cooperate and communicate, is directly derived from the spiritual core elements of the Indian culture. The ancient Indian tradition presents the earthly life in four phases, each with their own goals and tasks. Based on an average age limit of 84, each life phase lasts around 21 years. With this kind of calculation, man tries to develop oneself, based on his age and life experience.

The self exists in one’s mind, one’s soul. The body only serves the mind to develop itself until it is enlightened. For the Indian person, individual fulfillment can be achieved through the means of yoga, meditation and living one’s life on the right track. Only then can the soul be freed from the circle of reincarnation and can pass into Nirvana.

During the first life phase, called the ‘student’s awareness’, one is seen as a learning person. This person is mentally and physically emotional, naïve and inexperienced. Parents, grandparents, friends of the family, teachers and priests teach this young person about practice and discipline. They show him the interaction of the spiritual, social and family life and how they work together in harmony. This young person learns from his tutors that he does not yet hold the right knowledge and experience to make independent decisions. He learns through this, that authority needs to be sought from people who are no longer present on the scholar’s awareness level but have advanced. He tries to be guided by them, listens to them and is being lead by them. These leaders will guide the student onto the right path to self-fulfillment.

India does not differentiate itself from the rest of the world by making this young person aware of the importance of learning, to practice and to gain knowledge. The only difference is the social contract: “You are still a student. If you patiently, humbly and submissively accept the fact that there will always be someone to tell you what and how you have to live your life, only then will you be successfully merged into your next consciousness.”

The second phase of life revolves about being married. One is occupied with worldly and material things; to make and bear children, feed them, raise them and support them to stand on their own feet. The consciousness of the married person is to take up responsibility and to guide young people onto the right path of life and to share one’s knowledge, well-being and prosperity. This is the time to acquire leadership experience. This comes with a contract as well: “Now you have knowledge and have things to say. Your soul and body are no longer chaste. You have experienced the creation of life. Show the young, unmarried and inexperienced people around you that their waiting will be rewarded. But be aware that you have to be ready to accept your new duties. Look at your parents’ generation. Look, how content they are with themselves. They once were young, unmarried and inexperienced students, too. Then they changed the way you did and awoke to a new level of consciousness. Your leaders are expecting you.”

There is no gap between the worldly aptitudes and the duties that are implemented in the consciousness of the married person. For example: On one side, one will act out their sexuality to promote a healthy and harmonic balance of body and soul. On the other hand, one will serve their partner during their mutual love life, to support their well-being. The Kamasutra serves, amongst other things, for a sensual combination of necessity and labor of love.

The third phase of life is the part, when man has fulfilled all of his material obligations and attends to the spiritual aspects of one’s existence. He enters into the level of consciousness and withdraws from material assets. The children have long left their nest at home. During this time, one will meditate and pray more often to note how his inner life is changing. He consciously connects with his soul. He does not disconnect from material things during this period, rather enjoys fewer things with much more appreciation. This is the time when he reviews if his feelings, thoughts and actions are in harmony with the deities. This is when the two former social contracts are exchanged with a new one: “ You have achieved a lot. You have handed on life; you have used every available material possibility to differentiate between the essential and inessential. Now attend to the young ones, so that they too can achieve their material self without haste. But don’t forget to look ahead. Look at the ones, who are aging and are becoming wiser. Be aware that they are relishing the prestige and respect that is given to them! You will be like them some day. For now, be humble and generous.”

During the transition to the fourth phase of life, man becomes aware that the body’s earthly existence is finite. Maybe he will become sick and frail or plainly lack energy in old age. He lives in a stage where he will withdraw from the earthly life. He withdraws himself from others; he becomes slower and quieter and increasingly practices his spiritual exercises. In the company of younger people, his appearance is that of an experienced, wise man. Anyone living in the preceding phases holds him in high regards.

The fourth phase of life requires another contract: “Serve as a leading example to all younger people and show them how to succeed in the earthly life. Offer your guidance but don’t be obtrusive. Use this opportunity to come to terms with yourself, your mission and your diminutive size in this universe. Once your body dies and God is pleased, your spirit will be enlightened and won’t have to be reincarnated. It will transition to Nirvana. But if you missed or skipped important lessons during your early years, your soul will return and will have to cycle through the four phases of life once again.”

It is this kind of a traditional idea of man that is present nowadays. It is especially apparent during cooperation of Indians and Western Europeans: the Western European project manager asks his team member: “Could you please finish this project by Tuesday evening?” The Indian colleague, a young and smart engineer with an outstanding education, answers: “No problem.” The project manager is satisfied with this. His Western European ears hear this answer literally and he just assumes that the Indian colleague said “yes”. But by Thursday, two days after the agreed upon deadline, the project leader is surprised that not only the job has not been finished but that he was not given a note about the delay. He approaches his colleague and inquires about it. Again, he receives the same answer, although the intonation of the sentence leads to: “No, there is no problem…”. “But?”, asks the project manager. “Well, it’s just that my boss is on a business trip…”, answers the Indian colleague. The project manager is dumbfounded and angry, but he refrains from scolding. Before hanging up, he replies with: “Ok, no problem.”

Needless to say, the western European project leader is frustrated. He has learned how to lead team members so they would not need to rely on him, except for unpleasant decision-making and to shield the team from management. Every team member is his own leader, is responsible for his or her own actions and brings the right knowledge to the table. The project manager is only just another team member if they don’t meet for a project meeting every ten days. That is why the project manager had to assume that his Indian team member would immediately inquire and notify about any arising problems.

But this young, unmarried Indian colleague, who is living on the student’s awareness level, sees this participatory type of behavior as a lack of leadership. A boss, who always shows his anger or his utmost determination with a friendly face, can be nothing else but a team member: young, inexperienced and without any authority. That is why this Indian team member is waiting for his stricter but well-meaning boss. He’s waiting for this married person, a father or mother of two children, to return from their business trip and to guide him through his life, work and career. Someone who would just simply say: “You can handle this job. Just ask your project leader in Switzerland what he expects of you and make sure to meet the deadline!”

The student, the married person, the withdrawal from material things and the renunciation of all worldly matter: With the Indian belief system, man receives the learning tasks, experience and the knowledge that will serve him for the maturation of his or her current life. Not only does it seem unnecessary but unproductive as well, to confront a person with issues, which do not have to be dealt with yet. This might hinder the freedom of an individual to work and live independently, but it will relieve him of the pressure to be responsible for topics and tasks, that he is not yet familiar with. The traditional Indian manner of leading coworkers is often aimed at passing down the tasks. This kind of delegation and the demand of responsibility and accountability are surely tasks that are taken much more slowly than in Western Europe.

India seems to have a nearly inexhaustible amount of time. The Indian person learns from a young age on, that the ultimate goal is to achieve that same level of awareness as Brahman did. In the Hindu philosophy, Brahman is considered to be the highest concept of God. He is the cosmic spirit of the world, shapeless and timeless, without beginning or an end, the origin of all being and the absolute harmony. For the path of life, the Indian child is taught to strive for harmony with everything it feels, thinks and acts upon. On a spiritual level, its soul is partially identical with the one of Brahman, but has to live through numerous worldly lives first. Theoretically, 311 trillion years are at its disposal. This kind of time budget could be a true challenge for multi-cultural project management ventures! Some projects will just have to be divided into smaller jobs with much shorter time limits to reduce the appearance of unachievable goals.

Additionally, every Indian child learns that every one of his or her feelings, thoughts and actions will have an effect in the present or future life. For example: A persons’ negative thoughts will affect that person negatively. The same applies to the thoughts and actions, whereas the feelings have the most powerful effect, thoughts the second most powerful and actions the least powerful effect. This means, that the Indian person always tries to create the most positive energy and tries to develop positive meetings and relationships. He always strives for a harmonic present, as to achieve a kind of harmony with his soul for upcoming reincarnations.

The art of leading Indian co-workers is, to use suggestions that can be answered with a “yes”, instead of asking: “Where’s the problem?” That will only point out the in harmonic state. To find a loophole, he would try to distract from the problem, by saying: “No problem”. Instead, a sentence as: “We have discovered a problem that we should solve together”, will encourage this young, unmarried Indian coworker to answer with a: “Yes, you are correct!”. By pointing out this shared connection, it will establish the harmony between him and his superior.

The theoretical and theological importance of social and spiritual harmony is just as evident in the caste system. It is, without a doubt, one of the most discussed topics in the Indian community and culture. Although the four main castes (Brahmans, Kshatriyas, Vaishyas and Shudras) originally described the maturing process of the soul, man has turned their teachings into an instrument. With this he can dominate those who are in a lower caste, by granting power and authority to a self-appointed elite. During those four phases of life, this applies as well: every segment has it’s own duties, roles and obligations; all in due time; do not rush, do not challenge the universal destiny and do not make any changes to the social order because one’s luck might be refused.

The caste system is generally associated with the Hindu belief system. Yet it is much bigger. It is a part of the culture that embraces all religious denominations. This makes it possible for even Indian Muslims and Christians to be convinced that some categories of people belong into a higher caste and some into a lower one.

The perception of the four phases of life and the four castes emphasizes the hierarchical type of leadership, which still can be found at most Indian companies. A company that organizes itself hierarchically and follows those structures, will find that superiors and subordinate workers will follow the same principles. To lead and to follow, to superordinate or to subordinate is normal, necessary and appropriate. The co-worker avoids contradiction towards his superior, as so for to not lose face. This would only cause the loss of goodwill from his superior, who is supposed to be his most important leadership figure.

In this hierarchical system, Indian co-workers often tend to not only conform, but to go one step beyond. The Western European business describes this as the “Yes Culture”. Even though everything is agreed with a ‘yes’, the actions do not comply with the words.

If an instruction or possibly an order from the top is met with a compliant “yes” from the lower levels, a mutual dependence might be formed. The co-worker’s chance of advancement, his reputation and his self-worth become dependent from his superior’s good will. The superior, on the other side, makes his status, authority and his power of cooperation dependent.

It is apparent that job opportunities in the knowledge-based businesses are changing the Indian management style. Allegedly, India does not lead with such a hierarchy as it did just a few years ago but is on it’s way to adjust more and more to the western style of leadership. But the government of India’s official counts show that only 5% or 23.5 million of the country’s total work force of 470 million are employed in knowledge-based businesses. It seems impossible to observe any fundamental changes.

Nevertheless, India’s’ self-proclaimed goal is to become one of the leading nations of the world. Just like the spiritual core elements, this identical type of goal is anchored in the Vedic scriptures, the base of the Indian philosophy and belief system. Will India try to get into the lead externally, while changing its principles internally? Does the future hold a less hierarchical system of leading and following? All of these questions are speculative. But the essential question remains the same: Who is leading whom?

First published in its original German version in “Interkulturell führen – Diversity 2.0 als Wettbewerbsvorteil” at Neue Zürcher Zeitung

About the author: Waseem Hussain is the Founder & CEO of a services company with a specialization on business with India. Before, he was the business manager of a globally operating outsourcing company, after heading a joint venture between a Swiss and an Indian software development company. His key strengths are quickly grasping the clients’ situation, crafting executable strategies and implementing steps towards success. Click to view Waseem’s short bio

Alberto Elli looks where the resources are concentrated during the three major temporal blocks of an acquisition

After so many years of being involved in business development, I think one of the most critical moment in an acquisition is the integration phase, when there are great chances to destroy shareholders’ value.

Let’s see where the resources are concentrated during the three major temporal blocks of an acquisition:

1. Strategic intent, target setting and proforma decision to justify the deal price. Great focus from top management, quite unrealistic expectations pushed both from inside (needs for growth) and from outside (bankers driven by fees as a percent of acquisition price).
2. Negotiations and closing. Seller, buyer and advisors have strong vested interests to get the deal done, also stretching proforma. Maximum peak of resources involved: multi-functional team from the acquirer and handsomely paid consultants from outside: lawyers, environmental experts, tax experts and accountants, bankers for financing and for advising on the deal. Once Due Diligence is completed (and at times it is done too quickly and without depth) and Purchase Price is set, all these actors tend to disappears because they have reaped the biggest rewards.
3. Once Senior Management is on a new acquisition and the “clock” of external advisors has been stopped, the local team and a bit of divisional support is left with the huge task of integrating the new acquisition and to deliver the shareholders’ value they are committed to.

RISK ASSESSMENT

To better understand the challenges of integration, an analytical risk assessment will help to highlight the areas that will need most management attention and dedicated resources. The following model can be run both in a qualitative way (describing the issues) and in a quantitative way (assigning values to each variable based on prior integrations experience). The latter approach is particularly valid for “serial acquirers” that will quickly size the risks and assign internal or external resources based on prior experiences and … lessons learned!

Nature of the transaction
1   Clarity of Strategic intent
2   Board of Directors Approval
3   Highly leveraged
4   Proforma on more than 5 yrs.
5   Acquisition and integration costs budgeted
6   Target, public or private
7   New Market Entry
8   Bolt-on acquisition
9   Transformational
10  Joint Venture
11  Minority Participation

Complexity “up-front”
12  Sales $10 – $50 Mill. Or more
13  Multi-divisional
14  Multi-geography
15  Plants to shut-down
16  People to reorganize / downsize
17  Due Diligence -> major adjustments
18  Net Worth Adjustments
19  Ear-out on multiple years

Customer Facing / Front Office
20  Key Management to Retain
21  Criticality of customers – Sales retention
22  Criticality of customers – Terms&Condition
23  Bad Debts Reserve
24  Compliance issues / severity – FCPA specific

Back Office
25  IT integration complexity
26  ERP to implement
27  Business Intelligence
28  Supply Chain established
29  Production Planning
30  Safety Procedure
31  Inventory management / slow moving
32  Centralized Purchasing
33  Critical Suppliers
34  Finance – closing and reporting in less than 5 days
35  Finance – monthly B/S reconciliations
36  Finance – Cost Accounting
37  Finance – Bank relationships, complexity
38  Finance – Cash Flow Management
39  Finance – Tax strategy
40  Risk Management – Insurance and Legal support
41  HR – Payroll (internal or Outsourced)
42  HR – Labor Contracts repository
43  HR – Benefits defined, perquisites definition
44  HR – Pension Plans assumptions understood and funded

Others
45  Culture, consonant or dissonant to acquirer
46  Regulatory and IP protection, criticality of issues
47  Warranties on long term sales contracts
48  Warranties on long term purchasing contracts
49  Documentation of Labs procedure
50  FX hedging in place

WHO HAS TO LEAD THE INTEGRATION PROCESS?

Every each integration is different but the best practices on the resources needed have informed the following considerations:

1)  CFO (Acquiring or the acquired)

Given the ultimate goal to deliver on expected shareholders’ value creation, the involvement of the acquiring CFO is very important but cannot be the sole responsible, given the many others concurrent responsibilities. At times, the acquired CFO has been asked to lead the integration; results are mixed because the internal knowledge can be over weighted by the temporary nature of his/her mandate. Only if the acquired CFO will have a long term place in the organization, the integration role works pretty well, actually if executed with excellence is the best entry in the new organization.

2)  Internal Project Leader (Full time or part-time)

PMO skills are needed; either imparted through internal training or available in specific professionals but the true integration leadership is quite different: best is to have a manager that is slotted to become the leader of the acquired entity or the leader of another acquisition.
Depending the size of the organization and the frequency of acquisitions, the investment of full-time resources is to be considered; the experience is usually multi-functional and the resource can be redeployed quite easily.

3)  External Project Leader

Solution to consider when the acquisition is one-off or is particularly complicated from a geographical/cultural point of view. Difficult to recruit the right profile but once is individuated the scope, the timing and the cost is fixed, even more important is the independence from internal politics and divisional agendas.

4)  Internal Team (permanent or ad-hoc)

Best practice is to form a full-time internal group of experts that can be redeployed after the acquisition is integrated or kept as a team if more are foreseen. To be noted that integration can be a relatively compressed time frame but full achievement of synergies can be a longer effort, like for Supply Chain and for IT in the contest of ERP implementations.

5)  External Team

Risky proposition in term of having the right quality and number of resources for all the time needed to complete integration. Once a resource is hired for a functional area, always ask to identify a back-fill. If possible, try to shy away from time and material contracts in favor of closed end sum, or based on payment at milestones’ achievement.

CONCLUSION

Clarity of the objectives to achieve, well defined timetable, proactive risk assessment and correct deployment of resources are key to a successful integration that will deliver the full value of an acquisition.

About the author: Alberto Elli for the last three years has been Interim-Chief Financial Officer for private and PE-owned companies in the space of consumer electronics and fashion, leading processes of turnaround and exit strategies.

From 2008 to 2013, he was Vice President and Controller of Sherwin-Williams Global Finishes Group (OH) (Automotive Finishes; Chemical Coatings; Protective and Marine Coatings and Emerging Markets) with about $3 billion Sales. Since inception, in 2008, the Group grew sales 70% both organic and with several acquisitions. Alberto joined Sherwin-Williams in 2006 as Vice President and Controller of the International Division after ten year experience in the pharmaceutical industry with Schering-Plough. His first assignment was as Finance Director in Italy and he was later promoted VP of Finance for the Healthcare Division headquartered in US-NJ and after three years was named VP of Finance, Pharma International, a group of $4 billion Sales. From 1985 to 1996, Alberto held various financial positions in Italy, the last of which was from 1989 to 1996 as Finance Director for SCA, a leading Swedish multinational in paper and packaging industry.

Alberto earned his degree of Dottore in Economia e Commercio from the Universita’ L.Bocconi, Milano, Italy