Conquering the Chaos: Win in India, Win Everywhere by Ravi Venkatesan Read Free Book Online

underserved markets in India, China, Brazil,
     and Africa while also fueling innovation that opens a door into new markets in the
     more developed regions of the world. The establishment of a new business model in
     India is an important step and I am eage r to see it take off.
    The changes in GE’s approach to India are profound. For the first time, GE has a senior
     vice president heading India. Flannery, who was previously the head of GE Capital
     in Asia, is a trusted veteran with an impressive record. The organization structure
     has been changed, with all the leaders of businesses and functions reporting to Flannery,
     who has responsibility for GE India as a profit center and reports to John Rice, a
     vice chairperson. Flannery and his team have substantial decision rights, including
     the ability to hire people and invest $250 million over three to five years to build
     local capabilities.
    GE’s strategy has shifted to developing more local products for the Indian market
     and stronger partnerships to gain scale. “We will treat India the same way as we treat
     any other business in the company,” says Guillermo Wille, managing director, John
     F. Welch Technology Centre (JFWTC), GE’s multidisciplinary R&D facility in Bangalore.
     “This is a big difference for us. Previously, countries were never treated like a
     business.” The idea is that the India team in different businesses will define what
     products they want and the technology team in Bangalore will develop those products.
     Adds Flannery:
One GE is a significant evolution. Our theory is that by concentrating more resources
     and decision making in India, we will be able to better serve local customer needs
     and ultimately achieve faster growth. We also hope that by conceiving and developing
     products for the Indian market, we can in turn use those products to penetrate more
     mature markets outside of India. We will still have deep connections with our global
     organization, but the center of gravity will move towards India.
    There are significant challenges in implementing the new “One GE” model. Some have
     to do with building organizational capability in India, like product innovation, supply
     chain management, and leadership. But the biggest challenges are internal. Says Vijay
     Govindarajan, a professor at Tuck and an adviser to Immelt: “There are other challenges
     that will require a mind-set shift. In a HQ-driven company like GE, which is used
     to working in a certain way, things like reverse innovation and evolving an Indian
     way to do business will face resistance. It will require decentralization of powers
     and delegation of authority, which may have some opponents at HQ.” The hope is that
     with Immelt backing the plan, the changes will go through. “There is a realization
     at the top that people working in emerging markets need to have an explore-and-learn
     approach. They have to be profitable but not every month. They can spend money, adjust
     and fine-tune their business model, and then make money,” points out Govindrajan.
     The experiment is in its early stages, but growth is back: GE India is reportedly
     growing at over 50 percent annually.
    Why Is It So Hard to Change?
    Why is it so hard to avoid the midway trap? Why is it even harder to escape it, once
     trapped? The prescriptions for success in India are hardly rocket science, and companies
     are filled with extremely bright people. These questions were the most difficult to
     answer. As it turns out, they’re fundamentally about corporate mind-sets.
    The world is quietly entering a new era or phase of globalization, which is happening
     in an unheralded and therefore more dangerous way (I describe the new era in chapter 9 ). With the economies of the developed world in trouble, multinational companies increasingly
     have to look for growth in developing markets. So far, what has passed for globalization
     is international expansion of companies from the