When I first got into consulting, a mentor told me that the most important skill set was not how good an analyst you were or even how fast a thinker you were on your feet. No, he told me that the mark of a good consultant was one who had a deep sense of empathy to get into the shoes of his clients. I think this is great advice for procurement organizations when it comes to managing internal clients, and it's also good counsel for those doing business in developing markets. Purchasing’s Paul Teague recently covered a keynote from the recent Sourcing Interest Group event which captures this philosophy in its entirety. Paraphrasing journalist Robyn Meredith, developing markets are poised for "tectonic economic changes as they increasingly dominate the world economic stage … the rest of the world can adjust to the emergence of China and India and even thrive [she says] but first the world has to understand those two countries. Only then can the world compete."
But what are some of the more pragmatic takeaways that procurement and operations executives can glean from this advice? For one, I'd argue that we must understand and treat each country as highly independent. Certain US businesses may have far more in common with Chinese vendors and others may be closer to suppliers in India. When it comes to working with the Chinese, for example, you can't under estimate the value of relationships to get the most out of your investment. Policies and business come and go, but relationships and personal trust are pre-requisites to succeeding in Chinese business dealings. Back up the occasional handshakes and banquets with frequent face time -- or have people on the ground who can serve in your place. In China, out-of-site is not a good thing.
While relationships certainly matter in India, I've always found that being frank is even more crucial. It's also as important to establish credibility within the circle of contacts with whom you're dealing. The more people who know of your relationships and influence with others, the less likely you are to be taken advantage of. If you talk to a US Foreign Services officer, there's a reason they will admit to historically having preferred dealing with Pakistani more than Indian counterparts -- they trust Pakistan officials (at least most of the time) based on their word. The same level of trust is not apparent with their Indian counterparts based on those that I've had discussions with over the years. Granted, the private sector operates differently in India, but it's one data point at the least.
For this reason, it's critical to always level with Indian counterparts about expectations (e.g., price) as early as possible in a process. Don't expect that an early verbal commitment when dealing with a new supplier or partner will necessarily be sustained further down the line -- unless, of course, it's in writing. As a last recommendation in dealing successfully with Indian business culture, don't underestimate the value of process. Perhaps owing to the exceptional engineering, technical training and education available in the country, Indians always excel when there's more science than art as part of a deal or relationship. When you can quantify success for both parties, everyone has a a better shot at getting what they want out of a deal.
- Jason Busch