Review of the book “Riding the Tiger”

(How to Execute Business Strategy in India) written by Wilfried Aulbur with Amit Kapoor

“ Currently, India is the fastest growing economy and it is likely to occupy that spot for several years to come. Now is the time to change perceptions and to take India opportunity seriously. Now is the time to ride the tiger!”

The book concludes on a positive note about India as a business opportunity, and underlines the urgency to take the leap. One must remember that the authors are not dreamy India-lovers or biased patriots. And their message does not come from wishful thinking, but from objective and meticulous data-driven analysis.

 About the authors

Dr. Wilfried Aulbur has been visiting India since over 20 years. He draws his insights from his hands-on experience as the Managing Director of Mercedes-Benz India, and a wide advisory experience as India Head of the leading German Consulting firm – Roland Berger. He is no more an outsider to India. Yet having born, studied, worked and lived in Germany, he brings a distinct perspective to the question – “How to succeed in India?”. A lot is said about the complexities of doing business in India. But Wilfried brings to fore a number of our strengths which we might be taking for granted or overlooking them. I lived for 17 years in Germany mostly during the previous century. Then, in media “no news about India was good news”. During my recent visits to Germany I observe that the image continues to improve. Both have changed – the perception and the reality. Wilfried’s insights – objective, yet not detached - throw light on – “Why India opportunity needs to be taken seriously? What needs to be done to succeed here? How can the Government, Industry, Educational Institutes and society at large make it stick this time?

Wilfried Aulbur’s co-author Dr. Amit Kapoor also brings in wide academic and advisory experience in the fields of strategy, competitiveness and business models.

 Main theme of the book

The insights in the book can be divided in three broad sections. One – discussion about the execution of successful business strategy in India – by Start-ups and Large Business Houses alike. Two – Specific advice for MNCs coming from an expatriate on “How to succeed in India”. And three – At macro level what needs to be done by Indian economic ecosystem in general to sustain the momentum.

 The Indian Customer

Each country has it’s own culture, history, social fabric, habits and national character. Businesses must challenge and influence the character at the same time be sensitive and adjust to the character in order to succeed.

India is a nation of traders. In hyper-competitive Indian environment, large sections of population are highly price-sensitive. The author calls Indian customers - value-for-money devotees. Indian customers expect German engineering, US innovation, Italian design, Korean efficiency, Japanese quality at Chinese prices.

The author summarizes that - Success in India is often the result of unsuccessful attempts, quick course corrections, customer-focused innovations and relentless push for cost-optimization and scale. Having done that, the book could have turned into a doctoral thesis with all its research, detailed referencing, notes, indices and appendices, but for the sixteen real-life examples the author walks us through. Those examples cover automobile giants like Bajaj Auto and Maruti-Suzuki, German industrial multi-product companies like Bosch and Siemens, consumer product companies like Godrej and HUL, airline like IndiGo, tech-driven aggregator like redBus, German mid-sized Hidden Champion like EFD, hospital like Vatsalya Healthcare and some more. The examples have been explained in utmost detail. The vivid description gives the discussion, a sort of, 3-D effect and makes us feel being present virtually during the strategy sessions and execution phases. The success factors are analysed under seven themes Operational Excellence, Innovation, Choices and Trade-offs, Alignment, Leadership, Agility and Serendipity (sheer luck!).

The author discusses how Bajaj Auto decided to live “Profits before Volumes” as its strategy and took tough decisions of quitting scooters market, positioning in high-end motor-cycle market, collaborated with Austrian KTM, developed own R&D team, led lean manufacturing initiatives and vendor management programmes – all aligned towards the main objective. Similarly the author elaborates IndiGo’s extreme focus on - On-time performance, low cost, and a courteous and hassle-free travel experience, Maruti-Suzuki living by the motto - Volumes up, costs down, Adani Ports having trust in their choice of location of Mundra Port, long term vision, (and perhaps connectivity) and proclaiming - Invest and they will come.

I won’t wish to steal the thunder from the author by quoting more examples from the book or by going into their details.

I will, however, explore slightly in detail two topics which are close to my heart based on my own experience in the field. One – Essential change in the attitude by foreign MNCs to be successful in India, and two - the necessity to be focused and innovative for Indian companies who wish to Think Big.

Multinational Corporations

Many MNCs tend to be strongly HQ-driven. Certainly there are a lot of advantages in having uniform processes, tools, policies and products. However, agile course corrections may be necessary if it does not function as expected.

Failure to align their products and services to Indian needs in terms of functionality and prices, the book identifies, as a main reason for under-performance of MNCs in India. Strong commitment, patience, both ways communication, and the desire to succeed must also be present from the Corporate HQ to become successful in India. The author explains, using these ingredients, how EFD – a Bangalore-based German Hidden Champion in the business of induction heating machinery has not only been greatly successful in spite of initial setbacks but is also beating the Germans at their own game. EFD localized and adopted its products to suit Indian market environment. It challenged the typical “not in our global portfolio” mindset existing in many MNCs. Their Indian customer needed less automation, lower material specification, slower machine speed (due to sub-global scales), different materials, lesser wall-thickness to suit noise, vibration, harshness norms prevalent in India rather than in Europe and so on. EFD tried to understand the application of the product, used frugal innovation techniques and India-appropriate solutions. And it did not stop at that, it leveraged India for global operations for products with high labour content, products manufactured in small batches, for around-the-clock engineering, and for trials for global operation.

Not only this “Mittelstand” (SME) company, even the German electrical giant Siemens developed “SMART” products for the local market: Simple with basic features, Maintenance-friendly, Affordable, Reliable and robust, minimal Time-to-market.

Indian Companies

The chapter - Choices and Trade-Offs holds a lot of value for Indian companies. Using, again, the example of Hidden Champions, the author explains how they achieve the rank of global top three in their highly focused industry segment. The growth model of Hidden Champions is as follows. As a first step they  “Go Deep” i.e. become the best in their focused area. As second, “Go Broad” i.e. go global in focused area. In third step, Diversify in adjacent areas of their focused area. As against this, Indian companies tend to go for diversification too early in order to leverage their perceived management capacities, financial prowess, connections, and brand image. Perhaps the tendency comes from the mindset to de-risk the dependence on one industry. For “going broad”, the necessary Global reach was also not easy to come until recently. It also comes from the legacy of License Raj when it was not easy to grow beyond a limit without a number of restrictions or additional tax burden. Having said that, it also comes from the fact that as Indians we do not want to “Go Deep” by investing in technology, R&D and Innovation in a focused area.

We have had successful diversified companies and conglomerates in the past. But the times of formation of new conglomerates are over. Choices and trade-offs are going to help us in positioning clearly. This in turn will lead to long-term strategy and alignment of resources and activities.

Constructive criticism

While being generally positive about the India growth story, the author does not mince his words when it comes to listing the business challenges in India. “Indian legal system is de-facto useless” lambasts Wilfried.  Lack of infrastructure, logistical challenges, power shortages, expensive inputs, high cost of capital, lack of adequately trained personnel, country-of-origin disadvantage and so on test the patience of even an experienced investor. Indian employees often delegate their responsibility upwards.

In the chapter “Made in India” the author elaborates the shortcomings of Indian versus foreign machine tools manufacturers itemized by technology, application engineering, reliability, consistency, quality, commissioning, communication and so on. This detailed listing holds up a mirror to us and makes us aware about the long way ahead before we become world class.

Suggestions for improvement

A balanced review cannot be complete without some suggestions!

Sometimes there is a lot of business jargon used in the book. But it is all explained well in the abbreviations section in the beginning, and in Notes – towards the end of the book.

The “Leadership” chapter comes a bit short on inspirational/motivational stories - as we are used to, and a bit long on vision and execution. But then it is in line with the rest of the book which focuses - not on exceptional acts of bravery but on achieving of a challenging but rational plan which can be replicated. The book also does not talk of moral hazards and ethics which could be expected in Indian context. It could also have quoted some more stories like Kingfisher Airlines; one can learn a lot from failures. 

Businesses often face liquidity crunch in spite of the right business strategy as well as execution. Delinquent receivable is a serious challenge in Indian environment. The author does not mention about the way successful companies have dealt with the dilemma of top-line growth versus on-time receipts.

The best and the worst part of the book are the large number of graphics. They provide a lot of exciting trends and insights, provided one is prepared to strain one’s eyes enough.

 VUCA World

India happened to be volatile even in the past, and continues to be so. But, of late, the world over things have become volatile, uncertain, complex and ambiguous. Fluid political situation the world over, utterly unexpected outcome of Brexit and the US elections, onslaught of disrupting technologies, social media’s impact, speed and volume of data floating around us.....It is a new normal! Under those circumstances, environment in India becomes a good school for coping with the new normal. Barely three months have passed since publishing of this book. Since then, unexpected result of the US elections are out, India has re-monetized, as a result - GST introduction is deferred, IMF has cut India’s growth forecast to 6.6% and upgraded China’s to 6.3% – which may challenge some of the conclusions in the book.

Under such hazy circumstances it becomes important to go back to the basics, and follow Johann Wolfgang von Goethe’s advice: "Knowing is not enough; we must apply. Willing is not enough; we must do."

This over 400 pages book makes a good read for everyone - MNCs operating in India, inspired Indian companies, and for anyone, like you and me, interested in India’s economic future!

(Book published by Random House. In 2016. ISBN 9788184007534. Current price: INR 486 on Snapdeal, INR 598 on Amazon)