The time to cope with changes is much shorter in India than in Europe
Chai with Jorg Sunderman - COO Canara Robeco Asia Pacific
Over breakfast, followed by chai, Jorg and I spoke about change in his line of work. I asked him to share with me change in Canara Robeco with context to India.
One of the challenges he shared is a change process of ensuring that Canara Robeco products are advised on the basis of the need and risk appetite of a client. It requires having a customer centric approach. Making sure that internal and external efforts are aligned to this approach is key. For instance, internally we have introduced a net new money target. This means that the company must focus on attracting new clients as well as retaining current clients to arrive at the net new money target. Hence a long term client relation is most beneficial and actively stimulated. Externally, there is a focus on investor education to ensure our distributors and their clients have the knowledge required to advice and offer the correct choice of investment fund which is most suited to the customers' needs.
Change and India
He shared that he hears many people saying that India moves at its own pace. A misconception in Jorg's opinion is that the pace of change is at a constant speed. India's different corporate sectors are rapidly developing, especially with the new government in place. Although each sector has its own set of challenges, almost all sectors are confronted with change. Since many of these changes require industries to reinvent themselves in a short time span, it becomes increasingly important to remain agile to stay competitive and benefit from the potential the Indian market holds.
According to Jorg the Indian asset management industry within he works has seen ten times as many changes during the last ten years compared to the relatively tranquil European asset management industry. The time to cope with changes is also much shorter in India than in Europe.
Given the timeline and amount of change that happens in the Indian asset management industry people are used to dealing with change. From Canara Robeco's perspective these times are interesting as a lot of factors have aligned to stimulate India's long term development. The positivity around the new government, its decision making, and development efforts affected the stock exchange immediately. International investors have seen India move from one of the so called "fragile five" to one of the shining stars of the emerging markets. As a result, even the 'common man' (aam aadmi) doesn't want to be left behind, miss out on good investment returns and is starting to invest which will help to achieve a higher domestic participation in the stock market. For retail investors their investment behavior is for a large part driven by emotions.
What does that mean for foreign companies willing to come to India?
I think companies that want to do business in India should not judge in right or wrong but see how doing business works differently in India. They must adjust to the Indian way of doing business and take a long term view to become successful in the Indian market. Given the difficulty of doing business in India companies that come to India to make a quick profit from tapping into its huge market will be disappointed. They will be confronted with a hugely competitive market which is not always willing to pay extra to reward quality. This combined with a high entrepreneurial spirit and creativity of Indian companies and entrepreneurs makes an interesting and challenging environment to compete in.
My advice to companies in India going through a change process is to ensure that necessity of change is accepted and that you build in 'pit stops' during the change processes. Planning for these pit stops is key to see how people respond at different stages of the change process to ensure people are moving in the direction you want to change to happen. Being flexible to adapt wherever required is essential too as it is difficult to plan the entire change process on forehand.