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Posted on Monday, May 2nd 2005

More than ever before, Indians are going back to work in India. Rajesh Jain wrote in July 2003: “There is an optimism in the air. Opportunities abound. India is rising. The time to think about a return to India is Now.”

Two years later, the trend is really and truly gaining ground.

Most US companies are chartered with the goal of reducing the % of employees in Silicon Valley or other equivalently high cost location. Anxieties abound on whose jobs are going to get dislocated, and when. There is a win-win, though, which companies and HR departments worrying about this phenomenon should try to understand.

Culturally, India is a diverse and very large country. The language differences, the cultural nuances, the cuisine variations are all dramatic and significant. Yes, there has been movement and inter-mingling. But still, a remarkably distinguishable ethnic identity prevails in each part of India.

So here is pseudocode for an algorithm on how to address the “India Relocation Strategy” for companies:

  • Do an ethnic population mapping of your Indian workforce. How many are Gujratis, Marathis, Tamils, Kannadas, Bengalis, … ? What city are they from? Where are their respective families and roots?
  • Do an ethnic map, also, of your India-born management rung that would consider moving back to India, are capable of, and interested in building, running and scaling an off-shore Operation.
  • Given that Bangalore is going fast down the path of becoming an infrastructure chokepoint, you will need other satellite offices. This means, you will need multiple General Manager (GM) types who can run significant operations in multiple Indian cities.
  • Try to find five GMs, each from a different city in India, and a core group of twenty somewhat experienced people with leadership qualities that would like to move back, to go with each GM.
  • There is your Team-of-TwentyOne per Operation.
  • The rest can be locally hired, or filled out from more junior people in the company.

    In your Team-of-Twenty-One you have already designed in management scalability to sustain a 200-300 people operation from the get-go. You’ve set the culture, the tone, the pace.

    I believe, companies that are building 1000 people operations in one Indian city are making a mistake. They would be able to draw much higher degree of loyalty and emotional bond from their employees if employees are provided the opportunity to speak their own language, eat their own food, be close to their loved ones (India still has extended family structures), and raise their children in a familiar cultural environment that they themselves grew up in.

    India is not America. People do not move as easily. Language and Food are very crucial ethnic phenomena, which Americans don’t understand because it is not part of their cultural heritage. Americans also do not understand the need and desire of older cultures to have access to their history, their legacy, their ancestors.

    Hence, my recommendation of five Teams-of-Twenty-One : chosen from Bangalore, Delhi, Pune, Kolkata, Hyderabad, Ahmedabad, Chennai, Kanpur, Indore, Cochin.

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    Sramana love the analogy and your algorithim is so true! Long term sustainability in an infrastructure unable to keep up with the rate of expansion has demolished societies and cultures in history many many times before. Just ask your regular history teacher who will ask their anthropologist!

    Alvin Narsey Tuesday, May 3, 2005 at 9:27 AM PT

    Yes, and consequently, humanity heads towards a rootless, vagabond existence, driven by mercenary goals alone. How unfulfilling!

    Sramana Mitra Tuesday, May 3, 2005 at 12:03 PM PT

    Hi Sramana,

    Proably, it must have been a long time that you actually are in India. Hence, you may not be aware of the increasing mobility of people from city to city within India!!

    The current situational context (in fact, this is the situational context over the past 2 years) is that of people willing to move within India, provided there is 1. exciting and challenging work, 2. market competitive pay, 3. enough infrastructural support to have a lifestyle which is at least closer to the one that people are used to in America.

    Today’s India is in the midst of a transition to a culture marked by an eclectic mix of Indianism and Americanism and as a consequence, nuclearization of families is fast spreading in India!!

    Perhaps, it’s got to do with viewpoint – it matters whether you are viewing the issue while you are staying in America or whether you are viewing the issue while you are staying in India.

    TV Prasad Saturday, May 14, 2005 at 10:46 AM PT

    Hi Prasad,

    Unfortunately, I am quite aware of the mobility situation in India. I am also aware of how it is creating what you called an “eclectic mix of Indianism and Americanism”, and what I call a “non culture and an identity crisis”. What was unique about India is slowly getting lost in this mucked up mimicry drive.

    Nuclearization of families is only good to the point that it provides for privacy. It is not good, if it goes to the extremes of isolationism. One of the biggest problems with American society IS this isolationism and lack of roots. Lack of the roles of ancestors and relatives.

    You are absolutely right – it is a matter of viewpoint. Those in India trying to work themselves out of the rut of minimal resources and embracing whatever opportunities are coming their way – celebrate the opportunities and go wherever they need to. In the process, they make the sacrifices of moving away from family and friends. As a first generation immigrant to the United States, I also chose this route of moving away from family (a very old Calcutta family). However, the long term damage to a country and its culture is one that one can only contemplate, when the basic needs of Maslow’s Hierarchy – are met.

    Of course, people in India are craving for the lifestyle in America. The grass is infinitely greener on the other side. I realize, that only those of us who have seen both sides, and are not quite so bothered by the Maslow basics, can afford the luxury of the next level of thinking – beyond the individual, broadening to the universal, and the impact on the country and its culture.

    Sramana Mitra Saturday, May 14, 2005 at 12:34 PM PT

    An unstated assumption seems to be that only someone who has done the rounds in the US can be the GM. And the core team of 21 will forever be the priests and high-priest of the Indian office.

    It makes me feel that we still havent got over the ‘phoren-returned’ idea 🙂

    Shailesh Tuesday, May 31, 2005 at 11:48 PM PT

    You missed the point. This is about India Relocation Strategy for companies trying to reduce US work-forces, without losing their senior and valuable employees of Indian origin.

    I don’t see any problem with Indian GMs / senior management without the international experience, IF they have sufficient perspective and leadership skills. It is, however, often the case that people who have not had this experience lack the perspective.

    That said, one of my former trusted lieutenants, Santanu Bhattacharya, now at FusionTech, has managed to develop both experience and perspective without ever leaving India.

    Sramana Mitra Wednesday, June 1, 2005 at 12:03 AM PT

    One other criteria that should be added to your list of 2nd tier cities – airports. India has 400 small airports sprinkled liberally throughout the country, increasingly connected by a plethora of new discount airlines. Which is perhaps why Infosys has chosen cities like Mohali, Chandigarh etc. to locate some of its 10 million sq ft/ 44,000 seat planned expansion.

    Sanjay Wednesday, June 1, 2005 at 3:36 PM PT

    I discovered your blog through Rajesh Jain’s – your blog seems to be on its way to be an instant classic! A professor of mine used to say “If you don’t write about it, it didn’t happen” – That aphorism can probably be translated today to, “If you don’t blog about it, it didn’t happen”.

    Your point about hiring 1000 employees in one location is bang on target. In a larger context, I find that many companies in India are perhaps over-hiring a tad little bit. I often see teams of 25 engineers when 7-8 would have been a perfect number. The reasons for this seem to be fear of attrition (which is very real), and also perhaps the fact that because engineers are relatively cheaper to hire in India, people aren’t really paying that much attention to headcount (yet).

    Finally, not to nitpick or anything (okay maybe just a little :-)) but the correct term for people from Maharashtra is Maharashtrians, not Marathis. Not all Maharashtrians speak Marathi (Marathi is actually becoming a minority language in Mumbai), so this distinction is rather important to make. 🙂

    Sumedh Mungee Wednesday, June 1, 2005 at 5:22 PM PT

    Good points, Sanjay and Sumedh.

    I may be a bit biased, but I have to say, the biggest opportunity in second-tier cities today is Kolkata … great universities, reasonably good infrastructure, surplus power, and at this point, even a very cooperative government no longer bogged down by communist ideas.

    It’s actually a first-tier city that hasn’t been leveraged yet.

    Sramana Mitra Wednesday, June 1, 2005 at 9:25 PM PT

    Hi Sramana,

    I agree with your assessement that biggest opportunities lie in cities like Kolkata which are catching up fast to the IT boom in India.

    Besides the benefits mentioned above, I would also add :

    1) Lowest cost of living among metros- resulting in lower wages than say Bangalore or Madras.
    2) Lower attrition rates – this is a huge problem in Bangalore
    3) Business friendly IT ministry – forget all the old communist party stigmas; they are hungry for your business.

    I have first hand experience in setting up and managing operations in Kolkata.

    Plug : For those in the Bay Area, BBN is hosting IT officials from West Bengal end of this month(June).. check website for details.


    Ashim Guha Tuesday, June 14, 2005 at 12:14 AM PT

    […] d-tier cities and services other than IT. Few months back, I wrote another article called Team-of-Twenty-One, pointing to the opportunity for MNC’s in second-tier cities from a cultural perspective […]

    Sramana Mitra on Strategy » Blog Archive » The Case for Calcutta Tuesday, September 6, 2005 at 4:48 PM PT

    […] But remember my Team of Twenty One thesis? The rest of India is still relatively virgin territory for chip design. Pune has a bit, and LSI Logic has just set up in Calcutta. Kanpur has a fabulous IIT, and so do Madras (Chennai), Bombay (Mumbai) and Calcutta (Kharagpur). BITS Pilani is a good engineering school in the North, as are universities like Jadavpur and ISI in Calcutta. […]

    Sramana Mitra on Strategy » Blog Archive » Indian Chips Friday, April 7, 2006 at 1:53 PM PT

    […] Further reading: Team-of-Twenty-One. […]

    Sramana Mitra on Strategy » Blog Archive » Another 1.1 Billion For India Thursday, August 3, 2006 at 5:58 PM PT

    […] The good news is, many of these people are from those very low-cost destinations which would absorb the impact of the downsizing. Perhaps, some of these employees would be happy to go back home. To make this transition smooth and effective, I invite you to read an earlier article: Team Of Twenty One. […]

    Sramana Mitra on Strategy » Blog Archive » Cisco’s Slim Down Program Monday, March 5, 2007 at 7:29 PM PT

    Hi Sramana

    Are you tracking or have you published anything on the skyrocketing salaries in India in virtually all sectors.

    People at CXO and 1/2 levels below them, in startups, are routinely getting offers that are twice of their package and loyalty has become passe. People are on an average working less than a year before getting a 75-100% raise. Appraisals are not needed, and not being done. No ref checks happening.

    It has become VERY difficult to run unfunded startups and attract people on the basis of stocks or ESOPs. India is fast moving or has already moved to the “fat venture capital” model. In fact folks working in VC backed companies are having their cake and and their dessert too.


    Old Hand Tuesday, March 27, 2007 at 12:19 PM PT

    I know. It takes great charisma and leadership to convince people to work for startups these days in India.

    Sramana Mitra Tuesday, March 27, 2007 at 12:43 PM PT

    […] this point, as is evident from data and arguments presented in a series of previous pieces such as Team of Twenty One, India’s Scale Concerns: Real Estate, India’s Real Estate Concerns, and India’s […]

    Sramana Mitra on Strategy » Blog Archive » Beyond Bangalore Friday, April 6, 2007 at 2:37 AM PT

    leadership team work…

    Your blog posts are insightful. I will take them into deep thought and consideration. Your point of view is very smart and intellectual. Charlie…

    leadership team work Tuesday, July 3, 2007 at 4:34 PM PT