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Wednesday, December 3, 2008

Do Multinationals develop HR in underdeveloped countries

Peter Drucker, the iconic management guru and social philosopher, in his many writings claimed that modern day human lives are immensely influenced by the corporate houses. Why so? We live in society and it has no universal law as the physical sciences do. Drucker believed that society and human beings are in continuous process of change and evolution. Hence, the basic nature of human being is derived not from the absolute truth (from religion) but rather from ever variable psychological and societal parameters. In this essence, comes the concept of knowledge workers to describe post industrial economic men and women. Who creates those knowledge workers to a great extent schools and also corporate houses as knowledge spent almost 50% of our productive life in corporate houses whether big or small. Now my question is how the corporate houses specially the multinational ones are contributing to create knowledge workers in an underdeveloped country?

I have worked in two multinationals in Bangladesh before I started my journey to become a part of new and bold capitalism. My experience is that multinationals do and can play decisive roles in shaping the human resources or creating knowledge workers in an underdeveloped country. I know at least 20 well trained managers, who worked for those two multinationals, are now serving local home grown companies in Bangladesh. This will have a multiplier effect to create better trained managers i.e. knowledge workers in Bangladesh thus increasing the efficiency and productivity of Bangladeshi companies. I have also been instrumental in starting up TQM (Total Quality Management) and inclusive vendor management project for one of the leading MNC in Bangladesh. Initially it has been very tough. There were many oblique remarks such as a disciplined philosophy such as TQM will never work in Bangladesh where indiscipline is the essence. Neither I nor my top management believed that it is impossible. So, we started engaging our shop floor people in problem solving and encouraging people to come up with improvement ideas. We believed that it is all about understanding factors for motivation and concern and then designing right program with proper incentive. For example, we introduced a small program of giving employees free gifts on festivals such as Eid Holidays. And during that time we used to emphasize the fact that if employees don’t take defective products (even though it is free) why will they produce and dispatch defective products for consumers/customers. This created tremendous awareness in our plant level to make our TQM journey successful. Second was to engage people and train them in a very simple manner such as using visuals etc. Third important thing was immense commitment from top management even when business was in trouble. So, these initiatives in fact created about 200 highly trained workers and 20 supervisors.

We have also been successful in creating a participative supply chain even without having very sophisticated IT tools, though we were using some IT tools. How could we do that in a country where suppliers and clients relationship is more of boss and subordinate kind? We ensured free flow of 3 Bs- Bucks, Boxes and Bits. Bucks mean money or value, Boxes mean materials and Bits mean information. This created an environment of trust and confidence for us in our suppliers though initially they were wary about an Indian company. We involved our suppliers to understand our business needs and mechanism and in turn they also let us involved to understand their business financials, economics and needs. Hence, in negotiations table we always had mutual agreement without any acrimony. It may sound quite surprising to many in Bangladesh. We dedicated resources to improve the manpower quality of our suppliers or improve their business process such as purchasing or financing. That is another step which strengthened our collaboration with our suppliers. And above all we pay our suppliers within a week. Many believe that having higher credit is good for business. But in reality it is not because higher credit term is associated with lot of hidden costs. One is the cost of borrowing for suppliers will be higher than a client like my earlier company with access to many banks. And suppliers will definitely pass on this cost to clients. For this reason, we often financed our suppliers also on capital investment projects and went for profit sharing. Yes those things were done based on a little bit complex EVA (Economic Value Addition) model which can be different topic for discussion. Here also, our initiative of suppliers’ development program trained almost 500 workers and 50 supervisors. I am sure that these training and learning will percolate to other companies in course of time. I am proud that our suppliers today publicly say that we are one of the best clients to work with in Bangladesh if not the best, as they have got good financial benefits and even more highly skilled work force, better business processes and opportunity to be our real business associates. I believe that this philosophy also will percolate through our trained managers to other Bangladeshi companies.

Yes there have been many stigmas against multinational companies, specially those ones into extractive industries (Mining, Oil and gas), operating in underdeveloped countries. In some cases there are solid reasons for those stigmas too. But I think that with more moral consciousness among investors/stakeholders about how the money is made will make corporate houses more socially responsible in underdeveloped countries such as Bangladesh..


Anonymous said...

I don't know what you are talking about. I expected you learnt something amazing, but what you just mentioned, if the person is not mentally retarded, is just common sense. TQM is just consultant jargon for stuff that just happens on a regular and normal basis even with (surprise) Bangladeshi companies.

All multi nationals with the exception of Citibank still have a white supremacy notion. They are unwilling to hire top local talent. That is why you were on the shop floor toying around with TQM while CEO Shada had other important things in mind.

And there are people who don't know the term TQM yet practice it that lead some stellar local companies. Wonder what MNC had to teach them.

But if you had to differentiate MNCs. They are extremely creative in every angle and decision that they make. While local companies think in a linear fashion, MNC always think in terms of 5 directions. But you need to be upper mgt to know that and have no idea what TQM stands for.

the_skywalker said...
This comment has been removed by the author.
the_skywalker said...

Dude you seems to be one of those pathetic Bangladeshis who have grudges against “ Shadas”/foreigners for their own failure to get at the top levels of MNCs in BD. In addition, you are those kinds of people who do not have the guts, capacity or talent to talk eye to eye to a Shada or Foreigner working here in BD. And then you guys lament that Shadas/Foreigners do not promote Deshi talents. How can they promote guys without balls? I feel so sorry for you guys.

Fortunately, I do not belong to that looser genre. I was the COO of a US$ 50 MNC (when I left it was US$ 35 M). At that time I was one of the youngest COO in BD and also one of the highest tax payers as a salaried employee for my tax circle. If you have GHILU you will understand what I mean. For your information, the company, for which I worked, is identified by S&P as one of the top 50 companies to make it into the Fortune 500 list in next 5 to 10 years. If you Google you will learn about it. You may need to know that the company I worked for has grown from zero to US$ 50 M in a span of 6 years and still growing strongly at a CAGR of 15-20%. I was the only Bangladeshi in the C-Suites of that company’s Bangladesh operation. Rests were/are filled by top IIM (Indian Institute of Management) graduates. Oh Ya another information…when I was leaving my, ex company asked me to find somebody to fill up my position. I could find only one Bangladeshi guy from Unilever to fill it up. But the negotiations did not work out. As a result my position is filled up by an Indian now. What to do man? I tried my best to source a good local professional. But I could not. Why? The supply of deshi talent is so dry. If you want to check whether I am bull shitting or not, let me know. I can give you couple of references who are in top positions of leading MNCs such as BAT or the company for which I worked for.

You may also be wondering why this Dude left that company even when having such a good position. I have all ready written up in my original write up, I am in pursuit of becoming one of the new heroes of capitalism. Moreover, I do not feel satisfied just reaching certain level as most BD people do. Currently, I work as a member of the global strategy group for the number 1 steel company, on earth, which is almost US$ 120 B Company. For your information, I am the only Bangladeshi in that company in a leadership position. I am one of the 90 potential leaders who are being nurtured by this company for their future talents need at the very top(C-level /Executive VP level positions).

Now, if your cluster of MNCs is limited mostly to TelCos or Banks, I would agree to some extent that top positions are filled by Shadas or Foreigners (Indians/Pakistanis). But there are many other MNCs which are having BD professionals at the top level. Have you heard of Reckit Benckiser, Glaxo, Syngenta, Bayer Crop Science, Berger, Aventis, or Coats operating in Bangladesh? All these companies had and still have CEOs, CFOs, COOs, CMOs from Bangladesh. Even BAT is having some top Bangladeshi executive as in manufacturing. If you want more names of Bangladeshis who are at C-levels of fortune 500 companies, I can give you. By the way a few months back, I was approached for Chief Strategy Officer’s role for a leading TELCO of BD. I was approached by a Singapore/US based recruiting firm. That TELCO could not find local talents and approached to head hunters in Singapore to source most probably a Shada, or a Nak Chapta or an Indian as its CSO. Though I am not one of those, I was approached by the head hunter through other contacts in Singapore. So, it is not true that even TELCOs will always go for Shada. They go for Shada or Indian because they do not find the right people here in BD. You know why? Majority of BD people can only weep and point fingers at Shadas rather than concentrating on developing themselves.

Yes I worked in the shop floor in my earlier professional life. I feel proud for that experience. It is the absorbing experience of working in shop floor that honed my leadership skills, risk management skills and people management skills. Most Bangladeshis, finishing schools, think of going for some desks jobs and hate to make their hands dirty by working in factory floor or working in market on day to day basis. As a result they hardly develop any tenets of good leadership which is the number one requirement to wear a C-suite. I do attribute my success of getting into one of the greatest B.School on earth, to my shop floor experience man. Most Bangladeshi people, who studied and worked all through in Bangladesh, are so limited in their thinking and exposure. They do not believe in themselves rather feel constrained by circumstances. This is the case even for many who studied abroad. They think that it’s only GMAT, GPA and tons of money that would earn a seat for them into a top University/B.School. In fact very few BD professional try and majority of those trying miserably fail. Because in the admission process of top B.School such as Harvard, Wharton or INSEAD, GMAT/GRE and GPA take second seat to maturity, leadership/managerial experience, international experience, creativity, community and extra curricular activities. Fortunately, I could go into one of those though I spent my whole life studying and working here in BD. There are only handfuls of Bangladeshis with only deshi degree-deshi experience combination could go to some of the toughest Universities/B.Schools on earth. You know why? Most BD professionals do not take personal initiatives to develop themselves on all fronts and then cry about not getting opportunities or getting discriminated by SHADAS/INDIANS. You may say now that many Bangladeshis can get admission but they can’t go because of lack of money. In that case, I shall call you an Oxymoron. Good schools never admit you based on your financial condition. After they admit you, they will ask about your financial status. And if you cannot manage the fund, they come up with so many options to help you so that you can attend the program. I graduated from a top 10 B.School without paying 50% of my fees, of course I paid it later by getting a job and making my employer pay off my fees. It is shame for an IVY-league school if an admitted student cannot attend the program just for lack of money. Actually most Bangladeshi professionals whether educated in BD or foreign countries, mostly feel constrained by situations/conditions around them as I mentioned earlier. They just can’t think of getting beyond certain limits. That is why they are not successful to go to the top rungs of corporate ladders even in BD let alone at global level. Those who believed on themselves and never felt chained by circumstances (Shadas do not promote deshi talents) are extremely successful in all sense. I know so many of them.

By the way TQM is not a consultant jargon. It got developed in Japan long back mostly through work of two American gentlemen Deming and Juran. In Japan TQM is more like a culture that pervades almost everything in their life. I just quote our TQM initiative just as an example how MNCs are playing vital role in HR development. I wanted to point out how the culture and discipline was developed in an organic/natural manner. How people could get habituated to the philosophy? This is the learning people can take back to local companies and in fact doing so. I do know some local companies are practicing TQM or quality management practices. I even went to some of those as a consultant long back. But the approach is top down. Hence, the inspiration does not come from within. The culture is not inclusive. So most of those programs are just show offs. Of course there are a few exceptions.

An ha you are appreciating MNCs for their creative approach. You are right. You should also know that most Bangladeshi MNCs managers are forced to emulate practices from the regional HQs which are mostly in India. Not having enough decision making responsibilities, is one reason why I left my first MNC and joined the second one. Often I have shown the guts to deny our HQ decisions when I thought what is best in local context. In BD most are afraid to challenge top bosses sitting in central/regional HQ. I was never bogged down such fear. For example, once I had a long fight with the Chief Techonology Officer, sitting at HQ, about what type of technology we will use for a project. But ultimately I won the battle because I took the fight upfront for the good sake of the company. What I mean is that I was the key person to decide about key strategic decision making such as where and how new factories would be built, from where to source materials or what technology will be used. Dude just asks some of the top BD executives how much freedom they get to take such decisions. I know MD of a leading MNC lost his job because he alone took decision to execute 1 croe taka project. And I used to handle yearly 50-80 croe taka OPEX/CAPEX budget. I never let our INDIAN CFO/HQ guys to poke nose into my budget because it was my budget and it’s my discretion to use that budget. Now, how could I develop that guts. Because I worked in shop floor and handled so many complex issues starting from union, to factory strike, to big accident, to multi million dollar projects. That experience did make me courageous, confident and sometimes maverick in BD context.

So, dude shake off your grudges against Shadas. Learn the things in the harder way. Believe in yourself and do not feel constrained by circumstances. Stretch yourself. First learn thins making your hand dirty and also develop your qualities using all resources whether internet, books, face to face interactions with other professionals or training programs. Oh ya don’t be afraid to experiment and make mistakes. That’s how you learn and develop your confidence.

You really seem to be a moron. You do not know what TQM is all about. Everybody in Toyota (from top to bottom) preach philosophy of TQM. The company where I work now, a multi billion dollar project (something similar to TQM) is running and it is headed by one of the top guy in the company. In my earlier company also, top management (from HQ) championed the TQM program. That is why our Bangladeshi factories have become the most efficient unit amongst the whole group even beating some Indian counterparts. Efficiency is not meant here in terms of labor cost but in terms of productivity per hour or waste. So, this is more about synchronizing value adding activities and eliminating non-value adding ones. . This is the learning Deshi company can take from MNCs and in fact many are taking.

Anonymous said...

One point i like to make that influences the previous thread of argument is this, its not the 'shadas' as you call are making all the shots when it comes to hr development.

More often then not its the local old boys who are in control of bringing up or putting down other bangladeshi managers.

You have to agree the amount of naked politics and sorry small minded interests of family , communal or district preferences play a major role.

There is no one to closely examine the HR professionals themselves practicing in multinationals / nationals who are the best tool in the box used by the organization. The truth is our HR professionals are far from the ideal icons they portray themselves to be.