Thursday, May 20, 2010

On Corporate Training in India

My take: Indian training market will go through a major change in the next twelve months.

Call whatever you like, though 'Coming of Age' may seem most appropriate. It may offend some people, justifiably so, some Indian companies are leading training companies in the World. Like, NIIT, indeed. But, somehow, I think they categorise themselves wrongly. Many of these companies, like NIIT, Aptech etc, built themselves filling the great void in the education space. They are great private education companies, as good as any in the world. They are very vocationally oriented, mainly IT, and this is possibly why they benchmark themselves against training companies like New Horizons, Learning Tree or Oracle University. However, the motivation, commitment and alignment of most of their learners are quite different from the ones in the West. They are mostly school leavers than the mid-career professionals. Not that these companies don't offer a bouquet of in-company programmes, but that's not they are known for; consequently, this is not something which gets attention.

There are other companies indeed, which are far more focused on in-company training. NIS Sparta, which stood for National Institute of Sales when it started, and was focused on sales training for Indian companies, comes to mind. In fact, NIS Sparta's story is instructive of what ails Indian corporate training. This started, as I mentioned, with an objective of providing 'world class' sales training for Indian professionals. The 'Sparta' bit in their name came from their intended claim on Spartan heritage, lean, prepared fighters ready for the sales battle. Promoted by the owners of NIIT, and managed by people who started the business of western style motivation training in India in the first place [in a company called Team Productivity back in the late 80s], the company had all ingredients of success. Except one thing: They saw India through a prism of privilege and visualized the opportunity limited by the English speaking graduates from privileged backgrounds. They sought efficiency, and tied up with Huthwaite in Britain [which, strangely, operates as an independent company from the Huthwaite in USA, and hawks the same SPIN methodology] and took on some of the brightest professional trainers. The problem is - their model did not really work. The culture-fit problem is not just one of factors here; it is the factor. A sales training model like SPIN is embedded in behaviourist assumptions; behaviour of the trainer, behaviour of the trainee and future salesmen, behaviour of the customers who will be subjected to the method after the training. The culture question is everywhere in this equation. The model, unfortunately, did not take into account any of these.

Eventually, NIS Sparta all but failed and became, largely, an insurance training organization. A far cry from their intended top-of-the-range professional training, they were doing compliance training and slugging it out in the private education market. They got bought over by Reliance, which came with an advantage of the access to the huge internal market of the mother company itself. But, their model is at odds with the market. Despite the name, there was nothing Spartan about them; their operating model was full of glitz and glamour, and completely at odds with the shoestring operation and fierce cost competition of the compliance training market. They are not yet fully in alignment with the job they are tasked to do.

The story has various elements which can be extrapolated to construct the story of Indian corporate training. Let me try a list:

(a) Start as a small independent entity run by competent professionals, serving a niche clientele. [Team Productivity phase, where three highly regarded professionals teamed up to do sales training for up and coming technology companies like Modi Xerox and HCL, among others]

(b) The search for scale as the opportunity is large and the geography is diverse [Alignment, of a breakaway group with NIIT, and the other with APTECH in search of scale]

(c) The scale needing identity: the failure to create a home-grown identity and falling back on tried-and-tested models of the West [the privileged perception driving things to wrong direction; to become big and successful, Indian companies would not become like Western ones, they would need to become Indian]

(d) The mis-aligned model and lack of open-market competitiveness leading to search of security [While Indian companies have started exporting education successfully, they are long way of developing their own model of in-company training for the global market. The lack of open-market competitiveness of these companies forcing the executives, both at the training providers' side as well as at the client side, to decide to in-source, buy out the scale and make it part of the client's business]

(e) Failure to provide the promised internal efficiencies triggering new, independent competition [The story did not end with in-sourcing, as the efficiencies failed to materialize. The Indian industry continued to grow at a furious pace, and the internal structure of training creaking under pressure. This is leading the emergence of a new set of small independent players. Will it be deja vu all over again?]

As we watch this in-sourcing/ out-sourcing cycle, we should be mindful that one sector India has really done well in, Information Technology, has a long and successful tradition of in-sourcing education. I should point to an excellent article published by The Economic Times a few weeks ago, where Swaminathan S. Anklesaria Aiyar, one of my favourite writers and an astute commentator of India's progress, pointed out how Indian IT companies like Infosys and Wipro attained the scale and efficiencies by bringing training in-house. However, such success so far looks more an aberration than a rule, and seldom repeated in other sectors of the economy. In fact, in-sourcing led to a lack of efficiency most spectacularly in the financial services sector, where sobered executives are now bringing back the outsourcing of training all over again.

Now, this new growth of corporate training companies in India, I am predicting, will be different from the earlier cycles of growth in the wake of economic liberalization. This will be more matured growth, less spectacular but a lot more sustainable. Less spectacular because this new focus on corporate training spending will come from the search of efficiency rather than an unmet demand. The new training entrepreneurs can learn from the mistakes of the past, the lack of scale, the misaligned content and an overt subservience to dated western concepts, and this time around, build internal efficiencies and capabilities, just as the private education companies did in the past. I am also optimistic that this time around, the Indian businesses have a far more global mindset than at any time in the past; they are exposed to global competition and are willing to compete globally. The workforce is also more or less ready, at least at the cutting edge, to absorb the experiences gained elsewhere in the world but, at the same time, unafraid to think of their own.

So, interesting times in the corporate training space in India! I am sure we will see a lot more new efforts, business models and innovation in the area, as the Indian industry will continue to grow, compete globally and evolve their own model of management. It is a privilege being granted a front-row seat; I intend to make a very good use of it.


6 comments:

Shreepad said...

Hi Supriyo,
Agree with the expression that the Indian training space is likely to see a lot of activity.

Supriyo Chaudhuri said...

Thanks for dropping by, Shreepad. There is exciting opportunity, and I do believe we shall see the emergence of best-of-class Indian companies in this segment soon.

Kavin said...

Can U suggest what all topics are to be included to develop professionalism in corporate trainings program?

Supriyo Chaudhuri said...

I would think there would be a number of research based programmes which will be developed in India, offering an alternative perspective on Indian consumers and management practises. This can be in the areas of sales training, communication, team dynamics and leadership, but I would think in all these areas, Indian companies and markets behave quite differently from those of the West. So, essentially, I am hoping that Indian executive training companies will overcome the Private Education mindset and be able to go beyond 'foreign' and received wisdom. So, we shall see more home-grown serious research based programmes.

Amrita Singh said...

Hi supriyo,

I agree with everything you've written about the changing face of training in India, However, What is your take on the training of more behavioural and personal aspects of an individual? Do you see a rising trend in that sector as well?

Supriyo Chaudhuri said...

Amrita

Thanks for dropping by. I wrote this post two years ago and a lot of things have changed since. One thing which has not changed, however, is the quality and quantity of the Higher Education provision in India. The graduate numbers have increased and jobs have been created, but these graduates have increasingly lagged behind what the companies required. May be, this was not felt as acutely as it should have been at the wake of global recession, when the recruitment slowed down, but once we see a recovery around the corner - and the Indian companies should start seeing this later this year - the need would be more urgent.

I am mindful that most of the new workforce in India comes from smaller cities and villages, and the general education system never prepares them for a job in the global supply chain. This will indeed be a huge area of demand. However, I see many challenges: One, an Indian model has to emerge in this area, the recycled models simply won't do. Two, therefore, some investment in research and design has to happen. Indian schools are quite limited in provisions in subject areas like psychology and education, and this will have to change if the indigenous capability to design suitable training is to be created. Besides, one has to work through the regional diversity of India - what works in Mumbai may not work in Chennai - and still achieve scale of operation, which sometimes becomes a challenge.

Supriyo

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