Cross Cultural Workforce Engagement

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Cross Cultural Workforce Engagement
Dr. Brian W Tempest Chief Mentor Executive Vice
Chairman of the Board Ranbaxy Laboratories
Limited, Delhi, India Human Resources Council
IndiaConference Board 16th February 2007, Taj
Mahal Hotel, Delhi
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Disclaimer
Except for the historical information contained
herein, statements in this presentation and the
subsequent discussions, which include words or
phrases such as will, aim, will likely
result, would, believe, may, expect,
will continue, anticipate, estimate,
intend, plan, contemplate, seek to,
future, objective, goal, likely,
project, should, potential, will pursue
and similar expressions or variations of such
expressions may constitute "forward-looking
statements". These forward-looking statements
involve a number of risks, uncertainties and
other factors that could cause actual results to
differ materially from those suggested by the
forward-looking statements. These risks and
uncertainties include, but are not limited to our
ability to successfully implement our strategy,
our growth and expansion plans, obtain regulatory
approvals, our provisioning policies,
technological changes, investment and business
income, cash flow projections, our exposure to
market risks as well as other risks. Ranbaxy does
not undertake any obligation to update
forward-looking statements to reflect events or
circumstances after the date thereof.
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Economic Background

• Global Major Issues
• - USA on the verge of a military defeat
• - Iran and N.Korea are global nuclear issues
• - Shifting power in the Economic world
• - Religious turmoil in the Islamic world
• - Inspite of these, the world economy steadily
  growing, driven by
• - Technology innovation
• - Collapse in cost of collecting, analysing
  transmitting information
• - China/India growth
• - Integration of global market for goods
  services
• - Monetary stability
• Source FT, 10th Jan2007

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Where is the Worlds Wealth?
Netherlands 2
Spain 1
Switzerland 1
Taiwan 1
Canada 2
Rest of World 10
Germany 4
Italy 4
France 5
UK 6
USA 37
Japan 27
Source The World Distribution of Household Wealth
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Where are the Worlds Pharmaceuticals sold?
1.5
1.5
2.0
2.4
3.3
3.4
4.9
5.4
12.0
44.6
Top 15 countries 85.9 of worldwide
pharmaceutical market estimate 2003
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A race to prosperity
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Global speed of change

• The world is changing faster than ever
• Globalisation is the key driver of this change
• Best hope for the improvement of the lives of the
  worlds population
• Creates wealth
• Faster Trade and interdependence
• Over the last 2 decade, more people have been
  lifted out of poverty in Asia than in any other
  region at any other time in history
• Rise of China India has energised Asia
• Education is highly valued in India Asia

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Science Education in EU
This means that when pupils are in a science
laboratory their experience is unsafe,
unsatisfactory or uninspiring for 65 of the
time. Source Royal Society of Chemistry, Policy
Bulletin Spring 2006 UK A Level
entries Closed UK University
2000 2005 change
Chemistry Departments Physics
32,059 28,119 -12 Dundee
Kings Chemistry 40,856 38,851
-5 Surrey Exeter Maths
67,036 52,897 -21 Lancaster
Queen Mary Computing 19,099 7,242
-62 Source Daily Mail 11 August
2006 Only pupils at private schools can take
physics, chemistry biology separately Source
Times, 9th November 2006
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Science Education in India

• Number of Higher Education Institutions
• 05/06 18,123 59
• 00/01 11,412
• 90/01 5,932
• 80/01 4,861
• Source Indian University Grants Commission

Number of Students enrolled in Higher Education
Institutions 05/06 10,500
40 00/01 7,500 90/01
4,000 80/01 3,000 Source Indian
University Grants Commission
Number of Institutions courses
05/06 99/00 Pharmacy
1478 669 120 Medicine
229 174 32 Physiotherapy
205 52 294 Source Pavan
Agarwal (2006) based on data from
professional councils
PhD Degree awarded in Science 03/04 5408 44 00/
01 3734 90/01 2950 (USA 03/04 25,000)
Source Indian University Grants Committee
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The Education Advantage
Engineers/Science graduates p.a India 0.7m,
China 0.5m, EU 0.5m, USA 0.4m, Japan 0.3m
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The RD Investment Advantage

• 
  
• Most attractive RD Investment locations
• Ranked 3rd - China, USA, India, Japan UK
• Source UNCTAD 2005

• Reasons why India
• Qualified Scientists Engineers
• Global India players with Alliances
• English speaking
• TRIPs compliant first patent March 2006
• IIT, IIM other scientific institutions
• Source UNCTAD 2005

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The Pharma Advantage APIs
USA DMF filings by India
Share of USA DMF filings

• 
  
  
• India China
  
• 2004 27 9
• 2005 37 10
• Q106 44 15
• Q206 41 16
• Q306 45 17 (latest)
  
• Source US FDA / J P Morgan, 6th
  August 2006

• 
  
• 1990
  1
• 1995 4
• 2000 36
  
• 2004 187
• 2005 262
• Source Crisil / US FDA / J P Morgan

Source US FDA, Credit Suisse
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The Pharma Advantage - ANDAs
ANDA Filings in USA by Indian Companies
144
64
46
24

• - One in every four ANDAs filed
  by Indian Companies in top
• USA FDA filers
• Source KPMG
• - No Chinese generic company has
  yet filed a USA FDA ANDA

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Global Market Trends for Generic Companies
Source UBS, Businessworld, 30th October 2006
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The Tempest Crystal Ball - Pharma

• Post TRIPs new pharma products will dry up in
  India by 2008
• Under this pressure Indian Pharma companies will
  adopt different business models
• - Generics, Discovery, Services, MA
• MNCs will continue to be attracted to India owing
  to the science education
• China will be perceived to be stronger in
  biology/ toxicology
• 75 of new RD sites and 30 of RD staff
  globally will be in India/China
• Alliances between Western Biotech and Indian
  companies will expand
• The global generic industry will be dominated by
  India in the next five years
• China will dominate the chemical intermediates
  segment
• It will be India China - and not India or China

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Our Cultural diversity

• Country Headcount No. of Countries
• lt10 24
• 10-25 4
• 25-50 4
• 50-100 7
• gt100 10
• Ground operations in 49 countries
• 1/3 of headcount overall is non Indian
• Brazil, Romania, Malaysia, China, Russia, South
  Africa, Nigeria, Japan
• US, India

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Cultural Diversity is driven by MA

• 2003 2007 MA deals in Europe
• Ranbaxy - 6
• Stada - 2
• Matrix - 2
• DRL - 1
• Aurobindo - 1
• Wockhardt - 3
• Sun Pharma - 1
• Torrent - 1
• Jubilant - 1
• Zydus Cadilla - 1
• Source Nomura, 21st December 2006

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Potential for human disconnections

• Americans- very aggressive - must be clear,
  start early, finish early
• Chinese - bargain very aggressively
• Italians - possessive about their personal
  time, dont expect to meet outside office hours
• Australians or weekends
• Brazilians - love football, fast cars coffee
• Canadians - a mixture of Americans and Europeans
• Scandinavians- dont appreciate jokes so much
• Spanish - unusual long lunch hours is the norm
• French - want to shake hands every morning and
  may even kiss you
• Koreans - hardly stop working, but when they
  do, drink lots of whisky

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Both Japan India are hungry for Information
Internet Usage Asia
Mobile Phones

• China 123 m
• Japan 86 m
• India 51 m
• S.Korea 34 m
• Source Business Today, Sept. 24, 2006

• China 421 m
• 2. USA 190 m
• Japan 157 m
• Russia 148 m
• 5. India 116 m
• Source Times of India, Sept. 14, 2006

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Japanese India vs engagement

• Before time vs After time
• White shirts/ties vs Open neck shirt
• Sashime vs Vegetarianism
• Golf vs Cricket
• Takes time for each side to understand what is a
  very complex picture, eg. visiting cards, hellos
• Japanese are heavily influenced by USA,
  Technology Innovation, Education Productivity

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The Productivity Advantage
India a usa Pharma view USA
1 chemist Better education x
1.3 1 chemist
70 hours/week Longer working time x 1.3
50 hours/week
800 monthly Lower cost x 20
12,000 monthly
Sources IPHMR Conferences, New Delhi August 2004
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Assessment Centre results on 200 managers

• Some brilliant minds with perfect scores
• Mathematics are very strong
• Great achievers deliverers of results
• Weaker in the softer skills, eg. persuasion
  motivation
• Team building skills need enhancing
• Invest in training

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Conclusions

• Senior managers need to be chameleons
• Management teams should represent a mixture of
  culture
• HR team needs a mixture of cultures
• Communications is the most important step
• Operate seamlessly in different countries
• Sensitive to local culture traditions
• Avoid the expat India clique
• Invest in training, transfers, team, travel
• Source R.Gopalakrishnan Asian Management
  Review, April 2006

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Thank You