Operational and managerial challenges for Schindler in India

Napoli, head of corporate planning for the Swiss Schindler company, has this job of building and promoting elevators in India. He has been told by Schindler, that for him to succeed, it is important that he be "half monk, half warrior" in order to adapt to and attract the Indian people to his work. Napoli describes himself as warrior, and intends to work on his monk part. In the meantime, he is finding the job grueling and uphill although he feels that he is making progress somewhere.

He had already established offices in New Delhi and Mombai, had hired five Indian top managers, and begum implementing the aggressive corporate plan that he had initially drafted. This plan called for a $10 million investment and centered on selling local core products with no allowance for their customization.

However, Napoli was now faced with three challenges:

For the second time in two months, his Indian managers wished to customize an order requesting a glass door in an elevator

Unexpected prices were being added to his original cost firstly through transfer of material and secondly through custom duties on imported elevator parts

3. Napoli's requests for design specification, assistance, and parts were also not forthcoming from Schindler's factories.

Napoli's plan was that he would sell 50 units (i.e. elevators) in his first year in India. As yet, he has not installed a single elevator and Napoli, understandably, is concerned. He is wondering whether to revise his plan, seek the help of his visiting manager, or try to sort out the challenges himself.

On top of all of this, Napoli -- Swiss -- is having a challenging time dealing with the different culture and this had caused initial difficulties with his Indian team and employees.

Napoli's plan for selling in India was the so-called Swatch Plan that he had devised for other countries and that had, actually, succeeded there. In effect what this entailed was selling the S01, a standardized, non-customized elevator that would incorporate processes not used or sen by the group before and receive its components from outsourcing. There was promise of a need for higher technological elevators in India (they mostly relied on the simple kind at the moment); elevators were a commodity product, but there were price pressures involved and customer service was an important factor too.

In short, Napoli has to deal with internal challenges in India -- persuading a country to settle for standard, rather than customized, elevators and to agree to outsource when no other Indian companies outsource their work or material. He also has to see how to deal with the unexpected costs imposed by the Indian government. Aside from which, Napoli has to maintain contact with the European organization (Schindler) to obtain the assistance and parts that he needs. On top of all this, he has to prove Mr. schindler's trust in him that India can be the breeding and testing ground for further innovation for the company. Results of tests in India, the top management hope, can then be applied to the company as a whole. Acknowledging Napoli's efforts, Mr. schindler expects him to put on his 'warrior' garb and to wrestle it through. Napoli is uncertain about what to do.

The two largest problems

I think that Napoli's two key primes are:

1. Strategy and mode of entry

2. Marketing, sourcing strategies, logistics.

1.Strategy and mode of entry

India is an entirely different continent to that of Europe where, in order to succeed, differences in plans are called for, This is particularly so, since as shown, not only is cost an important factor to the Indian market, but customer service is too.

Nonetheless, Napoli had come prepared with a plan that he had tested for European markets and that he was intent on introducing in India. Much of this plan (for instance, the standardization and outsourcing) were contrary to the Indian infrastructure. Nonetheless, Napoli did not take that into consideration.

Furthermore, Mr. Schindler was determined to make India the testing ground for intended innovation that he would then import to other countries. What works in India may not necessarily work in other lands and Napoli's strategy and mode of entry is one of the key concepts that is giving him trouble.

2. Marketing, sourcing strategies, logistics.

Napoli is refusing to customize, as well as still intending to outsource. Moreover, he had also not been prepared for the Indian government's adding to their costs, nor had he anticipated not receiving the necessary design specifications, assistance, or elevator components from the parent Schindler company. These challenges of marketing, sourcing strategies, and logistics are creating further conflict.

To elaborate, Napoli is resolute on creating a niche by differentiating himself from other Indian companies and launching a narrow product of simple, standardized elevators. Both elevators that he wishes to introduce have been structured for other countries (S. Asia and Europe). Napoli intends to introduce them to India with only slight modifications. Doing so, would lower their production cost.

In order to keep overheads low and escape India's high import duties, Napoli also intended that the production of most of the components of the elevators would be outsourced to local suppliers (whilst the elevator itself would come from the country of origin; S. Asia). Logistics would also be outsourced to an internationally reputed company, whilst Schindler would only handle the safety -related components and deal with the maintenance contracts. Testing and approval would be performed by Schindeler's companies before the elevator would be released. However outsourcing was proving problematic too since no other company in the industry worked this way.

Finally, price estimates for transfer of parts was 30% above what he had anticipated, whilst India had also meanwhile increased import price on elevator component from 22% several months ago to 56%. Trying to work with Schindler European plants to find ways around the problem, Napoli was frustrated with their slow, almost negligible and not forthcoming response.

3.Was Silvio the right choice for general manager of Schindler's India operations, for this start-up company? Should you recruit staff primarily for knowledge or for attitude? If you were Silvio, would you accept this assignment? If yes, why or if no, why not?

I do not think that the problem lies with Napoli. I think that the problem comes from the top. Napoli was previously warned that in order to belong in India and to succeed there, he had to be both warrior and monk, but Schindler head management wished Napoli to mainly be the warrior.

Schindler was determined to fit India into the mold of adhering to his requirements, rather than he attempting to tailor his business to theirs. Napoli had realized the drastic cultural differences, and had structured his team accordingly to meet them. Schindler, however, wished India to serve as testing base for innovations that could then be disseminated and applied to other coutnries. To Mr. Schindler what worked in India would work in other coutnries, and vice versa. Fir them, Napoli was the ideal kind of person since he possessed the warrior spirit and he was intent on fighting it through. The problem, therefore, lay more with the upper management than with the hired person himself.

owever, each and every culture is different, and Schindler is incorrect in his suppositions.

In order to succeed, Schindler would have to take the opposite approach. He would have to revise his plans and warn Napoli to be more flexible. Napoli would have to research the interests and demands of the Indian market, listen to the insights of his Indian-formed team, and slant the logistics and marketing of the Indian Schindler company to suit the Indian market. This would entail Napoli being more of the monk -- namely, the reflective, humble, submissive and emphatic person -- than the warrior who is intent on foisting his demands on an unwilling public.

I think that staff should be recruited primarily for attitude and that this attitude should involve more of a willingness to innovate, take risks, dedication to host company, as well as the desire to understand the country in which one is working and to comply with the host culture. A person can always be trained, and, therefore, knowledge is secondary. Attitude, on the other hand, can never be taught.

If I were Napoli, I would only take on the job if I knew that the company would allow me freedom o pursue that which I wished to do (given certain constraints and limitations, of course) and that I were not bound by any irrational, limiting rigidities or expectations. Schindler does not sound like the kind of company that I would like to work for, since Mr. Schindler appears to want one and all to conform to his expectations and he is not willing to welcome criticism or alterations to his mode of thinking. He seems too rigid and inflexible, as well as unwilling to consider the individuality of people or to respect them for what they are. On the contrary, he seems to treat people and teams as tools to an end rather than as ends in themselves. I would not be willing to usurp Napoli's role.

Napoli has been described as a "strong-headed and single-minded manager" by his company. "He wants everything done yesterday, and in India things don't get done yesterday." (p.6) I would not have sent Napoli to India particularly since his Indian staff and colleagues described him as "driving very hard," "impulsive," "over-communicative" and "impatient" - all of these traits being in conflict to the patient, calm, quiet Indian personality. He was also described as a "pretty hard taskmaster" (ibid.) and angry when deadlines were not met.

The company chose Napoli for they wanted someone who knew a lot of people, could take risks, and was a generalist rather than a specialist. Having respect for the country and people as well as being flexible would, however, have been more valuable characteristics.

Imagine you are Mr. Luc Bonnard. How would you evaluate Silvio's first 8 months as general manager of the Indian company? How effective has Silvio been in developing the organizational capabilities of Schindler India? What action do you think Bonnard should take in regards to Silvio: Should he leave Silvio alone or coach him to make specific changes? Or is it time to remove him?

There are mixed signs. On the one hand, Napoli has failed to endear himself to the Indian market, and first impressions are very hard to change (*). He has been inflexible and rigid expecting the market to become compliant to him, rather than he to them and has failed to implement one sale during this first year instead of the 50 anticipated sales.

Furthermore, he has also been a difficult boss alienating many as detailed above.

For all these reasons, Napoli deserves to be removed.

On the other hand, Napoli, it seems, is beginning to realize his errors and has even been considering revising his plans. More importantly, he has established a team that offsets his negative points and that works together in n effective, smooth manner. The emergent company culture has been described as "informal," "open," responsive" and 'proactive" (p.7). These are excellent descriptions. The company itself is lean and efficient with employees seeming motivated and independent. Being that Napoli is open to change, it may be that all Napoli needs is coaching. Napoli seems a fast learner and someone who is persevering. Given his other qualities: that he is young, strategically-minded, eager to please, and has been successful in the past, I would recommend that he be given another chance. If this chance fails, Napoli can always be removed.

Napoli has to be taught the fundamentals of being an effective manager. A manager is a leader and an effective leader is someone who to respond to and recognize the needs of others. Leadership, therefore, necessitates effective communication. A good leader has to be able to communicate and be with as well as attempt to understand his employees from their perspective (Bateman & Snell, 2009, p. 436). He has to be humble recognizing that he exists for his followers rather than the reverse. He is able to deal with change and flexible and able to lead his subordinates through change too. Also important is that the effective leader leads per example.