Culture Case

How I Did It: Genpact's CEO on Building an Industry in India from Scratch

The Idea: As the head of GE Capital in India, Bhasin found its growth hamstrung by government bureaucracy. Then he had a vision--he could offer back-office services across GE Capital. It was the beginning of Genpact--and of an entire industry.

For several months in the late 1990s, I was inundated with phone calls from competitors and other companies that wanted to visit the offices of GE Capital in India. Taking competitors on tours of the facilities isn't among the responsibilities of most top executives--indeed, it isn't done at all. But I agreed because I viewed the requests from such companies as Standard Chartered Bank, Bank of America, and Accenture as a sign that we were on the cusp of something incredible.

And we were. Today my company, Genpact, handles business process management and employs 43,000 people around the world. It also indirectly contributes, we believe, to the employment of another million people, who work in businesses that support us and our employees. We are in 13 countries and we operate 39 facilities serving 400 other companies. Genpact spun off from its parent company, GE Capital, in 2005 and is now a $1.26 billion publicly traded company.

Genpact's First Six Years

But 13 years ago it was little more than a small division of GE Capital. Then the head of GE Capital in India, I was trying to find ways to grow the business. At that time the division was the first 100% foreign-owned financial services company that had been allowed into India. In our effort to create a local market, we were providing back-office services such as processing car loans and credit card transactions. India had just begun to open its borders--we were, in effect, an experiment by the government. But I could see how vulnerable the business was to changes in government policy and philosophy. We were hamstrung by regulations and red tape. When Indian banks faced a liquidity crisis, the government asked them not to lend to us, because it assumed that our borrowing from them was contributing to the liquidity problem. I recognized that a single regulatory stroke could change the dynamics of our organization completely. And it was hard to build a sustainable business that was so dependent on regulations under the government's control.

At the same time, I could see on a daily basis that an eager, ambitious talent pool existed both within the company and across India. Why not take advantage of it to build our business? We could expand our back-office support services to GE Capital all over the world.

I remember asking a handful of people I trusted if this idea was feasible. All of them said, unequivocally, no. What I was talking about would require building a large-scale facility unlike anything that existed in the region; hiring huge numbers of people and training them to Six Sigma standards on products they knew nothing about; persuading regional and national governments and telecommunications companies to set up and ensure service and infrastructure at a level unheard of in India; and creating an entire business ecosystem.

The concerns that were expressed ranged from the extreme (a terrorist attack would take us out) to the thoughtful--some of which I'd anticipated, such as that mission-critical processes might fail in our hands, or that if we messed things up, we might destroy the whole company's supply chain. Some people within GE worried that we'd be stripping out a critical layer of judgment--middle management. We would lose crucial records. They also had simple concerns that were easily dismissed, such as whether we would be able to set up modern offices and hire people who spoke English. But many concerns were valid and would require extremely careful planning on my part.

Completely Uncharted Territory

It was a nearly unimaginable undertaking. Many things could go wrong. So, I thought, we would need a foolproof plan. We'd have to think defensively--to get ahead of any real concerns. I didn't do any business plan modeling or studies to prove that an opportunity existed. To me, it was obvious. I knew that if we could get sophisticated technology to support us--a very big if in India at the time--we had the raw talent to offer our services at a small fraction of the cost elsewhere. So in 1997 I approached Gary Wendt, who then headed GE Capital, for money to launch a pilot project. He gave me the princely sum of $2 million to make it work.

In hindsight, getting the initial investment was the easy part. (We eventually spent closer to $5 million on the start-up costs.) We had virtually nothing in place to make such a global operation work. We couldn't just sit down and do the proper analysis to plan it, because this was completely uncharted territory. We did draw up a business plan, but there was so much finger-in-the-air stuff that I don't think it had much credibility. We didn't even know at the start how big the venture could be. We just said, "Let's light a fire and see what happens." We did know, however, that given the low costs of highly educated labor in India, we could probably build an operation that would save GE Capital 30% to 50% of what it was then spending on similar services. That was really the essence of our business plan. It was also pretty much all we knew.

Having a few people trained to provide minor back-office support for a nascent Indian market was a far cry from handling a large volume of work and calls from all over the world at any time of day. We needed to conceive the entire operation from scratch. We decided that we had to become very good, very quickly, at four key elements: hiring the right people, training them, building a tool kit to replicate our learning in other parts of the world and to move processes from one location to another, and embedding Six Sigma quality controls in our operation from day one. We would be a beta site with the potential for huge growth at GE Capital--if we got it right.

We had no expertise in recruiting and training the people we'd need for the work. And the products they'd be supporting, such as mortgages and credit cards, were completely foreign to most of our potential employees; training would have to begin at an extremely basic level. Even more challenging, we'd first have to train our trainers. No Indian trainers knew about mortgages and the other sophisticated financial products GE Capital offered the public. They didn't even have the knowledge of such products that we take for granted in America--how credit cards work, who pays the money and when, how a plastic card leads to someone's bank account. We had to teach them everything. The gulf between what