Prioritizing Cultural Alignment in Global Capability Centers

For global brands, the view of global capability centers (GCCs) has expanded over the last several decades. In the latter part of the 20th century and the beginning part of the 21st century, global companies began investing in GCCs in India primarily for back-office and shared services functions. Over the last decade or so, the mindset around GCCs has shifted, and these centers are increasingly taking on more strategic roles within their parent organizations, from driving research and development to product engineering and digital transformation.

Today, India is home to over 1,580 GCCs, up from more than 1,430 in FY2021. In addition to the US, other multinationals from Europe (Germany, UK, France, Switzerland, Austria), Asia (Japan, Singapore), the Middle East (UAE, Israel), Australia and Canada are investing in GCCs of various sizes and capacities in India. With this growth has come tremendous opportunity for the country. And, as India aims to achieve its goal of becoming a USD $5 trillion economy within the next decade, GCCs will serve as a key driver of India's economic growth.   

However, the growth in the GCC sector in India also faces a persistent challenge that needs attention – high attrition rates. In an increasingly competitive labor market, global and local GCC leaders must invest in creating a positive employee experience, offering competitive compensation and providing ample opportunities for upskilling and career development. By investing in their workforce, these centers can not only retain the best talent but also become an employer of choice and foster a culture of innovation and continuous improvement. 

In my role as Executive Director of Allegis Global Solutions’ (AGS) Global Business Services, I have the opportunity to lead and develop a truly global workforce. Currently, we have over 500 team members in India. From that experience, I understand how lack of cultural understanding can lead to conflicts, misunderstandings and cultural missteps that can negatively impact business operations and employee experience. By proactively addressing cultural differences and promoting cultural awareness, leaders can mitigate these risks and create a more harmonious work environment. 

In this article, I will cover why cultural alignment and consistency are important for global workforce leaders and why this commitment must be proactive and intentional, also ways to manage cultural nuances effectively.

Why Cultural Alignment and Consistency Are an Imperative for GCC Leaders

Understanding India's culture and aligning with headquarters' culture are both crucial for leaders working in GCCs in India. Firstly, understanding India's culture helps leaders communicate more effectively with their Indian team members. It allows them to interpret non-verbal cues, adapt communication styles and navigate hierarchical structures, leading to clearer and more productive interactions. Further, cultural understanding fosters trust and rapport between leaders and their Indian teams. When leaders demonstrate respect for Indian cultural norms and values, it helps build stronger relationships based on mutual understanding and appreciation. 

Cultural alignment between headquarters and the GCC in India also facilitates collaboration and integration across global teams. When leaders understand both cultures, they can bridge cultural gaps and facilitate smoother communication and collaboration between teams located in different regions. This supports effective decision-making, as leaders who understand India's culture can make more informed decisions that take into account local contexts and preferences. This ensures that decisions are culturally sensitive and resonate with the Indian workforce, leading to greater acceptance and buy-in from employees. 

Nurturing cultural alignment and consistency must be intentional. When employees feel that their cultural values are respected and integrated into the organizational culture, they are more likely to feel valued and motivated to contribute their best efforts to the company. In turn, this can result in higher employee engagement and retention – both critical in winning the fiercely competitive labor market in India.

Leaders play a critical role in shaping organizational culture and values. By fostering alignment between headquarters' culture and the GCC's culture in India, leaders can ensure that the organization operates cohesively and consistently across its global footprint. In summary, understanding India's culture and aligning with headquarters' culture are essential for leaders in GCCs in India to foster effective communication, build trust, facilitate collaboration, make informed decisions, engage employees, mitigate cultural risks and drive organizational values. 

How GCC Leaders Can Manage Cultural Nuances Effectively 

Once you’ve established leadership commitment and investment in driving cultural alignment between your GCC in India and global headquarters culture, here are a few ways leaders can go about establishing it:   

• Identify common values between Indian culture and headquarters' culture. Focus on universal values such as integrity, respect, collaboration and innovation, which can serve as a foundation for alignment. 
• Educate headquarters leadership on Indian cultural norms. Help non-Indian leaders understand things like hierarchical structures, respect for elders, importance of relationships, subtle communication styles, etc. This builds cultural awareness.
• Involve local Indian teams in strategic decisions. Don't dictate changes from above without input from those closest to the local context. Understanding local nuances is key. Leaders should exemplify the desired cultural values and behaviors through their actions and decisions and demonstrate respect for Indian cultural norms by actively seeking input from Indian team members and promoting cross-cultural collaboration.
• Focus on shared values, not just procedures. Look for common ground around things like integrity, customer focus and innovation rather than dollar-for-dollar replication of processes.
• Create hybrid-cultural practices. Adapt organizational practices, policies and processes to accommodate cultural differences while remaining aligned with the overarching goals and values of the company. This may involve modifying HR policies, decision-making frameworks and performance evaluation criteria to be more inclusive of Indian cultural preferences.
• Empower local Indian leaders to adapt strategies to their context. Give authority to local managers to make culturally sensitive decisions within broader strategic frameworks.
• Communicate regularly and transparently. Overcommunicate changes and rationales to build trust and address cultural issues respectfully through open dialogue. To facilitate dialogue and feedback, ensures that there are clear and accessible communication channels between the GCC team and headquarters. This ensures that cultural differences are addressed openly and constructively, leading to greater alignment over time.
• Focus on mutual learning. See cultural differences as opportunities to learn from each other rather than obstacles to be overcome. Exchange lessons learned candidly and facilitate opportunities for cross-cultural collaboration and exchange between the Indian team and the teams at headquarters. This could include joint projects, cross-functional teams or rotational assignments that expose employees to different cultural contexts.
• Celebrate the differences. Celebrate cultural diversity through events, activities and initiatives that highlight the richness of Indian culture and its contributions to the organization. This fosters a sense of pride and belonging among Indian employees while promoting cultural awareness among colleagues from other regions. 

Global Perspective, Local Focus

When considering cultural alignment and consistency, such as when you’re looking to establish or expand on existing GCCs in India or any global location, an approach that seems to resonate with our clients is, “80% globalization and 20% localization.” While it’s recognised that standardization and process efficiency are key business objectives when establishing offshore operations, it’s also extremely important to understand that the local leadership will be most effective when allowed to lead through trust and relationships. Giving the local leaders the autonomy to do so is important. At a recent client event, one of our clients shared, “Decisions in offshore locations are often more effective when made relationship-based first, process-based second.” 

Further, commitment should be visible from leadership at all levels – global and local. Global or headquarters-based leaders should visit the GCC in person to meet with and spend time with employees at all levels. In our own experience leading a global workforce and in working with our clients, we’ve found it is most beneficial for those in global roles to visit a GCC at least once per year, as the touchpoint goes a long way in providing the local team confidence in their support from headquarters and can positively impact overall employee engagement.