Early on a Saturday morning last July, 20 years after Ajay Mundkur set off toward a career with Scotiabank in Canada, he found himself standing at the door of his parents' home in the Indian city of Pune. It was a moment to savour for Mundkur, a 41-year-old who'd recently been appointed Scotiabank's vice-president for Asia-Pacific retail banking. After he rang the doorbell, he could hear his mother urging his father, a retired air force officer, not to open the door. "It's me, Mom," Mundkur called out. Seconds later, his parents opened up, and Ajay Mundkur stepped, once again, into the arms of India.
Delighted though his parents were, Mundkur's homecoming was not unusual. He's an example of a reverse diaspora of immigrant Canadians fanning out across the globe from increasingly multicultural head offices. Like companies in fields ranging from engineering to advertising, Scotiabank is tapping Mundkur's roots to increase its business abroad.
Long before the bank sent him back home, Mundkur knew that India's burgeoning middle-class affluence-deposits at private banks have grown 60% since 2002-offered tantalizing opportunities for Scotiabank, which has branches in five Indian cities, as well as a subsidiary, ScotiaMocatta, that enjoys the distinction of being the world's largest gold brokerage. But Mundkur also knew Scotiabank had struggled to build an Indian retail banking presence, even while competitors like Citibank surged ahead. Only days before Mundkur landed in India last summer, a $7-million deal to give Scotiabank a 4.9% stake in the Bank of Punjab collapsed. The indigenous competitor apparently was unwilling to share the pie with foreigners-a stance entrenched in laws that limit foreign holdings in Indian banks to 5%.
With years of experience running Scotiabank's mortgage and deposit operations-both of which are $60-billion concerns-Mundkur had proven himself star material in Canada. But on Indian soil, the game will be different, and Mundkur knows head office will be watching closely.
It took only until midmorning on Mundkur's first day in Scotiabank's New Delhi office for the bank's Indian troubles to come into focus. Local staff unloaded painful accounts of the demise of ScotiaFinance, a $5-million experiment in retail banking launched in 1999 and abandoned in 2001. Frazzled by years of chasing down doubtful loans, the ScotiaFinance team was terse with Mundkur at first. But by the time a lunch of dal, roti and kebabs was served, they were talking much more freely: "It was 100% risky business," a former ScotiaFinance executive told Mundkur. "We had little clue of the Indian market," another suggested. Someone-perhaps emboldened by the new boss's openness-called Mundkur's job "unenviable."
Mundkur, by now in shirtsleeves, appeared undaunted. "Either you're there full-body or you're not there," one of Mundkur's newfound confidants put in before comparing ScotiaFinance's failure with Citibank's high-profile success in a market where 27 state-owned banks hold 75% of the sector's assets. Then, as Mundkur's candour cleared the air, prospects seemed to brighten: "Car loan growth rates here are as high as 40%," Harish Chopra, a senior manager, told Mundkur. "The number of residential mortgages has doubled in two years," he added. "These are virgin markets," stressed Munish Sapra, Scotiabank's country head for India. "They're set to explode." Sensing the moment had come for reassurance, Mundkur offered a supportive word from head office: "There's a feeling the bank has been in Asia 30 years and it's time to take the steps to build," he said. It had been an intense discussion; he cracked a grin. "It's getting awfully hot in here," he said, leaning back in his chair. "Who turned off the air conditioning?"
Scotiabank's New Delhi operations occupy three floors of one of the sleeker buildings in New Delhi's financial district, where corporate towers loom above dilapidated arcades sheltering homeless beggars and street peddlers. After reviewing the ScotiaFinance failure, Mundkur mingled with staff. Handsome and easy-going, dressed in a pinstripe suit and silk tie, Mundkur looked the very picture of a multicultural emissary from head office. He quickly fitted in. "Yes, it does make a difference to us that he's from here," said clerk Akhilesh Samyal after Mundkur stopped to shake his hand. Harish Chopra concurred: "He's going to be able to get things done here far more easily than many non-Indians would."
A moment later, when he heard that his tour of another bank's mortgage-processing operation had been delayed, Mundkur had an immediate response: "I want to talk to someone about automobile financing-let's check out a car dealership." Thirty minutes later, Mundkur had crossed New Delhi under a gathering monsoon and was interviewing a Hyundai dealer. "These days in India, to get financing for a car, all you have to do is think you want one," the dealer boasted. By the end of his second day on the job, Mundkur had had similarly close-up looks at India's credit-card and mortgage industries. While there had been a lot of talk about risks, there had been far more talk about opportunities. "Our possibilities here are fantastic," Mundkur agreed at the end of his second day at work in New Delhi.
Just before Scotiabank CEO Rick Waugh gave a pep talk celebrating multiculturalism at the bank's Scarborough, Ontario, call centre, two guitarists wearing sunglasses, beach shirts and giant Afro wigs cranked up a frantic version of Let's Twist Again. Having arrived slightly early for the July event, Waugh was at serious risk of having to dance. And when a woman in a white cotton dress grabbed his hand and yanked him out of his chair, Waugh did what any bank exec in his position would do: He twisted.
Luckily for Waugh, it was a lovely summer day, the barbecues were sizzling and the laughter was good-natured as the plaid-shirted Winnipegger strutted his stuff. By the time Waugh broke a sweat, half the crowd was twisting too.
Waugh's speech credited the call centre's remarkable employee diversity for its equally remarkable results: Rather than just fielding calls, it has cross-sold services to people from across the multicultural spectrum. The call centre employees had welcomed him in 20 languages (from a repertoire that runs to 35), which gave him his cue: "If anyone doubts we're the most international bank, they can just come here." (Spotting an acquaintance, Waugh added a crack: "My God, there is diversity here-there's even someone from Winnipeg.")
Canadian entrepreneurs like Michael Lee-Chin, the Chinese-Jamaican founder of mutual-fund giant AIC Ltd., have proven that multicultural hiring and marketing can be a marvellous money-maker. It's a no-brainer, really: Almost all of Canada's population growth now comes from immigration, particularly from China and India. "Diversity pays" at AIC, Lee-Chin likes to say-a workforce that is more than 40% foreign-born helps the company sell investment products to a kaleidoscope of ethnic markets. Canadian companies would be suicidal, Chin warns, to ignore visible minorities.
It's a lesson Rick Waugh says Scotiabank-which is by far Canada's most international bank, with involvement in some 50 countries-learned long ago. Deep roots in Mexico, Central America and the Caribbean have given Scotiabank a market-share edge among Canadian immigrants from these regions. (In December, Scotiabank consummated an excursion even farther south by spending $390 million to lock up control of Peru's third-largest bank.) What's new, says Waugh, is the realization that multiculturalism offers corporate Canada a superb springboard to burgeoning markets not only at home but around the world as well. "We're in 50 countries, lots of them very high-growth economies, and that's also where most of our immigration comes from," Waugh explained between bites of corn on the cob outside the Scarborough call centre. "It matches up. For us, it's serendipitous that where we want to go in the world matches our talent base at home. I mean, people who can speak Mandarin have a great leg up."
In the likes of Mundkur, the Scotiabank CEO says, "We've got people who understand these new markets who also understand our Canadian products and services. They are our feeder pool for these markets. We aim to use them to build international retail and commercial banking networks that will replicate the model we have in Canada."
It's five minutes on the streetcar from Scotiabank's skyscraper headquarters at King and Bay to the clapboard home of Front, a design firm doing a roaring business branding TV networks worldwide. The atmosphere here is upscale international electronic art college, a striking contrast to the nearby bank HQ where batteries of executives strategize. But it's here, according to Front founder Jeff Rustia, that the words "leveraging" and "multiculturalism" were first coupled.
Rustia, a Filipino-Canadian raised in Toronto, was working for MTV in Hong Kong when he realized that American broadcasters pushing into new markets abroad presented a huge opportunity. "Most of these networks were run by people with little understanding of the very intricate, very specific local cultures in the countries they were targeting," Rustia says. "The networks needed to package themselves with local identities to win audiences in places like India, China and the Philippines. To develop these new identities, they needed help from creative people familiar with those cultures. I figured Toronto was probably the best place in the world to deliver that service." He founded Front in 1999.
Rustia's hunch proved to be a winner. By combing through Bollywood culture, Front beat out a slew of India's top advertising firms to win the contract to package the American children's channel Nickelodeon for the Indian market. Building on that breakthrough, Front has rebranded American networks in numerous countries, including Russia, Portugal, India and the Philippines. It has also refashioned scores of local stations and specialty networks across Canada and the U.S., as well as in places as far-flung as Hong Kong and Hungary.
On each project, a team of directors and videographers starts by assembling anthropological profiles of the new marketplace. The target is almost always the same young, affluent, fashion-conscious wedge of the demographic pie. Otherwise, though, the markets are as varied as the world-or the population of Toronto. "Canadian multiculturalism is our staple resource," Rustia says as he collaborates with digital editors pumping out three-dimensional logos for Georgia's national TV station. "When we hear about a contract to rebrand a TV network anywhere in the world, we can be almost certain we can hire people here at home able to help us decode the culture of that place for the client.
"They're all here in Toronto," says Rustia. "We can thank multiculturalism for that. That's why we're based here."
There's a comfort level that comes from having people with local links on the ground for your foreign projects. And the comfort is felt on both sides.
For proof of this proposition, talk to Marco Pronto, business development manager for engineering firm LEA International, a privately held, Markham-based transport engineering firm with experience in 53 countries. Pronto points to LEA's South Asia subsidiary, which puts 690 of the company's 750-strong staff to work on scores of transport infrastructure projects in India and Bangladesh. "We really ought to be based in New Delhi, but we tap in to South Asian Canadians all the time," says Pronto. "We've sent numerous engineers back to India. When we have them doing the design, we feel a lot more secure. If these were people with no Indian experience, we'd have to watch what they're doing even more carefully."
The other side of the comfort equation is exemplified by LEA's recent contract to study bus privatization in Ethiopia. Pronto cites the role of Ethiopian-Canadian transport economist Alemayenu Ambo, who headed up the World Bank-funded project. "This is the kind of person the government of Ethiopia likes to deal with. We rubbed shoulders with him, and once we realized he was a Canadian with a PhD from the University of New Brunswick, we asked for his resumé," says Pronto. "These people have good expertise and good contacts. We put them in projects that send them back to their home countries."
Pronto says Canada's ethnic talent pools give his firm a competitive advantage over less pluralistic countries: "Sweden, with all its engineering prowess, doesn't have half the international people we do."
Canada's ability to tap diversity outstrips that of most other countries largely because many immigrants to Canada arrived recently enough to still have fresh business contacts and experience in their countries of origin, says Alan Middleton, director of the Executive Education Centre at York University's Schulich School of Business. Immigrants currently represent about 70% of the growth in the labour force; within a few years, they are expected to account for all of it.
Even so, Middleton believes corporate Canada hasn't truly leveraged its multifarious workforce. "We've learned to hire multiculturally, but we haven't learned to apply it," he says. "Some companies, particularly Sun Life and Manulife, have used their successes with ethnic communities to build markets in China and India. But lots haven't."
Schulich's Executive Education Centre boasts a roster of 14,000 international businesspeople enrolled in programs in Canada, China, India and Korea. The school's own attention to diversity has proven crucial to its growth amid cutthroat competition for international students. "It helps us compete with the best schools in the U.S., the U.K. and France, where not as many instructors are used to dealing with multicultural classrooms," says Middleton. "We look for professors who understand local cultures- for instance, people who understand Mandarin Chinese. If you send in a Brit or an American, they're at a competitive disadvantage."
Like Middleton, Rahul Bhardwaj, a former Bay Street lawyer now heading up the United Way in Toronto's immigrant-rich York-region suburbs, also worries that companies are failing to fully capitalize on multiculturalism. "Going back 10 or 15 years, there was an effort to hire in the multicultural communities to win domestic markets," Bhardwaj notes. "But when it comes to leveraging those talents globally, although we have all these foreign-trained professionals, they're not being used."
In a study published in 2005 that surveyed some of the 50,000 foreign-educated professionals arriving in Canada annually, researchers with the Institute for Research on Public Policy found that a foreign degree held by a non-white immigrant brings one-third the return a Canadian degree delivers to a Canadian-born professional. In recent decades, immigrant unemployment has far outpaced unemployment among Canadian workers, while comparative earnings have also slipped dramatically. A Statistics Canada study found that 58% of immigrants who settled here in 2000 and 2001 took jobs outside their areas of training. Disappointed immigrants increasingly seek friendlier terrain in the U.S. or back home. Research by Simon Fraser University immigration economist Don DeVoretz suggests that as many as a third of all immigrants leave Canada, and that 20% of recently arrived Chinese immigrants return to their homeland or move on to a third country.
Although this problem is attracting attention in Ottawa, Bhardwaj says government initiatives aren't likely to work without wholehearted business support. Mentoring programs for foreign-trained workers mounted by several major companies, including Royal Bank, Manulife and American Express, suggest that at least some companies see a priority here. "Smart people are certainly thinking about this," says Bhardwaj. "If you are going after foreign markets, you can work with multicultural people trained over there, or over here. Either way, these people represent a huge pool of underused resources."
As Bhardwaj's comment suggests, we're living in a world where identities are multilayered. No better illustration of the new world citizen-the transnational-could be found than at Ajay Mundkur's Canadian farewell party.
It was a beautiful late-spring evening. Members of Mundkur's extended family stopped by with their spouses and kids for an informal dinner at the Mundkur's Ajax home. With a warm breeze drifting through the open windows, the conversation eddied both in English and Marathi.
The talk among the family-lawyers, doctors, teachers, teens-was unassumingly international. In this company, globalization seemed an ancient story, rooted in the global migration of Indo-European languages through centuries of intermarriage, trade and travel. Mundkur and his brother, a New Jersey attorney, grew up in India, before studying at U.S. universities. Other family members mentioned backgrounds in the Persian Gulf, the U.K., Asia, the U.S. and various parts of Canada. When Mundkur described some comically hard bargaining at a lawn sale, others contributed haggling anecdotes from a handful of countries. Mundkur's lawn sale presaged a major move, but among this circle, ocean-hopping is just a fact of life.
"We sold the house," Mundkur told the assembled family dispassionately. "And we're not sure how soon we'll be back."