Sree's Stories

April 22, 1994
10-page cover story

The Superboss
How did McKinsey's Rajat Gupta become the first India-born CEO of a $1.3 billion US transnational?

By Sreenath Sreenivasan

'I'm A Product Of McKinsey': Interview with Rajat Gupta

'Rajat Is The Firm's Future': Interview with Tom Peters

McKinsey's India Connection

Factfile On Rajat Gupta

"Congratulations," said Ron Daniel, "I'm very happy for the Firm." That's all Rajat Gupta needed to hear on the telephone while on vacation in Colorado (US) on Friday, March 25. After 21 years of working for the world's most influential and prestigious management consultancy firm, the $1.3-billion McKinsey & Co. (McKinsey, a.k.a. the Firm), 45-year-old Rajat Gupta had finally arrived: he had just been elected its managing director.

That call from Daniel, the chairman of the election committee and a former McKinsey managing director, brought the Gupta-Daniel story full circle. Two decades earlier, it was Daniel who had hired Gupta straight out of Harvard B-School for McKinsey's New York office--after Gupta had been turned down because he didn't have any work experience. That's when one of Gupta's professors at Harvard, Walter Salmon, wrote to Daniel, then manager of the New York office, asking him to reconsider the decision. He did, and the rest, as they say, is history.

For the Chicago-based Gupta, it is the culmination of a journey. A long and arduous journey by a young man from Maniktala in Calcutta, where he was born in a middle-class family, to the top of a $1.3-billion powerhouse of business savvy. Although McKinsey-watchers had predicted that a non-American could take over as CEO this time around, Gupta wasn't always mentioned as the top choice.

"McKinsey is truly a meritocracy. I don't think anybody would have considered for too long whether I was Indian or American," says Gupta.

Despite his characteristic humility, Gupta will have done more than cross a milestone on July 1, 1994, when he becomes the first-ever India-born CEO of a US transglobal corporation. Indeed, Gupta is the first Indian to have successfully broken through the impenetrable glass ceiling at the top which most transnationals have erected. Reckons Gupta, who was
interviewed for two hours by BUSINESS TODAY at his 29th-floor office in Chicago, which he heads: "Over the last few decades, McKinsey has become truly global." Adds McKinsey's India office managing director, Anupam P. "Tino" Puri: "Rajat was selected inspite of his being Indian. The process of choosing the managing director is blind to nationality."

With 62 offices in 31 countries, priorities at the 68-year-old company--which now earns 60 per cent of its revenues outside the US--are shifting overseas more than ever before. Says Norman Sanson, managing director of McKinsey's London office: "The time was near for a non-American to be the MD. This shows the non-Americanism within McKinsey."

FACTFILE NAME: Rajat Kumar Gupta
DESIGNATION: Managing director-elect, McKinsey & Co. Takes office on July 1, 1994
DATE OF BIRTH: December 2, 1948
AGE: 45 years
PLACE OF BIRTH: Maniktala, Calcutta
NATIONALITY: India-born US citizen (US citizen since 1984)
EDUCATION:Modern School, New Delhi, 1966; B. Tech (mechanical eng), IIT-Delhi, 1971; MBA, Harvard Business School, 1973
CAREER: Joined McKinsey in 1973; New York office, 1973-1981; Scandinavia office (Copenhagen), 1981-86; Chicago office, 1986-1989; elected principal 1980; elected director 1984; managing director (Chicago), 1989-94, managing director-elect, McKinsey & Co., 1994
SPECIALISATION: Strategy, energy, industrial goods, consumer products
WIFE'S NAME: Anita Mattoo Gupta, engineer
CHILDREN: Geetanjali, 16; Megha, 12; Aditi, 9; Deepali, 4
AFFILIATIONS: Advisory boards of Harvard & Kellogg B-schools
LANGUAGES KNOWN: English, Hindi, Bengali
CURRENTLY READING: The Complete Works of Vivekananda, Gita Mehta's The River Sutra
INTERESTS: Bridge, old Hindi film songs, and Western classical music

To the casual observer, Gupta's education--Indian Institute of Technology-Delhi (IIT-D), Harvard Business School--and his membership of the Firm could suggest he's part of the old boy network that is so special at McKinsey; a typical McKinsey consultant has been to an Ivy League college and graduate school. Gupta's past tells another story. After living in Calcutta for the first five years of his life, he moved to Delhi in 1953. One of four children, Gupta lost both his parents by the time he was 18 years old.

Completing most of his education with the help of scholarships, Gupta passed out of Modern School at Delhi, and was ranked 15th in the all-India IIT entrance test in 1966. At IIT-D, he won not only a five-year mechanical engineering degree, but also his future wife: Anita Mattoo, an electrical engineering student who was two years his junior. They first met at a play rehersal-- "Ratan" was a keen debator and actor--where she played Gupta's grandmother. In 1973, the duo married.

When Gupta finished at IIT-D in 1971, he had several choices: a job at ITC, a management degree from IIM-Ahmedabad--or an MBA from Harvard Business School. Not surprisingly, he picked the last. Boston brought culture shock--he'd never even seen TV before--but the academics was easy. Recalls Reuben Aragon, a Mexican-American dorm-mate from Harvard, now CEO of the Oklahoma-based Duralast Rubber: "There was a spark there. You knew he would definitely be going some place."

That turned out to be McKinsey. When he joined McKinsey in 1973, it wasn't as if he was the first Indian to work for the Firm. Puri had signed up in 1970 and became Gupta's mentor and big brother. Interestingly, around three per cent of the Firm's 3,000 professionals were born in India--and that doesn't include second-generation Americans of Indian origin.

Of these, 80 are associates, 10 are principals, and three are directors: Gupta, Puri, and Adal "Scratch" Zainulbhai, who works at the New York office. "Good Indian minds are good at consulting," reckons Arun Maira, a former TELCO executive director, who now works with the Boston-based consultants,
Arthur D. Little. Consider some of the qualities that allowed Gupta to beat the pack:


Several partners, consultants, and directors at McKinsey--as well as McKinsey's clients and alumni--were interviewed to identify the specific factors for Rajat Gupta's rise to the top:

  • Intelligence: Was a brilliant student at IIT-D and Harvard
  • Vision: Has always seen the big picture very quickly
  • Integrity: No doubts about his dedication to his clients
  • Track Record: Did exceptional work in Scandinavia and in Chicago
  • Experience: Experience in India, Europe, and the US will be handy
  • Loyalty: Has worked with McKinsey for 20 years
  • Patience: Low-key approach is refreshing
  • Hard Work: Willing to work at a problem until the job's done
  • Team Play: Spends time building teams and working by consensus
  • Creative: Uses unusual methods to arrive at solutions
  • Open: Always available to offer advice
  • Maturity: Is one of the youngest in most settings
  • Humility: Has a down-to-earth approach and did not lobby for the job

GLOBAL PERSPECTIVE: As McKinsey gears up for the challenge, who better than the India-born Gupta, who won his spurs in Europe and the US? Gupta's first test came in 1981 when he was sent to Scandinavia to manage McKinsey's operations there. Gupta was one of the youngest partners to have been entrusted with such a responsibility. "I was 32, and still a principal. It was very unusual for a principal to be office manager," he admits. At the Scandinavian office, Gupta turned around McKinsey's prospects.

LEADERSHIP: Gupta showed early signs of being a general rather than a foot soldier. Soon after he graduated from IIT-D--where he was general secretary--Gupta was called for a job interview at ITC. On the panel was R.C. Sarin, who now heads Carrier Aircon. Twenty years later, Sarin bumped into Gupta at a seminar in Delhi and instantly remembered the young man he had once interviewed. For, when asked the attributes of a leader, Gupta had given a memorable reply: "One who can motivate his colleagues and get things done without making his teammates feel that it was the leader who had actually got the work done." Summing up Gupta's leadership style, a colleague in the Chicago office, director Chip Chandler says: "Very quiet. Leads from behind. Builds consensus."

INTEGRITY: Advocated by Marvin Bower--the guiding spirit of the company founded by James O. McKinsey in 1926--McKinsey consultants are expected to function by the Firm Code. The five tenets: to put client interests ahead of Firm interests; to serve the client in a superior manner; to adhere to high ethical standards in everything the Firm does; to preserve the confidence of clients; to be ready to differ with client managers and tell them the truth even if it hurts. Not surprisingly, Gupta has treated the code as sacred and has won a squeaky-clean image in the process.

PEOPLE-ORIENTED: Gupta always finds time for people and their problems; he personally knows all the 148 senior McKinsey partners around the globe, and most of the 400 partners. Says Varun Bery, a former McKinseyite, who is now with the investment bank CS First Boston: "He has a very down-to-earth style. He is approachable by colleagues at all levels." In December 1993, Gupta flew down from Chicago to spend three days with the young McKinsey recruits in India. Says Ashok Alexander, partner, McKinsey India: "He found the time to have dinner with a group of associates whom he will possibly never see again in his life." Adds Shashi Khanna, director, MAP Consultants, Delhi, a friend from his IIT-D days: "He values relationships."

LOYALTY:At a time when loyalty is at a premium, Gupta has spent his entire working life with one organisation. Especially as McKinsey is a rich hunting ground for CEOs:
IBM's Louis Gerstner, Westinghouse Electric's Michael H. Jordan, American Express's Harvey Golub, Tele-Communications' John Mallone, and Levi Strauss' Robert Haas have all been McKinsey consultants. Gupta, however, has never looked askance at any McKinsey command, always putting the Firm's interests before his own. He refused the offer to try out Copenhagen for two weeks when the Scandinavian move was mooted. And while moving back to Chicago, he only asked a McKinsey associate to buy him a suitable house to move into--without even seeing it.

PERSONAL VALUES: Despite cut-throat competition, Gupta is admired in the McKinsey world for his humility and unassuming airs. Says Sanson: "He cares for other people's successes like his own, and does the right things for his clients. And more than everything, he is very humble." Adds Richard Cavanagh, executive dean,
Kennedy School of Government, who worked on-and-off at McKinsey for 17 years: "I'm a real fan of Rajat. He has astounding maturity for someone so young."

That is important, as McKinsey's partnership environment is a flat organisation, where the managing director of the firm isn't a typical CEO. Even the election--not selection--is more like the cardinals in Rome electing the Pope. There is no electioneering and you cannot declare yourself a candidate. All the directors around the world vote on the top few candidates every three years. This year, the 148 directors narrowed it down to two candidates, Gupta and Don Waite, head of the New York office. The vote was by secret ballot, processed by Price Waterhouse.

Does Gupta's appointment mean that Indians are finally ready to storm the bastion of White Anglo-Saxon Male CEOs? Not likely. Says Shyam Lal, an IIT-D and University of Chicago McKinseyite: "It is less a breaking through of the glass ceiling, and more a reflection of the fact that it was time for a young man with a global background to step forward." Adds Atul Kanagat, 38, a principal at McKinsey's Chicago office: "It will not have that kind of effect. Few companies would model themselves along our lines. At the same time, Rajat's been one of our most successful partners, and so, it's quite a natural progression for him."

McKinsey follows a brutal up-or-out policy: if you don't make it to the next level within a reasonable number of years, you are expected to leave. Associates, the new recruits, usually take about six years to become principals; about one in six makes it. It takes another six years to become a director, and only one in 10 associates becomes one. As a result of this policy and the constant headhunting, McKinsey has about 3,500 well-connected alumni the world over.

Ironically, getting to the driving seat may prove to be a lesser challenge for Gupta than steering the McKinsey juggernaut in the future. One criticism is that the Firm has grown too fast to deliver value for money. McKinsey has also been accused of being too bloated to serve its clients well. Gupta admits he needs to fix this: "We'll simplify our structure a little bit. We may have become--because of our size and growth--a little complex in our governance structure."

In the meantime, smaller firms-- A.T. Kearney, Bains & Co.--are chipping at McKinsey's business. While they don't have the Firm's reach, they are expanding. For instance, A.T. Kearney CEO Fred Steingraber is initiating a blitz in India this month.

Another sore point with carpers is McKinsey's fees, which are the highest in the business. Gupta agrees, but says: "We are expensive because of what it takes to attract outstanding talent." Talent doesn't come cheap: associates earn up to $250,000 a year until it's time for a promotion. And according to David Lord, editor of Consultants News, Gupta should make "between $2 million and $4 million a year" when he takes over.

In the history of the Firm, two managing directors are credited with playing a crucial role: Ron Daniel and Marvin Bower. If Tom Peters is correct, Rajat Gupta may be the third CEO whose tenure could be a watershed in the history of the Firm.

'Rajat Is The Firm's Future'

THAT the world's best-known management guru is a former McKinseyite shouldn't surprise you. Fifty-one-year-old Tom Peters is now an institution himself, but he used to work with McKinsey until 1981. In fact, it was a McKinsey project which led to the publication of the seminal best-seller, In Search of Excellence, which was written by Bob Waterman, another McKinseyite, and Peters himself. BUSINESS TODAY's Sreenath Sreenivasan caught up with Peters at his sheep and llama-filled farm in Vermont and, as it turned out, Peters had even worked with Gupta. Excerpts from a telephonic interview:

On Gupta's election:
To say that I was thrilled is an understatement. It came as a total surprise. I wrote Rajat a little note saying how delighted I was. He's the best thing to happen to McKinsey since Marvin Bower's days at the Firm.

On McKinsey's search for excellence:
The project set out to answer one question: if we're so smart at generating great ideas, why are clients having problems implementing them? An informal core group of 15 to 20 people worked on the project between 1977 and 1981. One of the best people in the core group was Rajat.

On McKinsey today:
It's hard to criticise its effectiveness. It adds tremendous value for clients. It's still the best place to turn to.

On fixing McKinsey:
McKinsey isn't showing the kind of intellectual leadership that it should. McKinsey always defined the business model. But no longer. Why is Microsoft defining the business model, and not McKinsey? Many of the best thinkers have moved on. There's a sense of predictableness. There's too much conservatism. Things aren't as wild, woolly, and wacky as they could be.

On Gupta and McKinsey:
McKinsey could be a more exciting place than it is. Rajat can make it so. He's the future of the Firm. He has the ability to understand clients well and then give them creative solutions. But remember, I have a very strong bias!

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McKinsey's Indian Connection

by George Skaria

December 1993. Fort Aguada, Goa. A few hours before the conclusion of the first-ever annual retreat of McKinsey in India, an unassuming person, who had sat quietly at the back through the three-day meet, walked up to the dais at the invitation of McKinsey's India office managing director, Anupam P. "Tino" Puri.

For the next 45 minutes, Rajat Gupta, then head of McKinsey's Chicago office, spoke animatedly about his career path, the choices he had made, the values of the company that he holds dearly and, finally, McKinsey in India. Says Ashok Alexander, partner, McKinsey India: "At the end, there was no applause. We were too stunned." Explains Puri: "Rajat is sympathetic to India. He will do what is expected of a managing director. And McKinsey is truly committed to this country."

Indeed, McKinsey's India affair began equally passionately in 1988, when the Puri-Rajat duo came on a recce mission. Whirlwind meetings with bureaucrats, businessmen and cabinet ministers set the basis of a courtship that was formalised four years later, when the Firm set up its India office. In the last two years, the Firm has grown from a fledging six-person bureau into a 40-strong team; 10 of whom are Indian repats.

As corporate India scrambles to restructure, McKinsey is targeting four kinds of clients: large Indian groups, smaller business houses, transnational corporations, and state governments. Says Puri: "These are unusual times, with most of our clients undergoing an unprecedented degree of turmoil." And the Firm's clients include the State Bank of India, Larsen & Toubro, RPG Enterprises, Hindustan Lever, Arvind Mills, Hindustan Motors, Shriram Fibres, the Council for Leather Exports, Coca-Cola--Parle, and the State Industrial and Investment Corporation of Maharasthra.

In the next few months, the group plans to focus on transnational corporations for whom India is an integral part of the global market, and public sector units desperate to become competitive. But McKinsey India will well and truly pick up the gauntlet when it tries to rebuild at least a dozen companies into Indian transnationals. Says Puri: "We have plans to take about 10 to 12 companies in different sectors and make them world leaders. The idea is to build on the competitive advantage of Indian companies."

To effect these changes, McKinsey has already prescribed radical solutions, based on its organisational restructuring models. Clients trying to instil cultural changes and cost reduction exercises, for example, are asked to go beyond total quality management (TQM) and apply McKinsey's model of a transformational corporation. Similarly, the consultancy supremo advocates setting up horizontal companies, rather than flat organisations, for better and quicker results.

New offices are expected to come up soon in Madras and Calcutta, and McKinsey is in the market for quality personnel. Already, the consultancy faces a dilemma in finding the right kind of people and training them. In the last two years, to circumvent the scarcity of skilled people for specialised tasks, it has flown in at least 35 senior consultants from McKinsey overseas. Increasingly, the focus will be on developing local talent, which is a time-consuming mission. Points out Puri: "Consulting is like a craft. To major from a carpenter to a master craftsman takes time. Our size here is supply-constrained, not demand-constrained."

Manpower is important for the services company, since the Firm will need 70 to 100 staffers to gain critical mass. Until then, McKinsey plans to bring in consultants from outside the organisation to work on specific aspects of a project, or even work side by side with other consultancy organisations in the country.

Points out Alexander: "We do not think in terms of competition. If it makes sense to work with other consultants, then we will do it." Still, McKinsey must watch out for the competition. Global rivals Andersen Consulting and Coopers & Lybrand set up local operations much before the Firm, while
Booz Allen & Hamilton, A.T. Kearney, Arthur D. Little, the Boston Consulting Group and Bains & Co. are also testing the waters.

Says CEO-elect Gupta about McKinsey's India strategy: "We have no quantitative objectives of any kind. We want to build the practice one client at a time, one study at a time. We want to be a long-term partner to improve the performance of Indian institutions, as the country becomes more and more part of the global economy. We are there for the long run."

For his mentor "Tino" Puri, the implications are clear and simple: he will probably have less time in future for his wine collection, classical music, dance, and the game of golf that he loves to play.

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'I'm A Product Of McKinsey'

Portrait of Rajat Gupta
IF YOU are a young man dressed in a business suit, visiting Chicago's First National Plaza for the first time, the chances are pretty high that the security guard there will ask you: "29th floor, right?" Right, but how did he know? "A lot of young men like you go there to be interviewed for a job." The 29th is one of the three floors occupied by the Chicago offices of one of the world's most influential and prestigious management consultancy companies, the $1.3-billion McKinsey & Co. It is also where Rajat Gupta, 45, who will take over as McKinsey's next managing director on the historic day, July 1, 1994, works.

Last fortnight, the receptionist at the CHO--as this office is called in McKinsey-speak--had a sign on her desk saying Congratulations, Rajat, On Becoming Firm Managing Director. Yes, plenty of eager young MBAs do come here to be interviewed. But BUSINESS TODAY's Sreenath Sreenivasan, who flew in from New York, visited the Chicago office only to interview the India-born Rajat Gupta. After speaking to several consultants and directors in the firm, he interviewed the Boss-To-Be, discussing Guptaís Indian-ness, his American-ness, and his McKinsey-ness for over two hours in his private conference room. Excerpts from an exclusive interview:

Q. When former managing director Ron Daniel called to say that you had been elected, were you surprised?
A. Surprised is not the right word. I'd say I was very honoured. Obviously, I knew I was in the running, and there were two candidates in the final round. So, I wasn't so much surprised as honoured by my election as managing director.

Do you remember the thoughts that went through your mind at that very moment?
I think the thoughts running through my mind had pretty much to do, frankly, with how terrific a place McKinsey is. I've never worked anywhere else in my life. So, whatever I am, I'm a product of McKinsey. I take all the congratulations as a great compliment to the Firm.

What role did your Indian-ness play in your election?
What I feel about the Indian-ness is that it's a great tribute to McKinsey. I can safely say that this is one place which is truly a meritocracy. I don't think anybody would have considered for too long whether I was Indian or European or American or from anywhere else. That is characteristic of the fact that McKinsey, over the last few decades, has truly become a global institution. That's reflected in what we now see as priorities for the Firm. Although the US is still important, many of our priorities are outside the country. It's become a global institution, and in a sense, McKinsey is blind to the nationalities of its partners.

Is the fact that an Indian has become the head of such a huge American corporation the equivalent of the running of the four-minute mile?
I wouldn't quite characterise it that way. I've never felt, throughout my 20 years here, that there was any issue about my nationality or the colour of my skin.

Tell me about your India days.
I'll give you a quick snapshot. I was born in Maniktala in Calcutta, and lived there for the first five years of my life. My parents, Ashwini Kumar Gupta and Pran Kumari Gupta, had three other children. I have a sister a year older, another two years younger, and a brother 10 years younger than me. My father was a journalist with the Ananda Bazar Patrika Group. He was a prominent freedom fighter and had been to jail many times. My mother taught at a Montessori school. When I was five we moved to Delhi, where my father went to start Hindustan Standard, and I studied at Modern School on Barakhamba Road. My father died when I was 16. My mother died when I was 18.

What did you four brothers and sisters do then?
We decided to live by ourselves. It was pretty unusual in those days. Normally, we would have been sent off to live with various relatives. Instead, we asked a spinster aunt to come and live with us. All of us were good students, so we all had scholarships. After Modern School, I went to the Indian Institute of Technology at Delhi (IIT-D) to study mechanical engineering.

What were your options after you graduated from IIT-D?
Well, everybody was going into management; you either began as an management trainee or you went to B-school. I had got a wonderful job at ITC. I had also applied to B-schools, both in India and abroad. I was accepted at the Indian Institute of Management at Ahmedabad, but preferred Harvard, where I got financial aid. I told ITC then that I wasn't going to join them. They wouldn't believe me because nobody had turned them down. So, they actually paid my airfare to come and meet them in Calcutta to explain why I wasn't joining them. Ajit Haksar, who was then ITC's chairman, was among those whom I met. I explained to them that I was going to Harvard, and only then did they understand.

What was Harvard like?
It was sort of classic. You always feel you're going to flunk in the first month. They give you so much to do that you say this is impossible. But once I got over that initial scared feeling, it was relatively easy. Because the IITs give you a wonderful education, better than you get anywhere, actually.

Were there many Indians at Harvard with you?
There were a couple in my class. One was Praful Gupta, now with Reliance, who worked at Booz-Allen & Hamilton for 20 years. He's a very good friend of mine...

How difficult was it being an Indian student at Harvard?
Well, people were surprised about how good your English was. Another thing is that Indians typically don't speak up that much, which you must at business school. I was very reticent in class.

Did your professors point that out?
Yes, everybody would comment on that. Right after the first term, there were only two of us who got perfect grades. Most of my classmates were surprised that I got all excellents. I never said much, you know.

Why did you opt for a consulting job after school?
The most practical reason was that there were precious few companies who would even want to talk to me since I was on a student visa. Second, consulting was the most sought-after job at B-school.

Why did you choose McKinsey?
McKinsey was important, and willing to talk to me. We had two interviews, back to back, on campus. The second was conducted by Bill Clemens, who was then head of recruiting in McKinsey's New York office. He told me that my credentials were terrific. "And you're obviously very smart, but you need to go and work somewhere else for three or four years before we'll consider you." I was, obviously, not very happy with that. One of my professors, Walter Salmon, who was a classmate of Ron Daniel, who then ran McKinsey's New York office, wrote to him to reconsider the decision. Then, I was invited to a full day of interviews at the New York office and, eventually, offered a job.

Why have you stayed on at McKinsey for so long?
I was never tempted to leave. I believe McKinsey is an absolutely unique institution.

Its people and its culture. McKinsey is a collection of extraordinarily talented people, who are also very interesting in their diversity. What ultimately keeps you is the people.

Former managing director Daniel describes the CEO's job at McKinsey as trying to herd cats. How would you describe it?
It isn't a classic CEO job. This is a sort of servant-leader job. We don't have one leader; we have at least 150, if not 400, leaders. So, you have all these highly talented leaders who--given the freedom--will do the right thing. What you need to do is figure out what their aspirations are, synthesise them, and distil them in the direction the Firm should take. Create the environment so that they can do what they think is right.

Only one in 10 associates at the Firm becomes a director. How did you make it?
You need the basic skills of consulting: problem-solving, interpersonal skills, developing relationship, serving clients, and so on. Then, you have to constantly think about how you can make a difference to the Firm. About the leadership you can provide.

What are your special skills?
The dimension I would pick is team building. The ability to build a real partnership.

Are there some areas you need to work on?
I'm sure there are plenty. At times, I'm not tough enough or firm enough. Generally, I'm a soft person. I'm probably not as good in large public settings as I am in more intimate settings.

How will your life change when you become CEO?
I suppose I'll have to do less of client work and more travel...

Will you move to New York?
I'm not planning to move to New York. Only a fraction of our partners and principals are in New York. So, there's no particular reason to be in New York, or any particular place. There's no such thing as the Firm's headquarters. It doesn't exist.

What makes McKinsey so unique?
It's a global partnership, which is almost impossible to build from scratch. We have an extraordinary internal value system that holds it together. The people are special. We attract the best and we hire the best. We have a unique way of developing them. We invest a lot in building competencies in various industries and functions.

Critics complain that McKinsey is simply too expensive. Do you agree?
We are very cogniscent of the fact that we are expensive. We are expensive because of what it takes to attract outstanding talent. While some of our clients may comment on that--I mean, who wouldn't?--they still come back and are very happy with what we do...

What about clients who have had problems?
It is always easier to tell in hindsight. We hope that we can turn things around, but sometimes it just doesn't work...

What is your personal vision for McKinsey?
We will continue in many ways the way we are. We'll simplify our structure a little bit. We may have become, because of size and growth, a little complex in our structure of governance...

Isn't there too much management by committee?
You can take off a bunch of committees, I don't think all of them are essential. You can involve the director group in making more decisions directly. You can emphasise the value system, and manage more through values...

How practical are Marvin Bower's (McKinsey's guiding spirit) values these days, when the bottomline is everything?
The bottomline isn't everything. I think professional values--the interests of the client come before the interests of the Firm--all hold true. If we do those things well, the financial rewards will follow. The financial rewards are a result, rather than an objective.

What criteria, then, do you use to judge performance?
In order to be a real member of the Firm, you have to adhere to its values. And have a strong personal impact, radiating those values. We look at two dimensions: client impact, and firm impact. Client impact means: what difference are you making to the performance of our clients? Firm impact means: what is your contribution to building the institution?

How closely are you in touch with India?
Very close. I go every year... I was involved in the opening of our India office. Of course, Tino Purie pretty much led our effort to establish ourselves there. I have very strong ties with India, and I would like to contribute as much as I can. I owe my success to the basic, underlying philosophy of India.

Which is?
It goes back to the fundamental philosophy of the Gita, which is that you worship work and do it for its own sake and don't judge it by what results you achieve. Concentrate on doing your best in what you do.

What is your relationship with Tino Purie?
Tino has meant more to me than anyone else at the Firm. He's been my big brother and my mentor for 20 years now. He was the senior-most Indian here when I joined. Whenever I need personal advice, I turn to him.

What are your plans for McKinsey's India office?
We have no quantitative objectives of that kind. We want to build the practice one client at a time, one study at a time. We want to be a long-term partner, as India becomes more and more a part of the global economy. We are there for the long run.

Why didn't you go back to work in India?
I have been extensively involved in the governance of the Firm in some form or another for about 10 years, and I feel that all the things I was doing would be difficult to do if I went to India. The other reason is that it would have been difficult for our children; they've all grown up here.

Tell me about your wife, Anita.
First of all, let me make it clear that she is a lot smarter than me. She was a gold medalist at IIT. After doing her electrical engineering there, she studied at Columbia and worked at Bell Labs. We married after she finished IIT, and before I started at McKinsey. She stopped working after our second child. Now, our youngest is four years old.

You met at IIT?
Yes, she was two years junior to me. We used to do plays together. I was quite active in dramatics, both in school and at IIT-D. I did 17 plays in those five years, Hindi and English, modern and classical.

Is there still life outside the Firm?
Of course there is, in many different dimensions. Even though I work about 12 hours a day, I make it a point not to work weekends, unless I'm travelling. I've been involved with the Harvard Business School Club and the advisory board of Northwestern University's Kellogg Business School. I have also been involved with Bala Balachandran at Kellogg in helping him think through Indian projects. Beyond that, I have four daughters and they can keep you pretty busy.

Since you are only 45, you could serve five three-year terms until you retire at 60 as McKinsey's CEO. Is that how you see it?
This is a very intense job. Like everything else we do here, it ought to be a rotating position. I don't know precisely, but somewhere between five and 10 years is more than enough.

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