The honeymoon with India is over. Business leaders around the world have deep concerns. `Potential' has been discounted. They want to hear the country's leaders recognise problems even if they don't have all the solutions. They want to see hard evidence of success. India does have success stories, but they are not highlighted and the leaders are not turned into heroes."
This is how Rajat Gupta, CEO, McKinsey & Company looks at the country's future. Gupta who was addressing the AIMA conference here yesterday, had three broad observations for the business leaders.
First, the size of turnover or physical assets will not matter. What will matter, is performance. And, growth in itself will not be good till an industry earns the right to grow. Owners must be prepared to relinquish a business of which they are not natural owners. Intensive restructuring of operation and organisation will be necessary.
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Second, the business leaders must not ignore world events as India is rapidly integrating with global markets. It is safer to assume that the global market will become tougher. There is lot to learn from the Asian crisis. Many business groups waited too long to choose their core business from other area which were merely hobbies, and, were forced into distress sales.
Third, the leaders must ensure that they are winning the war for talent. India has a pool of talents.
But, outstanding talent has global reach. The thrust will be to pick up new talent from the campus. They are the intangible capital that will make the difference between success and failure.
Gupta said a structural change has taken place in the global market and this will affect India too.
Capital flows have been privatised resulting in an increasing search for improved shareholder performance.
The new atomised world rewards companies and countries with strong growth prospects and deep reservoirs of talent. India is strong on both.
The challenge is to liberate the markets and reward performance.
India Inc has a major image problem, he said. Much of this could be the consequence of poor communication. It should be a priority to articulate a clear, believable and relevant view on India.
In sharp contrast to the finance minister, Yashwant Sinha's confidence about the non-vulnerability of India's foreign exchange reserves, Gupta said that as high as 80 per cent is highly mobile.
It may not be hot money, but much of it is uncomfortably warm.