points McKinsey’s Rajat Dhawan
India is expected to witness a ‘roaring 20s’ exactly like the US economy performed in the 1920s, according to Rajat Dhawan, McKinsey India’s new managing partner. Dhawan revealed to ET during an interview that indicators of the 2020s as India’s decade have been made evident. Domestic consumption is returning, and not in the way of spending money like in a game of blackjack, the build-out of infrastructure public investment continues, and indicators indicate returning to the cycle of private capital following an interval of 10 years and a combination of proactive policies may aid the country in delivering on its promise of manufacturing, Dhawan added. “We are extremely optimistic about India. It shouldn’t come as a surprise to get the real deal. GDP growth of around 8percent in the next few years. If productivity increases are accelerated the growth could go to 10 percent,” he said.
Dhawan was promoted to the role of India managing partner in July.
The rapid growth of India since the country’s economy was opened after the second wave in the pandemic Covid-19 is expected to continue, he said. “We are seeing huge ambitions for entrepreneurship within the Indian corporate sector and we are hoping that multinationals begin to reconsider the India opportunity the way that they had with China around 10 years ago. There’s a different level of commitment to magnitude and ambition that we’ve seen from Indian companies since January,” he said. In the past 20 months in which India Inc struggled to adapt to the reality of the pandemic, The McKinsey consultant pointed out that two intermediate and long-term industry-defining trends emerged: an enormous value-migration as well as accelerated digitalization, with a particular focus on Cloud. Dhawan claimed that chief executives, as well as boardrooms, were seeking advice on taking strategic decisions on topics like sustainability, energy transitions, and customer connectivity on the front using digital ecosystems, the use of data analytics as well as new types of commerce. “They are also drawing out 5- and 10-year strategic plans,” Dhawan added. As the economy is growing both new and legacy firms have been handing out assignments to consultants to assist to address disruption, productivity, and problems with growth.
Top-rated firms such as McKinsey, BCG and Bain are having a difficult time attempting to accept new assignments.
“Mandates and the intensity of mandates have increased for our older clients as well as digital natives. We currently have 85 partners spread across 10 different sectors. We have a critical amount of this extraordinary group of leaders however, we’re not able to satisfy all clients’ needs,” said Dhawan. Even in the time of the pandemic the most frequent topic of discussion within the corporate and consulting world was the issue of market-leading position in the premium consulting market in India. Many consultants are saying that BCG might have surpassed McKinsey with respect to India consulting costs. “We are the most preferred partner for impact from India Inc. I am a believer in the concept of an “infinite” game that isn’t about achieving a result either winning or losing to the competition. You have to be in pursuit of excellence. We’re aware of the competition, but don’t worry about it. Our own thrilling trip ahead,” he said. The premium consulting industry has evolved from pure strategy to intensive implementation, the technology has grown significantly and competition from technology players such as Accenture and IBM as well as Big Four companies like Deloitte and EY is growing.
Are Dhawan concerned about the growing competition and market shift?
“Absolutely not. It’s opened up new opportunities for us. In the world, CEOs have looked at their investments in technology over the last 10 years, and frankly, the majority of the investment in technology didn’t produce the results expected,” he said. “Digital migration is opening up opportunities and we are building specific capabilities that complement each other, even organically, just a handful each month. Only a handful of companies are able to provide top-of-the-line counseling and change management, as well as scope and impact. We’d make unorganized moves in India when we have additional abilities,” Dhawan added. For McKinsey India, he said the company was ready to ‘lift-off’. “I wouldn’t be surprised if our people pool, at a minimum, doesn’t become two and a half times where we are today in the next five years.” Despite the firm’s record-setting growth across the globe, it was haunted with the presence of India-based McKinsey members such as Rajat Gupta Arun Kumar as well as Puneet Dikshit, in insider trading investigations. “These are isolated instances however they are extremely regrettable incidents. The company has strict standards for professionalism and institution. Zero tolerance is the norm,” Dhawan stated.