The Hindu Business Line : `The best thing for Indian industry is opening borders'

The massive convention hall at the Chennai Trade Centre is packed to the brim with a very disparate audience. The occasion is Blaze '07, the district conference of the Rotary International district 3230. Gurcharan Das, corporate strategist, and better known as an author and former CEO of Procter & Gamble India, is speaking on India in a globalised world. He's gung-ho about the India growth story in a rapidly changing global environment. He feels India's time has come. Eager Rotary members who have come to the convention from various districts of Tamil Nadu pepper him with several perspicacious questions, which he fields with aplomb. BrandLine caught up with him after his talk for a quick tête-à-tête. Excerpts from the interview:

You were a global manager long before it became fashionable and Indian companies went global. What are the challenges that you see facing Indian managers and business groups as they increasingly go global?

One of the disappointments of this growth model is that we have not got enough FDI. It's not just about money but smart money. You learn new technologies, new managerial practices from companies that are successful around the world. The disappointment is diminished because Indian companies are going out to buy and they will learn; Tatas will learn from Corus, Bharat Forge from the German company it took over. But as far as overall managing is concerned, I don't think there is an Indian school or style of management.

Management is universal — if you're passionate about your customers, treat your suppliers fairly, motivate your employees — these are some of the rules of managing that make you successful and the best school for learning this principle is competition. The reason why Indian companies are performing is that our markets are becoming more competitive. The best thing that has happened to Indian industry is that we opened our borders and most of us did not realise that Indian companies would actually be able to perform.

As far as Indian managers are concerned, we should make a strong push for FDI. The best school for business is not business school, but to do, which means what a person in the job learns in the first three months is much more than an MBA.

We have to open up to the best practices. I also think Indian companies going out is good but there is a limit. I have begun to worry; for example Tata's takeover of Corus: I suspect a kind of national hubris is beginning to take over when it comes to these big M&As. We have to remember that one out of two fail always. You have to go back to the Japanese experience of the '80s — of the 15 major acquisitions made by Japanese companies, only four succeeded. Even the Chinese, it's too early to comment on Lenovo, but their acquisition of Thomson was also a disaster.

So, do you think cultural issues could derail takeovers?

I think cultural issues are less of a problem. As I said, management is universal. Frankly, I am happily surprised to see how Indian companies have succeeded. We have some major deficits in India: team work, for one. We are not good team players. But when pushed against the wall and attacked in the market place, Indian companies have responded well. So, keep the borders open and try to attract foreign investment.

My advice to young managers is to try and work for an international company at some time in their careers. They will learn something new over there. China is exactly the opposite. A very large part of Chinese exports are MNC-originated. So the Chinese are learning a lot more managerial stuff because FDI has gone there.

But, you made a point that China has not been able to create the brands that Indian companies have ... is that because China has been more of an outsourcer to the world?

I think the reason is that the Chinese government is still suspicious of the entrepreneur. And, therefore, 70 per cent of Chinese exports are from MNCs or State-owned enterprises. They are like a shop floor; the Indian entrepreneur has a lot more freedom to operate than his Chinese counterpart. In five years, there should be at least five Indian brands thrown up; they are in the making.

What do you think could derail the Indian growth story? Even The Economist in a recent issue said that the Indian economy is overheating.

The Economist article is too pessimistic, I thought. I have expressed anguish about governance. It's not going to derail the story but as a result of poor governance, the poor are not going to benefit from the growth story.

If our schools, hospitals and PHCs (primary health centres) were working well, then the poor would benefit from the growth a lot more. Otherwise, we still manage. Despite bad infrastructure we still survive and are the second fastest growing economy. But infrastructure is improving; these public-private partnerships are becoming very real. A good system should throw up scores of very good managers; look at what E. Sreedharan has done with the Delhi Metro.

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