‘Many new ideas are coming from the periphery’

Vinay Kamath Chitra Narayanan | Updated on March 13, 2019

Hans-Paul Bürkner, BCG Chairman, on the next big wave he sees and more

Globalisation and transformation were BCG Chairman Hans-Paul Bürkner’s focus, when he was the CEO and President of the consulting firm between 2004 and 2012. During his tenure, he tripled revenues, doubled global staff, opening 18 offices across the world, as well as established a public sector and sustainability practice. Excerpts from an interview on the sidelines of the IAA World Congress at Kochi:

You learnt Chinese when still studying — that was quite unusual in those days, wasn’t it?

At that time, people did not expect the economic miracle in China, India and South-East Asia. I would not say I foresaw this development either. I learnt Chinese because I was intrigued by Asia. After all, if you go back into history, 2,000 years ago, India and China were leaders in technology development and had a big cultural impact on the world.

When I did my PhD, I wrote about savings behaviour and savings mobilisation in the Philippines and Thailand. I spent a year there and it was fascinating. Now, of course, I am here every month in China and India.

After globalisation and digitisation, in your view what is going to be the next wave?

Globalisation has been there for hundreds of years. But it is not a straight line. It is in waves. Digitisation started in the ‘90s. It will play on for many decades to come.

At the moment what you see is more protectionism, more “isolationism”. But it is part of this wave-like process of globalisation. Sometimes you take two steps forward and one step back.

The key wave we are engaging on now has to be on environment and sustainability. Whether floods, droughts, storms, all are getting extreme and we need to take drastic measures to counter this. Otherwise the cost will be enormous.

You operate in many markets. How do you compare India with other markets?

On the one hand, we have seen enormous progress in India and we see potential for further significant growth. On the other hand, there is still a lot of need for investing in people, education and health as well as investing in infrastructure and markets — whether financial markets or opportunities to operate labour markets. And to make sure that rule of law, security, bureaucracy are all working well. Of course, we should not forget that India is the most complex country in the world. China is much more homogeneous.

How do you view the coming elections in India? What ramifications do you foresee for business?

Whenever there are elections in a major country, I must say I do worry a bit. We had it in Brazil, we are having it in Nigeria, Indonesia later on. So I think every election brings uncertainty. Will there be a workable government, one with a workable majority? In some countries, especially in Latin America, we see the pendulum swing from one extreme to another, resulting in stagnation in growth. In many countries, especially Europe, you don’t see these extremes. Therefore, whether you are centre-right or centre-left, people usually build on what is there and not undo it.

I do hope that GST will stay — that’s perfectly fine. And I hope there is clear continuing emphasis on building infrastructure. Five years ago, infra had almost come to a halt here. Now you have 27 km a day constructed. You need to restructure the public sector and help banks to recapitalise. There are lots of things that need to be done. But there is hope that India continues on the path of moving forward.

We have seen boundaries blurring between businesses. Consulting firms are getting into other domains too. How is this going to play out?

Yes, all professional firms are converging and overlapping a lot more than we have seen 10-15 years ago. That puts a lot more pressure on people in terms of their depth and breadth of capabilities and knowhow. You also need greater specialisation.

All of us, whether advertising firms or tech firms or consulting firms, are covering a lot more today. In order to be credible you have to have bigger scale. We also need to find ways of working together with others in order to cover broad topics. We need to orchestrate our capabilities.

As professional services overlap, their performance diverges a lot. The larger ones are really gaining more share. Smaller ones don’t have resources and are falling further behind. Many small firms are being taken over.

Being in the middle is much more difficult . If you look, in HR there are only three big firms left, in accounting four big firms, in IT we still have quite a few. In pure consulting, besides BCG, there is McKinsey and Accenture and some accounting firms.

You have grown BCG from 4,000 people to 19,000 today? Where has that growth come from?

We have increased our depth and breadth of capabilities. Originally we were focusing on strategy, organisation, operations, marketing, sales, pricing and IT. We are now working on issues of digitisation, data analytics, advising leadership, etc. This is what clients need. That is a key element of our growth.

Where do you get ideas from? How do you gauge what the next big change is?

We do talk to our customers and clients. We engage with people in all kinds of venues. We learn things through projects and work that we are doing. Very often it is peripheral offices, places which are under more stress, where new ideas are coming up. The centre thinks that we see changes, but business is still strong. Whereas, at the frontier, the periphery, people feel the change and pressure and come up with solutions. That’s why many new ideas really come from the periphery. When BCG changed in the ‘80s, it came from Europe. Now we find that a lot of new ideas are coming from Asia, China, India because there the pressure is strong and they don’t have too much legacy. Clients are growing ten-fold every year, and not 5 per cent year-on-year. But ultimately the ideas also come from always listening, and being open.

Can you share examples of ideas that came out of India?

We are engaging a lot with clients on addressing supply chain issues, which are challenging here. We are finding new ways of connecting the dots. We have used digitisation and data analytics in a big way in India to look at old industries and we found that on the supply side, we can make a lot of savings, whether energy or preventing waste, and streamlining operations by using data.

Published on March 13, 2019

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