Mckinsey Man Pats Hind Lever, Reliance Strategies

McKinsey has advocated for growth in Indian companies which encompasses shareholder value, competitive sustainability. organisational vitality and job creation.

Andrew Grant (left), principal, McKinsey & Company, said, "Growth is not an end in itself". A Rhodes scholar and a man with eminent research background, Grant will present his perspective on a micro level on sustaining growth at the silver jubilee convention of the All India Management Association (AIMA) today.

He has classified business strategies in three horizons. On horizon 1, the companies should extend and defend core businesses. "With primary focus on bottomline and profitability, the management challenge is to unlock remaining potential and defend profitability in core business", he explained.

 

On horizon 2, that is, when the companies are looking at new businesses, the management challenge is to build capabilities and fuel revenue growth. "The primary focus will be on top line growth and capital efficiency", Grant said.

Horizon 3 provides the options to companies build their future businesses which calls for nurturing options in a broad portfolio. This opens up future potential and robustness across multiple scenarios.

In other words, on horizon 1 companies should defend the core businesses, on horizon 2 they should build emerging businesses and on horizon 3 they will create viable options.

The broad message for companies today is "relinquish or repair". "The companies should be sticking to their knitting and business should grow like a banyan tree", Grant said. The loss making diversifications should be hived off. However, Grant also talked about exploration of the export market by the Indian companies.

He appreciated the business strategies of Hindustan Lever and Reliance, which were being studied in minute details by the McKinsey group. The Tata group, however, was not analysed as it is a much-talked about group, Grant said.

"HLL is recognised for its segmented approach and capital productivity, while Reliance is mainly known for its capital efficiency," Grant said.

However, Grant expressed his disappointment at the way young business talent is not being utilised in India. "I have tremendous amount of respect for the Indian intellect but a forward looking approach and young talent need to be harnessed," Grant said.

Currently, Grant is the principal in the Auckland office of McKinsey and also the joint chief of McKinsey's New Zealand practice. His areas of expertise include redesigning business models and implementing new organisations with new business processes ranging from capital allocations to human development.