I think I must go back to Alexander. He was the young man about 16 years old. And he was, let me go back a moment and come back with Alexander then, when he was 16 years old, in a small place called Macedonia which was not even the city states of Athens and Greece which was shining in those years, 3 to 400 BCs and beyond Athens and Greece lay the mightiest empire in the world the Empire of Persians beyond which lay Alexander’s dream. For the young man, so much to cross, wanted to get to India. I guess that why he was saying, reversing the Alexander effect. This man at the age of 16, this is what he said to his Secretary General, his tutor, who then wrote his biography, Alexander’s biography, he said the Gods dream in the heart of men. Dreams, desires and aspirations that are often much bigger than they are. And the greatness of a man corresponds to that painful discrepancy between the goal he sets for himself and the strength that nature granted him when he came into the world. In other words, ‘I have a dream and at this moment I am not capable of realizing that dream’. So there is discrepancy which is painful only because it won’t let go of your dream. If you let go of your dream, there is no discrepancy and there is no pain anymore. To hold on to that pain, that discrepancy, then to do something about it. So that is the story. And I will fill the theme in of the source of leadership, as I go on to, sharing lot of thoughts with you.

I was young person in Tatas, sent out in the mid 60s about 30/40 years back, when Tatas were invited to set up their first operation out side India, it is was in Singapore. So I went with 2 directors of Tata’s sons. They got an allowance of 10.1/2 pounds a day, for six days. We could not stay longer, no week ends. And I got 9.1/2 pounds a day. So I was in Singapore to create a new project with these 2 directors. And I found my people at my level is it Tatas, is that a name is that a word, what is that mean. To the youngest person who has joined in India with a strongest brand name, it was a complete shock. Slap on the face. Cold water on the head. I and we were unknown. Not for my directors, they were talking to Brooke and Swee, Heep and Hue, those people knew who Tatas were. 20 years later and those 20 years were eventful years for me certainly in my organization, Telco which is now Tata Motors, where we were able to establish in a country around Singapore and around India, we can establish the brad of Tatas in our vehicle. I would say with proud, we would in our neighboring countries Singapore, Malaysia, we were able to sell within a short period of 2 years products, trucks with a Tata brand on them at a price higher than the prices of American trucks and higher than the prices of Japanese trucks, even though our specifications on paper were less than theirs. We built a confidence in this brand, a trust for which truck owners endorse our opinion; they want durability, reliability and trust, paid more money and that. So there was some experience now how do you build this brand again with new audience, I had the benefit of the brand in India which was affected on me when I was in here but here how do you take the brand name across. 20 years later, in mid 80s, the government of India along with this industry had its ambition, we need to build global brand, take them out of India. We need to get them seen in, respected in Europe and United States and we would as government, willing to support building the brand of India and only where the brand of India can be built with the Indian products which are bought, used and seen, in those countries. Which products today, they said, which organization today has any hope of having a product which is visible and have some experience of taking this product out of this country. So naturally one of the 2 organizations they asked was Telco and they say we will pay money and they did, at that time a million dollar to a consultant from America, to help us think improve, what would take us to sell our products to Unites States of America and I went with those people and our team. We went across to US; we already had design, what the product would be. And we sell the product today. Design, what it would be and we took it to various parts of Unites States and the focusing we didn’t, the American company did. They had potential customers in groups, Texas, California and east coast. I must tell you, the first part of each of those groups was delightful because they will ask people, what are your needs, they wanted something they could trust, something which was durable, something which was reliable etc, it was went on. And also must be elegant, it also must be whatever it was and then they will unveil the model of our product hoos and haas was terrific and they will ask how much would you pay for such a product, you know what a GM costs and what the Ford costs. And issues of froes and corns and they would come with a price which was frightening and then that fellow will gently say everytime, this product will be coming from India. And then, in 19870, looking around, shuffling around, some one said, do they make these things in India, I didn’t think there is industry in India. They were talking, this was the perception there. It struck us that we would have to take another route. Now what we realized is, we were apparently able to engineer and design a product but the perception in the consumer of our ability to deliver was not there. so 2 years later, a year later, I with my colleague in R&D with Tata Motors, arranged a meeting with the global management team of General Motors, the technical team of General Motors, in their head quarters in Warren Michigan, Washington at which we said to them, ‘Gentlemen, you are the biggest company in the world but you know you have a problem. The market is requiring more and more products because you have Japanese competitors you have German competitors and your own competitors. The number of products that you will have to put out in the market to compete in every segment is becoming so large. In fact the truth is, as you know, since then to today be double; the same size of market in America the number of model being sold is double. Also we said that the life of the product each of them as you put out is going to be less. So you will have to develop these products at a lower cost so that you can recover your development cost of your product in good time. And we in India can design, develop and engineer a product for you at 1/3 your cost. These were engineers that took that seriously. But again, from India? This is going even further, when you could say you can assemble the product and sell, do you mean to say you can help us in design; you could help me in making the tool, American company? The meeting ended with, the Chairman of the meeting seems to be young man, if I have to give a price of audacity to anybody, and I will give it to you.
Yah, it was a dream, the mordacious dream but we realized that we had something that might be going for us.

Here is the world today and in this world the American world the Japanese world the European world the Developed world that big companies are there, they are competing for their own markets and new markets. In this world, in our company, Boston consulting group and other consulting companies, we find that every board of companies in those countries, must have a China Flag and today they must also have Indian flag why, because as you heard in the previous session, China and India with a 1 billion people each are potential group markets. The more consumers shall buy so they must have the strategy to sell in India sell to India and china. Lately though, last year some of them have become a little concerned because Indian companies are having best to sell in their markets. And they wonder what is going on here? This is not supposed to happen those are under developed countries to whom, we give technology we take their money to help them do something. How can they come here, it is like a member. India when Alexander came here was a big country and big empire. Then how could this young man on a horse come here with 2 of his solders. So we have helped his lines I put together, to study to look at each challenger the attackers from the rapidly developing economies of the world, China, India, Brazil, Eastern Europe and South East Asia. Very systematically to look at starting with very first 3000 companies in these countries, to look at each one of them, had already begun to achieve some presence outside their country therefore becoming more global and doing it in a way that one could see some strength in continuing with that journey for becoming even larger and more global. And we came down to then 100 companies which passed the test to be now described as attackers from the rapidly developed economies. India is one of them. But I want to show you, what the results shown. Firstly, there were 100 such companies as I said, out of them 44 are from China, 21 are from India and the remaining 35 are distributed over other 9/10 countries. So it is China and India. 40 of those Chinese companies are government companies, 4 of them are private and one of whom is pure Hong Kong Company. Out of 21 Indian companies 20 are private companies and one, 21st is ONGC, a public listed but government, largely government owned company. See this difference in the character of the 2 economies, you can see it yourself. How do these companies do in terms of profits, in terms of phase of growth? See this chart here. This chart shows the total share holder return produced by companies over the period from 99 till now. The black line is the share holder return produced by the SNP 500, the biggest company in Europe and America which is about flat over these years. Which is why, of course those companies are looking for markets, the growing markets, emerging markets. Over all in the emerging markets, the total share holder returns being produced as it shown here was an increase of 160%, the white line. These 100 companies, the rapidly developing economy attackers, produced a return of 170%, 168% so these are really comparative companies out of these emerging markets. And amongst them, CD Engine 201%, yes even more comparative than the rapidly developing economy attackers. There is something about the mind set about the global leaders that we could pick up to go with that. By the way the 100% RDE, rapidly developing emerging attackers, are growing at some 30%, sorry, 24% per year, very large growth. And the larger part of that growth every year is out side their home country. In the case of India the growth every year of these 21 companies is 30% per year. So the Indian companies are growing faster, hard sharper, more competitive and more profitability than the rest.

I will be looking to these 21 companies, we found was leaving ONGC aside, it goes out side to secure resources, raw material resources. The other 20, almost all, by and large, companies who are taking Indian engineering design, new product abilities, they were brought mass production capabilities. They were not economies of scale but economies of scope that they were taking into these countries to do that. But how did this come about? It came because a long time ago in the 50s and 60s, we heard about those regulations which were made and imposed on us. There were unintendedly some good benefits for us. Firstly the British colonized us and prevented industry but they taught us English language. 2ndly in the early days, as I said, we wanted to build the commanding heights big institutions for higher education, big steel plants, protecting domestic industries, forcing it to do everything itself. Not allowing it to, as I said, go bouncing go get the resources that you need it technology and other things for yourself so freely. So the built capabilities in Indian companies to do things in depth, the sort of thing one mention to General Motors in Wardon. And the 3rd thing you will be surprised, that we felt went wrong, it was population. Just see what has turned out. Industrialization of the world began 200 years ago, 250 years ago with the use of steam engine and then in petroleum engine, everything productive in factories and industries. And those engines required fuel and then fuel is oil and when the countries are using this oil for growth, USA, Japan and UK ran out of fuel and where to go, they went to middle east and other places who providing the fuel, earned a lot for themselves and those who used that wealth sensibly are doing very well.

We are now in the service economy in the world, all the rich countries with lot of money, very few people work in the manufacturing, very few people work in agriculture. Those economies are supposed to be service economy and not knowledge economy. The fuel required for the service and knowledge economy is what, is people. No longer the thing in the ground and so if you project now, this is the projection till 2020, where will they be this fuel, the fuel of people young people, trainable people in the world, there are 3 colors, the red or the color of the countries which will have a short fall of working age people in relation to their economic size, all short Germany, Japan, UK, France, Spain, United States, Australia, Russia even China, one child policy, you pay the price later. They are running short and will be short.

Yellow and Green, green is only one country India which will have a surplus of 47 million young people, employable people trainable people in relation to the size of our economy and here is the fuel that we could be using and began to use the fuel of both of out companies and our economy in the world.

So Ladies and Gentlemen, when we talk about Brand of India you have been hearing, we look at picture and said, the Brand of India has to be its people. And people in terms of creativity, their skill, ability to do things, many things, and new things. Quickly have a low cost. This is not a scale. Our brand of people is not solders, it is not single line factory workers, and it is more creative designers, engineers and people as we have in IT industry. Doctors, professors, as so on, artists, we heard earlier. Designers of cloths, movies and we get recognized for that and income for that also. So we got to now build India and now strategies for India with this strength, which means leading people actually. I am now going to come now therefore the question of Leadership but before I get to that, I want to show you something else which is extremely important. We are feeling very proud in China and in India and we will be big sells,
2 or 3 largest economies in the world in the year 2050, ok, there are 2 charts here, the 1st chart show the usual pattern as countries grown their GDPs, their income per capita has always grown. This is in the history of economic development. And thus the US is the largest economy and also perhaps very large per capita income as you see in the left hand chart. Japan follows and Germany, UK etc. But for the first time, in human economic in the history, 2 of the 3 largest economies in GDP will remain poor economy and India as you see, the circle which is not colored will be a very poor country over all actually, even though our GDP will be very large, per capita will be, still a poor country. Very important implication, which discussed earlier, one is the market of India will not buy the same project or at the same prices. That will be sold in those richer countries. No.2 is, as said earlier, since we are going to have brain, whole pool of employable people, trainable people and they will be earning little which our chart shows, they will be low cost also, so the cost of people should not raise in India. And so, something we could discuss this time during questions, how come people in Bangalore, engineering industries in India are complaining that they can’t set people at the right place. The people are there, just have to go to right places train them help them, our cost can’t go up on the people side if we do that. The 3rd thing is however, the business models require to sell into India are going to be different to the business models that have been successful in the richer countries of the world. The environment growth, I want to caution here that the physical environment growth is not going support the growth of China and India. If we keep going from 8% to 10% India and for China I projected as 10 and 12%, within 15/20 years as calculated that the amount of water, soil, forest product and air that we will need for China and India, alone will be equal to entire planet, we have to have another planet to be able to support the growth of these 2 countries and the world. So Gentlemen and Ladies, we cannot just blindly copy the technologies and the approaches to management of the countries from outside that we are copying today and saying that is practice. And expect that we will be able to grow to 2050 to the size mentioned there; we will run into a road block as you begin to, in many resources. You run into very serious road block in about 20 years time and 25 at the very most. So leadership is about discovering new way of doing things not following the way others have been going. So who is a leader, happened to be a leader in the global world? I have one definition after much search. This is the debate we have been having at the momentum earlier. And I heard Peter Drucker person who has written best books and 10 qualities of a good leader, best seller in America 1992, on a platform with 5 CEOs of American and European countries who are getting global. I was thinking of this question how do the build leaders with a global mind set? Jafer said something and this person who gave this book with 10 points and then this panel was asked, what are your quotes, they all said, you know, just formulate descriptions and the techniques against each of the 10 so called qualities, really doesn’t create leaders. What Drucker was saying was really correct, what Drucker said was, the quality, that the spirit that is in the heart of leadership and the rest is then learnt like Alexander said. So here is the definition of the leader. A leader, he or she who takes the first step, towards that which he or she deeply cares about in ways that others very well wish to follow. It is about action, it is about taking steps not just talking, it is about caring for a cause or something bigger a dream and aspiration towards that which he or she deeply cares about and especially in the global context about ways in which others everywhere wish to follow. Why would they follow just because they feel respected, they feel understood, they feel they your dream and you know their dream and so they shall follow you. So the ability to listen and understand if people who are not like you, who can’t grow up the way you did, either because they were in another country or because in our own country they did not grow up like that. It is going to being leaders in the new global world with that mind set. So there is 3 dimensions to that globality, one is obvious one which we talk about which was in the picture of the globe and geographically being in many places conquering many places. The 2nd dimension of globality is about the globe itself. It is about respecting the whole system of environment, the basic resource on which we grow our companies and our economy. And the 3rd dimension of globality is respecting and touching people wherever they are. Alexander thought the world was flat. We for many years have believed that the world has been round. Thomas Freedman said, actually once again the world is flat when Thomas Freedman was here to launch his book in India because Bangalore where he started, when he said that, there was a person from India who said, ‘Mr. Freedman, just because people in Bangalore able to saw people in America and understand each other, doesn’t mean the whole world is flat. May be these people in these campuses in Bangalore don’t know what is going on in the slum across the road and certainly not in the village, outside Bangalore. But there is a long way to go yet before the world is flattened in terms of connection and understanding in between people, still a very wrong word and we don’t know the person on the other side.
Ladies and Gentlemen, Thank you very much.