| Rajat Gupta
Washington, Feb. 27: Rajat Gupta, managing director of McKinsey and Company, is to step down in mid-2003.
Gupta, an Indian who holds what is probably the most prestigious business management job in the world, is inhibited from continuing in his post by the same rules that prevent even successful US Presidents from being in the White House for ever.
While the limit for a US President is two terms, the global head of McKinsey does not stay in the job beyond three three-year terms.
The term limit is self-imposed. McKinsey spokesman in New York, Michael Stewart, said Gupta had introduced it in his first three-year term itself. Gupta’s successor will take over on July 1, he added. Gupta became managing director in 1994.
His successor has not been finalised, but management industry sources said the choice will be between Ian Davis, who heads the company’s operations in London, and Michael Patsalos-Fox, head of the New York office.
McKinsey’s managing director is chosen, rather, elected, by a process in which the firm’s 283 directors and senior partners vote for a prospective candidate.
Sources familiar with the selection said the first round of voting shortlisted seven. A second round was necessitated because none of the seven got the requisite number of votes. A process of elimination based on the votes garnered by each candidate left Patsalos-Fox and Davis for a second round which will be completed early next month.
Under the leadership of Gupta, who graduated in mechanical engineering from the Indian Institute of Technology in Delhi, McKinsey grew in almost a decade to become the most highly-rated management consultancy in the world.
When he took charge, the firm had 58 offices worldwide. Today, that figure has grown to 84. It now has as many as 84 of the world’s top 100 companies on its client list as opposed to 54 a decade ago.
While McKinsey has grown steadily under Gupta’s leadership, it has not been unaffected by the recent turmoil and setbacks in the corporate world in the US and elsewhere.
McKinsey advised Enron and Global Crossing, both companies embroiled in major scandals in the US, as well as Swissair, which was forced to fold up some time ago. What impact these may have had on McKinsey’s own fortunes is unknown. The management consultancy withholds all financial information about itself from public scrutiny and is not listed on the stock exchange, reportedly because of fierce resistance to the idea from Gupta during his time as the firm’s head.
Stewart said Gupta’s “current intention” is to continue with McKinsey as a member. “I don’t know if he will continue to serve clients. He will definitely focus on the company’s non-profit areas like education and global health,” Stewart said.
Last month, Prime Minister Atal Bihari Vajpayee honoured Gupta and nine others abroad of Indian origin for their outstanding achievements and services.
A few days ago, Gupta and a few others here set up the Indian American Policy Institute, a think tank, to prepare Indian-Americans for the 2004 presidential election and strengthen their voice in US social and political processes.