Rajat Gupta Story - Pure Speculation
Among the elites of India, Rajat Gupta is a well-known name. Moreover, his rise at the very prestigious McKinsey and Company tells us all Indians that America is a true meritocracy where [as Rajat Gupta himself stated for McKinsey] race and national origin discrimination don't exist and a poor boy whose parents died early and who had to survive on scholarships can rise to the highest position at one of the most selective companies to work for.
Here, goal is to look at his success with a critical eye and re-examine some of the major events of his life. Goal is not to be harsh on him - he seems like a very nice gentleman - but to tell the fellow Indians to develop critical thinking and not to trust everything handed out to us by the West or its followers. Most of the material is speculative (even though I write it as 'fact') and could be wrong, but because of my own laziness in researching (hardly read a thing) and lack of publicly available material this is the best I could come up with.
The elected post of General Secretary was the most important student post at IIT Bombay. Almost all the general secretaries got admissions to either prestigious business schools like the Harvard or Stanford, or went on to become industry leaders. While I was at IIT Bombay, one thing that stood out was that while excellent people skills were needed to win the coveted post of General Secretary, almost invariably they all belonged to the suede junta (snob group) meaning they all were highly westernized in their thinking. However, at the same time, they seemed to like certain things Indian especially hi-brow things like Indian classical music and dances. How did some of them become so westernized? Their families. I believe that all of them came from upper-middle to rich, influential families. A poor boy from a modest family didn't stand a chance.
What did Rajat Gupta have? Excellent people skills? Yes. Influential family? Yes, father was a famous freedom fighter and well-connected to the powerful and elite. Rich? While Rajat's dad didn't seem to be rich, I wouldn't rule out his dad's dad being extremely rich on friendly terms with the Britishers. Just a conjecture, though. However, anybody who has lived in any society especially in India where family dynasties control power, knows how important these other factors are.
Academic excellence is not that a big factor at HBS's MBA (or whatever they call it) program. For academically gifted they have a highly regarded doctorate program. Scions of rich and famous, from the world, makes up the student body. Academic excellence is just a bonus and while some brilliant students are attracted, most of that are not that bright. (More on that in a separate article.) What dictates the admissions process is how likely the applicant is to become a leader in her business or political field. If you are the son of Tata or Birla, unless you mess up everything else like scoring in the bottom one percentile of admission tests, they are likely to consider your application favorably. Very favorably. Once you become a decision-maker at Tata, the professors can enjoy hefty fees as 'consultants' and moreover can subtly influence the direction the company will take, which means it will work for the interest of Harvard and the USA's interest and not against it. Those darn Japanese and Germans, who work for their own countries' interest!
Rajat Gupta is brilliant but seems shy when it comes to talking about his academic performance at IIT Delhi. In the interview he seemed to change the topic to praise of his wife who was a gold medallist. We don't care whether he performed well in IIT, but the fact that he was a general secretary there gave Harvard enough hints to know that he is well connected. Moreover, because of his father, I expect he got recommendation letters from influential political figures - say, like the prime minister of India. Since I am in a roll, I would add that a couple of reference letters from industry leaders - like Birla - didn't hurt too. Right! Perhaps, a few IITD professors and a few Delhi Modern High School teachers wrote recommendation letters too, but they were immediately dropped into the waste baskets without even reading them, as is the tradition at HBS
Very few people, even now, have rode a plane in India. In 1971 it was a rarity. The fare of flying from Delhi to Calcutta (Kolkatta) is comparable to one month's wage of a middle-class worker in India. Gupta, according to him, was poor surviving on scholarships. (If I was that poor and somebody offered me plane fare to meet him, I might have thought of going second class by train and spending the difference on basic needs like food and clothing.) My feeling is that the chairman of ITC was upset because he was a family friend and thought it was his duty to protect and take care of Rajat.
Grades were excellent but anybody who studies there gets excellent grades. HBS is notorious among potential employers for trying to hide in past its student grades. Reasons are not that difficult to understand. Main job of Harvard is to mold you into American way of capitalism and to make sure that you blindly swallow everything they give. They count on peer pressure too. If you talk about globalization and outsourcing, all for the benefit of rich, developed countries, at a high cost to the exploited nations, all will be fine. Like almost all Indians brought up Westernized, I don't think he had any problem there, professors and fellow-students having recognized that he is one of them, albeit somewhat darker-skinned, and could be counted on
Companies like McKinsey are careful not to give the impression of improper conduct in hiring so as to effect the morale of employees and effect the functioning of its workplace. Imagine, if somebody could not get admission to IIT based on JEE and then through the pull of his father got into computer science department. How much respect you would have for IIT's selection process? Similarly, companies like McKinsey don't like to overrule their recruiting managers' decisions. Not that lot of hanky panky does not go on but once a decision is made, it is difficult to overrule that. (India is different and anything goes there.)
That Harvard professor wrote a letter. Even if it contained "Please consider hiring Rajat because he is very good," the fact that a powerful professor wrote a note, would have been good enough for McKinsey. In America, they don't write much in letters - easy to discover later by legal authorities and reporters to everyone's embarrassment. Instead, they talk on phone or better during golf rounds. After making sure the parties involved are not wired.
In a complex society like the USA, different selection processes tell a lot about the candidates and the next organization doing the recruiting benefits from the information contained in that process. For example, HBS knew from the fact that Gupta was a General Secretary at IIT, that he was most likely a popular person and probably from a Westernized upbringing. Then the facts are cross-checked. If Rajat Gupta mentioned in his application that his favorite author is James Joyce (Westernized - yes), or Rabindranath Tagore (culturally elite perhaps, and could be Westernized), Saleem-Zaved pair (drop the application in the waste basket unless there are other mitigating factr). Similarly, McKinsey knew a lot about Rajat Gupta before getting the letter. The fact that he attended HBS, his grades all told them almost everything about him. Still they decided not to hire him then. Why?
They knew that he was brilliant. Still there was something missing in him. After talking to the professor it realized that he is extremely well connected in India with both the political and business segments. If McKinsey had to open a branch in India that would have been an asset. A high-price consulting like McKinsey relies on 'relationships' to get its assignments and Rajat definitely could be used. Moreover, the communist threat was there and the professor assured that he was a free-market advocate. Moreover, he was orphaned and was looking for a 'family' and 'The Firm' could provide him one. He exchange, he would be loyal to them till the end. Can't trust those Chinese and Japanese who are looking for stealing secrets to help their own countries. In contrast, Indians are cool.
If you were working at McKinsey and saw this Indian and heard how the recruitment manager was overruled, will you be nice to him. You better be since you don't know who he knows and he ain't going to tell you. My guess is that his colleagues and bosses knew that he is well-connected and went out of the way to be nice to him in order not to hurt their career.
Rajat Gupta did end up as the highest placed person - Managing Director - there. First of all, the post of MD is somewhat different from the post of CEO in a typical company. All senior partners are multimillionaires and most of them just want to do their work without getting distracted by other administrative positions. Like chairman of an academic department is a nice position but not all faculty members are looking forward to that post since it takes time away from research. My belief is that certain trend in global economy made it worthwhile for the company to appoint an Indian as its managing director.
India growth in economy and therefore profits to be made from consulting Indian firms had been overshadowed by India's role in computer off-shore sourcing. There are brilliant people at McKinsey but most of them would rather do marketing or finance than understanding what middleware or network mean. Indians could be filled up in computer-related consulting, coding, marketing, analysis and so on. To have a MD who is an Indian helped in developing the right connections and trust, and getting future consulting job with Indian company's because of good will generated.
East India company operated in India long time ago. Its role was to loot vital resources from India. It needed local support from rich landlords, businessmen, police and military to do its job. Currently, companies like McKinsey and the developed countries need scarse resources like computer coding skills and off source tycoons and consultants are there to help them. Companies like McKinsey with the help of people like Rajat Gupta will do very well.
(Last Updated: June 12, 2004.)
Reform IIT