There is every reason to be bullish about Indian economy: Johan aurik managing partner & Chairman-Global, AT Kearney

The tell-it-as-it-is leadership approach is what managing partner and chairman-global Johan Aurik has used effectively to navigate AT Kearney at a time when the consulting industry globally is undergoing consolidation. In India recently, the Dutch consultant, who took over the top job at AT Kearney in 2013, talked to Vinod Mahanta, Sachin Dave & Dia Rekhi about the changing perceptions about India, consolidation in consulting and the Chinese economy.Edited excerpts:
Are CEOs getting cynical about India again after the euphoria that accompanied PM Narendra Modi's election has subsided?

You would be surprised that about a year ago, when PM Narendra Modi was just elected, it was like, `well may be' ... but the reaction quickly went back to being cynical again. It's no surprise because for last decades there were a lot of reasons to be cynical as the reforms never took off and India is one of the difficult places in the world to do business. But I don't think there is a reason to be cynical about this country. I think they are wrong -they just need to be patient. I am actually bullish on what's happening here. The reforms have started, the growth has doubled. There is still a long way to go and I am fully aware of that, but the message that I will take back to business leaders around the world is that there is every reason to be bullish about this economy.

Is AT Kearney profitable in India?

I won't comment on profitability. We are very healthy in India. We are very healthy globally. It's not very difficult to make a consulting firm profitable, we know a bit about economics. The issue is how you build a sustainable model for a long term. India is a fairly profitable consulting market. China is a much more demanding market. In China, almost everyone is losing money or is below where you want to be. This market is not too bad.

What's your view on the Chinese economy: Is the worst over or the slow landing continues?

I would not be negative on China. The growth has slowed down but just look at the size. Every year they add a Switzerland or so to the economy. They are going through major changes -going from a low labour cost to a technology-consumer-driven economy.Ten years ago, their labour cost compared to that of the US was around 7 cents to a dollar or so, and now it's about 6070 cents. So, the period of the low labour cost is over, and they know it. So, the government is focusing on technology innovation. Last year, China had more patents than the entire European Union combined. The government team -yes, they make mistakes, they should not have manipulated the stock markets, but it is a very competent team. Is there a risk there? Yes, there is a credit risk and some banks are exposed and there is no doubt about it. Environment is a disaster and there is still a fair amount of corruption.So they have challenges but I would not be negative on that. The government team is so competent.

Some prominent mid-level consulting firms like Booz and Monitor either went under or were sold out in fire sales. How are you making sure that AT Kearney stays afloat?

We are the fourth-largest partner-owned management consulting firm. And there are certainly industry consolidation taking place and it has only helped us, thus far. The reason that they were bought or declined is not because they were in the mid-range, that's a fable, that's not the reason. The reason that they went belly up is because some were bankrupt or had a governance structure that wasn't right.Some of these companies went belly up because there was a small group of partners, who were in their late 50s and had majority of shares. They wanted to cash out. It's fine, it's not illegitimate, but it affected the future of these companies. We are very much blessed with a flat democratic partnership. That's a great thing. Second one is, we are very healthy financially. We are debt free, which means we have a room to invest.