"I am delighted to be here today to unveil the findings of the first ever study of leadership capabilities and competencies of the chief executives of some of India's best performing and best run companies in the public and private sectors.

When I was a student some fifty years ago, a very famous British economist and my teacher Lord Kaldor used to say that the success of any economic system depends ultimately on the mindset of people who make the crucial decisions of a nation's life. He used to argue there is no technical necessity why capatalism or socialism to do better than the other. The outcome will, therefore, depend on the mindset of the peoples who make crucial decisions of a nation's life and among the stakeholders the role of Chief Executives of Enterprises both in the public and private sector is of critical importance. We need a mindset which celebrates change, which recognises that the only constant thing in a world in which we live is change itself. The world is today characterised by the growth of human knowledge at a speed which was unthinkable even a decade ago. So, change brings with it uncertainties but it also gives rise to opportunities and we need Chief Executives and other stake holders who recognize that our nation's survival and its progress very much depends on our ability to harness change to our advantage. We cannot ask the rest of the world to standstill. We cannot freeze technological conditions. We cannot determine beyond a point what happens in the outside world. We have to take many of these things as given and learn to adapt the evolving environment to our advantage. When I look at India's economic performance, despite the improved growth rates that we have achieved in the last 15 years, our share of world trade, our share of world GDP, our share of world exports is much too small compared with our nation's potential and when we look at a country like China, has achieved in the last 20 years, I think that's the role model that we have to look at. We cannot be satisfied with the status quo. We, therefore, need Chief Executives, we need academic leaders, we need politicians, and all those who make crucial decisions of our national life to be dissatisfied with the status quo. We cannot be satisfied with the status quo, we must aim high and we must learn to manage change, taking full advantage of the opportunities that lie in the fast-changing world that we live in. It is in this context that this study assumes importance. I compliment the Public Enterprises Selection Board and the Bharat Petroleum Corporation Limited for commissioning this study by the Hay Group. Such studies help to generate the required factual information and insights on the basis of which policy can be formulated and performance assessed. I attach great importance to empirical studies and to the correct analysis of facts in the formulation of macroeconomic and sectoral policies as well as for formulating sound corporate strategies. I hope, therefore, the findings of this study are widely disseminated.

As I said I am a strong believer in the importance of individual leadership, but often there are binding constraints imposed on even the most competent leaders; it is not easy to judge whether the resultant outcome is a function of the capability of the leader or the inadequacies of the environment in which he or she must function. It is, therefore, interesting to note that in this particular study it has been found that "boundary management", an evocative phrase indeed, consumes an inordinate amount of time of Indian CEOs. Here too, I believe, an inter-temporal analysis, rather than a cross-sectional analysis, may throw more light on whether or not we are addressing this problem overtime. I suspect we are. I have been told by many CEOs that the time they now spend in Udyog Bhavan has dramatically come down in the past 15 years. Perhaps there are other "boundaries" that still need to be managed, even if bureaucratic interference in the management of firms has come down. We have to identify these boundary conditions both that operate in the public sector and that operate in the private sector. To find if some of these constraints can be bent and bent to the greater good of our economy and our polity. Here again, it is entirely possible that private sector companies are better off and that public sector enterprises have to still contend with as I hear ministers and ministries. If so, we must change this and give greater functional autonomy to public sector CEOs.

What is heartening to see in this study is the fact that the best Indian CEOs do compare favourably with their international counterparts and that in some areas of management they are even superior. According to this study they have unique "inner strength" and "adaptive thinking" capabilities. As in so many other things, in management too we seem to have high "thinking" capabilities but modest "doing" capabilities. Some people say a national cultural trait, I hope this is wrong. That we are good at conceptualization, at abstraction, at thinking, but not as good at execution, at implementation and at doing. Understanding this and recognizing the problem is in itself a movement forward. The next step is to deal with it. I do hope that your organizations and your firms will take the next step to redress this imbalance in our management capabilities.

I would like to assure you that our Government attaches the greatest importance to strengthening the capabilities of our firms, of our managers and of our skilled workers so that our firms can become truly globally competitive. We are also committed to strengthening the competitive capabilities of our public sector firms. All our firms, be they in the public sector or the private sector, must become more competitive so that they can face increased competition with success from abroad. It is instructive to note that while as individuals we Indians do well in international competition, we are not as yet equally competitive in groups, as organizations. What accounts for this and how do we redress it? The fact that the people of Indian origin do so well in the Silicon Valley is a challenge. Our challenge is to reproduce in our own country the conditions that our people don't have to go abroad to prove to the rest of the world that we Indians are second to none. I think this has to be a collective introspection in which we must engage in.

I must reiterate my compliments to the Public Enterprises Selection Board for initiating this study and the CEOs of PSEs for participating in this study. I am aware of the fact that many of our PSEs have very talented and committed leaders. We must strengthen their hands so that they can provide effective leadership and manage public resources more efficiently. I believe our Ministers have the responsibility to get the best out of the public sector managers that we have got. Our Government has made a clear commitment to empowering our PSEs and their managements. We have already given our commitment to help in the globalisation of our "navratnas", especially of firms in strategic sectors like energy. Both the "Navratnas" and the other PSEs require competent management leadership. They need this to survive competition. Above all, they need this to grow and deliver on the promises they have made to their stakeholders. This is a collective endeavour which both Government and management must undertake. It is, after all, public money that has been invested in the public sector and we have to make most productive use of vast investment so that the funds that have been invested generate a return commensurate to what our public expects from our public enterprises. We cannot simply afford to waste public resources by allowing PSEs to function below par. They must be run efficiently and must be cost-effective if they are to serve the interests of our people. As you are aware the T K A Nair committee had made several suggestions for toning up the management of PSEs. I hope all these recommendations will be implemented with speed.

While a CEO does play an important role in the orderly functioning and growth of any organization, I do believe that the real strength of any organization lies in the commitment and capability of its many functionaries. The excessive focus on individuals is in fact antithetical to the spirit of democratic functioning. A true leader inspires by example so that others feel motivated to follow and do their assigned job to the best of their abilities. It is in this context that the management of human relations assume great importance in the contemporary world. However, I find that the western, especially the American concept of a CEO places perhaps excessive emphasis on individuals and has contributed to excessively generous compensation packages for CEOs. This has had a negative impact on the work culture of many large corporations. I have seen widespread criticism even in management literature of the 1990s, the tendency of CEOs over-compensating themselves on the basis of the belief that the success of a company is largely a derivative of CEO's competence. In the final analysis any chain is as strong as its weakest link. Hence, while CEO competence is important to success of a firm, a CEO's real competence lies in creating an environment conducive to the flowering of individual competencies and capabilities down the line in an organization and, therefore, how we manage human resources, how we get the best out of our workforce is also often a critical determinant of the success of the enterprise.

What this means, in terms of human capital formation, is that we need more centres of excellence as much as we need ordinary training institutions of high quality. That is, not only do we need more IITs and IIMs, but we need more and better ITIs and professional colleges and institutions. The quality of manpower must be improved down the line, from a CEO down to the ordinary worker. We are today in a world where countries like Korea have workforce, where every child who is of a secondary school age is in fact in school. In contrast, we have a nation where we have not been able to universalise access even to elementary education. Now, if our workforce has to compete with a workforce as skilled as trained as the Korean workforces are, I think we can draw the conclusions that are quite obvious as to what are the limitations under which we function. The quality of manpower needs to be improved as I said down the line from a CEO down to the ordinary worker. One brilliant CEO can do pretty little if he is saddled with mediocre managers and workers. We have decided to set up a National Knowledge Commission that will in fact deal with precisely this challenge, identify priority and areas which require urgent national attention. India needs a knowledge revolution at all levels of knowledge and not just at the top of the pyramid. Universal elementary education is perhaps as important as anything else in training our workforces to match with the challenges of our times.

An important implication of this study is that many Indian firms today do have the managerial leadership to go global and compete at the global level. We have seen examples of such global success both in the public sector and the private sector. I believe we need to understand how we can replicate such success stories so that more and more Indian firms go global. We must move towards global scale and world class in manufacturing and services sectors. Our Government will remove barriers to growth and encourage Indian companies to become globally competitve. As I have repeatedly said, we must think BIG and think BOLDLY. We must move away from the paradigm of incremental growth to a paradigm of exponential growth and growth into uncharted territory. Our motto and our goal should be to do as well as a country like China does whether it is in the area of growth of GDP, growth of manufactures, growth of trade or growth of infrastructure.

I sincerely hope the findings of this study will be analysed in greater detail in our management institutes and the practical recommendations coming out of this exercise will be implemented by our firms so that they are better equipped to face the challenge of competition at home and abroad. I have confidence that India have both resources and the willpower to emerge as a major powerhouse of the evolving global economy. That's the reason which should motivate all our stakeholders.

I once again commend those who took this initiative.

Thank you".