Transformative technology developments, economic growth, new ways of working, and geopolitical risks are all affecting enterprises’ global operating models. By adopting generative AI’s power and taking advantage of their own operational skills, global capability centers (GCCs) can transform from being execution centers to centers of innovation, generating talent pipelines and next-generation leaders across global verticals. In this episode of the Future of Asia Podcast, McKinsey senior partner, Indy Banerjee, talks to Pravin Goel from BlackRock, Debasis Panda from TransUnion, and Fabrice Desmarescaux, a partner at McKinsey, to delve into the opportunities for GCCs to become catalysts for transformation in this uncertain world. An edited transcript of the conversation follows.
Indy Banerjee: Hello, I’m Indy Banerjee. I’m a senior partner at McKinsey and leader of the Global Operating Model Practice. I’ve led over 100 global programs across Fortune 250 companies across 28 countries, transforming their global operating models and creating new growth engines for the enterprises. I’m excited to have a discussion today with some of the foremost thinkers in this space.
First, I have with me a dear colleague, Fabrice Desmarescaux, who is a partner in McKinsey’s Singapore office. Fabrice specializes in coaching senior executives, helping them understand the challenges that exist in the new, emerging marketplaces and advising them how to navigate the challenges at their levels of seniority. He also explores with them the possibilities that exist both for their enterprises and for themselves. Welcome to the podcast, Fabrice.
We also have two wonderful leaders joining us who lead some of the largest global key performance drivers’ (KPD) centers. First is Pravin Goel who is the managing director and leader of GCCs for BlackRock. Pravin has deep expertise in driving global business success, especially across both operations and technology. He has a passion for innovation and leadership and in fostering the unique One BlackRock culture across the entire footprint in which he works. Welcome to the podcast, Pravin.
And last, we have with us Debasis Panda. Debasis is the head of GCCs for TransUnion and leads a team of over 3,000 technologists, analysts, and business professionals for Costa Rica, India, and South Africa. He manages lead critical functions for the entire global enterprise. Welcome to the podcast, Debasis.
Today, we want to talk about the role of global KPD centers with, on the one hand, the huge tailwinds that we are seeing of year-on-year growth of the footprint by 10 to 15 percent. On the other hand, we also see the headwinds of geopolitics risks and change management that create the need to be able to balance the growth and figure out what’s sustainable.
The topic of GCCs and their role in global enterprises has been around forever. I remember discussing this over 25 years ago. What has really changed? Is it a lasting change or is it one of those things that comes every two to three years before we move on to the next big trend? I would love to hear, Pravin, first from you, and then from you, Debasis. What do you think has fundamentally changed in the space?
Pravin Goel: I think the changes can be summarized in two concrete aspects and one subtle aspect. First, there’s a significant opportunity shift—moving from being an execution center to becoming a transformation catalyst. The business landscape is evolving rapidly, demanding companies embrace technology-driven transformation now more than ever. GCCs already established in technology are well positioned to deliver these transformative technologies in a horizontal, cross-functional manner at scale.
COVID-19 acted as a catalyst testing the scalability of remote work—now there’s a clear tailwind for GCCs around remote work as well as distributed leadership. This reminds me of the innovative Hadoop unlock, which brings code to where data is. Imagine the opportunity to do exactly the same thing around leadership—bringing leadership to where execution is.
Second, there is an opportunity to grow next-generation leadership for global firms. Traditionally, leadership has been concentrated in headquarters, limiting its global perspective. To truly become global, leadership needs to be decentralized, leveraging not only where the execution standard lies, but also spreading globally. And last, there’s a subtle yet significant aspect of expectations for GCCs to take a leadership role. The power of expectations can be a formidable force in driving change.
Debasis Panda: Indy, I agree with you that GCCs have gone through a significant shift over the past two or three decades. I will say that it can be looked at in two phases. Before 2020, GCCs went through a sequential maturity curve—a curve where it was primarily about a right to engage. This was more about having staff augmented teams with costs playing a big factor in terms of arbitrage.
Then we moved to a point about the right to partner, which was more about having extended teams or self-contained teams driving portfolios and programs. And now, post-COVID-19, (or post-2020) there has been a significant accelerated digital revolution in the remote mode of work. And, with all the new changes that are happening in terms of the sociopolitical shifts, GCCs have evolved fast to become transformation hubs. There is a significant strategic value that GCCs bring in terms of realizing enterprise strategies and priorities and getting aligned to them.
Indy Banerjee: It sounds like several of these shifts are not just going to be long term, but also be cutting across sectors with regard to the global operating model. Is there a variation that you see that would be sector specific, for example, within the work that you do at BlackRock, Pravin, or specific to the kind of work that you do at TransUnion, Debasis, versus what’s really horizontal? These are changes or fundamental differences that are happening in every single sector. How would you characterize the difference between the two, Pravin?
Pravin Goel: Clearly, other than the remote work and distributed leadership, I also focus on work that has both the horizontal cross-sector factor and specifics in financial services—and technology touches on both. If 2007 was known as the year of the iPhone, I don’t think it’s a surprise to anyone that we’re now living in the era of generative AI (gen AI). And, while certain aspects of that cut across industries and sectors, I think there are some very specific factors within the financial services.
I’ll pick a key one here. Over the last few years, the way we did financial modeling transformed from being very statistical to machine learning (ML) driven. But, the lack of full explainability of machine learning models has been a challenge to understand. With gen AI, for the first time ever, you can actually talk to the model. In many ways, the unlock for gen AI is that you can talk to the computer in English. That has a specific, interesting, and unique use case for our industry.
Indy Banerjee: Debasis, how would you look at what’s horizontal versus what’s specific to TransUnion and the sector?
Debasis Panda: I know Pravin talked about gen AI and AI/ML, and we talk about sustainable technology or an immersive internet where we will be able to work, play, and socialize on a persistent platform. And, for that matter, we see robots becoming more human in appearance and capabilities. These are things that will cut across industries, across every single function, because this is the way business innovates.
Then, the global operating model and the remote model of work have gone to next-generation operating models where talent is going to be tapped across the world and will be completely agnostic of which business you’re in. These are some significant steps that we’ll be cutting across—the ability of GCCs to tap into this and help organizations will be significant.
Now, coming to the specifics at TransUnion, we are an information insights company where data is the basic background of everything we do. There’s a significant opportunity for us to leverage as we see the technology innovations happening, as we see the ability to tap into talent, and as we see the geopolitical cybersecurity, information privacy, and standards (CIPS)—which we talk about in terms of privacy and regulations. These can add significant value to the enterprise from the GCC standpoint.
Indy Banerjee: How much of the innovation is going to be led, for example, by the enterprise headquarter or by the business divisions with the GCC being a support engine? Or are you beginning to see a trend change where the GCC itself is becoming the innovation center and is moving closer to almost being the R&D center, where you are the tip of the spear and are creating new technologies? This is especially around themes like gen AI that are just taking off. Are you beginning to see any of this come to fruition, Pravin?
Pravin Goel: I would start with the GCCs’ strengths. GCCs have a proven track record of operational excellence. We excel at streamlining processes, optimizing workflows, and driving efficiency throughout the organization. Additionally, we’ve developed what I would call a mosaic of perspectives across diverse markets, client segments, and regulatory landscapes. I don’t know if there’s any other such setup across an enterprise that has that kind of diversity.
Now imagine channeling the same energy, the same discipline around optimization into the workflows, and the power of diverse perspectives into the realm of innovation, and you will see it makes total sense that we’re beginning to lead some of that. GCCs in India also have a scaled engineering presence, which is really the crux of what is needed.
These hubs have become an integral part of the fabric of the firm and therefore are uniquely positioned to identify opportunities for improvement and growth. I think gen AI provides the spark needed for business transformation. And this is happening as GCCs are primed to evolve into innovation hubs. This is such a promising ecosystem for domestic start-ups and born-in-the-cloud tech natives.
Indy Banerjee: That’s really encouraging to hear, Pravin. Debasis?
Debasis Panda: On that point, let me take a step back. Today’s GCC is a microcosm of an enterprise. Every single enterprise function is deeply embedded in the GCC. Now, when we look at the GCCs in terms of innovation, most of the GCCs’ strategies are currently aligned or were formerly intertwined with the strategic priorities or directions of the enterprise.
For example, if we want to drive improvement in customer experience on the front end, or we want to reduce costs, or we want to bring the costs down on the back of each side, gen AI is going to play a significant role—and the domain expertise and capability that sit in the GCCs will fulfill those drives.
So, this end outcome-oriented innovation will completely focus on GCCs. We are the talent hubs of the world right now in terms of technology as well as value, and we will be able to drive the innovation agenda for an enterprise. And, one more thing, there is high potential in the start-up ecosystem and the ability to incubate some of GCCs’ initiatives—when we incubate those capabilities and try to scale them, GCCs will be a great platform to do that for innovation.
Indy Banerjee: So really, the second play a GCC can have is as a force multiplier, which is innovation at scale. Fabrice, I would love to hear your perspective: innovation, leadership, and talent are intrinsically tied. What do you see in this space?
Fabrice Desmarescaux: I assume we’re talking to a global audience here, and so not everyone is going to be in a GCC. I think any enterprise that segregates innovation to one part of its business is going to find itself in trouble very soon. Innovation needs to happen at all levels and in every sector of the company, not just in the GCC. The role I see the GCC is playing is as a stimulant. And, because I expect so much innovation—particularly around new technologies—coming from GCCs, I hope that this will stimulate further innovation from all corners of organizations that have GCCs.
Indy Banerjee: It’s interesting that we are seeing what we call top of house functions—growth and leadership—that come into the GCCs. We are increasingly seeing that GCCs now have anywhere between 20 to 40 percent of global headcount. Basically, what will it take to create 10 to 15 percent of the C-suite for an enterprise out of the GCCs? You have worked with very large enterprises in creating the top talent. What has been your experience? What do you believe is going to be the most critical components that GCCs will have to grow?
Fabrice Desmarescaux: Let me make an analogy—human development. As humans, we grow from child to teenager to adult and, at each stage of our growth, we build new capabilities but also increase our level of consciousness. We start seeing the world in a much more inclusive and comprehensive way. So, I think that GCCs are going through an evolution from the early stages when essentially a GCC was a cheap resource that delivered automated processes with predictable inputs, generating predictable outputs. That’s the infant stage.
Over the years we’ve seen GCCs evolve and grow in maturity, progressively getting the right to partner with global functions and now increasingly having earned the right to set the agenda for the whole organization. In other words, they have reached the adult stage. With this stage, of course, we’re no longer translating predictable inputs into predictable outputs. We’re having to deal with an increased level of complexity and “unknown unknowns,” as I call it. We don’t know what’s waiting for us around the corner. We’re managing deliverables at a stage of complexity where we don’t necessarily understand the relationship between our inputs and our outputs.
So, I think GCCs have grown through these stages of development and now increasingly are earning the right to set the agenda. They’re capable of managing a level of complexity that has led the key leaders of GCCs to occupy the most senior roles in companies. This evolution parallels the evolution of leadership that we’ve seen in every sector, where the world has become a lot more complex and requires a level of consciousness that is much greater than what we needed to run a corporation 30 or 60 years ago.
Indy Banerjee: Pravin and Debasis, do you see evidence of 10 percent of C-suite leadership coming from GCCs? What’s your sense of it? Are you seeing this in the industry and in your sector?
Pravin Goel: I do think we are growing in a similar way to how humans develop on their strengths. I think we as GCC leaders need to recognize our strengths in execution and build on them. It is the foundation upon which we can build our leadership pillars. But equally important is a mindset shift, not just for ourselves but also for our current generation of leaders at both local and global levels.
Over the years, we’ve developed great domain expertise and we have transformed from that teenager to the adult, from data-centric to outcome-focused thinking—that fusion of domain knowledge and outcome orientation is perfect groundwork. However, it does necessitate a paradigm shift. What is that shift? GCC leaders must transcend the waiting game and no longer rely on being told what to do but instead chart our own trajectories. Moving from being uncomfortable with the unknown unknowns, as Fabrice calls them, to figuring them out. It’s about leading global firms on a journey where historical direction setters—the adults of the past, so to speak—evolve into cocreators and invest in mentorship.
These leaders, including GCC heads like myself, play a pivotal role in providing context. To nurture the next generation of leaders, I want to say two or three other things: we must transition from giving content to providing context; that switch is paramount. The other switch is from being risk averse to being more entrepreneurial. I see a lot of people who, as they become senior, become more risk averse. We need to switch from that risk-averse mindset to building the confidence and experience to take wise risks.
The final one I would like to mention, building upon your previous question, Indy, is the switch from the vertical to horizontal. Instead of leaders needing to and wanting to grow vertically, they need to not just grow but also deliver horizontally. So, I want to use this opportunity to remind global leaders that, as much as they should be pushing GCC leads to make a mindset change, they equally need to challenge themselves to change from being control focused to autonomy net.
Indy Banerjee: I love that analogy, Pravin. The paradigm shift actually is happening at both ends. Debasis?
Debasis Panda: I think that as the GCCs have matured into transformation hubs, there is a significant development of chief experience office (CXO) minus one and CXO-led minus two roles based out of GCCs. It’s all about being more driven by business needs. It’s about creating opportunities, which is done by the headquarters, and realizing those opportunities, which needs to be done by the GCCs. From an enterprise perspective, as we tap into the talent globally, as we drive innovation and transformation, it is extremely important that the approach is completely global rather than siloed.
Now, for the GCCs as well, they need to be ready to drive these large-scale transformations, focusing on solving the challenges of tomorrow and being better positioned to drive meaningful change. When we combine this need with the opportunity, what we have is the inevitable option for us to create leadership. I see that happening across GCCs, not just in our GCC, and that’s a very healthy example of how global organizations truly become global.
Indy Banerjee: Fabrice, let me ask a provocative question from the work that you do across organizations: could GCCs actually become the talent headquarters for global enterprises?
Fabrice Desmarescaux: Absolutely. Again, same as what I said earlier for innovation, I don’t think a company wants to only have one talent headquarter. Arguably, the entire company should be the talent headquarter. But, I certainly think that GCCs are now in a position to produce an increasing pipeline of leaders who will rightfully gain entry into the C-suite—and why not into the CEO role? Traditionally, if you look at how people become CEOs, there was a very small number of roles that you could take. One has been the role of the business—sales or marketing—and you get roles of increasing seniority that eventually that lead you to the CEO role. The other path traditionally has been finance, where CFOs quite frequently become CEOs. We haven’t seen too many global CEOs come from the technology route, except obviously in technology companies, but even that is not the absolute norm.
So I think, for the GCCs to produce more global leaders who become C-suite or CEOs in the future, we need to go back to the fundamental mindsets and elevation of consciousness that we talked about. I love what Pravin said—that, first of all, you have learn how to play to win and not just play not to lose, because that’s not how you become a CEO. You need to know when to take risks.
And, obviously, when you come from a legacy of operating with high reliability and predictability at a predictable cost, and with extremely low levels of errors, that’s not necessarily the mindset that that you need to be ready to play to win. You tend to avoid making mistakes.
I think the other shifts that we need to see happen are around the topic of complexity—as we said earlier, the world is increasingly complex and we need to deal with the unknown unknowns. For that, we need to be able to play in a different way. And, finally, as always, as you increasingly interact in a global system, you need to be able to play horizontally. That requires having discipline around self-managing your rhythms, energy, building networks, and developing relationships throughout the system that you may not have had in the earlier stage of, as per my analogy, childhood or teenage years when that was not required.
Indy Banerjee: We’ve had an interesting and stimulating discussion and I want to thank Debasis, Fabrice, and Pravin for sharing such amazing perspectives on how GCCs are going through fundamental changes. Using that analogy of transforming from being a child to an adult, in GCCs we see the move from production into innovation and becoming a force multiplier provoker, creating end-to-end impact, being a thought partner to the enterprise, and becoming a global talent center. But, as the arc of growth happens, there needs to be a paradigm shift in how both sides think and to create a play to win mindset. Thank you so much, all of you. We’ll be back with more such topics in our next episodes.
