Issue 10
Aug-Sept‘10
Consulting Research Entrepreneurship Strategy
CREST The E-Magazine of CRESCENT, XLRI
ALL ABOUT CONSULTING!!
ENGAGIN G
PUBLIC P OLICY CO
A CONSUL TANT
NSULTIN
HR CONSUL TING-THE GOOD, THE UGLY BA
G
D AND THE
THE G N I R E T MNC’S EN ETS K R A M L A RUR
THIS ISSUE...
Cover Story Page 3
Crescent The Committee for Research, Strategy, Consulting and Entrepreneurship (CRESCENT) is the result of the endeavor of the student community of XLRI to promote an environment of creative solution building amongst the students of the institute, while reaffirming
high
ethical
standards and values, and fostering personal development in the pursuit of excellence. It works with the two
Engaging a Consultant.
Features HR Consulting | Page 2 The truth about HR consulting from as an HR professional relates his experiences for CREST Public Policy Consulting | Page 6 The need for public policy consulting in India MNC’s Penetration Strategy in Low-Income and rural Markets | Page 8 Creating Livelihood Partnership to reach customers at the lower end What’s New in the world of Consulting | Page 10 Campus Reporter | Page 11
fold agenda of creating a brand
presence
of
XLRI
among the corporate and to help nurture ideas of budding entrepreneurs by providing a
From the Editor’s Desk... The advent of a new term brings a new CREST into your inbox we try to decode some more mysteries and explore new dimensions of Consulting.
platform to them to showcase
Editorial Team
Our cover story ‘Engaging a Consultant’ focuses on the different phases of engagement between a consultant and a client. The article singularly captures the essence of the expectations of a client and the role of a consultant. While a lot is talked about what consulting is, there is hardly an focus on what the process involves. This CREST article reveals the story right from what happens in the pitching phase till the final presentation is made.
Miti Vaidya Neeti Kumar Siddhartha Saran Urshila Ghag
We also have the truth from the horse’s mouth about HR consulting. An HR professional speaks to CREST about his the trials and tribulations of HR consulting. Other stories cover Public Policy Consulting and MNC’s penetration Strategies in the low income market.
their Ideas.
The Editorial Team would love crest.xlri@gmail.com. Happy Reading!
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CREST Jul-Aug 2010
CONSULTING
HR Consulting– the Good, the Bad, and the Ugly Roy Eddington-Charles recounts his experiences as an HR consultant and tells us in this article about the various stigmas and stereotypes associated with HR consulting and the trials and tribulations an HR professional undergoes everyday in his professional capacity. When we talk about HR Consulting, most people think we trawl the net for recruits, or headhunt, or walk surreptitiously into companies and yank their employees for competitors. Once, I was visiting a friend at his office. The manager heard that I run an HR firm and got rather nervous. He told the friend to get me to leave as soon as possible! Older professionals remember HR people from the Rajesh Khanna and Amitabh movies: the chaps who deceive workers into working for less, who pretend to be the workers‘ best friend while actually helping the company‘s bottom-line. The worst moments are when you are testing, training or guiding an executive much older than you – and he thinks he knows himself and his management style better than you do, better than your tests can show. It is so frustrating; a colleague once ran out of the room, closed the bathroom door and screamed. But finally she did get the executive to come around. The reality of HR consulting is not usually so sinister. I still get mail from senior executives I trained long ago – sometimes thanking me, sometimes telling me about a daughter‘s job or son‘s marriage, but usually asking me for advice. An HR trainer is often seen as a counsellor you can turn to at professional crossroads. That‘s very satisfying.
“Once, I was visiting a
friend at his office. The manager heard that I run an HR firm and got rather nervous. He told the friend to get me to leave as soon as possible!”
Remember, also, the value of HR expertise in an age of mergers and acquisitions. Who can forget the tension in a company recently been gobbled up wholesale by another group: ―Will my profile change? Will I lose status among new colleagues? Will I be out on the streets with a pink slip?‖ Finding best-fits, soothing ruffled feathers, being tough when necessary… The HR professional seems a cross between a surgeon, a top executive and a hand-holding clinical psychologist! And, of course, when you walk into that training hall, and a few hundred voices roar a greeting, and a few hundred eyes focus entirely on you, and you feel the professional trust of a bunch of people who know what they are doing – well, it is a high no drug can deliver. Go ahead: the consulting field is vast, sometimes threatening, sometimes horrifically competitive, but always rewarding. Yes, and recall the freakishly big bucks too. :-)
Roy Eddington-Charles is the President of an independently launched Consultancy which operate in the areas of IT, HR and Education. Previously he has conducted corporate training programmes by invitation and specializes in leadership training. 2
CREST Jul-Aug 2010
CONSULTING
Engaging a Consultant... In this article, Neeti Kumar unveils the less talked about perspectives of consulting; the expectations of a client and what goes into that final panacea of a presentation Many of us want to be consultants. This article will help tell you what it is like to be in the shoes of a consultant as well as the shoes of a client. A consultant is an individual with specialized skill and knowledge who is contracted to accomplish (or assist in accomplishing) an assignment in an unprejudiced manner and independent of other responsibilities. Clients need consultants when they require an expert‘s advice or some specialized skill. Consultants need clients to work on new projects. There exists a symbiotic relationship between the two. Let us analyze the different phases of the engagement between the two.
The Different Phases: 1) Pitching Phase 2) Brainstorming or Hypothesis Generation 3) Data Gathering and Analysis 4) Conclusions and Story Building 5) Final Presentation
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Pitching Phase Client‘s Perspective: Several factors have to be considerer when choosing a consultant include a thorough risk and cost analysis and the consultant's availability, track record, experience, and qualifications. Consultant‘s Perspective: Partners carry out the main pitch process. Associates might get involved in some non-chargeable work to support partner‘s conversation with client. Letter of Proposal (LOP) or Letter of Intent (LOI) is the product of this discussion. LOP forms a guideline to the focus of the efforts of the consulting team. It also mentions expectations about results, what client resources will be required, and how long the engagement is expected to take. It may or may not touch upon the topic of remuneration. Brainstorming/hypothesis generation Client‘s Perspective: For Clients, it is important to be a part of the project since the planning phase. They should ensure that the consultants have understood the requirement clearly. After making the right choice of the consultant they should see that the progress is in the right direction. Consultant‘s Perspective: The focus is on brainstorming involving the whole consulting team, and sometimes client members. The idea is to understand the problem, discuss different options and form hypothesis. This brainstorming stage is at once the most exciting and the most frustrating stage of the project. On the one hand, it gives a new consultant a firsthand opportunity to see how more senior members of the team tackle the problem set before them. On the other hand, the team may not seem to be making much headway. The final part of the brainstorming stage is to take each of the emerging hypotheses and determine how they can be proved or disproved in the analysis stage. What data is required? How can it be gathered? Which team member will take responsibility for each part of the analysis? Data gathering and analysis Client‘s Perspective: This is just the beginning of establishing a good working relationship. Since clients are nearest to the problem they are nearest to the solution also. They must ensure that they communicate to the consultant their problems and experience well. Communicate! Communicate! Communicate! is the way out. They should
CREST Jul-Aug 2010
CONSULTING
also see that consultant respects their personal data and values long term relationship with them. Consultant‘s Perspective: The hypothesis which is formed at the brainstorming stage is approved or disapproved at this stage. The Consulting in-house library is considered, closely followed by that of the client. This usually results in large stacks of text-lines, brokers' and annual reports, and other reference materials. The big advantage which consultants have is the intellectual capital of their consulting firm. They can approach firm experts or consultants who have worked on similar but non-conflicting projects. More interviews with client personnel may be required. Some studies may require consultation with industry experts; others may necessitate more hands-on measures. The main task of a consultant is to find a way of re-cutting the data, combining different data sources, and making judicious assumptions in order to end up with data that definitively supports or negates the hypothesis you are trying to test.
“Clients must demand knowledge transfer from consultants. A good consultant is one who not just provides a solution but also creates a structure which leaves the clients more independ-
Pulling out conclusions and building the story Client‘s Perspective: Clients must demand knowledge transfer from consultants. A good consultant is one who not just provides a solution but also creates a structure which leaves the clients more independent. Consultant‘s Perspective: Developing a story is an evolving process throughout the project – it starts at hypothesis generation. As more and more hypothesis is approved / disapproved a clearer picture emerges. One might require to prepare more hypotheses and to do some more analysis to solve the jigsaw puzzle. By developing the storyboard up front, the team is forced to helicopter back up to the top level on a regular basis and check that their analysis directly answers the client's key questions. Presentation to client Client‘s Perspective: Clients should see that their key questions are directly being answered. Consultant‘s Perspective: What actually happens in a presentation depends on the frequency of meeting between the consulting firm and the client. Formal presentations are presented as a landscape of exhibits, held together by a storyline. The result of the final presentation should not come as a surprise to the client. While the partner or the director with the senior client relationship tends to run the meeting, managers and even an associate who has taken ownership for some work, might get to present. Inputs from Vault Guide to Consulting, zdnetasia.com
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CREST Jul-Aug 2010
CONSULTING
Public Policy Consulting A summary of the paper by Prema Sagar and Poonam Madan on the lesser known phenomenon on Public Policy Consulting in an emerging Indian Framework. From license raj in 1950-1970‘s, to liberalization and increased influence of associations and media in 1990‘s, to setting up of independent regulators there has been a transition from closed-door culture to consultative policy making.
Impediments to Breakthroughs in Policy – Makin include stalemate between the executive and legislature, Coalition politics, the contradiction between “mass and elite politics”...
“Think tanks can provide a brilliant medium for good policy making.”
The reluctance to bring about any breakthrough in many policy areas is because the politicians speak simultaneously to two audiences. The first, which has grown increasingly important in the last decade, is the domestic policy and financial elite as well as international donors and investors. The second is the politician‘s own constituency, especially the large and intermediate farmers who stand to lose the most from the reforms. The cutting edge of this interaction between mass and elite politics defines an important facet of the role for professional public affairs practitioners. As we see today there are interactions between the mass politics (on caste, religion etc.) and elite politics (on economic policy etc.). Civil Society and media are playing an increasingly visible role at such intersections. Labor law reforms, inflation, impact on environment are few areas of interactions. Actors involved in policy making today are the executive and the legislatures, both at the central and state level. The interplay between the two levels is often the seat of stalemate on issues such as GST. Coalition Politics is another facet of today‘s policy making wherein every coalition partner wants to push through his own agenda. Media has played a crucial role in bringing policy into public domain. With increased awareness civil society is also playing an active role especially in issues such as putting increased pressure on companies to adhere to social and economic standards. Civil Society organizations (NGOs) also seek to improve governance by increasing transparency and access to information about public policy formulation and implementation. Think tanks can provide a brilliant medium for good policy making. However independence of think tanks is an issue in India. With formation of industry associations such as CII in 1990‘s there has been a shift from particularistic lobbying to general policy advocacy by industry interest groups. It has been seen that the frequency of interaction between industry interest groups and political parties is fairly high and the former helps the latter primarily in raising party funds. The problem exists in the lack of transparency in these interactions. The extent to which both the parties and the government officials are lobbied is not known. The question which arises is that how one can achieve a professional businessgovernment framework for policy consulting in India.
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CREST Jul-Aug 2010
CONSULTING
“In emerging India, bureaucracy is the weakest link that can, indeed, become the strongest link in the policy consulting framework.�
In emerging India, bureaucracy is the weakest link that can, indeed, become the strongest link in the policy consulting framework. Government officials are largely generalists, while the groundwork requires technical expertise on par with the rising complexity of business aided by technological /managerial/ financial innovation in a globalised economy. Likewise for regulation, since independent regulation by regulatory authorities is a relatively new ethos in India. Professional public affairs practitioners can, by providing well researched facts and arguments, make a strong and clear case for the issues they are mandated to manage. Consultations using the power of domain expertise and insights on government policymaking processes at this level would make bureaucracy the strongest link. This would also reduce transaction costs for industry. Clearly, therefore, there is great potential for professional public affairs consultants given the emerging complex issues impacting business; the dynamic regulatory framework requiring navigation and keen insights; and the government‗s openness to collaboration on policy matters.
Source: http://www.johnehrenfeld.com/2009/10/the-consultants-relief-and-ret.html
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CREST Jul-Aug 2010
STRATEGY
MNC‘s Strategy to Enter Rural and Low-Income Markets When companies figure out how to serve low-income consumers in developing countries profitably, everyone wins: the disadvantaged gain access to products and services that the private sector is best positioned to deliver, while companies tap into vast new markets. On top of that, in many places the MNCs also try filling the gaps left by government by building roads that help them deliver their goods, providing education and health care for communities whose workforces they rely upon, and implementing environmental programs to protect precious natural resources needed to keep supply chains running smoothly. Some commentators would call these activities corporate social responsibility (CSR), while others might cynically remark that it is just another way for Multinational Corporations (MNCs) to make inroads into the lucrative rural and low-income markets.
“There has been a discernible shift in how MNCs look at their entire investments in rural markets beyond CSR. With growth drying up in developed markets and their centre of gravity shifting to emerging markets, MNC businesses are under pressure to prove that their rural strategies aren't just about doing well from a CSR perspective.”
There has been a discernible shift in how MNCs look at their entire investments in rural markets beyond CSR. With growth drying up in developed markets and their centre of gravity shifting to emerging markets, MNC businesses are under pressure to prove that their rural strategies aren't just about doing well from a CSR perspective. They also need to show head office that these strategies are doing well from a business perspective. In short, the strategies must start delivering top- and bottom-line results. One major challenge that stares them in the face is the complexity of these rural markets across the world. Even within one country such as India, strategies need to take into account the vast number of languages and cultural differences across India's hinterland, while keeping the strategies highly flexible and adaptable. One solution could be developing products and services tailored specifically to the rural/low income markets. When LG entered India in the mid-1990s, numerous brands were vying for shelf space with hardly anything to distinguish them from competitors. The South Korean company developed two color television sets for the rural market, ―Sampoorna‖ (which means "complete" in Hindi) and Cine Plus. At US$65 and US$107 respectively, the sets were priced slightly higher than the black-and-white televisions that other manufacturers were selling in rural markets and that had become obsolete in urban homes. Now LG has refrigerators, washing machines and microwave ovens targeted at price-sensitive consumers sold from hundreds of retail and distributor outlets across the Indian hinterland, with rural markets contributing 40% of its Indian revenues. Other solutions could be applying novel distribution tactics to reach out to this segment such as selling products like shampoos and biscuits in small, inexpensive packets for low-income consumers in the hinterland with little spare cash. But it has been felt that unless the companies try to build a sustainable model and think ‗long-term‘ with their distribution strategies, they would not be very successful or successful only in the short run. Generation Therefore, here comes out the most trusted and innovative solution: creating "livelihood partnerships"—surrounding a core product or service with additional benefits. Rather than treating communities purely as collections of consumers, companies that take this approach provide low-cost, productivity-enhancing assistance, such as Philippines‘s Manila Water, bridge cultural gaps between com-
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CREST Jul-Aug 2010
STRATEGY company and community, create positive associations with the company's brand, raise switching costs, and promote micro market activity. All this has positive consequences for both the community and the companies doing business there. Manila Water relies on collective billing to ensure the timely payment of bills, employs small-scale entrepreneurs as couriers and pipeline contractors, supports micro lending, and brings affordable water to schools and hospitals. Similarly in India Hindustan Lever has developed Shakti, a program that trains rural women to operate as entrepreneurial distributors of consumer products in villages of fewer than 1,000 people. This makes it possible for it to earn revenues out of villages that would otherwise be uneconomic to serve. Thus the key takeaway is investing in building sustainable partnerships with the rural communities—involving the local Self Help Groups (SHGs) and cooperative centres as trusted partners in the supply chain. Also, the companies should not make the mistake of expecting quick financial results form their rural investments. They should be less focused on year-on-year success and spend more energy on building innovative solutions and business models for this segment. It's a long haul. And many have realized it. The rest should learn this lesson quickly to survive in the rural and the low-income segment battleground. Inputs from: McKinsey quarterly , India Knowledge @Wharton
Top Ten Ways To Know You're Dating/Married To A Consultant 1.
Referred to the first month of your relationship as a "diagnostic peri-
od". 2. Talks to the waiter about process flow when dinner arrives late. 3. Takes a half day at the office because, "Sunday is your day." 4. Congratulates your parents for successful value creation. 5. Tries to call room service from the bedroom. 6. Ends any argument by saying, "let's talk about this off-line." 7. Celebrates anniversary by conducting a performance review. 8. Can't be trusted with the car-too accustomed to beating up rentals. 9. Valentine's Day card has bullet points. 10. Refers to lovemaking as a "win-win".
Source: www.lachances.com/humor/jokes.htm 9
CREST Jul-Aug 2010
CONSULTING
What’s New in the World of Consulting Who’s at the Top? Vault.com, the source of ratings, rankings and insight for the consulting industry, has released its annual Top 50 Consulting Prestige Rankings. The Vault Consulting Prestige Rankings provide a comprehensive roadmap of who's who in the consulting industry—ranging from big consulting shops to smaller, niche firms, and spanning a vast swath of industries. From March through July, over 4,500 consultants of all levels were asked to rate consulting firms on a scale of 1 to 10 based on prestige. (They were unable to rate their own firm, and were asked to rate only firms with which they were familiar). The 2011 Top 10 Most Prestigious Consulting Firms are: 1. McKinsey & Company 2. The Boston Consulting Group 3. Bain & Company 4. Booz & Company 5. Deloitte Consulting 6. Mercer LLC 7. Monitor Group 8. PricewaterhouseCoopers 9. Ernst & Young 10. Oliver Wyman Much in line with McKinsey‘s repeat at the top, this year's prestige ranking showed a remarkably low rate of movement from last year. The Top 10 firms are entirely the same, with some slight adjustments in positioning, as HR consulting firm Mercer LLC moved up two spots, while Monitor Group and PricewaterhouseCoopers each moved down one notch.
PWC to acquire Diamond Management and Technology Consultants PricewaterhouseCoopers LLP (PwC) has entered into a definitive agreement to acquire all of the outstanding common shares of Diamond Management & Technology Consultants, Inc., for $12.50 per share in cash. The transaction represents a premium of 31% to Diamond‘s closing stock price of $9.54 on Monday and values Diamond at $378 million. Diamond will join the PwC Advisory practice, which ranks among the largest providers of consulting services globally. The transaction is expected to close in the fourth quarter of calendar year 2010.
KPMG Boosts BI with Analitica Acquisition KPMG‘s UK Performance and Technology (P&T) Advisory division has acquired Analitica, a leading Business Intelligence (BI) and Enterprise Performance Management (EPM) consultancy.
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CREST Jul-Aug 2010
CAMPUS REPORTER
The WIZARD OF ODDZ– The Game of Strategy
Wizard of Oddz was a strategy based fun game designed to get people off their feet and run around even with their thinking caps steadfast on their heads. There were six games based on Game Theory and Nash equilibrium such the Public Goods game, ‘Nash Bargaining’, the Ultimatum game, auctions and Prisoner's Dilemma with an interesting XLRI flavoured twist. Needless to say, people’s interest was piqued and excitement ran high as players cooperated and defected in a bid to get the highest scores. The team with the highest overall score and the top player from the top two teams walked away as the winner and the sought after title of ‘the wizard of oddz’, the person whose wits reigned supreme.
ISEL (Initiative for Social and Entrepreneurial Leadership) is a joint initiative of SIGMA and CRESCENT. ISEL at XLRI provides opportunity for students for internships, final placements and live projects in the social sector and start-ups The ISEL introductory session was conducted by professor Madhukar Shukla who spoke to the students about the various learning opportunities under the various kind of companies in the social sector.
ISEL LAUNCH
CRESCENT BLOG Now you can stay tuned to Crescent via its new blog at http://xlrii-crescent.blogspot.com/. We look forward to your contributions, articles, write-ups , basically, anything that you feel you want Crescent to know and you think would make the business world a more interesting place to live.
UP NEXT...
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After the C3 Launch , in the second term we have more sessions lined up especially keeping in view the SIP Process to help you crack those elusive consultancy interviews and become experts at guesstimates and case analyses. There is also the Idea factory Launch on the horizon for those with raring to get set and go with their Entrepreneurial dreams. Stay tuned with CRESCENT to know about upcoming campus activities and as always, CREST will arrive faithfully in your inbox with more insights into the worlds of Consultancy, Research, Entrepreneurship and Strategy. As always, we welcome your feedback for ways to improve.
CREST Aug-Sep 2010
CRESCENT MEMBERS Faculty Advisor Prof. Munish Thakur Secretary Mohammed Sadique Quraishi Senior Executive Members Aalok Sanghvi Miti Vaidya Nitin Agarwal Siddhesh Ajgaonkar Vikas Kedia Vikram Singh Rathore Junior Executive Members Namrata Singh Neeti Kumar Rama Krishna Chava Rohnak Shah Shashwat Sahai Siddhartha Saran Urshila Ghag
CRESCENT e-mail id crescent@xlri.ac.in
Cover Photo Courtesy Karthik Srinivasan
The Editorial Team of Crest invites articles from readers for publication in forthcoming issues. If you have articles/ experiences/ studies to share in the areas of consulting, entrepreneurship, research or strategy, please do send them in to crest.xlri@gmail.com mentioning your name and institute name.
CREST
Sep 2010