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Page 1: Joka Strategist
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CONTENTS

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FROM THE EDITOR

RELATIONSHIP BETWEEN INDIA, FRANCE AND EU

A TALK WITH: NARESH RAISINGHANI

DOWN AND OUT WITH NEW YORK AND BRUSSELS

BUILD PARTNERS THROUGH CONSULTANTS

CAPTIVE COAL MINING

TAPPING THE ELUSIVE MILLENIAL MINDSET

FUN CORNER

Joka Strategist

Joka Strategist / Nov 2011

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The Consulting Club The Consulting Club, IIM Calcutta is a student-run organization dedicated to creating opportunities for students to explore and engage with the consulting industry and assisting them in preparing for successful careers within it.

The Consulting Club of IIM Calcutta comes out with a range of publications spread out over the calendar year. The publications cover the entire spectrum of consulting literature right from material on case interview preparation to articles on the latest industry trends and happenings.

Joka Strategist

Joka Strategist is the consulting magazine of the club. Thought leaders from both industry and academia contribute articles to this quarterly magazine. Joka Strategist has widespread readership with the circulation now having increased to over 40 international universities.

From the Editor

Dear Readers, The November’11 issue of Joka Strategist, brought out by Consulting Club, IIM Calcutta in association with BMGI brings a collection of interesting and insightful articles from the

consulting world. Our February issue was appreciated by the readers and your comments and feedback have helped us in coming out with a better magazine.

In our first article we focus on the relationship between Euro-pean Union and India by highlighting the various initiatives taken from both sides and how things can be improved upon after looking at the situation from both sides. Our next article comes from one of the founders of Zomato which a platform dedicated to food and the information that can be useful for users before selecting a restaurant. The third article comes from the VP and country head(India) at Regalix and he talks about the importance of usability in the field of marketing by highlighting some very interesting real life cases. Another arti-cle talks about the field of consulting and the way a consultant thinks about solving a case by giving importance to various stakeholders who are involved in the project. Our final article comes from Cognizant which is a viewpoint about the impor-tance of having workforce of a particular age and the effects such employees have on the organization dynamics. We have included a fun corner and a crossword which would be enjoyable for you. We have tried to gather views from various industry experts and present it to you. Your feedback would be really helpful for us in improving and making subse-quent changes to the magazine. Please feel free to write to us at [email protected].

Happy Reading!

Sahil DevEditor-in-Chief, Joka StrategistEditorial Team

President Eisha Srivastav Advisory Editor Shiva GoyalEditor-in-Chief Sahil Dev Designer Prakhar Srivastav

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Club Sponsor 2011-12

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The economic growth of India gradually leads France and Europe to reconsider their relationship in order to build an influent and sustainable partnership. Indeed, India

should be considered as an area of prosperity and security compared to other continental regions like China or Africa. As a multicultural and democratic country, India managed to preserve its identity and is opened to dialogue with Europe and France. This then encourages interpersonal relationship and shar-ing of ideas. This is all the more important as India can challenge China’s influence and become a part-ner compatible with the USA. Thus, India could solve global issues in the future and benefit from new rights according to its place in the world.

THE EXPECTATIONS OF FRANCE AND EUROPEAN UNION

First of all, India is encouraged to open its market, ex-pand its investments in both directions according to the treaty related to free trade between India and EU and to OMC negotiations. Moreover, India is expected to enforce competition, social rules (cf. the Interna-tional Labour Organisation Constitution) and also environmental rules. At last but not least, reciprocal enforcement of the rules is required from India : in-deed, an Indian company can buy a foreign company

but not in the other way around.

In addition to that, India should clarify its position concerning security policy towards Afghanistan, Pa-kistan, its defence policy especially about nuclear and surety measures ruled by IAAE.

India is also expected to take into consideration global warming and to define efficient quantitative restric-tions on emissions of greenhouse gases

In the framework of G20, India should be more in-volved in currency issues in order to avoid inflation, overheat and volatility due to massive capitals influx in India. Indeed, India is believed to become more aware of economic interdependence. The coexistence of stagnation of many developed countries and of in-flation in developing countries requires coordination between all the central banks like the Reserve Bank of India.

Secondly, India should take part to the regulation of raw material and agricultural markets since its con-sumption is so significant that its variation deeply af-fect the international market.

Thirdly, India is invited to participate to the world governance through a reform of the Security Council

RELATIONSHIPBETWEEN

INDIA, FRANCE & EU

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of the United Nations and through a more significant role in the International Monetary Fund and in the World Bank in order to be more involved in resolu-tion of conflicts

INDIA’S EXPECTATIONS India tends to defend its claims so as to preserve its growth and development : the opening of European markets, the protection of its agricultural market and the access to sensible technology. Furthermore, India managed to secure its diplomatic position in the re-gion : it tries to avoid the internationalisation of the Cashmere conflict and a diplomatic crisis with Iran and to stabilize the afghan region. It also tries to se-cure its energetic supply and its access to raw materi-als, to restructure its defence system largely supported by Russia, to fight against terrorism and then to en-sure its participation into a broaden Security Council.

As a result, the EU must change its policy since it does not play a major role in India in spite of its histori-cal, political and cultural proximity. Indeed, EU still has a blurry identity according to Delhi’s position. However, India built strong bilateral relationship with France, Germany, or United Kingdom.

France then has a competitive advantage since India already relies on France for its important specialised industries : transports, infrastructure, food-process-ing, nuclear energy, etc. This exchange of services could then lead India to acquire technological skills

and build a strategic partnership with Europe in order to become less dependent on the USA or even Russia for its military supplies.

Then, an intergovernmental action between UK, Ger-many and France above and beyond trade and eco-nomic rivalry could result in international policy so as to face issues like regional crisis, climatic change, or fight against international terrorism and piracy.

These intra-European actions are necessary to make EU a foreground actor in the multipolar world for the future. Indeed, as Lady Ashton said in Delhi in July 2010, EU has difficulties to appear as an understand-able partner to India. However, the Indo-European summit of December 2010 gradually highlights the evolution and the clarification of this relationship ac-cording to India.

India’s expectations lead its politics to establish differ-ent kind of relationship so as to satisfy its interests. There is no real homogeneous and fixed bloc but a variable relationship regarding the sector : India/Chi-na on climate, India/USA on nuclear energy, India/Brazil on trade and WTO. Then EU, France and In-dia will then try to define “Broad coalitions to tackle global challenges”.

The French Presidency of the G20 wishes to promote a collective presidency, inviting then India to take part to global issues : G20 efficiency, non proliferation of Weapons of Mass Destruction, monetary stability, etc

As a result, the EU must change its policy since it does not play a major role in India in spite of its historical, political and cultural proximity.

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These collaborative actions must obey guiding princi-ples : if India is mainly focused on its national security at the hands of China and Pakistan whereas France and European Union want to spread out and strength-en democracy in a multipolar word. India will then be considered as the most reliable partner compared to Russia and China.

The President Nicolas Sarkozy and the Prime Minister Manmohan Singh set in 2008 the objective to double their trade by 2012. Despite the financial crisis pre-vents both to progress as expected, the target has not been abandoned. Strengthen the cooperation in infrastructure since the unprecedented modernization of India involves today important requirements in this area. Develop political relationship : organize more fre-quent presidential and ministerial visits, more parlia-mentary trips and establish link at different level (lo-cal institutions, political parties, ...) between India and FranceImprove relationship between France and India through trade-unions, think-tanks so as to research on different common topics between both countries :affirmative actions, secularism, agricultural policy, status of minorities and women, sustainable develop-ment, etc.

DATA France is ranked as the 5th among the European

partners of India after Germany, UK, Belgium, and Netherlands. During the first ten months of 2010, the bilateral trade showed a 31.1% growth over the cor-responding period in 2009 with a figure of Euro 5.81 billion. France is ranked as 9th largest foreign investor in In-dia : almost € 1.4 billion from April 2000 up to August 2010.

EU is one of the leading trade partners for India, with bilateral trade in excess of $85 billion. Both sides have set a target of $200 billion by 2013. Foreign Direct Investment

EU outward investment to India 2009: €3.2 billionIndian inward investment to EU 2009: €0.4 billionEU provides €13.4million for trade related technical assistance to India through the Trade and Investment Development Programme (TIDP)India’s trade regime and regulatory environment still remain restrictive : in 2008 the World Bank ranked India 120 (out of 178 economies) in terms of the ‘ease of doing business’.

Bruno Arlanda, is a French student doing a double degree program in Management between ESCP Eu-rope and IIMC. He has a Master degree in Public Law. He is reachable at [email protected]

Strengthen the cooperation in infrastructure since the unprecedented modernization of India involves today important requirements in this area.

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BMGI helps companies define their strategies, train their employees and make improvements that posi-tively affect the bottom-line and top-line. Could you tell us more about some specific ways in which BMGI differentiates itself from other management consulting firms?

One of the key differentiators is that we guarantee results, which nearly most consulting firms shy away from. We are committed to client success and work towards becoming partners in progress. We are will-ing to stake a significant part of our professional fees with the results.

The other key differentiator is that we prefer to deploy experts (Master Black Belt Level) with high problem solving competency, who are able to deal with chronic and complex problems of significant business impor-tance. Clients usually come to us, when they are done with the MBBS doctors and want an MD to look at their business problems.

What were the motivations behind starting your management consulting firm in 2002?

Ans: In 2002, we did not have many consulting firms focussing on execution of their recommendations and observed several Indian organisations strug-gling with great but difficult to implement recom-mendations, leading to limited benefits at the ground level. We hence, felt that India and the APAC region could definitely benefit from having a BMGI Indian office, which was recognised for delivering results at the ground level by using some of the best problem

solving methodologies such as Lean and Six Sigma. In fact, our Global CEO, David Silverstein’s Six Sigma deployment in 1998 at Seagate, was recognised as one of the best deployments in the world by several Per-formance Excellence Experts including Mikel Harry.

Today in India, we have augmented our portfolio with a strong emphasis on guaranteed results through the following services:

• Structured Innovation• Strategy Planning and Deployment• Problem Solving Suite and • Business Transformation

What were some of the challenges faced by BMGI in setting up and growing its operations in India?

I think it always happens to any new set-up where you are faced with a catch-22 question … “what is your experience as an organisation in our geographic zone?”…, whereas the reality is that you are just about setting up shop in that region!

We were aware of this probable constraint and hence started with a very strong cross-border team of highly experienced Indian professionals who had under-standing of how business issues are best tackled in In-dian firms and having our international partners who shared their global best practices. We received a rave response and were able to initiate our launch with public and private presentations to over 200 CXOs across various industry sectors.

A Talk With

NARESH RAISINGHANI

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Do Indian companies understand the value of con-sulting? What do you think are the key focus areas for the budding entrepreneurs looking to set up a consulting start-up in India?

India Inc, today provides tremendous opportunities for “intellect on hire” and I would strongly recom-mend consulting as an option to MBA students who are interested in setting up a consulting shop and wanting to take India to greater heights.

For consulting you have opportunities in areas such as Strategy, Product Innovation, Operational Excellence, HR Consulting, IT Consulting and Business Turna-rounds. My recommendation to budding entrepre-neurs is: Target Mid / Small companies, if you are go-ing to handle directly or get into a tie-up with a niche consulting firm and bring them to India to get all the soft collaterals and methodologies.

And if you are interested, ask BMGI to invest in your firm! We have already given this offer to Alitum Solu-tions, set up by 3 IIM-B graduates, Gandharv, Abhi-nav and Nitin, that just in case you need Angel Inves-tors we would be glad to partner or have you as new Division in BMGI India.

This is an open offer to all consulting enterpreneurs in IIM-A,B, C and L.

Is consulting a profitable industry in India?

If 33% is acceptable as EBIDTA; yes. However for consulting organisations which have delinked profits

from their people cost structures, it becomes difficult to successfully manage…. as you would have read sev-eral case studies of consulting firms being in financial crisis.

Tell us something about BMGI’s “insourcing capa-bility”. In what ways is the “insourcing capability” important for the client and for BMGI?

We strongly believe in developing the capability for organisations to solve problems themselves and hence we groom internal consultants who can then replicate the learning in other areas of their organisation. Cli-ents also respect the ability of being provided the tools for self-help.

We would like to know more about some of the in-teresting work that BMGI has done recently. Can you share some of your experiences with us?

Well, some of the recent engagements we are doing specifically in India include:

Strategic Planning: Helping a large Indian company identify 25 manufacturing opportunities for setting up units

Strategic Deployment: Helping L&T Hydrocarbon SBG deploy their strategy using the Balanced Score-card

Performance Excellence: Helping ITC, internalising best practices of Lean and Six Sigma in their various businesses such as Cigarettes, Leaf and Tobacco Divi-

ABOUT NARESH

Naresh is widely regarded as a leading thinker and implementer in the Indian community on Perfor-mance Excellence Methodologies such as Lean and Six Sigma. Today BMGI under Naresh’s leadership has been chosen as the Knowledge Partner for Lean, Six Sigma and Innovation related events byConfed-eration of Indian Industry (CII).He has extensive experience in assisting clients in devising and im-plementing strategy using the Balanced Scorecard.

He has been a speaker/ Judge at several national platforms on Performance Excellence and has spo-ken alongside some of the leading thinkers and practitioners of Performance Excellence such as Mikel Harry (Six Sigma), Professor Koskela (Lean) and Dr Phil Samuel (Innovation).Naresh has facilitated over 100 executive sessions

including sessions for Reliance, L&T, ITC,Young President’s Organization and Asian Paintson vari-ous aspects ofPerformance Excellence, and has worked with the senior management to develop the deployment plans and policies to ensure results get delivered. Several deployment clients have seen net benefits of typically 2-5% of revenues with returns on investment in excess of 10:1.

Naresh also serves as an advisor to the Board of Directors for James Budd Group, an international service provider to the maritime industry and ship-owners, operating in 18 countries.

Naresh has over twenty three years of experience in management consulting and shop floor operations and has consulted over 75 organizations in their

performance excellence journey.

Prior to starting BMGI operations in India, Nar-esh was working at Infosys on various corporate business excellence initiatives. He was also instru-mental in Infosys winning the IMC Ramakrishna Bajaj National Quality Award.Thereafter, at Info-sys Leadership Institute, he assisted in designing a framework for Leadership development for select high potential leaders besides designing leadership workshops. Earlier in his career, he had directly worked with Eicher Tractors and Tata Motors.

Naresh has done his Management from Harvard Business School in the Owner/President Manage-ment Program and his Bachelors in Mechanical Engineering from the University of Mumbai.

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sion, Foods Division and Personal Care DivisionBusiness Transformation: Enabling Sudarshan Chemicals in their journey towards becoming the 4th largest pigment player in the world

Could you share BMGI’s strategy for its India op-erations with our readers?

Summing up the strategies being practiced at BMGI India:

• Exceed all commitments to your clients • Hire the best talent who are self-motivated indi-

viduals• Continually research your methodologies to be

known as the thought leaders in your chosen field

With the placement season around the corner, what would be your advice to students looking for a ca-reer in consulting?Consulting is one of the best choices for MBA gradu-ates, as it provides them opportunities to apply vari-ous aspects of their learning immediately.

Usually people with high intellect, also get bored faster. Consulting provides an opportunity to do non-routine projects, be in different environments periodi-cally and multi-task. Lastly, the learning here prepares you for becoming a CEO or setting up your own firm rapidly…..should that idea interest you. Alternatively, if George Clooney’s image of the consultant in “Up in the Air” seems more exciting, you may also choose to rise up to partner / managing partner in the consult-ing firm.I personally would always advise consulting over in-vestment banking. This may sound biased coming from me, but I believe most in the equivalent con-sulting fraternity such as Mckinsey, Accenture, Bain would agree.

Could you share with us your experiences as Man-

aging Editor of worldchesschampions.com and the motivations behind taking up this role?

I was attending one of the classes at Harvard Busi-ness School as part of the Owner President Program way back in Oct 2008. One of the discussions with the OPM chair, Lynda Applegate and other fellow col-leagues revolved on aspects of time distribution of CEOs: • in the business • working on the business • as free time for working on other passions • on other aspects of life

The question was thought provoking enough to make me realise that I had lost touch with chess, which I en-joyed and reasonably excelled during my earlier days at college and career. I decided to re-ignite my pas-sion and planned to establish a world class website on chess, where I could give chess lovers an opportunity to learn, play, socialise with like-minded persons and be inspired by the best in class in chess.

As the site is aimed for excellence in chess, I got in touch with some of the greatest chess players to bless it. Today the site is endorsed by Vishwanathan Anand (World Champion), Alexandra Kosteniuk (Women’s World Chess Champion), Stefan Meyer Kehler devel-oper of the Software Shredder – which has won the computer world chess championship 12 times and Vasik Rajlich, developer of Rybka, the official reign-ing computer world chess champion for the last four years.

Naresh T RaisinghaniCEO and Executive Director________________________________________• Performance Excellence Deployment• Operational Excellence Leader• Diverse IndustryExpertise• Innovation, Lean, Six Sigma, Balanced Scorecard Expert

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CAPTIVE COAL MINING

The Captive Coal Mining poli-cy of the Government has not met with as much success so far as was envisaged

Sidharth Balakrishna

THE ISSUES AND POSSIBLE SOLUTIONS

The Captive Coal Mining policy of the Govern-ment has not met with any great success and the actual achievements in terms of produc-

tion figures etc are far below what was envisaged. Out of approximately 200 blocks that have been allocated for captive mining purposes, it has been reported that only around 20-25 have seen any substantial progress. This article aims to examine some of the reasons for these slippages and suggest some methods towards re-medial action which can be taken going forward.

Remote-location blocks allocated in some cases: One factor responsible for the tardy progress in cap-tive coal mining is that, according to some private sec-tor coal developers, some of the blocks allocated for the purposes of captive coal mining were at remote locations, situated deep in forest areas and with little or no infrastructure nearby to develop the mines and evacuate the coal.

Not only had the private developer to spend on devel-oping the mine, but it also had to invest in building connecting roads and other infrastructure to the mine to evacuate the coal. This added to his cost and made the project unviable.

Delays in permissions and clearances: Another ma-jor hindrance is the reported delay in obtaining the requisite permissions and clearances. Even after being allocated the block, industry players are required to

obtain a Prospecting License for the block followed by Environmental and Forest Clearances, amongst oth-ers. These requirements often significantly delayed the project, besides escalating costs.

Land acquisition, Relief and Rehabilitation Issues: Looking at things purely from the perspective of the industry, these issues have emerged as a major prob-lem. The local populace has been demanding ever in-creasing amounts of compensation and is reluctant to move.

An example here best illustrates the point: hearing that an industrial facility was to be established in a particular area and compensation was to be awarded to the residents of that area, the population of that area suddenly shot up from just a few hundred individuals to a few thousand people, with a number of people claiming to be residents so as to be able to obtain the compensation amount!

The picture is, however, quite different when one con-siders the other side of the coin and looks at these is-sues through the eyes of those displaced by infrastruc-ture projects. The land has been said to be akin to the ¿mother¿ by some; for which no compensation would be enough.

What is clear is that there is no easy solution for this issue.

The major issues that have arisen pertain to the allocation of Remote Blocks, Land Acquisition issues, Delays in obtaining the requisite Permis-sions, the presence of non-serious Players, the Lack of interest shown by Banking Companies to finance Projects etc

An independent Regulator is the need of the hour for the Coal Sector

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vides some Regulatory oversight.

However, this may not be an optimal solution and it would be better to have an independent Regulator. The functions of the Regulator would include the fol-lowing:

• Hold auctions for captive blocks and issue licenses for their development• Review the progress made in bringing captive coal blocks into production• Approve plans submitted by interested developers for developing captive blocks• Penalize non-serious players • Ensure a level playing field between public and private sector entities• Approve or reject extensions in the time periods for developing coal blocks after examining the performance of developers on a case-by-case basis

The relative success of some of the other sectoral Reg-ulators point to the need for such an agency in the Coal sector as well. Although such a Regulatory agen-cy for the coal sector has been under active considera-tion for some time, it has not yet seen the light of day.

More judicious Allocation of Blocks and Sharing of Infrastructure: A certain percentage of blocks for captive mining could be allocated in areas where Coal India already has established coal production and evacuation facilities.

These facilities could then be shared with private sec-tor developers, who could pay a fee to Coal India for their use. This would spare the private sector from having to incur large up-front costs on developing support infrastructure, lowering their overall costs

Lack of expertise/ Non-serious private sector players: Some players who had applied and obtained captive coal blocks were reportedly not really serious players. Plus, most of the companies that have been allocated captive blocks lacked expertise in coal mining.

This is not unexpected as the following argument demonstrates: let us consider a private sector power generator who has been given a captive coal block to develop so as to obtain fuel for his power project.

It is quite possible that that he lacks expertise in the mining of coal, since his core experience is actually in establishing and running power plants, not develop-ing and operating coal blocks.

Financing Issues: Some financiers have reportedly expressed their concerns over certain clauses in the cur-rent captive coal policy. Should the borrower default on his payments, there appears to be little recourse for the lender-for there are no assignment rights under the current policy and no transfer of ownership is al-lowed.

The lender would have to continue to deal with the end-user of the captive coal, in this case with the same agency that has defaulted in payments.

POSSIBLE SOLUTIONS

Given the above issues, what can be done with a view to ensuring the success of captive coal mining?

The establishment of an Independent Regulator: The Central Mine Planning and Design Institute (CMP-DI) is a subsidiary of Coal India and currently pro-

One possible solution could be to allocate blocks with some of the requisite permis-sions already in place

Infrastructure could be shared with Coal India to reduce overall Mine Develop-ment and Evacuation costs

In addition, more flex-ibility could be given to Lenders

KEY IDEAS

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and helping to ensure that project economics remain viable.

Obtaining Licenses and Permissions: As highlighted above, obtaining the Prospecting Licenses and forest and environment clearances are quite cumbersome. Many developers have asked that captive blocks be al-located with some of these licenses/ clearances already in-place, somewhat on the lines of the power sector’s flagship Ultra Mega Power Projects (UMPP) model. This could save considerable time and cost in bringing the allocated coal blocks into production.

Financing Issues: Greater flexibility could be incor-porated into the policy for cases where the borrow-er defaults on payments. For example, if a borrower defaults, the lender could be granted the right to sell the produced coal to third parties or through auction in the open market through suitable policy amend-ments, rather than have to continue to deal with the defaulting agency. This will give them more comfort to lend to captive coal developers.

SUMMARY

The establishment of an independent Regulator could go a long way in addressing some of the issues per-taining to the coal sector and in particular, Captive Coal Mining. Sharing of infrastructure and grant-ing the requisite permissions and clearances are also likely to have a beneficial impact. In addition, lenders could be given greater flexibility to encourage greater lending to the developers of captive blocks.

Sidharth Balakrishna is an alumnus of IIM Cal-cutta (2004 batch) and has been employed with the world’s top Marketing, Management Consul-tancy and energy firms. Besides this, he has writ-ten a number of books and articles for various reputed publications and has taken several guest lectures and seminars across the country.

His books include the following, all published by Pearson Education :• ‘An Introduction to CAT-Tips from an IIM Alumnus’

• Reading Comprehension for the CAT- A Win-ning Approach by an IIM Alumnus’

• Marketing Case Studies’-part of the Pearson Case Book series (link: http://www.pearsoned.co.in/web/books/9788131757970_Case-Studies-in-Marketing_Sidharth-Balakrishna.aspx

He is a Career Counselling Expert with the Hindustan Times and a member of the Interview Panel to select MBA students at various MBA institutes. Sidharth has also given lectures as a Visiting Faculty in several MBA institutes and seminars across the country.

Sidharth has written for ‘The Hindu Business Line’, Rediff.com, the Times of India, the Hindu-stan Times, MBAUniverse, ‘Just Careers’, ‘Man-agement Compass’, ‘Indian Management’-the journal of the All India Management Association (AIMA), shiksha.com etc.

Some of his papers and articles on oil and gas have been presented to top Government officials and have helped shape the industry structure in India.

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Remember that favorite cartoon of yours from childhood? Mickey Mouse, Jerry or Donald Duck, being attacked by their respective noto-

rious counterparts. After a nail-biting chase that caus-es quite a bedlam, suddenly, in an effort to outrun the other, someone goes beyond the precipice. Although the land underneath their feet has ended, they keep on running in the air. But delayed gravity sets in final-ly and they hurl downwards. Scenes like these surely evoke laughter. Curiously enough, this mere sequence has come to life outside the realm of cartoons. And this time around, it is not a cause of celebration. For it is the central banks of our global economy that has crossed the peak of stability long ago, hoping against hope that a downward spiral would not set in. Alas!

It has been thirty years since the world economy ex-perienced a double-dip recession. Once again, we are dangerously close to another. Ironically, the two conventionally strong economies—the U.S. and the E.U zone— are the weakest links in the fight against it. Things are a bit more complicated too this time around. When the first phase of the latest recession hit in 2008, there was a general consensus that central banks around the world should stimulate the econo-my and revitalize the market. Though averting a major depression, all the supposed advantages of neoliberal prescriptions have fallen short of a definitive recovery.

Worse, no one knows what the recipe is to see through a double dip recession, if and when it hits the market in the coming weeks or months.Across the globe, the economic predictions are sound-ing the alarm in frenzy (think of the downgrade of the US credit rating by S&P), the public mood is increas-ingly brewing of sour pessimism, and the political will to compromise beyond the party or across ideological fault lines is disappearing into the ether. Just look at the politics of bailout by the EU or the raising of the debt ceiling by the US Congress.

What we knew as the rich western world with an ef-ficient system of crisis management proved to be far more like us in their dirty party-politics wrangling. It took both economies nearly a year to approve of a plan to be signed into law. Yet, at best, both plans are a fee-ble response to a serious crisis whose scope of damage is far more than the politicians are willing to shoulder. It became clear to the world that both the economies have lost the political will to inflict themselves with long term pain over short term gain.

The attempt to reach at such political solutions over economic recourse is simple: unjust policies that are unnecessarily harsh on the people of particular countries over multinational corporations with rich

DOWN AND OUT WITH NEW YORK AND BRUSSELS

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stakeholders (many of them liberal donors to Senate or Parliamentary campaigns). What is an example? Think of Greece.

The kind of undesirable alignment of politicians and traders that stimulated heady discussions among Greek philosophers like Plato and Aristotle have come back centuries later to haunt the same country. Greek protests on the streets day in and day out over its government’s brutal (and shocking) austerity meas-ures evokes an intense fervor that can hardly be dif-ferentiated from those seen at Tahrir square in Egypt or other parts of North African countries. The same holds true for much of the rest of the world. Think of the huge auto industry and bank bailouts in the US by taxpayers’ money, or the 2G scams in India. Every-where, it is the occult wedding of the politician with the industrialist that is causing the havoc. And when-ever the market is in trouble, ordinary taxpayers are shouldering the burden.

The bitterness, division and dysfunction that resound-ed around the world in recent weeks as the United States and the EU veered towards default (dragging the stock markets of the world along with it) should do much more than just fuel a perception that once thriving economies of Japan, US and the EU are po-litically gridlocked and economically unreliable. The political histrionics of the recent years should erode our faith, not only in the West, but also in the Western model of capitalism, that has shown, time and again, that even its best models of econometrics cannot pre-dict, understand or control the jitters of the so-called “free” “market”.

To watch our economic trends today is like watching a drama-filled reality show whose aim is to be involved in a race to become the most financially irresponsible superpower. This pathetic picture must change, once

we get out of the mess, however slow and long, that might be.

It is not hard to guess that the 21st century will be the era of mass travel, open borders, instant communica-tion and easy access to information. But will be the age of the austerity of many to balance the affluence of some, or will be the age of affluence of the many over the avarice of some? To be able to predict that out-come we would have to undergo fundamental chang-es in our business as usual.

This is not a call for a Marxist revolution or a reat-tempt to create a benign dictatorial utopia. Rather it is an attempt to perfect a severely ailing system of trade that, quite clearly, is not so “free” or “fair”. Across the world, the plutocracy of the current system serves the “Wall Street” at the expense of the “Main Street”. Iron-ically, this is farthest from a world once imagined by the likes of Smith, Ricardo, Malthus or Hayek!

Leo Tolstoy noted in Anna Karenina that “Happy fam-ilies are all alike; every unhappy family is unhappy in its own way”. The same, however, cannot be said about the sorry state of our economy. For it is not simply an unhappy debt crisis that the world faces, it is much more fundamental: a crisis of democracy!

Barnil Bhattacharjee is pursuing his second Master’s de-gree in European Studies from Leiden University, Neth-erlands. He received his Bachelor’s Degree in Political Science, from Temple University, U.S.A and a Master’s Degree in International Political Economy from Central European University, Hungary. He has worked for two think tanks— the Foreign Policy Research Institute and The Civil Societies Program. He has also interned as a researcher at the University of Hong Kong and George-town University.

It has been thirty years since the world economy experienced a double-dip recession. Once again, we are dangerously close to another. Ironically, the two conventionally strong economies—the U.S. and the E.U zone— are the weakest links in the fight against it.

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BUILD PARTNERS THROUGH CONSULTANTS

Overview

Managing an organization is like driving a car on the fast lane. Things are changing so rapidly that before you can get adjusted to the new gear, you are forced to change gears. Thus, we have a complex situation – Fast changing environment and demanding cus-tomers who have to react quickly to stay ahead in the market.

The need of the hour is Specialists (Consultants) – the key characteristic of Specialists is focusing on a very limited area thus developing an ability to react quickly to changes in the area of specialization. The number of organizations, irrespective of size and business, using consultants as the backbone for their business is increasing by leaps and bounds. If an organization has an array of specialists who have an overview of the business and can be your friend, philosopher and guide, then there is no need for you to get into the depths of that area. Plunging into new processes and technologies just because it is the state-of-the-art is not in the interest of the business. You need an expert to tell you the cost and benefits of a

new concept.

This article focuses on how an organization man-ages a group of consultants effectively to maximize its growth, profitability and compliance to regulatory guidelines.

The Business Problem

Having an army of specialists at your beck and call leads to a new set of issues – how do you ensure that the recommendation of one specialist does not conflict with another expert recommendation. One way out of the problem is for you to have an over-view of the work of all specialists and make sure that all are in conformity. Another way is to have another specialist whose main skill is tying up all the special-ists. This area of specialization is more commonly called as “Integrators”.

It is therefore certain that you need trusted special-ists to succeed in today’s ever changing market place. Effective management of these specialist Consult-ants and ensuring that you work together is critical

RAVI RAMAN is a graduate from IIT Madras (1977) and an alumnus of IIMC (1980). He is a consultant specializing in Information Technology in Banking. He has been associated with Citigroup for over 25 years in various roles in technology within India and abroad.

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for success. You have to define the role of specialists, manage them continuously, and build an effective working partnership with them. It starts from the point of selection of a consultant and you need to have tight processes to select the right consultant .If you don’t build a good working relationship with the consultants, it is only a matter of time before all spe-cialist services are “insourced” again. You must have a skill to convert outsourced specialists into business partners. The quicker you are able to achieve it, the more will you be able to concentrate on your area of specialization – servicing your customers.

The key to success is to convert your consultants into business partners. The partner must share your gains and pains – if you gain significantly because of the relationship, both should share the gains. If some-thing misfires, the pains must also be shared. This will cement the partnership with ownership and add to the friend-philosopher-guide relationship.

Critical issue in Managing Consultants

Consultants have their own business priorities which may or may not be aligned with your business. At the start of the relationship, the entire relation thus works on a principle of mistrust, which is counter productive to both parties. The relationship is thus languishing in the Lose-Lose quadrant in the dia-gram given below. If the consultant is stronger it could result in a Lose-Win relationship for your organization and if the organi-zation is stronger, it could result in a Win-Lose relationship. Either way, it is not a desirable relationship. We need to move towards a Win-Win relationship. This can be achieved over time and only when you enter into long-term relationships. Short term one-off consulting assignments do not result in a win-win relationship.

The Emerging Solution

Everyone is of the uniform opinion that no single or-ganization can be the master of all areas of specializa-tion. The need for developing consultants is therefore undisputed. The key is how the relationship with the organization should be structured. The relationship has to change from customer-vendor to Business Partners. Some analysts may brush it off as another

buzz word or old wine in a new bottle. However, if you analyze the concepts of building a partnership, you will notice that it is based on some very strong fundamentals and it is these fundamentals which will move the relationship towards the top right quadrant – towards the Win-Win relationship. Let us look at building a partnership in some more detail.

The basic principle is that you work with the organi-zation as a part of their organization and not as an outsider. There is good understanding of each other’s business and the entire relationship is based on a “share the gains and pains” principle. Clear measur-able parameters are laid down as part of the under-standing and if the objectives are not achieved, the rewards are lower. There is no concept of an annual renewal of contract as it is a long term relation-ship based on a reward sharing scheme with higher rewards for higher level of performance. Building a partnership has its own life cycle which is described below. With proper commitment from both sides, it can lead to dramatic improvements – otherwise it can also lead to disastrous results.

Customer-Vendor vs Business Partner Relationship

Customer-Vendor Relationship is like living together while working as Business Partners is more like a married couple. The bonds are stronger and there is spirit of adjustments to make the relationship work over a long period of time. Occasional divorces do

happen in building business partner-ship but such instances should be used as learning case studies which can be used for building future relationships. With the spirit of continuous improvement, the net result can be a long lasting fruitful rela-tionship. The table below summarizes the key differences customer-vendor relation-ships and building business partnership.

Business Partnershp Life Cycle

Building a Partnership is similar in structure but dif-ferent in content and emphasis to Customer-Vendor relationship. Building a partnership involves a three tier structure as given on the side:

Fundamentals

This is the basic principle of the relationship. This level is very much prevalent in customer-vendor relationship with one major difference – the em-

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phasis is on understanding each other’s business in totality and not just the impacted areas. It involves the fundamentals like drawing a legal contract which specifies the scope of work, the methodology for ex-ecution, project planning, tracking and configuration management process, commercial terms and condi-tions and understanding of market trends and busi-ness needs. It must be clarified that the legal contract may be drawn as ongoing contract with only letters exchanged to make annual adjustments to contrac-tual obligations.

People Skills

The next level of operation is where building part-nership differs significantly from customer-vendor relationship. This level is totally absent in customer-vendor relationship where each party looks after the requirements of their people. When you work as partners, this becomes a joint responsibility. Training requirements, on-the-job learning, motivation, strat-egy to take team performance to higher planes are jointly discussed and implemented. Even issues relat-ing to rotation of jobs and promotions are mutually discussed and agreed upon before implementation.

Relationship Skills

This is the relationship built at middle and senior management level. Performance reviews against goals, corrective actions, tracking of corrective ac-tions and long term strategy issues are discussed and agreed between both parties. The relationship blos-soms if there is proper understanding and direction given by senior management. Meaningful realistic goals with measurement of activities against these goals form the pivot of relationship building.

The emerging trend is to move away from vendor contracts on a time and material basis to long term relationships. This does not imply that building partnerships is the panacea to all problems. It has to be carefully thought out process with commitment at all levels. The following set of activities collectively called as Outsourcing Life Cycle act as a guideline for a good partner relationship.

• What to Outsource• Whom to Outsource• When to Outsource• How to Outsource

Conclusion

Building partnerships is not an art but a science that is still evolving. It will not be long before it becomes a mandatory subject in schools of management as this is the direction in which the industry is heading. The science can move closer to perfection if all people get together and share their experiences on this front. The road to successful partnership building is rocky and thorny but once you reach your destination, it is ecstasy. However, the quicker you convert your customer-vendor agreements into business partner-ship arrangements, the better you will be placed to face the challenges of the future.

Customer Vendor Relationship Business Partner RelationshipBased on annual legal contracts with commercial terms and conditions

Based on a legal contract with emphasis on long-term relationship and profit-loss sharing

Short term work assignments Long-term relationshipSeparate and maybe divergent objectives Common objectives for both sidesReview through Process Audits and Meetings to check deliveries against contract

Review through meetings and process audits aimed at continous improvement

No motivation for high performance High Rewards for higher performanceMetrics may be related to penalty issues Metrics is the fundamental basis of the relationship

and is used for continous improvement

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Millennial employees bring more than just the fresh ideas

of a new generation to work. Steeped in technology and

craving collaboration, millennials encourage innovation,

teamwork, and communication in ways that challenge cor-

porate hierarchies and break down barriers. Enterprises

that actively engage workers in this generation—defined

as between 15 and 35 years old—report greater employee

productivity, a better understanding of younger

customer segments, and successful new ap-

proaches to overcoming business challenges,

according to IDG Research Services.

However, despite the benefits that mil-

lennial workers bring, few companies are ac-

tively pursuing this growing segment of the

workforce. In a June 2011 survey conducted

by IDG Research Services in conjunction with Cog-

nizant, more than half of the 163 technology and business

executives polled say their companies are doing nothing

in particular to attract millennials. The survey also shows

that at best, most companies are fulfilling only some of the

workplace expectations considered essential by millennial

employees, and that the majority of respondents have no

or limited understanding of what millennial employees ex-

pect from an employer. What’s more, only 3 percent of re-

spondents say their business processes are optimized for

millennials.

“Many companies feel ‘we’ve survived so long doing it

this way, why make changes to accommodate millennials?’”

says Gabriel Schild, director of Cognizant’s business con-

sulting division. “It’s a leap of faith.” And it requires some

investment, outfitting workers

with new technology like iPads; not

to mention the infrastructure, pro-

ductivity and security implications.

Re-energizing a UtilitySome forward-looking enterprises

realize that upsetting the sta-

tus quo can be a good thing. As

the baby boomer generation ap-

proaches retirement age, compa-

nies must rejuvenate their ranks by attracting millennial

workers, even if it requires changing the way a company

recruits, and more importantly, retains and recognizes that

talent.

At Southern California Edison, the power procurement

division is responsible for buying and selling energy. With

30 percent of the utility’s overall workforce preparing to

retire within five years, this strategic division recently real-

ized it needed to start recruiting younger workers. But in

order to do so the division knew it had to change how busi-

ness is done.

“We’re a 125-year-old company with a very staid culture,

and we’re somewhat siloed. Millennials don’t operate that

way,” says David Bartholomew, manager of strategic infor-

mation planning. Bartholomew notes that the new genera-

tion of workers not only communicates differently, but also

expects to be included in decision making and to see results

quickly from their efforts. “We want new ideas and new ways

of looking at things; our industry is going through some

changes, so we want workers who will look at things differ-

ently. They help to move the culture forward.”

Tapping the Elusive Millennial Mindset

EnTERpRisEs BEnEfiT fRoM ATTRAcTing And RETAining MillEnniAl WoRkERs

P R O D U C E D B Y

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Best practices for Attracting MillennialsWhile bringing new energy to an enterprise, millennials also

introduce a wide range of expectations as they enter the

workforce. Enterprises that make changes to accommodate

these expectations may realize significant advantages in pro-

ductivity and innovation over the competition, particularly in

industries that are considered conservative or traditional.

Enterprises should consider:

Avoid the Sunday night/Monday morning experience:

Millennials are accustomed to using social media tools in

their private lives, and expect to leverage them at work as

well. Companies that realize such tools can be used as work

resources will have a better chance of retaining millennials.

Jettison the command-and-control struc-

ture: Millennials dislike hierarchy and glass

ceilings, since in their online lives everyone

is equally accessible, every opinion equal-

ly important. Millennials want to be able

to ask a question to anyone, regardless

of rank, and want to know they are in-

fluencing important decisions. Decision-

making power should be shared with

them, and their input should be heard.

Abolish silo thinking, working and pro-

cess: Millennials crave collaboration and will

quickly crowd-source their way to a solution when

faced with a difficult task or challenge. The adoption of vir-

tual teaming will help attract and retain millennials.

Aspire for more: Millennials are looking for a workplace

with a cause. It’s not all about making money, but about

making a difference in the communities they care about.

Corporate social responsibility policies will go a long way in

making motivating millennial workers.

Of course, expecting enterprises to completely overhaul

their corporate cultures is unrealistic, and could result in

more problems than solutions; sometimes making little

changes goes a long way.

Jack Belcher, CIO of Arlington County in Virginia, re-

alized the need to attract millennials a few years ago. He

received approval to launch a well-paid internship program

that included on-the-job training, with hopes of grooming

these young workers into career professionals. But at the

same time, he knew that if he didn’t make some changes

in his organization, retaining these new workers would be a

challenge, so he took some relatively small steps that had

a big impact.

“One weekend I went out and bought paint and painted

the walls the brightest color orange I could find,” he re-

members, changing the office environment from the

government-issued grey that was there. He oversaw

remodeling of the office that replaced traditional

dividers with removable glass partitions and added

common areas with couches—and found himself hav-

ing to explain to managers in his department that

just because an employee is sitting on a couch with

a laptop and headphones doesn’t mean he or she

isn’t working. He also worked with the county’s HR and

finance departments to institute changes such as placing

emphasis on benefits that mean the most to millennials and

de-emphasizing those that aren’t as important to someone

starting out in their career.

Belcher says the few interns he’s brought into his IT de-

partment have given him fresh ways of looking at things, re-

sulting in changes to how the department recruits

new workers and the experience requirements

the department places on open positions,

for example. The effort he put into at-

tracting and retaining millennials, which

included lobbying the county’s HR and

finance departments to make changes,

has been worth it, he says. “You’ve got

to be willing to change how you think,

you can’t be dogmatic,” he says.

In the end, companies that cater to the

mobility and social media cravings of millenni-

als—so Monday morning is not that different than

Sunday night—stand to gain an innovative mindset that will

surely shape their future.

“We want new ideas and new ways of looking at things; our industry is going through some changes, so we want workers who will look at things differently. “

For more information, visit

www.cognizant.com/futureofwork

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FUN CORNERThe classified ad said, “Wanted: CEO needs a one armed consult-ant, with a social sciences degree and five years of experience.”

The man who won the job asked, “I understand most of the quali-fications you required, but why ‘one armed’?” The CEO an-swered, “I have had many con-sultants, and I am tired of hear-ing with each advice the phrase ‘on the other hand’.

HU

MO

UR

Barbara Minto, Michael Porter, Bill Bain, Arthur D Little

1 2 3

4

5

6 7

8 9

10 11

12

13

14

ACROSS1. Leading healthcare information provider with a consulting group4. HR consulting firm acquired by AON corpora-tion in 20108. Founder of the ‘Pyramid Principle’10. Consulting firm which helped the US navy in World War II12. Former Liverpool FC managing director was once an employee of this strategy consulting firm13. Michael Porter was one of the founders of this consulting firm 14. Founder of this firm received a U.S. Medal of Freedom and a Victory Medal from the Chinese government in ‘45

DOWN2. Former MIT Sloan professor who coined the term ‘corporate culture’ (last name)3. Consulting firm founded by 7 BCG partners in ‘735. One of the ‘Big Four Auditors’6. Leading thinker on building client relation-ships, author of ‘All for One’7. Second largest professional services network9. Largest human resource consulting firm11. Consulting firm founded by Kellogg profes-sors who proposed a solution for the multi-choice knapsack problem13. Largest consulting firm in terms of revenues

1. IMS 2.Schien 3.Bain 4.Hewitt 5. KPMG 6. Sobel 7. Deloitte 8. Minto 9. Mercer 10. BoozAllen 11. ZS 12. LEK 13 Across: Monitor , Down: MCK 14. ATK

CONSULT CROSSWORD

IDE

NT

IFY

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Consulting Club IIM Calcutta

For collaboration with the club, please contact: www.iimc-consultingclub.com

Eisha Srivastav Sahil Dev Shiva Goyal [email protected] [email protected] [email protected] 9674315591 9674319567

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