Aug-Sept‘10

The E-Magazine of CRESCENT, XLRI

Issue 10

CREST

Consulting Research

Entrepreneurship Strategy

ALL ABOUT CONSULTING!!

ENGAGING A CONSULTANT

HR CONSULTING-THE GOOD, THE BAD AND THE UGLY

MNC’S ENTERING THE

RURAL MARKETS

PUBLIC POLICY CONSULTING

From the Editor’s Desk...

Crescent The Committee for Research,

Strategy, Consulting and En-

trepreneurship (CRESCENT)

is the result of the endeavor

of the student community of

XLRI to promote an environ-

ment of creative solution

building amongst the stu-

dents of the institute, while

reaffirming high ethical

standards and values, and

fostering personal develop-

ment in the pursuit of excel-

lence. It works with the two

fold agenda of creating a

brand presence of XLRI

among the corporate and to

help nurture ideas of budding

entrepreneurs by providing a

platform to them to showcase

their Ideas.

CREST Jul-Aug 2010

Editorial Team

Miti Vaidya

Neeti Kumar

Siddhartha Saran

Urshila Ghag

T H I S I S S U E . . .

Cover Story Page 3

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

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The advent of a new term brings a new CREST into your inbox we try to de-

code some more mysteries and explore new dimensions of Consulting.

Our cover story ‘Engaging a Consultant’ focuses on the different phases of en-

gagement 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 hap-

pens in the pitching phase till the final presentation is made.

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 con-

sulting. Other stories cover Public Policy Consulting and MNC’s penetration

Strategies in the low income market.

The Editorial Team would love to get feedback from you on

crest.xlri@gmail.com. Happy Reading!

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CREST Jul-Aug 2010

C O N S U L T I N G

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 un-

dergoes everyday in his professional capacity. When we talk about HR Consulting, most people think we trawl the net for re-

cruits, or headhunt, or walk surreptitiously into companies and yank their em-

ployees 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 col-

league 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 cross-

roads. That‘s very satisfying.

Remember, also, the value of HR expertise in an age of mergers and acquisi-

tions. Who can forget the tension in a company recently been gobbled up whole-

sale 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 horrifi-

cally competitive, but always rewarding. Yes, and recall the freakishly big bucks

too. :-)

Roy Eddington-Charles is the President of an independently launched Consultan-cy which operate in the areas of IT, HR and Education. Previously he has con-ducted corporate training programmes by invitation and specializes in leader-ship training.

“Once, I was visiting a friend at his office. The manager heard that I run an HR firm and got rather nerv-ous. He told the friend to get me to leave as soon as possible!”

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CREST Jul-Aug 2010

C O N S U L T I N G

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 pana-

cea 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 con-

tracted to accomplish (or assist in accomplishing) an assignment in an unpreju-

diced 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.

Pitching Phase

Client‘s Perspective:

Several factors have to be considerer when choosing a consultant include a thor-

ough risk and cost analysis and the consultant's availability, track record, experi-

ence, 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 Pro-

posal (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 some-

times client members. The idea is to understand the problem, discuss different

options and form hypothesis. This brainstorming stage is at once the most excit-

ing 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 hypothe-

ses 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 cli-

ents 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

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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CREST Jul-Aug 2010

C O N S U L T I N G

also see that consultant respects their personal data and values long term rela-

tionship 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 con-

sulting 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 re-

quire 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 try-

ing to test.

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 hy-

pothesis 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 pre-

sent.

Inputs from

Vault Guide to Consulting, zdnetasia.com

“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 cli-ents more independ-

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C O N S U L T I N G

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 as-

sociations and media in 1990‘s, to setting up of independent regulators there has

been a transition from closed-door culture to consultative 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 fi-

nancial elite as well as international donors and investors. The second is the poli-

tician‘s own constituency, especially the large and intermediate farmers who

stand to lose the most from the reforms. The cutting edge of this interaction be-

tween mass and elite politics defines an important facet of the role for profes-

sional public affairs practitioners.

As we see today there are interactions between the mass politics (on caste, reli-

gion 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 coali-

tion partner wants to push through his own agenda. Media has played a crucial

role in bringing policy into public domain. With increased awareness civil socie-

ty 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 transpar-

ency and access to information about public policy formulation and implementa-

tion.

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 as-

sociations such as CII in 1990‘s there has been a shift from particularistic lobby-

ing 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 business-

government framework for policy consulting in India.

Impediments to Break-throughs in Policy –Makin include stale-mate between the ex-ecutive and legisla-ture, Coalition politics, the contradiction be-tween “mass and elite politics”... “Think tanks can pro-vide a brilliant medium for good policy mak-ing.”

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CREST Jul-Aug 2010

C O N S U L T I N G

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 in-

dependent 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 gov-

ernment 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 consult-

ants given the emerging complex issues impacting business; the dynamic regula-

tory 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

“In emerging India, bu-reaucracy is the weakest link that can, indeed, be-come the strongest link in the policy consulting framework.”

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CREST Jul-Aug 2010

S T R A T E G Y

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 fill-

ing 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 com-

mentators would call these activities corporate social responsibility (CSR), while

others might cynically remark that it is just another way for Multinational Cor-

porations (MNCs) to make inroads into the lucrative rural and low-income mar-

kets.

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 deliver-

ing 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, numer-

ous 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 re-

frigerators, 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, inexpen-

sive 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 as-

sistance, such as Philippines‘s Manila Water, bridge cultural gaps between com-

MNC‘s Strategy to Enter Rural and

Low-Income Markets

“There has been a dis-cernible shift in how MNCs look at their entire investments in rural mar-kets beyond CSR. With growth drying up in de-veloped markets and their centre of gravity shifting to emerging mar-kets, MNC businesses are under pressure to prove that their rural strategies aren't just about doing well from a CSR perspective.”

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CREST Jul-Aug 2010

S T R A T E G Y

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 vil-

lages 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 coopera-

tive centres as trusted partners in the supply chain. Also, the companies should

not make the mistake of expecting quick financial results form their rural invest-

ments. They should be less focused on year-on-year success and spend more en-

ergy 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

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CREST Jul-Aug 2010

C O N S U L T I N G

Who’s at the Top?

Vault.com, the source of ratings, rankings and insight for the consulting industry, has re-

leased its annual Top 50 Consulting Prestige Rankings. The Vault Consulting Prestige Rank-

ings 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 indus-

tries. From March through July, over 4,500 consultants of all levels were asked to rate con-

sulting 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 re-

markably 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 Consult-

ants

PricewaterhouseCoopers LLP (PwC) has entered into a definitive

agreement to acquire all of the outstanding common shares of Di-

amond 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 Enter-

prise Performance Management (EPM) consultancy.

What’s New in the World of Consulting

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CREST Aug-Sep 2010

The WIZARD OF ODDZ– The Game of Strategy Wizard of Oddz was a strategy based fun game de-signed 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 Pris-oner's Dilemma with an interesting XLRI flavoured twist. Needless to say, people’s interest was piqued and excitement ran high as players cooperated and de-fected 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.

Now you can stay tuned to Crescent via its new blog at http://xlrii-crescent.blogspot.com/. We look for-ward to your contributions, articles, write-ups , ba-sically, 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... 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 En-trepreneurial 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.

C A M P U S R E P O R T E R

ISEL LAUNCH

CRESCENT BLOG

CRESCENT e-mail id

crescent@xlri.ac.in

CREST 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

Cover Photo Courtesy Karthik Srinivasan

The Editorial Team of Crest invites articles from readers for publication in forthcoming issues. If you have articles/ ex-periences/ studies to share in the areas of consulting, en-trepreneurship, research or strategy, please do send them in to crest.xlri@gmail.com mentioning your name and insti-tute name.