My Journey As Consultant - 4

 Two Early Major Assignments and Insights Learnt.

Let me share the excitement of two major assignments, early in our consulting career, which gave us wide exposure to product marketing. These assignments also honed our business development efforts for our unique service model of management consulting which became a great hit with prospective clients. While we were getting small assignments with low yields per engagement till then, these two assignments brought substantial billing that matched our earning potential. 

Of the two, one was a new electronics components manufacturer and the other was a medium-sized two-wheeler manufacturer based out of Hyderabad promoted by the AP state government. The lessons we learnt from these assignments stood us in good stead all through our consulting career and will be of value to readers of this blog. 

Professional Grade Components Ltd. (PGCL) was a new entrant in the manufacture of Carbon Film Resistors (CFR) and Metal Film Resistors (MFR). It was set up around 1983. The company was promoted by two technocrats with manufacturing background in a large public sector electronics company based in Hyderabad along with a businessman dealing in electronics products being supplied to the electronics industry. They had appointed as Chairman of PGCL an eminent former CEO (let me call him AML) of a major consumer product company who was also, post retirement, a member of the Board of Governors of Administrative Staff College of India (ASCI).  Mr GVS Murthy took me along to meet him in another company where he was associated as an adviser. AML immediately recognised me as he had been  instrumental in selecting me as marketing faculty in ASCI and had received good reports about my work there. His first comment was that ASCI had lost a good professional in my leaving and he knew the reasons for my leaving  which made him unhappy with the  management. I saw that the meeting had started on a positive note and I explained to him my new avatar as a management consultant in association with two other associates. When he found that I had an electronics background, he asked me if I could conduct a market study for electronics components to assess demand and give recommendations for launching a product. Since I had an early background working in the electronics industry and a marketing background I immediately said yes. He arranged for me to meet the MD of PGCL and his team to get a briefing and finalise the terms of reference and a contract.

During the meeting with the PGCL MD and his team I noticed that, while all of them had a very good background in manufacturing and technology in the electronics industry, they had no one with a marketing background in the team at that stage. They had already invested in an imported plant with a huge capacity to manufacture both consumer grade CFR and professional grade MFR. CFRs were used in consumer products like radios, television, etc. and MFRs were used in industrial electronics and military and space applications. In those days, the Department of Electronics was the nodal department giving licenses and other permissions to set up new manufacturing facilities for the electronics industry. They had allowed a large number of small and medium units to manufacture these products as they were considered to be import substitutes, which was an important consideration for licensing in those License Permit Raj days. After some initial discussion, the PGCL MD agreed to my suggestion that I undertake both secondary data collection from published sources as well as primary data collection from both the end-users and the electronics market supplying these industries. We agreed on my travel to a few major cities and smaller towns across India for field work and acquiring certain government reports and other publications having information on the electronics industry in India. Keeping in mind the amount of work involved for me, and the time it would take to get all the data from both primary and secondary sources, they agreed on the substantial fee which I indicated to cover my time and travel costs. I was given 45 days to get back with my report giving my findings and recommendations for a marketing strategy to launch the product. Since I needed money to start work and travel, they also agreed to 50% advance, with the balance payable on submission and acceptance of the report and recommendations.

First, I spent a few days poring over the secondary data available and to my surprise noticed that PGCL’s installed capacity was four times the entire effective demand for these products in the Indian market as available from the published sources. At the same  time, the total approved capacity for small and medium units for these products was ten times the effective demand projected in the next 5 years! I parked this information in my notes and went on my field work to get data from both end-users and dealer markets  located around Bombay, Pune, Ahmednagar, and New Delhi. These field data also confirmed the huge supply against effective demand within the country, apart from some of the trade practices which indicated that these components were  now sold like commodities instead of speciality technology products. 

Finally, when the time came to make  my report, I decided to first sensitise the client about my findings through discussions, to ensure that  he understood the magnitude of the challenge the company would face to enter this market. It was clear that they had to look beyond the Indian market right from the beginning if they had to be economically viable, and they had not even thought of this when preparing their  project reports!! To my mind, this project was heading for trouble from the word go; but, without saying so, I presented to them the reality, and the options available to survive initially, which would involve exploring the export market from the beginning, apart from competing in the Indian market purely on price. With hard data  backing my report and recommendations, they accepted my findings and paid the balance amount. After a few years, I noticed that many component manufacturers who had set up new capacity in this industry along with PGCL folded up, and PGCL itself changed hands before it also folded up. 

This assignment taught me an important lesson about how not to start a major project. Demand assessment  before starting a project, and understanding  competitive information and market dynamics, is essential to formulate a new project. We started using this insight while guiding anyone, particularly technocrat entrepreneurs who were encouraged by industry promotion financial institutions looking for business opportunities to start a new venture using their technical competence.

As I was completing the PGCL assignment, Mr. GVS Murthy spoke to me about AP Scooters Ltd (APSL). He had worked for them as marketing manager earlier and, after he left his job with them, they had appointed him as an adviser for marketing on a nominal monthly retainer since they had recently signed a technical collaboration agreement with Piaggio of Italy to produce the famous Vespa brand of scooters. Since Mr. Murthy was not finding enough time to APSL, after discussions with MD of APSL, they agreed to transfer the contract from him to us with Mr. Murthy available in the background.

Originally, Vespa had a collaboration with Bajaj Auto Ltd. but, due to government policies changing during the change of government in 1977, Piaggio had to leave the Indian market along with many other major foreign brands. Bajaj continued making the same products under their own brand names and improved on them using good R&D backup. In those days, they had a waiting list of 7 to10 years to supply a scooter to those customers who had booked with them. There were other manufacturers of scooters, but they did not command such huge demand as Bajaj for various reasons. 

In 1982, the government changed its policy and allowed Indian manufacturers to bring in foreign brands with only technical collaboration, to manufacture and  supply four-wheelers and two-wheelers to meet the surging demand in the country. 

Vespa was still a very sought-after brand and, due to the long waiting list for Bajaj scooters which were originally based on Vespa design, Piaggio felt that relaunching their products under a new collaboration would help meet the pent-up demand. Piaggio signed up with Lohia Machines Ltd. (LML) based out of Lucknow, which was entering the two-wheeler business for the first time, and AP Scooters Ltd based out of Hyderabad. Both were  licensed to produce only 100 cc and below scooters, whereas Bajaj was selling 150 cc scooters, which was considered the standard for the Indian market. 

By the time AP Scooters finalised their collaboration and were ready for launching the Vespa brand, LML had successfully launched its product and collected Rs. 100 crore as advance with 20 lakh bookings. This put pressure on APSL to match LML to some extent and get significant bookings to show that they were also a serious player in the two-wheeler business.

It was against this background that APSL engaged us. Soon after that, they also needed us to get more involved in the launch process, and signed up a major contract to avail our services in all aspects of marketing involving advertising, promotion, booking and allocation and appointment of distributors. It was indeed a de facto Marketing Manager’s role except that the product decision was already taken as per the collaboration agreement. 

We had a major role to play initially in finalising the advertising campaign. One major decision was to give a unique brand identity differentiating their product from the Vespa 100 cc scooter which was already used by LML. At this stage, we discovered that, while Piaggio had signed two collaborations, the product they offered for APSL was a different variant from the LML one: LML had the wide body variant and APSL had the narrow body variant. The wide body variant looked very similar to the popular Bajaj brand in the market but had a 100 cc engine, whereas the narrow body variant looked totally different, though it had the same 100cc engine. However, on studying the finer technical details, we found that the load carrying capacity of the APSL version was 170 kg whereas the LML scooter had lesser capacity due to its body weight being higher. So we positioned the APSL scooter as VESPA PL170 to emphasise the load carrying capacity, using the short form for Pay Load as PL. This was a major shift in the industry since, till then, all two-wheelers were described only in terms of engine capacity. 

APSL had appointed a major national advertising agency based out of Chennai for designing and executing their ad campaign which included all the major media mix available at that time, like newspapers in many major languages, magazines, cinema and in-showroom merchandising displays. We had to help approve the campaign and the timing of release of these campaigns. We noticed that, although the teaser campaign was started, the company had not imported demo models for display at their showrooms before announcing opening of bookings. So we had to slightly delay the further ad releases till all the showrooms across the country had a nice display model before going ahead with the bookings announcement. Since LML had already skimmed the market, we did not expect to match their numbers but hoped to get at least 20 to 30% of what they got. Finally, VESPA PL170 ended up with 5 lakh bookings and collected Rs 25 crore as deposit. Before the announcement of bookings, we also had to help finalise the printers for printing of the booking forms and getting them distributed across the country at their showrooms and an agency to collect the booking deposit and account for it and deposit the collections in APSL’s banks.  We also had to locate a  data processing agency to randomly allot the priority using a suitable computer program, and another agency to post the allotment letters to customers with their priority numbers, but without committing when the actual delivery would happen!!!

At this stage, we had too much attention from the media and most of them were trying to look for some negative news that they could carry to the public. The MD quietly made us deal with the media and I learnt how to be circumspect in answering them without giving them much to write about. Once the bookings came, there was clamour for appointing more new dealers across the country who wanted to encash the opportunity to get  into the automobile dealership business. We had to guide and advise on the need to exercise proper caution while doing so, since there was also political pressure being brought about to appoint dealers in many places which were likely to be unviable in the long run.

The drama of both the LML and APSL booking stories did not end there. New problems started as soon as the allotment letters with priority numbers reached the customers. Two types of problems, in fact. In the first case, all those customers who got a very low priority number, where they felt they would not get delivery even in the next one year, started cancelling their bookings and there was a major logistical nightmare dealing with refunding of the deposits and reallotment of fresh priority numbers for the remaining bookings. 

The second reason for cancellation had to do with the capacity of the 100 cc vehicles. In the case of  LML’s design, the scooter had a wide body design and looked similar to the 150 cc Bajaj scooter, but its pulling capacity was perceived as poor compared with the Bajaj vehicle, leading to cancellations. In the case of the APSL scooter, the pulling capacity was better than the LML model because of its lower body weight; however, the narrow body design became an issue since scooters were treated like family vehicles where husband, wife and two or three children were carried, and the narrow body did not give enough space for that. So another set of negative feedback followed, leading to more cancellations. 

Later, both LML and APSL had to indigenize their manufacture progressively as per their license approval and, when the later models hit the market using locally made components, quality problems multiplied, adding to more customer dissatisfaction and word of this eventually destroyed these new launches. In the middle of this, Piaggio decided not to renew their collaboration agreements and both  companies were denied the use of VESPA as the brand name which was the last nail in their coffin!!!!

For my colleague and me, this was a major lesson in how not to take customers for granted and give them what they did not want. Over the years, the market for scooters changed and other major two-wheeler brands came up with variations of scooters to meet different customer segments. In addition, motorcycles slowly took over the scooter market to the point where today Bajaj scooters don't exist, and Bajaj has moved on to become a major player in the motorcycle market. Scooters have become a niche product and Vespa has returned to the Indian market as a premium scooter along with other major brands like Honda and TVS.

Both these assignments gave us wide exposure and showcased our business development efforts for our unique service model of management consulting, which was appreciated by prospective clients. But we never again got another assignment like these two early projects for various reasons about which I shall discuss later.

In the next post, I will share my experiences with some clients who had great appreciation of our work and had long associations spread over their lifetime and who made it a point to refer us to others. 

My Journey As Consultant - 3

 Market Opportunities and Insights gained from early assignments

It took us six months to establish our credentials as trustworthy and reliable consultants, or rather, partners in progress, of the owner-managers of small and medium businesses. We learnt the art of navigating our way past the maze of road-blocks in each of the three  principal categories of consultancy assignments on which we focused our attention. Here in brief is our mantra for success.  

We built the wherewithal for the first category by establishing our credentials with a public sector bank which was the major lender to many small and medium enterprises in Hyderabad. Companies that were in this category were businesses which were having financial problems due to various reasons and were approaching the banks for more money to manage their day-to-day affairs; such units usually got referred to us through the bank for stock audits and diagnostic studies. 

Personal references of well-known businessmen like my friend GVS Murthy (referred to in the last post) and building a portfolio of success stories brought success for us in the second category. These were businesses that were doing well but the promoters were having difficulties growing the business and were seeking outside help. This approach worked well for us in Hyderabad but is an infallible route to success anywhere in the country. 

Market studies and project reports are a major opportunity for any consulting business and formed the third category of our assignments. Building a portfolio of well-documented and thoroughly researched reports, backed by extensive field work, built our credibility both with entrepreneurs and banks. These were new projects promoted by first-time entrepreneurs looking for funding from financial institutions. They needed a market survey along with a project report to be presented to these institutions and, if necessary, our help to negotiate with them for getting approvals.

Looking back at those engagements, we notice certain patterns of issues in each type of assignment. The businesses facing financial problems were of two types. In the first case, there was systematic diversion of funds from working capital to other purposes and covering up these with overstating the value of their stocks to get more funds from banks. These diversions could be deliberate or misguided decisions to use working capital to build long-term assets like an additional building or expansion of capacity, hoping to get more business which never came.

The second  category was mostly due to inability to manage receivables from their customers effectively, thereby upsetting the working capital cycle. In some of these cases our diagnostic study also brought out an interesting aspect. When the units were running a small business with a short working capital cycle they were very profitable. But when they expanded capacity and started going after newer markets, mainly  with large government organisations as their clients, the working capital cycles increased, eroding their margins and also affecting the cash flow. Since we were engaged by the banks on behalf of these units, our role ended with submitting our findings to the bank and also to the business owner. Since the units were already financially stressed, no additional work came from these units.

The second category  of businesses had different sets of problems. They were financially very successful. The original promoter had started with a few known, trusted people working for him who were essentially good errand-boys but very loyal. They also had the ear of the promoter. Once the firms started growing steadily, they needed to hire new people to work for them who also had better professional qualifications and were younger. These newcomers had expectations of growing in their careers. They also wanted to earn more and most of them, coming from a middle-class background, wanted for job security. In those days, in the command and control economy, public sector jobs were paying better than many of these smaller organisations and there was job security. Most youngsters who had joined these client organisations right out of college used these jobs as a learning  ground to gain experience and quit the moment they got a job in a government-run organisation. To add to their discomfort, the older employees who were with the promoter from the beginning used to carry tales about them behind their back, which also made the promoter distrustful of them. So, getting and retaining people to help manage the growth was a big challenge for which these  units had no immediate solution, affecting their growth. 

Another related problem was that these units also had no proper systems and procedures, and the owner was used to taking all decisions on an adhoc basis as he was in charge of all business activities and everyone was expected to do his bidding. This culture continued even after they started growing and this caused a lot of resentment among the employees. I got many of these insights when I insisted on starting my engagement with an attitude survey  of employees in an unstructured freewheeling discussion with a cross-section of the employees before coming up with ideas for improvements. This is also when I realised that I was confronted with the challenge of change management along with growth management. I also noticed that the older employees who formed the inner circle of the owner resented my being appointed as consultant and were constantly trying to  undermine my work. So the first focus was to get the promoter to trust me.

When I used to present my initial findings in confidence to the promoters, they would willingly agree, saying that they didn't see any  other way to deal  with their situation but realised that the  problem was with themselves. So my first engagement was to help them set up proper systems and procedures, along with some semblance of structure and an information system, so that all work would go on as smoothly as possible without the owner getting involved in every aspect of running the business at the operating levels. To keep the old-timers at bay, I suggested that they be given independent responsibility for particular areas of operations where they had already established an understanding of the business operations and they had to now report to the owner only these aspects and nothing else. 

In the beginning, this was not easy but I noticed that, with my role as an external change agent -- and constant  prodding -- some order finally came into an otherwise chaotic situation. 

The next challenge was to recruit, at the middle management level, professionals who also had exposure to working in a structured organisation. This is when we took the responsibility for recruitment and placement activity, where we had to use our network along with some head-hunting to identify good candidates. We noticed that in those days many youngsters who were working in other big cities but had roots in Hyderabad were looking to shift back here. We were able to identify such individuals and sell them the idea that, since Hyderabad had a large number of mid-sized organizations who could gain from their experience and would give them a good opportunity to grow, why not consider these options? After initial hesitation, they would join and we as consultants would make sure that they made a smooth transition and stayed put in their job. 

This kind of role also ensured that we were with the same organisation, implementing and monitoring our recommendation over a longer period: in some cases, the association lasted for 2 to 3 years. This also got us steady revenue from a few of these clients over this period. Some of these clients subsequently engaged us for helping them in diversifying their business operations. 

In a few cases, the professional equations became closer than the arm's-length one usually seen between consultant and client. Some of them went to the extent of trusting me in particular with their personal issues at the family level, and many employees also started confiding in us. I realised that we were getting sucked into roles for which we were not trained or engaged and decided to  move on by slowly winding up these assignments. 

In the third category, where market surveys and project reports were required, we found two types of clients. The first type were the most avoidable since they approached us to fix a deal with the financial institutions to get funding in such a way that their margin money was also funded!! We took a stand of saying a point-blank “No!” and let go of such opportunities. In a few instances, however, we found that it was possible to convince the promoter not to do this if he was serious about earning by running a successful business, since such an approach was doomed to failure. 

The second category was the  serious promoter who wanted to go by the rule books but found that in many financial institutions in those days there were some black sheep who would not fund a project unless they were taken care of. This is where we were able to take advantage of our connections to bypass such individuals while making sure a solid project report, backed by a good market study well defended by us, would get the funding it needed. My Bangalore  associate had become particularly good at this over a period of time and he used to handle such assignments. 

During this period we also had to hire additional staff, particularly to conduct market surveys. Most of these were industrial market surveys which required our staff to visit potential clients located across the country, to assess demand gaps and opportunities for new entrants. We also tried to use them to do some follow-up work on getting new prospects. We soon realised, however, that they were not  coming up with new clients since they required a deep understanding of the selling process for client acquisition and closing the deal, for which they were not yet trained. 

Between 1983 and 1986, we had regular business in Hyderabad and  Bangalore but we noticed that in Chennai, where we had registered our firm hoping to get more business from an established industrial base, we were not getting any new business after the first study we got in the beginning of 1983. I shall discuss in the future posts how this kind of skewed business development causes its own problems in running a small consulting outfit. 

Apart from this, we also got a few large assignments which gave us big exposure in Hyderabad and we started getting enquiries about our services from prospects. These assignments also gave us a good exposure to markets in some industries, and challenges involved in launching a new consumer product. I shall discuss a couple of these engagements in the next post.

My Journey Through Management Consulting as an Independent Consultant - 2

Acquiring Clients – The Early Years

Getting clients and getting paid for services are the two most important aspects of doing any business, and Management Consulting is no exception. But when you start for the first time this looks like a daunting task. And no doubt it is not a simple task either. When I look back at how it all happened, I realise that three things helped us to get introduced to prospective clients, and our Value Pricing approach ensured that we could start work quickly once the prospect was convinced. And eventually we always got paid. Officially, we started our business on September 1, 1982.

The first thing that worked for me was my personal contacts. The moment I left ASCI and was planning to start my new life as an Independent Consultant, I just went around telling everyone I knew. In the process, I met a friend who was the husband of my colleague from ASCI, a Chartered Accountant by profession, who was also running a printing press along with another partner. When I shared my plans with him, he said he would like to hire me and be my first client. He was thinking of diversifying his business to make cardboard cartons for packaging, for which he felt there was good demand around Hyderabad. Would I be able to help him identify prospective clients in the pharma industry which had proliferated around Hyderabad, and guide him how to enter that market? Without even blinking my eyes, I said “Yes!” and asked him to give me a letter which I could use to meet prospective clients for his new venture. I didn’t bother to discuss any terms of a contract and such other niceties. 

In a week’s time, I gave him a list of persons in various companies whom I had met, and who had shown interest in his offering and would like to meet him. I went along with him in the next round to introduce him to some of these prospects and then left it to him to finalise the deals with them. I just simply moved on after a few days, looking for the next client, when he sent word through his wife asking me to meet him to take payment for my services. I told him to pay whatever he felt like paying and he was very generous. Today he has moved on to start and grow a large Financial Services business with a national presence, but he continues to remain a good friend, who also was my first client.

The second client was referred by one of my course participants when I was in ASCI. This happened towards the end of October 1982. I was the course director along with another colleague for Indenting Agents of a large chemical products company which wanted its agents to get trained in modern marketing approaches in a changing competitive environment. One of them was from Hyderabad and I had informed him that I had left ASCI and was working as an Independent Consultant. Being a businessman himself, I asked if he could refer me to anyone who could benefit from my services. One evening, he landed up with another businessman who was a semi-wholesaler in sarees. The person was one of his customers who owed money to him as he was facing financial difficulties. Could I help him get out of this situation? Without hesitating a bit, I said of course I would and set up a meeting at the office of the textile dealer the next day. The address I was given turned out to be a small shop located in a nearby textile market from where the dealer was doing his business as a semi-wholesaler. No discussion on fees and contracts; I just started listening to his problems. I realised that I needed to spend time understanding his business first, and only then could I come up with ideas for solving his problem. We agreed that I would spend two hours at his shop every evening for the next few weeks. I also told him I may need to go into his books of accounts and other operational information including his financial details, which he should share without hiding anything from me. He agreed to cooperate fully and kept saying that he was on the verge of bankruptcy unless I helped him out. 

Then he also said something which made a big difference to my approach with small businessmen. He said whatever advice I came up with I would have to hand hold him to implement, since he had no one to do so. Thus I embarked on an assignment for which I was neither formally trained by education nor had I any clue how I was going to do it, except by just diving into his problems as my own, and finding ways to help him address them. Needless to say, it took me one year to get his operations from heavy losses to breakeven, at which point he decided that he was in a position to carry on without my physical presence every day. In the process, I also learnt quite a lot about trading businesses and the approach to earning money on a daily basis followed by his business community. 

The third advantage I had was having a good mentor and well-wisher who went out of his way to help me get clients. This was my friend, GVS Murthy, who had been closely interacting with me since my days in ASCI, as he was interested in my work in management education. He took it upon himself to hand hold us to get new clients, sometimes literally dragging us to meet some of his business friends and telling them to hire us with strong recommendations on our behalf. We got quite a few assignments through him over the next couple of years and made a big breakthrough in the Hyderabad market. Mr Murthy was like a Guru who also guided us how to deal with many tricky situations in our client engagements, and I owe a lot to him in getting a sound foundation as a Management Consultant.

Apart from the above three approaches, we also got work from the small business services group of a large public sector bank. My Chennai colleague’s sister referred us to her friend, who was heading the small business services unit of the bank. So we went and met her and talked about our new venture. When she saw our profiles, she felt that  banks could use our services in doing stock audits and diagnostic studies of incipient sick small units they had funded. On her reference, one of the local branches of a bank hired us to do a stock audit of a small engineering company which had never repaid its loans over the previous several years.

Normally stock audits are done by Chartered Accountants who have no knowledge of the engineering-related aspects of the stocks. Being engineers, we brought in this insight and showed to the bank in our audit report that the owner of the unit was over-stating the stocks to the extent of his margin money. This revelation pleased the bank officials since they got a  better understanding of the situation, and we got recommended to other branches to use our services not only for stock audits but also for diagnostic studies of sick units which in their opinion could be revived. 

During the early days of our work, we had an assignment from a government industry-promotion organisation in Chennai for doing a study on small business development. The assignment took me to Bangalore in January 1983, where I was introduced to one more person who was freelancing as a Management Consultant doing market research and project reports. He was from IIT Bombay and IIM Calcutta, and remembered me from our IITB days. He agreed to join us and cover the Bangalore market and merge his existing business with ours from April 1, 1983. He was independently getting work from Bangalore-based clients and this led to our business booming from the second year onwards. 

We also converted our business structure into a private limited company registered in Chennai so that we could show a professional face to the market. All three of us became founder directors. 

To summarize, the key takeaways from the early days were:

1. Focus on demonstrating value and do not bother about financial returns; 

2. Get involved and learn the client’s business so that you can offer assistance of practical value; and 

3. Have a good Mentor from the beginning.

As we progressed, we started getting references to new prospects from these early clients. But we also noticed that our yield per client was not very large and we needed to handle more assignments to develop good top line growth. This required us to hire people to work for us, which added to our overheads. I will discuss later the issues that we had to address because of this, since the overheads were a fixed cost which had to be borne every month while our new business acquisition rate was not fast enough to cover the idle time cost of these overheads. 

In the next post, I will discuss the market environment and the kinds of business opportunities we could see and the new clients we could acquire in the mid-1980s.

My Journey through Management Consulting as an Independent Consultant

How it all began

In August ’82, I QUIT my job after an unsavory personal experience with the management and decided that I will NOT look for another job but do something on my own.

I had no money except for small savings in Employees Provident Fund which could meet my financial needs for the next 6 months at the most. I had two small kids and my wife had a job which was just enough to pay the rent and nothing more.

Most people around me called me mad not to look for another job and the security that comes with that. 

In the early days, my office was my scooter, the local job typist was my secretariat and the public telephone booth was my telephone. A helpful friend agreed to take messages from anyone who wanted to reach me. When I look back now those early days were tense with lots of uncertainties but at no point it occurred to me to end all this by looking for a job. The excitement of wanting to do something on my own and confidence in my conviction that I will succeed kept me going.

All this is history. Over time I built a reputation for adding value and trustworthiness among my clients and had the luxury of picking and choosing assignments.  

First a little about my background so you can get to know me;

I belong to the generation which came into the job market in the 1970s during the Control Permit Raj and had to be part of the transition of the Indian economy from this to a liberalized one later on in the 1990s. Having passed out of IIT Bombay in 1973 and IIM Bangalore in 1976, I was having stars in my eyes and very idealistic. So when I got my first Job in 1976 in a public sector and posted in New Delhi at the head office, we were in the midst of Emergency and found every one was looking over his shoulder and generally talking in hushed tones. As a management trainee I was simply thrown into a job which made no sense to my education or sensibilities. but having signed a bond to serve for 4 years I had no choice but to hang on. In the meanwhile I got transferred to Hyderabad, got married and had 2 kids and continued to rue my fate in this job waiting for the bond period to end. 

During this period I had befriended people from Academic world in Management working for Administrative Staff College of India (ASCI) based out of Hyderabad and they suggested that ASCI was looking for Marketing Faculty; why not I apply since my background suits their requirements. This was close to the end of my Bond Period at the beginning of 1981 and I liked the idea of a non transferable job based in Hyderabad and hopefully help me pursue my interest in completing a PhD while working. I got the offer to join from ASCI at the same time the bond period was ending and decided to move to the Academic world. 

While ASCI offered me immense freedom to work and set my own agenda with lots of time available outside the classroom teaching time, I took to the environment with gusto and did lot of reading, published papers and  even got funding from ICSSR (Indian Council for Social Science Research) for a research proposal I had sent which was surprising to all the other faculty who said you have to have a PhD to get any grant from ICSSR. While the work front everything was going fine the Academic environment was fraught with a lot of political machinations by fellow academics which was very disturbing. And the management of the institute was doing everything to make the situation worse for individual faculty and I noticed exodus of many old hands from the institution. I realized that I have no future in this world. So I decided to quit overnight around August 1982 after an unsavory personal experience with the management and decided that I will not look for  another job but do something on my own.

But to do something on my own needed money which I had none except for a small savings in Employees Provident Fund which I could with draw in full and which could address my financial needs for the next 6 months at the most even if I had no earnings. I had two small kids aged 3.5 and 2 years old and my wife had just managed to get a job which I realized was enough just to pay the rent and nothing more. Most people around me called me mad not to look for another job and the security that comes with that. 

Without capital the only option available was to use my education background and work experience of six years in industry and academia to offer my services as a management consultant. About this time another friend who was based in Hyderabad and after quitting his job had moved back to Chennai with an intention to start his own management consultancy practice. When he got to know my plans he approached me and suggested why not we work as a team and cover both Hyderabad and Chennai markets. When you embark first time to do  something that too with zero bank balance and only hope as the motivation and confidence in ones own self that one can manage the future which looked otherwise uncertain, the comfort of having someone with you was enough to make me accept his offer. 

So we formed a partnership company and started looking for clients. But we had no idea where they could be and what we should offer them initially as a special focus and so we ended up offering everything we could think of which could come under the ambit of management consulting in the brochure we created hoping some thing will click with prospective clients. We were prepared to  take on any work that could come our way and that is exactly what happened in the initial days.

Being a two man outfit, large corporates were beyond our purview but we thought small and medium businesses could possibly use our services. To target them instead of making blind calls we used our friends locally and network of alumni from our alma maters IIT and IIM  to get references to meet them. Surprisingly most of them had issues which needed outside help but did not know how to get since those days consultants were mostly working for large corporates and charging by the hour which was beyond their reach. More over when we met them their first response was why don't you just work for them full  time and they will pay us a salary with out having any idea how to engage us. Or they would ask for our rates for our services and when we quoted some reasonably low rates compared to the high priced consultants they would say they will get back and never did. And some of them also said we can't implement your advise even if you give since we don't have people to do so, can we work with them to implement on a contract basis if they decide to engage but after asking and getting our rates they will not go ahead.

This is when I realized that prospective clients were not able to see value of engaging us but could see the cost when we quoted with out showing the value experience. And the need to implement was more important than getting advise in their value expectation. So instead of talking cost we need to discuss value and that cannot be shown with out them experiencing value. So I started suggesting that let them engage us with out any financial commitment to begin with for a period of month or two as they feel fit and let us help them address their problems working with them along with their other employees and after and if they see value we can discuss continued engagement and the financial aspects. More like a trial offer. Surprisingly in every case where we made this offer the client accepted it and after experiencing the benefit of our association they on their own came forward with a contract which was far more than what we would have asked for. I started realizing the power of Value Pricing in practice even though it was a theoretical concept till then in my mind for a service offering. Second aspect of  this was what clients wanted was not management consultants but management services where implementation is the key. This became the corner stone of my approach to acquiring clients which started with small and medium businesses in the early days and later when the economy opened up even with large corporates about which I will share as we go along my journey.

Apart from the individual businesses we were also approaching institutions like banks, financial institutions lending to MSME's and small business promotion organizations. They used to  refer us to problem units whom they had funded and not getting their money back and give them an assessment in the form  of diagnostic study of  the unit or stock audits if  they suspected diversion of funds. In some cases we also got assignments from these institutions for study of certain types of industry to develop policy options which we got only because we quoted ridiculously low prices since all contract decisions by these government organizations were solely based on price.

When I look back now those early days were tense with lots of uncertainties but at no point it occurred to me to end all this by looking for a job. The excitement of wanting to do some thing on my own and confidence in my conviction that I will succeed kept me going. And after a couple of months work was coming our way quite regularly and due to band width limitation we had to do some juggling around to  space the assignments with out losing the prospects. Honestly it  was all requiring improvisations.

During this period my office was my scooter in which I moved around, the  local job typist  was my secretariat for getting any typing done and the public telephone booth was my telephone to make contact over phones. And giving a helpful  friend's personal telephone number who agreed to take messages for any one to reach me. This was reality since in those days getting a  telephone connection took 7 years or more after you apply; only special category personnel were allotted phone connections with in a year. Or under Own Your Telephone Scheme (OYT) if you deposit Rs 10K, you will get a connection in one years time!!! So I discovered that my wife who had para medical background could get a phone on priority in a year's time and applied for and got a connection in her name in 1984 which I still use it even though the Plain old Telephone has become a museum piece in todays world of Smart Phones and Wifi enabled Internet connections.

In these musings I will share interesting experiences of assignments and the lessons learnt with the sole purpose of guiding young potential entrepreneurs on building lucrative businesses.

Success From Failures

Success From Failures

A long time ago I was listening to a talk by the headmistress of a local school where my son was
studying. This school had a philosophy where they didn't push their students to be competitive and
succeed as an individual but encouraged the students to develop their own personalities as they felt
appropriate and the school was acting as a guide in this process. When the speaker finished her talk
one of the audience member asked her a pertinent question."Dont you think your students won't be
able to succeed in a highly competitive world where they would eventually land up". For that the
speaker asked another pertinent question back: "What is your definiton of success". Well this
stumped everyone in the audience and I was so glad I sent my son to such a school that didnt push
him. But at the same time I asked myself the contra question: What is failure??

Both success and failures are two sides of the same coin. Succcess is measured in terms of what one
thinks of as personal success and what others think as worldly success. Same goes for failures.
Other day when we had an occassion to catch up with some of our classmate after 30 odd years
when we were engaging in exchanging notes about how we had spent our intervening years, I was
amazed at how each one of us had succeeded in our own way in our respective lives. For some it
was a measure of their personal success and for some it included public accolade.
Does that mean our life was a smooth ride all the way. I dont know about others but if I dig deeper
each would have a story to tell about the pitfalls they had to cross to end where they have reached
now..

But in my case I can definitely say that my own story was one failure after another leading to
amazing reinvention of myself after every failure.

Let me narrate how it all started. Soon after graduating from IIT in 1973 I was keen on working
only in design and devlopment job and kept rejecting job offers for sales and production jobs and
ended up jobless for the next 7 months before I finally got a job as a design engineer in a small start
up. It was exhilarating and I ended up doing some great designs and new product development
before I realized that I had no long term future in India, back in those days when R&D came to
mean Read and Duplicate!! So there ended my dream of a successful Design Engineer!!

So I quietly looked around and found that at that time in India (1974) the only future option if I had
to stay back in India and work (I loathed the idea of leaving my country) I would have to get an
MBA to have a meaningful career!!! So when I got a seat for the first IIMB batch in 1974, I simply
grabbed it, and quit my job. But my employer felt I was making a big mistake since in their view I
had a great future as design engineer!! Well I told them I felt otherwise and left anyway.

I dont know if many of you know that when IIMB was inaugurated the stated goal of the institute
was to train future managers who would serve the Public Sector as at that time the commanding
heights of the economy was held by the public sector. It was a patriotic duty of every management
graduate to work only for the public sector and they invited only Public sector companies for
campus placement.

So I along with a few other classmates ended up joining a Public sector company which had just
been formed with the stated objective of promoting east europan rupee trade in electronics and also
develop technology to reduce dependence on the Hard Currency areas. Leave alone the laudable
objective but what was interesting in those days when we joined this company, they already had
more than a dozen MBA's from IIMA and IIMC and we all thought we are the great catalyst
recruited to promote the interest of this great country through foreign trade with east european
countries.

Like all great dreams this dream also started souring with in a year of joining when we found that
this company was primarily behaving like a purchase department for the various government bodies
which wanted some imported elctronic product for which they had no foreign exchange so they
asked this company to scout for similar products from these countries. Moreover very soon I
realised that instead of the MBA's setting the agenda for catalysing the great trading alternative, the
company was headed by unqualified bureaucrats from govenment and other public sector agencies
who were only good at throwing the rule book at you. The last straw was when I found that those
who were at the beck and call of the bosses were treated with better work assignments and perhaps
even increments and promotions!!

So my dream of making a big difference through public sector came to an end. When I enquired
with some friends how they were working in other private sector organisations, most of them had
similar dissatisfying experiences. I then decided that it is better to go back to the academic world
and have the freedom to think and act and make a difference!!

I was in Hyderabad back then and the best known institution for managment education was
Administrative Staff College of India (ASCI) and since I had taken a liking for Hyderabad as a city,
explored for an opening there as a member of faculty and very soon I landed up as a Marketing
faculty in ASCI in 1981.

I was elated and felt here is my chance to use my intellectual prowess and make a difference to the
management world. ASCI was unique in one respect in that they only taught working managers and
they had no undergraduate or any other programme. And I was expected to be available when called
for to give specific input on marketing subject depending on the pogrammes they were running. It
all seemed easy. Also I had a lot of free time I could use to read and research and publish and there
was no one to tell you what you should do. No boss no subordinates. Looked like a very cosy job
until to my horror I discovered two major truths about the academic world in management
education of the time.

The first truth was that the managers who came to attend the courses offered by ASCI took it as a
paid holiday and they were not interested in learning which came as a big dampener. But the more
serious problem was with fellow faculty. They knew that the participants were not interested in
learning but they could be influenced to rate their lectures in there respective favour and against
other faculties. And the Indian frog syndrome was opearting in full with each faculty pulling the
other down behind each other's back. For me this was worst than a corporate job. Even though I felt
I had a golden run during the 18 months I worked at ASCI in terms of teaching, research and
publications, at my heart I felt this is not a place I should waste the rest of my life. I was only 32
years old in 1982 when I took the major decision to quit ASCI and literally walked out of the job
with no other alternative except a dream to make something of myself on my own.

After quitting I realised the enormity of the challenges of life. I had by then married and had 2 kids
below the age of three and my wife, though a professional was not able to work as she was busy
bringing up the two kids and zero bank balance. I did not know where the money is going to come
from to pay the mandatory expenses to run a middle class life. In the beginning of this narrative I
said every failure helped me reinvent myslef. This was the first major reinvention when I found that
there is no one out there going to pay you unless you are useful to them. And useful I decided to
become by offering my only asset, my knowledge and learning, to help solve business problems for
any company which would hire me to address the problem.

Thus my consulting practise was born in 1982. Surprisingly I found it was not difficult to get work
so long as you didnt ask for any money upfront and when the clients discovered that they had
benefited immensely from your work they were more than glad to pay whatever you asked for. I
discovered the power of value pricing and with good references from friends and the power of IIT and
IIM network kept the body and soul together comfortably. I was soon joined by a couple of friends
who had similarly left there jobs to start out on their own in Bangalore and Chennai and we felt it
would be a good idea to team up so that we can get larger business from a larger geography with a
complementing skill sets. So we formed and registered a Private Limited company with branches in
Hyderbadad, Chennai and Bangalore and we had very soon a very large client base in both
Bangalore and Hyderabad but the Chennai office was becoming a drag. Moreeover we soon
discovered that as our business was growing we had to hire people to keep our business
committments. And these overheads started eating into our profits since the assignments were not
continuous but the salary committments and office over heads had to be met. Thus after running this
business for 4 years when our top line doubled every year, our bottom line was always showing
negative balance. I soon realised that this business model was not going to work out and decided to
break away from the company and became a totally freelance management consultant.

This move helped me financially since I had zero over head and I literally operated out of my
scooter and home and my client's business premises. Remember this was 1987 and we had none of
the luxuries of the modern day technology to run a home office. The only saving grace was that we
managed to own a landline because my wife had a para medical background and was entitled to
priority phone connection(very funny management graduates with engineering background were not
considered priority professions) which itself was a great feat to get in those days when waiting list
ran for 10 years to get a phone connection.

This was also the period I realised that only depending on Managment consulting practice to make a
living was not a good idea and started other business activities to offer marketing services to help
companies outside Hyderabad to sell in the Hyderabad market. This second busines brought in
significant improvement in my financial position and I was able to afford the luxury of graduating
from scooter to car and own other material comforts.

But all good things cannot last forever. By 1991 Indian economy was heading south and the
consulting business started slowing down and there was a general recession and this took a toll on
my cash flows. Very soon I found no new business was coming and old customers had no money to
pay for services rendered and by middle of 1992 things had reached rock bottom when economic
reforms were announced.

The reforms created new opportunity for the consulting business from the traditional companies
who found their cosy world of easy money from the command and control economy was shattered
by global competition and the need to become more customer focused. The long queues for many
consumer products and services started disappearing and along with that came new opportunity for
smart businesses to make money. I found my work experience of the previous ten years using
emerging Personal computer technology with small businesses was easily adaptable to address the
problems of large corporates who by then had heard of concepts like Business Process
re engineering and Lean management and Theory of Constraints but had no clue how to get them
implemented. I seized this opportunity with both hands and using my old Value pricing model
approached the corporate world with an offer which they found it difficult to refuse. I once again
started on a roller coaster ride for the next 15 years with occassional tripping here and there. I found
that when most of the major consulting firms offered to render advise with a report, my model that
you pay based on implementation of the advise and ideas and creating ownership of solutions
among client personnel made a big difference in our success.

In fact some of the clients jovially jibed that I should have been a consultant in europe or other
developed counties where I would have perhaps travelled in a Rolls Royce for my abilities. Many a
satisfied CEO's used to ring up other companies needing similar help, who sent work to me and my
team. Despite the business growing steadily I resisted the temptation to create an overhead based
organisation; instead created a network of asscoaites who worked with me on a project to project
basis sharing the fees equitably. Everything was looking so great I thought the good times would
never end when one day in July 2008 I was rushed to a hospital with severe pain in my stomach and
doctors performed an emergency surgery and discovered I had a severly gangrened gall bladder
which they had to remove before the gangrene spread to the liver and other parts of the intestine.
With that ended my active consulting pracitise since it took me six months to recover and my
digestive systm couldn't take the strain of intensive travels and outside food. I hanged my
consulting boots in 2009 and since then I am spending my time mentoring young and not so young
entrepreneuers pro bono and willing to give my vast knowledge and experience to whoever who
cares to ask for help. But only from my home, online or over phone!!!

Well the story I told of my life has taught me 2 important lessons about measuring success and
failures. Lesson one is success to me was not the amount of money or recognition I got from others
but how well I did my job assigned to me so that I am remembered for my contribution. The second
lesson is that you have to reinvent your self personally with time if you want to remain relevant to
the out side world if not for yourself!!..You cannot be boxed into a small corner with limited
possibilities but you should use your learning skills to pick up new ideas and adopt them for others
benefit.

Finally there is one aspect which is most important in life..which is self belief..with out that
you can be swept away by failures.

This is the success of my failures.

R. Srinivasan

Interfacing With Youth

About a couple of years back due to health reasons I decided that I cannot continue my management consulting practice in the model in which I had conducted for the last 20+ YEARS requiring extensive travels and eating all types of food available there. At the same time I was caught with a dilemma as to how to spend my sunset years productively for the society.

I remember as a kid I used to attend the Kathakalakshepam's ( Mythical story telling) by various Deekshitar's and swamigal's while accompanying my mother. It was actually a duty to accompany her since these events used to be held in the night at temples after dinner from 8PM onwards and end by 10PM. I was the only son willing to do this duty since my younger brother was too young and and elder brother was too busy and my dad used to hate the idea of accompanying mom anywhere and sister cannot give safe accompaniment. Hence the chore used to fall on my head even though I used to protest that I have to study etc..when my mom will use her emotional blackmail to convince me to come along. I was I think around 10 - 12 years old at that time. While listening to those stories usually embellished with sonorous music and some typical south Indian jokes, I was quite impressed by the Hindu way of life expostulated by these story tellers. The four stages of life being Brahmacharya, Gruhastha, Vanaprastha and Sanyasa and how every mortal Hindu has to go through these four stages. Subconsciously I think I was greatly influenced by this and tried to live my life conforming to these guidelines as i have understood.

So I realised that I have come to that cross road in life where I must move from Gruhastha stage to Vanaprastha where it was suggested that having completed your duties to your family and society at large during the previous stage you metaphorically move to the edge of the forest (that is why the term Vanaprastha) and be available to the society for your knowledge and wisdom and offer them when sought but do not seek out any material interface with the world outside. And I found the best way to meet my desire to be productively useful and at the same time not seek any material rewards was to take on the role of a Mentor to the youth especially any youngster with a desire to pursue his life through entrepreneurship. Initially I was not sure how I would go about getting this interface happen when I came across two institutions dealing with supporting entrepreneurship development and providing the Eco systems were keen on getting on board people like me to offer Mentoring support and they promptly invited me to join them in this endeavour.

Then the question arose what about the other youth who want to pursue career options outside the self employed business route. Typically I used to get offers to take courses for Management students in many institutions which have come up with shortage of teachers to teach many of the management topics to be covered for writing and passing an exam. I was never excited by those offers but I felt that if the same institutions give me an opportunity to address these students or interact with these students outside the course curriculum then I would share with them my perspectives of learning and knowledge acquisitions and adopting the same for their real life contexts using the very same concepts which they learn by rote for passing an exam!!

I cant say that this idea has taken off in a big way but I do get some invitations from a few institutions where some one who has personal knowledge about me is associated and gets me to talk to their students. Many a time I never make any structured preparations for these sessions, talk from my heart and head literally, words flow and at the end of the sessions it is a pleasant surprise to find animated discussions from those who attend. It is fun to see that many of these students have good knowledge and exposure thanks to internet making easy access to information. But what the present education system lacks is giving them an opportunity to learn to adopt these understanding and I think when I address these students they find some resonance between their knowledge and its applications.

Well the Vanaprastha stage of my life has started making sense to me over the last two years and one consequence of this is that I have no connection with the world with which I had established an active rapport till two years back and hardly any one I knew even bothers to call me up and check if I am around at all and it occurred to me other day that this has not bothered me at all!! In the meanwhile the youth whom I have started interfacing with through my mentoring keep coming back to me with their own issues and I enjoy my role of being their Mentor. I think I have found my path to Nirvana through this role!!

See you till next time...

Making a Beginning

Karthik, my son, has been after me to start this Blog for a long time. I have suffered writer's cramp for a long time and a combination of inertia and boredom kept me away from starting this Blog page for some time. Today my friend Chari called up to say that he has started writing his thoughts and didnt know how to start a blog page and I advised him what to do with out having ever done that myself before!!! That is me who can visualise solutions to any problem with out having done that before!! And that goaded me to make a beginning by first registering this blog page and call it by its name "Srini's Musings"..Nothing original about it and when u think about it as common to most of us..we all love to muse but very few dare to write their musings down for all to note what they are!! I am trying with this Blog page to simply write down my thoughts as they come and I have no illusions that it will be reaching out to a large audience either. But in every posting I hope to focus on one thought that is crossing my mind strongly at that point on anything under the earth or over it!!!


So why did I decide to write this today..yes the ambivalence I feel about my beliefs and behavior. Well this is not uncommon for most of us. But I am always caught between the contradictions between the two and I am always rationalizing that what I do in public is for others and what I believe in private is for me. Well even that is not new for most of us; we do have this dilemma and each of us do find a way to deal with it with out causing any dissonance in us. But my dilemma is I have a constant dissonance arising out of this which keeps disturbing me when my beliefs are transgressed by my behavior and then I start the internal process of rationalizing as a way out to get out of this dilemma till once again I get into this situation another time. The question that I am asking is why should I continue to keep this facade going..and how long should I be doing it and if i decide to get out of this dilemma would I be hurting myself or others close to me!!! Good question and I think there wont be a simple answer for this. If there is one then we would not live with this dilemma all our adult lives since this conflict starts when u reach early adult hood and continues rest of your life!!!

Till Next time Bye