SOCIETY NEWS

Welcoming the participants, President Suhas Paranjpe gave the backdrop of the day’s topic for discussion. He said that the process of building a professional services firm resonated very well with the BCAS Theme for the year ‘Tradition – Transition – Transformation’ as every growth from small to medium to big would need to undergo this process.

After Hon. Secretary Mihir Sheth introduced the guest speakers, Shariq Contractor set the tone of the discussion by emphasising the need for growth by the professional services firms and a change in their mind-set if they wished to survive the challenges posed by continuing innovations and technology transformations. The need for change could not be overemphasised when 90% of the professional firms were operating with less than four partners, depriving them of the scale and depth required to maintain excellence through best possible talent retention. Sharing his own experience, he said that it was a ‘leap of faith’ fully realising that change could be painful. However, not changing would have been more painful in hindsight. Every professional firm would need to decide and discuss amongst its stakeholders its strategy, systems and processes, succession and leadership decisions and define the relevant metrics for growth. After this brief introduction, he invited each panellist to share his story of growth.

Dinesh Kanabar, who was the first to speak, said he would rather share the experience of what he did and why he did what he did instead of delving into the theories of growth. When he started his firm after retiring from the Big-4, he focused on the basics by defining the fundamental tenets of where the focus should be out of the large canvas of services that it was possible to offer. However, what made a difference was the realisation that growth could only be possible by offering expertise through quality talent in the chosen domain of strength. Besides, the services on offer had to be relevant to the marketplace. This, in turn, would build the size and scale necessary to create a brand that would self-sustain growth by attracting further best-in-class talent, making it possible to have patronage from large domestic and international firms.

Creating the right size with a deep knowledge base was the key to success. There was also an underlying conviction that the size and scale should not be achieved by chasing revenue enhancement and spreading thin into a number of domains. Another factor that was responsible for this decision was the belief that the services that his firm would offer must leave no chance of conflict of interest between the verticals. This belief reinforced his vision to focus on a few areas of acquired expertise that could count amongst the best. A broad vision to this effect was the germination point that eventually evolved by hiring the right talent, building the appropriate infrastructure and technology, and sourcing of the right mix of domestic and international clients. If one was ready to break the mould, there was huge scope and also plenty of opportunities for professional services firms. Dinesh Kanabar concluded by saying that growth was not an option but a compulsion in the current times.

Narrating his growth story, Mr. Haigreve Khaitan described how his more-than-100-year-old firm had to reinvent itself by breaking the shackles of its image of being only a regional player. One of the fundamental principles with which the firm decided to take up the challenge was that under no circumstances would it compromise on its culture and value system but yet cast itself in a new avatar, fully equipped with the right talent, knowledge base and infrastructure. It was this thought process that eventually led it to define the pillars that could help achieve the goal of building a firm with a stellar repute and consistent growth. The pillars that were defined were: (i) Knowledge, (ii) Technology, (iii) Infrastructure, and (iv) H.R. Practices and Hiring policies to attract the best talent. This resolve to change had met with the expected success.

Mr. Jay Desai, sharing the story of the journey of his firm Universal Consulting, stated that by force of circumstance he had to change and evolve continuously to meet the demands of time and of the ecosystem. He started management consultancy for the SME sector with a focus on Operations Improvement, Organisation Structuring and Developing an IT Strategy in 1994 – but he had to rethink and re-strategise in the year 2000 because of the dot.com crash followed by global recession. Adapting to the new reality, his firm then focused on developing strategies for mid-sized and large companies. This led to a change in the business model for the better when their client profile changed from 90% SME sector to 20%, with the rest of the 80% coming from mid- and large-sized companies. Again in the year 2008, with the financial sector crash, his firm decided to deepen focus on different industry verticals so as to have broad-based exposure. While this was helping, there was a recession that followed due to the anti-corruption movement and the lack of policy decisions by the Government which then prompted the firm to focus on implementation of a strategy for growth.

Again in 2020, the corona pandemic occurred that forced a complete overhaul and relook at the way of doing things. Mr. Desai said he abandoned the fixed office concept and created a digital platform enrolling consultants across various domains in different verticals. This helped him build size and scale for consulting and expand his business. At the firm level, they focussed on a single vertical of Life Science and Healthcare catering to their need for strategy, operations and organisational structuring. This led them not only to survive but also helped them to grow. Concluding his story, he added that it was not the ability to predict but the ability to adapt that leads an organisation to survive, sustain and grow.

Several other issues were also deftly handled by the experts. These were:

Treatment of goodwill, partners’ compensation, managing and retaining clients, managing technology, hiring strategies, succession planning, expanding footprints globally like big multinational professional firms, growth vs. profitability, retaining the core of the organisation by the code of conduct and the value system on which the organisation is built.

On the issue of goodwill payment, most panellists felt that goodwill should remain with the firm; on partners’ compensation, the opinion was that it should be based on a proper evaluation based on defined criteria giving full weightage to the fact that each partner could be different in his capabilities, some good on strategy, some on execution, some others on profiling and client acquisition. They must not be made to play a salesman’s role but be made part of the environment that gives them joy and satisfaction to work. Client retention and management could be best managed if the client was given end-to-end solutions and total comfort.

Technology management and hiring strategies was a specialised field and would require a long-term vision and the help of experts; a firm should not hesitate in taking their help. Succession planning should be openly discussed amongst partners and lead candidates as identified should be groomed with special training. Once the succession occurs, the successor should be empowered with full authority and no interference; the handing-over partner should only play the role of a guide.

Although global expansion was a desirable ambition, it required sustained wherewithal to make a mark globally. Some of the experts did share their experience on the challenges posed by local laws, huge investments and regulatory problems. On the issue of growth vs. profitability, the consensus was that they are not mutually exclusive. In the process of growth there was bound to be chaos that would upset the structure of costs and immediate profitability. But eventually it would give rise to a U-shaped recovery with sweet spots emerging by way of enhanced profits and client acquisition.

On retaining the core of the organisation, there was a consensus that growth and the value system forming the core of the organisation were not oxymorons but in fact complementary to each other. Growth based on the strong value system on which an organisation is formed will always be exponential. Anyone acting contrary to this was sure to die.

The panel discussion was followed by a Q&A session when questions and concerns related to many of the above matters were answered by the panellists.

Treasurer Chirag Doshi proposed the vote of thanks. The video link of the panel discussion is available on YouTube and the BCAS website.

MEETING THE MAYOR

President Suhas Paranjpe presenting recent publications of the BCAS to the Mayor of Mumbai, Ms Kishoritai Pednekar, when he called on her at her office on 16th February, 2021