Sunday, May 20, 2018

Development Consultants - Retention

A recent study of more than 600,000 researchers, entertainers, politicians, and athletes found that high performers are 400 percent more productive than average ones. Steve Jobs summed up talent’s importance with this advice: “Go after the cream of the cream. A small team of A+ players can run circles around a giant team of B and C players.” But only big 4 Consulting firms and donor agencies have power over the candidate with good monetary compensation and brand value. The other organizations have to design better HR retention strategy as they don't have deep pockets.

Being a leader at development organization is a tough task. There are essentially three basic ingredients that teams expect from a leader: Direction, Trust and Hope. Hence, building high impact team is tough as each individual require set of smart goals, timely feedback, progress monitoring, and supporting mechanism in the team. Yet, being a leader can lull one into a state of complacency. In that state one tend to assume that development consultants are subject to their will. One forget that a consultant can decide to leave them at any time. A leader can't retain development consultants alone on relationship basis. The company must support the leader with multiple levers (monetary, role, culture, growth, area of work) to manage and retain talent.

Monetary rewards are important. Development Consultants are mounted with education loans, rising inflation costs and increased peer pressure that further push talented lot to frequent hopping. Job security remains the number one reason that attracts development consultants in India, while salary is the number one driver to retain them. The organizational survey data indicates that the ability to match salary demands has been identified as the most critical challenge to hire individuals in the senior (65% of respondents) and middle management (59% of respondents) cadres, especially in urban areas. [ Talent Infusion in social enterprise]

360 Degree Feedback: Development consulting firm must set a good example of managing candidate expectations by clearly defining and communicating the job role while also developing an exposure program for the new recruit. This must includes performance in probation period, annual salary increment, leave policy etc.

Fairness in Appraisal: The most averted topic always come to haunt the enterprise during this phase. Fairness is the essence of justice. When the appraisal happen in a partisan manner and often whim of CEO, there will be disgruntled consultants.

Intrapreneurship is the biggest opportunity for the managers, and can be instrumental in bringing big rewards. The monetary incentive to bring the business and client delight must be top priority for the development consultant. Such intrapreneurs must provide support the firm to start new ventures under the umbrella of the parent organization.

Overburdening the development consultant with many consulting projects without offering a substantiate reward/ promise of the reward is a regular practice in development consultancy firms. This can't be brushed under the carpet as learning curve only. The burnout is a major reason to break away from the organization.

Flexible hours: Development consultants want to have more flexibility in their working hours and remuneration packages than a pay increase. This can be introduced successfully in organizations by converting to the “total cost to company” concept and where the different generations and individual development consultants can choose to work less hours or condense their hours as well as how much of their remuneration packages is allocated to the various benefits and allowances made available by the organization.

Work from home: While permitting flexible timings of work including permission to work from remote location must be encouraged. Encouraging development consultants to have a ‘work from home’ day at-least twice a week will be a great motivator. Many development consultants end up putting in additional effort on these days as well.

Stock options:Equity in the organization is key factors in managing senior management talent. In other words, they create a sense of ownership in their development consultants who has shown loyalty and participated in the revenue of the firm.

Volunteer Experience: Encouraging development consultants to work in other organizations for short term and get more hands-on experience for develop new skills/network can be used by the firm.

Mentoring and career growth planning is important for middle and junior management. The insight into mentor's expertise by receiving critical feedback in key areas, such as communications, interpersonal relationships, client management, technical abilities, and leadership skills must be done in official manner. Gaining knowledge about your organization's culture and unspoken rules that can be critical for success and; therefore, adapting more quickly to your organization's culture.

Access to Professional Network: Professional networking opportunities like conferences, mentoring, or even secondment to other parts of the organization, where they can get deeper insights into the work the organization does, and the difference it really makes. Networking with a more influential development consultants and donors always help in developing professional network of the consultant.

Visibility: Everyone wants to work with a star performer. The drive of HR Manager must be for making a consultant into star performer. Fundamentally, opportunities and visibility creates a positive loop – visibility increase faster if one work on more opportunities; and one is picked for more opportunities if one has a higher visibility. The recognition of the peers is often greatest motivation factor in the ecosystem of organization.

There is a British saying I always loved, “penny wise, pound foolish.” Organization spent more money in hiring new recruits rather than retaining in house talent. Retaining your good development consultant is such a valuable activity to focus on; it means spending less on employee turnover, reducing the chances of knowledge loss, and that keeps the morale of the team high. What is often overlooked when considering the retention strategies, is the habit of encouraging and listening to feedback from the exiting development consultants. They focus on retaining star consultant while they actually need a cadre of good consultants rather than solo star.

Organizations always crib the fact that candidates lack the soft-skills to work in a development consultancy. But the not-for-profit sector isn't generally known for offering the structured training programs or even assigning a mentor that some big corporates provide. There will no perfectly finished development consultant to hire. There will be critical gaps in soft skills among candidates most of times, especially at the middle management and junior staff level. What must be non negotiable is good understanding of the sector with relevant technical skills.

Thursday, April 26, 2018

Development Consultants - Hiring

A Development Consultant’s primary role is to own and give technical advisory to the client projects and to facilitate research, in-depth analysis, and insightful problem solving. It is common for clients/consultancy firms to find social consultants through personal links and alumni networks, and while this may be effective, it is weak in terms of competition, transparency and accountability. The best way is to reach a range of potential consultants is to use free digital networks like Face-book Groups or LinkedIn or pay to advertise on job portals like NGOBOX. This improves the impartiality, build credibility of the recruitment process and creates chances of diversity in the organization.

The sure way to build pipeline of talent is to build good relationships with one or two recruitment partners who can provide access to quality talent and help benchmark against the industry. Recruitment process must also include advertising the post though personal networks, asking colleagues for recommendations, or encouraging particular consultants to apply. Referral is the proof that the culture and profile of the organization has positively impacted life of employees. Getting referred candidates is an important part of the process and although this does not make it a more open procedure it provides an element of cross-checking. It is important to know if someone is recommending a consultant or just passing information to their contact details.

One must look for generalist while hiring development consultant for the middle and lower ladder of the management. The expertise is build slowly in the young recruit over the years. Some skills are needed in all consultancy work and may be as important as specific areas of knowledge or experience. For example, the ability to understand a situation quickly, to get on well with people and, perhaps above all, to be able to write quickly and clearly. In most cases of consultancy, knack for networking, budgeting and writing skills are crucial for a junior consultant. A Development Consultant needs to demonstrate capability:

1. Technical skills which are specific to the sectors
2. Business Communication and Interpersonal skills, which apply to all situations
3. Consulting skills, which apply to requirements of each consulting phase
4. Relevant Work Experience (Consulting) or even Project Implementation
5. Lead Generation for Business Development and Networking
6. Extra: Local Activism, Volunteer Activities, Data Analysis & Quantitative Skills

The screening of the candidates can be done on the parameters given above in resume. Screening resumes usually involves filtering based on the role’s minimum and preferred qualifications. The biggest challenge of screening resumes by far is volume. Recruitment process must be designed in four stages.

1. Communication Skills through Telephonic Interview
2. Quantitative Skills through: Small scale B-Plan/ Budgeting
3. Analytical and Technical Skills: Analysis through case study
4. The Last round should be Interview: Career vision, leadership and team building

Even an organization will always put credence in analyzing track records and relevant experience, reviewing written reports, and talking to referees. But it is in the interview where chemistry is established and essential intangibles like passion, adaptability, and fit are determined. The trick is to hire mix of star and undervalued people and then give them proper leadership, guidance, environment and tools.Star will give you stellar performance for a short period of time (1-2 Years) while undervalued person will deliver tremendous loyalty and above average performance when given proper mentor-ship and supportive structures. Hiring undervalued consultant is not about promoting incompetence but same as buying good stocks at low worth.

Whenever you question investment in hiring, always remember a great vision without great people is irrelevant. Good development consultants are expensive. As they say, If you pay peanuts, you get monkeys.

Sunday, April 1, 2018

Thoughtful Present!

Development solutions are inherently difficult, every individual in this field experiences failure at some points. Even when it comes to mundane work, everyone needs advice. Whether one isn't sure how to tackle an assignment or want to talk through an interesting job offer, there’s nothing better than having a few mentors to help you out along the way. As an individual gaining new skills by working with a mentor, one can take on more ambitious projects; As one recognize new problems to address, one can work with the mentor to develop additional expertise.

Being mentored helps in the career from 'sleepwalking into slow terminal decline'. And, on the job mentoring is much more effective than formal training programs. Mentor-ship is given when someone with expertise and experience takes an aspiring individual under their wing, to share their knowledge and advice, and to provide support and guidance in career development.

It's hard to praise boss and credit him/her as a mentor. Yet, here I am doing so. I am currently working with Mr. Swaminathan S who is quite democratic and empowers everyone around him. He is prepared to stick around for a good, long conversation about the career road up, out, and forward. Being mentored has helped me to break down the barriers between the theoretical knowledge and practical realities in development, as well as provide a much needed support network in early phase of my career.

As they say gifts come without warning when we least expect them. Got a copy of Rain Making: Attract New Clients No Matter What Your Field by Ford Harding from mentor near closing of the financial year. In Dante’s Inferno, at the bottommost circle of hell, the ungrateful are punished by being eternally frozen in the postures of deference they had failed to perform during their lifetimes: trapped rigid in enveloping ice, they stand erect or upside down, lie prone, or bow face to feet.”

I rarely acknowledge thoughtfulness, and generosity of the power-holders. Yet, I do this time.

Monday, March 12, 2018

Indian CSR model

Indian Corporate Social Responsibility (CSR) laws has only set minimum standards, but not created an impetus for positive action. The reported expenditure on CSR projects doesn't give a good metric of societal welfare. There are issues emerging in the Indian CSR model that is worth being paid much attention to. At present the fate of most CSR can be termed as similar to glorified IRDP scheme. There is huge noise but nobody to verify the impact measured. The characteristics of Indian CSR model:

Integration of business objectives with CSR: A study by Macarthur Foundation has found that CSR spending is highly agenda-driven and closely aligned to the corporation’s business strategies, competencies and brand recognition. Tata Motors started a safe driving program. ITC went in and realigned its supply chain to help farmers. HUL works with children in schools and mothers through health clinics to educate them about hygiene behavior.

The scope of CSR is limited as it is seen either as a Public Relation exercise or Branding campaign by most of the companies.That is why outreach initiatives involving mass participation, such as the Marathons are funded by CSR rather than direct marketing sponsorship. Few companies responsible for acquiring of lands through coercion, disposing of toxic waste unchecked, doing unmeasured usage of ground water and unethical labor practices are able to counter this with positive PR campaign.

Lack of Professional Human Resource: Companies deploy mostly Human resource from HR, Public Relations and Marketing department in CSR wing. CSR with a good budget requires independent function and skilled project managers. The lack of vision leads to poor strategic planning and bias mechanism to channelize the money. There is also too much interference by the top management without required skill set for the course correction and arbitrary suggestions to partner NGOs.

Government interference in CSR: Current government has been actively encouraging CSR investments in its pet schemes such as the Swachh Bharat Abhiyan initiative. Hence, government priorities have resulted in a very large chunk of CSR money being invested in a handful of programs to win direct or indirect goodwill from the government. Instead of revenue collected through taxation of the companies for democratically determined priorities, CSR money goes into whatever the companies prefer to emphasize. In other words, ‘mandatory’ CSR will remain largely voluntary.

Sectoral Preference: There are interesting insights while reading India CSR Outlook Report 2017. CSR spending is almost uniformly focused on community development, education and health, and is often directed to mostly well-established NGOs and causes. Education projects received almost one-third of total CSR spent. Skills development projects received 5% while Swachh Bharat related projects received 7.3% of the Country’s CSR spent.

CSR fund is primarily focused on health and education because they are for short term, tangible and more visible. Community Development, Relief work, Women empowerment, Environment protection, working with disables & orphans comes secondary activities in the list. The tertiary level of involvements are in the field of skill development, livelihoods, and financial inclusion. These activities are not much taken up due to complexity in program design, lack of professional experience and exposure of CSR team in the given sectors. Journalism Fellowship, Rights and advocacy-based grants are neglected by the CSRs. The reason of neglect is simple as the funding outcome may come indirectly lead to confrontation with the state.

Funded NGOs: As far as funding NGOs is concerned, CSR spending has more strings attached than a foreign foundation. Instead of organizing the community, NGOs work on survival instinct. Local NGOs are approached by CSRs to implement their own pre-formulated programs according to their own agendas and outreach policies. This means a big gap arises between CSR requirements and real development needs.

Fraudulent Practices: Some companies are using onhire charitable trusts to fabricate CSR spending. Read more at:How Indian companies are misusing public trusts to launder their CSR spending.

Impact Investors: CSR funding currently cannot go directly towards impact investments at present. But Impact investors can currently adopt a Social Venture Fund (SVF) legal entity under Category I of India’s securities regulator SEBI’s Alternate Investment Fund (AIF) Regulations. The recommended amendment will be allowing CSR guidelines for financing to a Social Venture Fund.

There are no quick fixes when it comes to solving social issues. India Inc needs to wake up to its social responsibilities. Indian CSR is in a nascent stages and will take years of maturity to support activities with intangible outcomes. The impact numbers with the length and breadth of the activities are available but there is lack of strategy and sustainable investment models. The future lies in the deployment of entrepreneurial mind of corporates in designing of the impact interventions. Report on India Inc spending on CSR 2017-18 will give the readers a story towards change in a year.

Friday, December 29, 2017

Why do rural enterprises remain small ?

I was reading yesterday an article by Mr. Sanjiv Phansalkar: What stops rural enterprises from growth and prosperity?. Mr. Sanjiv Phansalkar has written a good article but I find the article quite limited in explaining the scenario. The factors contributing to the failure among rural enterprises as per him are: Lifestyle obstruction, Modes of thinking, Sticking to schedules and Patterns of living. I propose ten better reasons on what stops rural enterprises from growth and prosperity. I have referred rural enterprises as micro-enterprises at several places in the current article.


1. Rural Enterprise Sector: Rural enterprises works in the segment where entry barriers are low and it is easy for these new entrants to enter the market. This poses a threat to the micro-enterprises already competing in that market. With an easy entry, all micro-enterprise tends to produce identical or nearly identical products – both in terms of quality and design, without offering significant product differentiation. This has implications for the pricing power and subsequently on margins as well of the rural enterprises. The customers always command an upper hand in pricing in the absence of clear product differentiation. More competition and increased production capacity without a concurrent increase in consumer demand – means less profit to go around.

2. Horizontal Growth: Rural entrepreneurs grow businesses by starting multiple businesses (known as horizontal growth). This seems tacitly a weak strategy when compared to the norm of linear growth of a single business. They prefer to start a variety of micro-enterprises rather than develop an existing business into a small enterprise. The establishment of complementary businesses is done to build on the breadth of family resources, tap on the competencies available, and also help to diversify risks. The main reasons behind this are “risk aversion”, and not “growth-orientation” of the business owners. The establishment of different businesses with different seasonal markets and cash flow requirements is needed to build a consistent annual income for the household. Mostly rural enterprises are run by women have limited business vision with their main aim being to earn an income – frequently labeled as “supplementary” in nature. This approach reflects a greater extent the reality of women’s lives, as opposed to the norms of economic models which tend to be derived from the experiences of western firms.

3. The Business Ecosystem: Rural enterprises are under-capitalized and generate limited profits; hence they have little opportunity for surplus accumulation and are vulnerable to the slightest changes in their business environment. Closely linked to the issue of business ecosystem is the fact that the majority of rural enterprises operate in restricted locally-based markets which by their nature are limited in size. Entrepreneurs engaged in business largely confine themselves to local markets where access, mobility, and networks are easier for them to negotiate. Also, locally made products are increasingly in competition with a growing range of branded and well packaged goods coming into the market at all levels. The already established brands and the markets they have captured are the biggest threats to these
rural enterprises.

4. Enterprise Trait:It is necessary to differentiate rural enterprises into opportunity and necessity type micro-enterprises. Necessity type enterprises began operations as they are forced into entrepreneurial activities because the entrepreneur had to find a means to survive and are less likely to succeed. While opportunity type micro-enterprises are more able to grow because entrepreneurs have the knack to identify and tap into an entrepreneurial opportunity.

5. Education and Financial Literacy: Many entrepreneurs lack the necessary education and skills associated required for maintaining internal systems and negotiating with clients. They face both practical and social problems in grasping the new opportunities. Information and financial literacy problems are likely to be particularly as schooling levels are low, sheer neglect of book-keeping, and little experience with the formal financial institutions.

6. Marketing: Rural enterprises finds it difficult to identify or discover markets beyond localized markets. This can be attributed to lack of information, both on part of consumers and manufacturers, to discover each other. It is difficult for consumers to learn about the existence and quality of different enterprise outputs. As a result, consumers often buy exclusively from a local producer, and producers sell mostly to local customers. The limited size of their potential customer base limits rural enterprises’ ability to grow. Often rural entrepreneurs want to limit themselves to operations, while leaving sales to some other person.

7. Access to Finance: Access to finance is one of the leading operational challenges that obstruct the sustainability and growth of the rural enterprises. The credit is available to SHG/JLG as the risk appetite and credit worthiness of individual borrowers in risky for financial institutions. Micro-finance offer entrepreneurs ease in credit facilities but the interest rates are on the higher side (22 % - 26%). The higher interest rates eat away the surplus generated in the business leading only to lower margins. Low levels of literacy limit entrepreneur's ability to produce the sort of written business plans and loan proposals that are required by banks. Even if B-Plan is facilitated by any organization, either they don't want or don't have farm land to put as a collateral security to the banks.

Most of the business works with Cash Credit Facilities that provides instant credit to business for the working capital requirement. Most of the rural enterprises resort to term loan facilities from SHGs for the working capital needs. That is complete mismatch of the credit product. Also, surplus credit from term loan is consumed in unproductive activities. There is no insurance product specially customized to need of rural enterprises in unorganized sector dealing with accidents, natural disasters, death and business related exigencies.

8. Capital Investment: Most of the rural enterprises have exhibited a low level of capital investment. They tend to operate with simple tools and equipment for production, which means lower fixed costs and lower maintenance costs. Investments in better machines would require significant capital, skill up gradation and a strong visibility of order pipeline that would economically justify capital-infusion. The decision to invest additional capital is triggered on the basis of visibility of order pipeline rather than need of the better quality and design of the end product. Successful business relations with a vendor on wholesale scale and risk appetite for expansion is rarity in rural enterprises. Entrepreneurs also do not possess substantial business history and credit history to avail unsecured loans from conventional channels and resort to high interest loans from money lenders.

9. Lack of Market Research: There is no recognition of the value of the market research among the rural entrepreneurs. There is a complete lack of appreciation of customer needs. The core strategy is to form the micro-enterprise on what they can produce, and not what the customer wants.The individual investment decisions are not made in isolation but the choice for the business is driven by the herd behavior. The short term success of one entrepreneur leads to mushrooming of several entrepreneurs replicating the same model. This frequently leads to excessive competition, under-pricing and even failure of many micro-enterprises.

10. Government Aid: The traditional government response to the credit needs of micro-enterprises has been subsidized interest rate programs. This becomes costly, corrupt, politically directed, and damaging to the incentives for the financial sector. There has been assistance from National Rural Livelihood Mission (NRLM) for the credit but the impact is quite limited in scaling up. Even the trainings provided by the government is supply driven rather than demand driven.

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This Blog is meant purely as a personal diary of a rural manager in making. It exists to record information, experiences and opinions about various issues encountered in the line of duty. Any person, institution and organization mentioned here doesn't assume any liability for its contents. This is not a deliberate attempt to defame anyone. And if you have actually read all that is written in the blog and aren't mad at me, then thanks for your time and patience !

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