We assume that the easiest way to build a leading practice is to replicate the best practices of leading firms. "Not so," says Ashok Wadhwa, CEO of Ambit Corporate Finance. "Trust your instinct and protect your clients' interests. Be bold and experiment in the face of competition."
In October 1997, nobody dreamt, not even Ashok Wadhwa who worked there, that the Andersen brand, one of the most recognised names in business circles the world over, would be wiped out of corporate memory in less than 50 months.
That month, peers and colleagues wondered why he quit one of the most prestigious jobs in the country to do his own thing.
By 2003, it's a no brainer: Ambit Corporate Finance Pte Ltd, the company he founded with a small group of specialists, is clearly recognised as one of the front running investment banks in India. In Bloomberg's latest M&A league tables, Ambit tied in third place with Citigroup, after Ernst & Young and Merrill Lynch.
The journey was not as easy as it sounds. In mid-2001, Tehelka.com, a Web site run by a group of investigative journalists, exposed a scandal in the ministry of defence. While Ambit's only involvement was a valuation of the media company, the resultant mega publicity did not exactly generate the right kind of headlines, which would help a fledging firm in the conservative financial services arena.
Undeterred, Wadhwa ploughed on, investing in a slew of interesting new ventures, encouraging unlikely managers to become entrepreneurs. He joined hands with a former chairman of GE Capital to launch an asset management fund in India; and a former CEO of Coca-Cola to start an e-commerce portal.
Even as Cineblitz covered the launch of an Ambit-sponsored Hrithik Roshan Web site, the Shanghai Star caught up with Wadhwa in China warning the locals. "Indian founders are good businessmen and tough negotiators, and that's a pretty lethal combination," he was quoted. Ambit was all over the place.
Ambit's success and Wadhwa's own achievements inevitably beg the question, what drives excellence in a professional services firm?
The fact that he has worked both in a large, well established multinational as well as a small start-up begs the second question: are the parameters for excellence different in the two types of organisations?
The need for excellence in professional services seems to be becoming more and more relevant. The paradigm of excellence has also evolved over the years, yet I believe that some tenets are constant and these have sustained me through double-digit decades and the different types of professional services firms where I have worked.
It has been an amazing journey filled with experiences and discoveries of interesting aspects. At the very outset and without any hesitation, I must admit that the most crucial element that makes a successful professional service firm is excellence: be it client service, people skills, organisation policy, ethics, etc.
From the day I began my career at Arthur Andersen as its first employee in India way back in 1983, the metamorphosis of professional services has been dramatic.
In fact, building the practice at Arthur Andersen and later founding our firm, which I shall discuss later, have provided valuable lessons in excellence. Beginning with getting clients to accept and value our services, to attracting the best available talent in the business, the need to excel in every sphere has been an ongoing commitment and it did not come easy.
Seven steps to excellence
I believe excellence has many similarities to a person's character. One has to constantly nurture it, protect it and in testing times, prove its mettle to withstand the litmus test.
When clients share sensitive information on their strategy or acquisition plans, strength of a person's character is demonstrated in the manner one conducts oneself.
In fact, I believe seven key aspects have sustained me all these years and worked wonderfully for me:
1. Honesty: Be it doing corporate deals or advising, an honest approach is essential.
2. Reputation risk: It's what keeps you in the business.
3. Service delivery: It's why clients come to a firm and stay on.
4. Innovation: Have enough 'fire in the belly' to be the best in providing solutions.
5. People: Make your peers and subordinates feel they are part of a family.
6. Empowerment: So your team members can think for themselves.
7. Entrepreneurial: Enable every member to contribute to the firm's success.
In the 1980s, the business environment in India was still nascent for a professional services firm. The traditional services offered revolved around auditing and tax services. However, as established Indian business houses showed increased interest in entering new businesses and enhancing value for stakeholders, the profile of professional services took an upward turn.
I recollect those days when it was difficult to get the head of a traditional family run business to accept the fact that the firm would be his advisor, rather than any specific individual. As it turns out, this was an important learning in establishing an institution.
Clients need to have faith in the institution that they consult with, and be secure that they will get the best advice irrespective of the partner or the employee with whom they deal with.
I have a dream
With the activity levels increasing in India in the mid 1990s, India offered tremendous opportunities for new niche service providers. Frankly, I have always thought of myself as an entrepreneur.
It is one of my strengths or weaknesses, depending on how you look at it. But the idea of establishing a global firm like Andersen came about quite by chance.
I was trying to recruit someone to join Arthur Andersen and instead of saying yes or no, he asked instead, "Do you think you can create an organisation as effective as the one you head today?"
I kept thinking about that challenge for a long time after he had left my room.
That was the pull factor. Push came because Arthur Andersen were restructuring their business in India and part of that restructuring involved my moving to Hong Kong whereas my priorities, my strengths, my commitments required me to be in India.
A small team and I ventured out to build a firm that could be regarded as a trusted advisor for clients. When we founded Ambit Corporate Finance and RSM & Co in 1997, we cherished a dream to be amongst one of the best professional services firm in India.
For the second time, I had to realise how difficult it is to build an institution. On the personal side, the biggest lesson was that many whom I considered to be my friends, who had assured me that their organisations would back me, backed off.
Some even stopped accepting my calls. I had relied on them and their assurances and suddenly they were not around. At the same time, there were people with whom I did not even have a relationship, yet they wholeheartedly supported the new endeavor.
This taught me who my real friends were, where they came from. It also taught me who to rely on, who not to.
In building an institution that takes pride in excellence, the biggest challenge is actually to get everyone to share the vision and motivate them to deliver results to clients on a consistent basis. I have seen organisations falter when they feel it is only the top management who are responsible for delivering results.
I believe the organisation culture and environment should enable employees to imbibe in them the ability to take ownership for clients and feel responsible for their own actions.
My personal experience is that firms derive enormous results out of such an exercise and this also enables top management to build future leaders. I believe this is one of the most important elements that have enabled us to successfully build the practice at Ambit and RSM.
Clients who came to us not only relied upon our ability to deliver the best quality service but also wanted us to ensure that we did not undermine their trust. In short, we never had the benefit of relying on a global brand, global knowledge base or resources.
We had to continuously innovate and think out-of-the-box to ensure that clients got value for their money. What this did was to build a basket of brilliant technical professionals within the industry who were regarded for their intellect.
Like a virtuous cycle spiraling upwards, this basket in turn enabled us to attract the best talent to a relatively small and new player in the industry.
Trust your instincts
I must share another instance about our learnings at this stage. We were working with a client on an acquisition, and it was proving difficult to convey the need for the target company to accept the terms of the acquirer.
All efforts to deliver the best possible solution seemed to be heading nowhere, till I realised that the negotiations were not so much a matter of the terms discussed, but related to the loss of control and egos of the existing management. In such a situation, I have seen that subordinating one's ego and handling the situation with humility helped us to the desired results.
I had expected that the Indian firms which knew us so well would support us and the multinationals would not. Exactly the opposite happened. Multinationals believe in quality work, they do not care if you have a big brand name or not. This was a pleasant surprise for me and changed my entire way of thinking.
The jobs that bring in money are not necessarily the ones that give maximum satisfaction or pride. On the satisfaction side, achievements are always more intangible. In my opinion, my single most important professional achievement is attracting and continuing to retain the finest professional talent available and making it realise its true potential. I never thought we could bond so many quality people together and create an institution like this.
There's another critical lesson I keep reminding myself, and it was learnt the hard way. We had won the mandate to sell off a business. The deal was at the due diligence stage when the acquirer, who had trusted us implicitly till then, discovered that actual losses in the business were many more times over what had been declared by the seller.
This left us in a rather poor situation. It taught us never to accept any mandate till we have done our own due diligence. And to deal only with people with integrity and honor.
Be bold, and experiment
A belief that I strongly disagree with is that the assumption that the easiest way to build a leading practice is to replicate the best practices of leading firms. However, my own experience with our firm is that a lot depends on each individual's ability to demonstrate the seven aspects that I talked about earlier.
We had to trust our instinct, work extremely hard to win a mandate and provide comfort to clients that their interests are protected. In fact, our idea of proving our excellence was quite straight. Our 'standard' message was a cry for boldness and experimentation in the face of unprecedented competition.
While our belief in being the trusted partner for our clients is key, it is also extremely important for the people in the organisation to know that they are critical to the institution.
We have in our organisation an advisory team that is represented by personnel across different levels and it is their responsibility to ensure that the management gets to act on some of the most important issues or concerns that impact the larger organisation.
I have seen that in a playoff, the talent level is really high and emotions run high. It is important for organisations to be cognizant about the aspirational needs of its resources and canalise the collective energy and enthusiasm towards common goals.
Given my liking for cricket, it is something akin to the entire team preparing and playing the game with passion to bowl the best or score the century or take a brilliant catch. It is the entire team effort that make winning the match worth it.
Success creates success
In retrospect, the past six years since we founded our firm have been hugely exciting and satisfying, and the fire to build a quality firm lives on. That is what being an entrepreneur is all about.
Everyday is a challenge to contribute and better your efforts of the previous day. In fact recently, when we started feeling that we had achieved adequate scale and success, it was time to seek new opportunities.
So when I heard that three senior executives from Lazard were planning to set up their own firm, I invited them to join hands with us. Such a move could provide them the platform they sought, and at the same time providing the firm with its next leg of growth.
The decision of the three Lazard senior managers was a manifestation of two aspects of our organisation: we could provide seasoned professionals with a entrepreneurial platform; and second, the objective we had initially set out with seemed still to be on track.
An individual's passion and ability to dream big enables one to excel in a professional services firm. In essence, I believe excellence is an ongoing goal for any professional services firm.
Published with the kind permission of The Smart Manager, India's first world class management magazine, available bi-monthly.