Ranatunga Doctrine: how boutique firms can win

The Ranatunga Doctrine implies moving at such a pace of deep insights that you leave the competitors behind: do less but do it very well.

Strategy Study W0 8

The laziness of ex-consultants is an opportunity

How do we do overcome this problem at a boutique firm?

The parity trap is one where two alums of an elite firm, see themselves as being at parity. In other words, an ex-BCG partner leading a bank does not necessarily think another ex-BCG partner running his/her own boutique consulting firm is any better, and will usually not hire him/her for advice.

They would simply hire BCG. People love brands. Gucci, Prada and McKinsey. All brands.

Yet, the parity trap has one flaw.

When consultants leave BCG or McKinsey, they fervently believe they have earned their stripes, earned recognition and should be rewarded for the time they have served at the Firm.

This expectation is the problem. Most consultants, who join industry, are unwilling, and sometimes unable, to maintain the intensity required to keep their skills sharp, check their work as carefully and push through for the deeper findings. They focus on being accepted by their new peers.

In other words, they believe since they earned their stripes, they can get away with doing a little less, by relying on their reputations.

This creates an opportunity. It’s a tiny opportunity but it is more than enough. If you are an ex-consultant who can maintain the intensity required to develop deep insights and if you are willing to push the envelope just a little more, you will have a glorious career.

It is a small advantage, but it will make a huge difference. Because it grows over time. The lazy ex-consultant gets more jaded if they are not successful and they tend to work even less. So the gap just grows and grows.

That is how we will overcome the parity trap. By willing to go just a little further in checking, thinking and assessing the issues.

If this is the strategy, what is the plan for engaging the client?

Engaging the client

The thing is never to become defensive when critiqued. It is better to offer to meet later and then walk away until that meeting. Do not ever become emotional or ridicule the client – even in private.

Even if the client mentions McKinsey 50 times in a meeting, you should never ever mention another firm. Why advertise for them?

Knowing when to present and waiting for an opportunity to demonstrate the rigor with which we are approaching things, is vital. It must only happen when the team is ready. That is why we never ever meet the client for an update until we are ready.

That first impression may very well be our last impression.

The internal strategy group has already done many studies on entering the US market. Before even going onsite, knowing that they are not going to check things as carefully – ex-consultants almost never maintain the same vigor in their work – I can reasonably assume they are going to use a lot of 3rd-party documents on which to basis their analyses.

For example, they will read books, articles, and interviews about other banks that have done similar things.

Now, when we present our first update after the focus interviews – we always start strategy studies with focus interviews – they will challenge us about something, in that meeting.

We can stop the attacks by explaining that we spoke to the source, the company itself, and not merely read the article of the company, and therefore our findings are different.

This simple exchange sends a direct signal to the internal consultants, and others, that we are:

(1) Extremely thorough – more rigorous than they have been.

(2) Relying exclusively on primary data versus reported, 3rd party, information.

(3) Have relationships they probably do not have.

This tactic always stops the criticism. And it is a deliberate trap. We are setting them up to challenge us publicly and publicly be rebuked. If we do it in private, it may work, but public executions work best.

Now you can see why the focus interviews are so important. It always our first update, and it is based on facts since everything in a focus interview cannot be anything by factual, and facts cannot be challenged. Therefore, we cannot be challenged.

Once the unnecessary critiques stop, the engagement team must focus on continuing to build momentum.

How do we accomplish that?

The Ranatunga Doctrine

As I mentioned earlier, when I was within the firm as a partner, I followed the Powell Doctrine of managing clients and studies.

FIRMSconsulting will have to follow a different strategy because no matter how many types of alum staff our study, including former partners, we will never initially appear to have the capability of McKinsey or BCG, and we will be constantly harassed for that.

There is a way to stop this from happening.

The Ranatunga Doctrine basically means that you blitz the client intellectually – not in terms of volume – but in terms of the insights you generate, and you do that literally from the first day.

Note, blitz does not being rude. It means being very articulate and having the ability to shift a discussion onto the logic when people stray from a discussion point – which they invariably do when they are emotional.

Most consultants from McKinsey etc. who form boutiques try to first become friendly with the client, not alienate the client and then slowly grow into the role and show progress. Boutiques, of course, need the work to survive. And the client knows the boutique firm will agree to everything and anything because they need the work – the client will, therefore, have that specific leverage and use it.

We are not going to do that. That is what the internal units and ISU expects of us. We report to the CEO and our job is to get to the answer.

By doing this we shift the leverage to our side.

Where does the doctrine originate?

I grew up watching football and basketball, though my brothers liked cricket, which I felt was slow and boring. Who has 5 days to watch just one game, which could end in a draw anyway?

Eventually, the International Cricket Board set up one-day games that last just (!) 8 hours. Though, even that was very slow. The batsman would take their time settling in and it only got exciting in the last few hours.

In the 1996 ICC World Cup, a little team called Sri Lanka captained by Arjuna Ranatunga, so chronically overweight that he needed to bring in a stand-in runner, and coached by Dav Whatmore, who only played 8 games in his entire professional career, were the underdogs.

What could an overweight captain and coach who had never really played actually do?

Plenty, due to the way they read the rules of the game.

They ended up deploying a completely different strategy that changed the game of cricket forever.

They realized that in the first 15 overs, think of it as the first 30% of the game, the opposition could not place too many men on the edge of the very large playing field. In baseball terms, this means bringing all but 2 of your outfielders to stand just 5 or 10 meters away from the infield.

They exploited this.

They used two batsmen, Sanath Jayasuriya, and Romesh Kaluwitharana, to smash the ball all over the field since there was no one to catch them at the edge of the field. Once they were done, they sent in solid closers like Aravinda da Silva to finish the job and drive up the score around the terrified outfielders.

This changed the game completely.

This team made me like cricket.

Rather than starting slow and building up, they basically hit the accelerator from the start of the game.

This attacking style won them the World Cup and most teams now use this style.

The Ranatunga Doctrine will be our approach and I have used it many times before in this situation:

(1) Ramp up rapidly and keep that heavy pace right to the end.

(2) Know the source material and legislation governing the client versus only reading the sound bites and quoting anecdotes.

(3) Insights first, and we make friends only if doing so does not compromise our findings.

(4) Less volume of work, but a massive focus on deep insights that must challenge the client’s deepest assumptions.

(5) Strip out the emotion and have economic arguments (an economic argument need not any numbers nor number crunching) to support all recommendations.

In this strategy the ISU struggles to catch up and since they are always behind, they cannot legitimately co-opt the study if they cannot keep pace with us.

The CEO will also like this if we can produce deeper insights that he does not have.

The key here is stamina. It is incredibly hard to work at this incredible pace. Burnout is very common so I need to ensure the team is very focused on just the most important areas.

The Ranatunga Doctrine is not the same as the Powell Doctrine.

Maybe that is worth clarifying.

Ranatunga vs. Powell Doctrine

In the Powell Doctrine, you look so powerful and capable that no one will dare challenge you. So you actually do not have to do much. Yet, you deploy overwhelming force to get the job done if needed.

In the Ranatunga Doctrine, since you do not appear to look powerful, you have to pull the trigger so to speak. You have to show people just how good you are.

If your confidence is built on the fact you went to Harvard, Stanford, Yale etc., then you rely on the Powell Doctrine. Your “show of force” so to speak is your education. You hope people never challenge you due to the school you attended.

Consultants who use the Ranatunga Doctrine are highly prized since they rely on their demonstrated competency to gain respect. These types of consultants are incredibly impactful.

Because no matter who you are, you need to demonstrate your competency, because only through the demonstration of your competency are you critically evaluating the study.

Clients typically expect a firm of ex-partners to focus more on the high-level executive issues. We are going to attack the problem from both sides.

It should not need to be said that doing this is very hard. It takes a lot out of you to operate at this level. You need to make sure it is worth it at the end. That means working on important problems, at great clients and being paid well.

If you work at a boutique firm you may need to start out with lower rates and smaller clients, and that is fine. Eventually, you will get the reward if you are deliberate in going in that direction.

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