UKCP

Not suppose to come back to this at this moment as the sunshine outside there in the Madrid is calling me. Well, it’s always good to reflect on what you have done before moving to the next stage. So, although the UKC Project already completed last week, allow me to reflect a bit on the learning process.

Our client was a small UK company specialises in boat building. The original project scope was to suppose to be identify potential international markets for its products. But after initial research and client meetings, we found that the business has serious problem in securing order locally, not even to mention the international expansion. Therefore, the project scope was then changed to a marketing strategy in order to increase orders regardless of geographical location.

So, here’s the learning.

Defining of Project Scope

Defining of project scope is the most challenging and critical process of any consulting project. I had bad experience in the NfP project where my teams took almost a month to finalise the scope with client, which resulted in poor outcome due to lack of time for research and analysis. Learning from that experience, I was paying more effort to finalise the project scope with client at the early stage of the project.

However, sometimes clients do not really know what they want. As mentioned before, client intended to find out potential international markets for their product. We were quite excited by looking at this “international expansion” project, but after initial research and client interview, we found out that there was a serious business continuity problem within the organisation. The company has only 3 orders in the past 3 years. Current production capacity is 2 boats annually but can handle up to 6 orders per annum by outsourcing some of the processes. This means that the production facilities was far under utilisation due to difficulty in secure new orders. Furthermore, Client USP is the customisation and customer experience where customer can visit the fabrication yard and give preference for design during the production period which may not feasible for an oversea customers. Moreover, Client did not favor to spend much budget on international marketing.

Based on these factors, we concluded that an international market exploration is not feasible for Client and what really important is to secure additional 2-4 orders per annum regardless of the geographical locations.

We formalised the change of scope in the Project Plan and obtained the confirmation from Client one week after the initial interview. This has gave us enough time to kick start the research directly with a clear project scope and target in mind.

My key learnings are:

• Make assumptions about what client need through the project brief and initial research.
• Verify the assumptions via client interview.
• Understand the fact that client sometimes does not clear about their own problem.
• It is the consultant’s role to scrutinise the problem from different perspectives and guide the client to the right path.
• Last but not least, get the confirmation from client about the agreed scope before starting anything.

Design the Research Methodology

Start with the end in mind. A research shall start with a hypothesis. To verify the hypothesis, we need a model for the analysis; to populate the model, we have to identify what data is necessary; to look for the data, we need to determine what research is required...All seems to be working backward, which is quite contradict with the traditional way, where research started by random data collecting, followed by analysis through whatever data available and finally a conclusion based on the analysis.

I have to admit that working backward was very hard at the beginning of any project, as everything was so uncertain and vague. To form a concrete hypothesis at this stage is very challenging. This again depends on how success we define the project scope and project target that I described before. A well defined project scope and target will give you a clear idea of what need to be achieved, hence a clear idea of what need to be tested.

After forming the hypothesis, another essential skill is to design a model for analysis. This is associated with the variables that we want to test in the project. For example, in our project, the key variables are the customer persona, product USP, competitors and channels. An effective model will be a pictorial explanation of how all the variables can be integrated together to test the hypothesis. Based on the model, what data is required to support the variables become clear and consequently what kind of research has to be done to collect the data also become obvious.

My key learnings are:

• Start with the end in mind.
• Start writing the report with executive summary even no research has been done yet.
• Make hypothesis based on the project scope and target.
• Identify the variables needed to test the hypothesis and design a model to integrate them.
• Based on the model, identify what data is required and finally determine the research method.

Contemplate the Strategic Recommendations

Dollar, Data, Deal and Decision, another MBS terminology for the consulting project, taught by the MBS professor. The outcome of the consulting project should be able to deliver the Dollar, Data, Deal and Decision to the client, which means recommendations of potential market size (Dollar), supporting evidences of the recommendations (Data), potential orders or channels that client can access (Deal) and action that client need to take to achieve the deal (Decision). All recommendations have to be robust with supporting data, and actionable considering client capacity. 

In this project, we have quantified the potential market size based on our secondary research data, we also estimated the potential orders that client will get by adopting the actions that we recommended. However, it was not always easy to make a recommendation that client do not like to hear. We have found potential new customer personas for 2 of client’s product. But we also found out that the other product, which client wanted to push the most, have no distinct USP to compete with other competitors. We tried to convey this message to client through the telephone conference several times but client seemed to be ignoring the fact.

As the main duty of a consultant is to solve client’s problem instead of just telling what client would like to hear, we decided to honestly present our finding in the client report as well as in the final presentation. We suppose that this decision will help Client to know better about the position of their products in the market.

Again, My key learnings are:

• Dollar, data, deal and decision - the model for a consulting project recommendations.
• Recommendations shall be robust, realistic and actionable
• Tell client what he need to hear, not what he like to hear

As a matter of fact, the Diploma stage of the MBA ended last week with the completion of the UKC Project. My MBA stage currently started with an internship in Madrid. Lot's of excitement and happening here in Spain! Will update you more about the internship in near future!

M&A

Manchester seems to know that I am leaving soon. She shows up with sunny face more frequent and more longer than anytime before. Still not used to the bright day at 9pm. People started wearing the short sleeves shirts with short pants, lying on the lawn, enjoying the sunshine out there. But I don’t have the luxury to enjoy it, at least until today.

This few weeks have been another busy peak in my MBA life. Working on 2 big projects simultaneously, exchange preparation, internship application and I even started the fulltime job application. Schedules filled up my diaries from Monday to Sunday, morning to night. Knowing that this is the capstone of the Diploma stage of the MBA, and realise that after this I will be leaving MBS for at least 6 months for internship and exchange, the remaining moments here with friends, the schools and Manchester became so precious.

Just finished the negotiation of the M&A project yesterday. I have to say that this is the course that I enjoy the most in the MBA so far. It was very practical project that you will see what you learned before in accounting, corporate finance, marketing, operation, HR and strategy, all fit together so well to form a powerful tools in the real-life application. That’s the Manchester Method, learning by doing.

The M&A projects started with a series of lectures on valuations, targeting, screening, due diligence, deal structure and finally the negotiation. In the project, we were hypothetically represent a real leading food processing and retailing company in UK looking to acquire another company as part of its corporate strategy for inorganic growth. The project is divided chronologically into 3 stages.

The first stage is the valuation of the food company itself. Not intend to describe the details here, but it was basically the assess of the business performance, forecast the future growth, revenue and other financial data, and estimate the enterprise value based on valuation method like DCF, DDM, Abnormal Earning Model etc.

Second stage is the ranking exercise where the group needs to identify target company for acquisition. This again involve the investigation of the corporate strategy of acquirer, market attractiveness, strategic fit, financial performance, synergy as well as ease of acquisition of target companies. Based on the criteria, the group to ranked the top 3 target companies and presented the rationale to the faculty.

The last stage came in twofold - with the preparation of a justification document; and a negotiation with the target company. The justification document is a report explaining the plan for acquisition, that to be submitted to the top management of acquirer company. The rationale of acquisition, expected synergies, deal structure, management plan after acquisition are the key subjects in the report.

The climax came in with the role play of the negotiation, where we have to negotiate against the faculties who played the roles of the directors of the target companies. It was a long process with 4 separate meetings spread through 2 days. Some groups finished earlier due to walkaway in the middle of negotiation. Our group somehow managed to stay until the last for a deal. The faculties were really hard negotiators. Although we managed to close the deal, the benefit that we, as an acquirer can enjoy after acquisition remains quite thin. Nevertheless, it was a exciting and stimulating process which I gained a lot of learning.

That’s the end of the M&A project. How about the UKCP? Tell you later.