The Hindu Business Line : `India is important as our global centre of excellence'

I would say 90 per cent of our work is touched by someone in India. The most important driver was the breadth of talent and expertise (scientific, business, statistical, etc.,) available here.

MR COLIN GOUNDEN, CEO AND FOUNDER, GRAIL RESEARCH

With India having become the hottest spot to locate Research and Development, delivery and development centres for corporates from all over the world, it is no surprise that global research firms too are heading Indiawards to leverage the enormous cost, and increasingly intellectual, arbitrage. Grail Research, a member of the Monitor Group, is a relatively new member in this space. A fast-growing entity with the mandate of providing customised research, it treads a different path compared to the syndicated research model followed by many earlier entrants. But Mr Colin Gounden, CEO and founder, Grail Research, does not think his company is late at all. In India recently, he spoke to Business Line in an exclusive interview on the advantages of working out of India, retaining talent and the company's vision.

Excerpts from the interview:

What led to the decision to focus on customised research, when there is a big market for syndicated research?

We looked at a large number of syndicated research players before finally buying one in 2004 and successfully exiting it in late 2005. During that period we looked at some 60 syndicated research firms as investments. We found that a large number of customers were disenchanted with the syndicated research model.

They didn't like the idea of paying an annual subscription for reports that everyone else had, which did not provide them with any edge in decision-making nor were tailored to their most strategic questions. What customers did like were the custom research groups within these research firms. That was the genesis of Grail.

A year in, we find that the demand for our services continues to increase. We provide very focused research that gives our clients the freshest information, which is also proprietary to them, and which is wholly focused on the question that's most important to them. It's a model that resonates extremely well in the market.

Do you see a greater shift towards custom research in a world where the dynamics of business are constantly evolving and people need relevant, focused data to make their decisions?

Absolutely. The need for research and analyses to help businesses make high-stakes decisions has always existed. What's new is that there are faster ways to gather relevant data, more conflicting information that needs to be reconciled, and bigger dollars at stake more frequently (more acquisitions and more markets to enter). These require research and analytical expertise. This, combined with the strategic lens for what information is relevant to the specific opportunity, is what's most valuable to our clients.

How does Grail plan to make good the delay in arrival in India, especially in the face of competition from established players?

I don't see us being late at all. We haven't had a problem recruiting top talent. We are over 100 people now and are on track to hit 200 by the end of the year. About 25 per cent of our associates come from IIT alone.

The rest are from top schools such as the like IIMs and Oxford University's business school. I think the big issue isn't raw talent. India has plenty of smart people and a proven capability to follow processes. We are building the next-generation research firm competing on customer experience and the ability to deal with more ambiguous and more volatile customer needs. That's a market I think we are entering early.

What prompted the move to locate a unit in India — the labour arbitrage or the intellectual arbitrage? How important is the Indian unit to the overall business?

We have a blended model. We have associates in Boston, New York, and Toronto who work closely with our associates in Delhi and Beijing on delivering work — it's not an "over the wall" model. India is clearly important as our global centre of excellence. I would say 90 per cent of work is touched by someone in India. The most important driver was the breadth of talent and expertise (scientific, business, statistical, etc.,) available here. India is probably the only country where you can go to a college with a less than two per cent admission rate (like IIT), make offers to only one per cent of candidates that you see and still end up with a good volume of hires.

What hiring benchmarks does Grail follow? Going further, what is the value proposition to the candidate?

This may sound heretical, but when most companies say people are the most important asset, they are being superficial at best and hypocritical at worst What we have seen is an enormous number of companies who recruit good people only to treat them poorly once they join.

Once we have made an offer to the one per cent of people who pass our cultural and analytical screen, we spend a great amount of effort in training, professional development, allocations systems, human asset development, etc.

While attrition is high in the industry, we have had only two of our first 100 leave us. And both did so to do great things - get married and move to a hi-tech startup!

Grail conducts research in dozens of countries and in local languages too. How do you manage to operate on a global scale?

We have done primary research in over 50 countries and over 30 languages. One of the great things about Delhi is that there is also an incredible global talent pool here.

Foreign embassies from all over the world here mean incredible language capabilities are available as well. We have been lucky in our ability to attract local talent for global work.

There are exceptions, of course. China, for example, is a country that's tough to cover from here and where there's a huge global demand for local information. We opened an office in Beijing in January to help support our efforts there. We will open more local offices as needed.

As an American of Indian extraction, how connected are you to your roots in Tamil Nadu?

I was born in Canada and my parents, and their parents, were born in South Africa. Their parents hailed from Tamil Nadu. While raised mainly in Canada, I grew up with traditional Indian values (and a taste for spicy food!). In that sense I'm very connected to India.

Your company claims to cover the `long tail,' as it were. Do you have a core group constantly scouting for emerging market opportunities or is it done only in response to customer requirement?

Yes and no. We do have a specific approach to identify what we call "booming markets." Sometimes these are obvious, like biotech. Some are less obvious, such as like the Japanese luggage market or handheld mobile devices in the Middle East. We don't have a dedicated team for this but rather rotate associates through this. We also regularly do meta analyses on our own work — that is,i.e., we look out for trends in our own work. For example, we recently did a great deal of work in packaging. We then ask what's at the root of this interest in packaging and try to identify drivers.

How does Grail ensure customer satisfaction? What processes and practices have you put in place to ensure it?

Our specialty is the "very quick hit" answer. For example, for a biotech company launching a new diagnostic device, we had a client call us on a Monday and by Friday, we were able to talk to 40 physicians and help the client answer key questions about their positioning right ahead of launch. Most importantly, we were able to add a strategic lens to the analysis.

We have three key assets that help us achieve this. First, Monitor has a strong belief that leading-edge methods drive leading-edge results. We inherited that at Grail. We use proprietary methods - some from Monitor, some developed by ourselves — to approach problems from different and more productive angles.

Second, we leverage software tools developed within Monitor to help us collect and analyse information more efficiently. Finally, we invest in a breadth of training. Some call it training "hard" and "soft" skills. We think of it as "hard" and "harder."

"Hard" skills include analysis, interviewing and how to deal with ambiguous requests from clients, while "harder" skills would include how to provide upward and downward feedback, how to motivate and make teams productive and how to engage with clients on difficult subjects.

What is the advantage of going with Grail? How do you score over competition, what is the value add to the client?

I could give many functional advantages: faster, better, more rigorous. I think the real advantage that customers see is leverage. That is, when a client works with us, we are able to use the minimum amount of their valuable time to structure complex and ambiguous projects.

Many times, clients don't know what they don't know so the scope of the problem changes as we work with them and we have to adapt to provide them the outcome that they're looking for. That's very different from following instructions or a process focus. Rather, we focus on creating a better customer experience getting them what they need even when they have trouble or not enough time to articulate it clearly.

Grail is part of the Monitor Group, which has its fingers in many pies (merchant banking, corporate finance, advisory, global business network, etc). Was the diverse nature of operations a reason why Grail was started? Does Grail leverage the group's reach to build business?

Monitor is dedicated to helping organisations grow in the ways that are most important to them. There are lots of ways to unlock growth (strategy, capital, education, etc). Some of those ways involve research and analysis and that's where Grail Research comes in.

The group has such a wide reach in 23 countries around the world that it's hard not to work with a client that isn't in some way connected. Monitor alumni also happen to be big supporters of ours.

Since Grail also works extensively with private equity and venture capital firms, what's your take on the VC scene in India?

A lot of money was raised on the private equity side in 2006 in India, less so on the early stage VC side. I think the answer depends on the time horizon. In the near term, there is a lot of capital but there is so much opportunity for infrastructure plays and consumer plays that in the long term (10+ years), there is plenty opportunity for further investment.

Are there any particular verticals that Grail specialises in, or is everything fair game?

While companies have approached us for every kind of topic from mining to packaging, what we have been actively targeting initially are life sciences (pharmaceutical and biotech) firms.

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