Emerging fast: what’s it like consulting in emerging markets?
Emerging fast: what’s it like consulting in emerging markets?
They offer rich opportunities – but what’s it really like to consult in a rapidly-growing economy?
As the pace of change in the global economy accelerates, emerging markets are becoming an ever more crucial business arena over multiple sectors. One estimate is that they will bring more than 1.3 billion new middle-class consumers into the world economy* in coming years. Add to this that emerging economies contain the majority of the global population and are guardians of most of its natural resources, and the opportunities they present are immense.
What does all this mean for an MBA aiming to work in consulting in an emerging market? Jaideep Prabhu is Jawaharlal Nehru Professor of Indian Business and Enterprise at Cambridge Judge, Director of the Centre for India & Global Business (CIGB), and teaches the Cambridge MBA elective ‘Marketing and Innovation in Emerging Economies’. For him, context is everything:
“These are ‘low trust/high context’ environments and that makes them immediately different from western markets. The institutions and infrastructure in developed countries facilitates market exchanges and enables market transactions – you don’t need to know someone to know you can trust them; you can make a purchase online without knowing the seller because there are safeguards and a trustworthy system in place. But emerging markets are low trust environments where you still need to know someone to do business with them and that brings new challenges, not least the possibility of corruption and having to pay bribes to gain and show trust.”
Knowing the social hierarchy
Emerging markets also tend to go hand-in-hand with environments which are socially hierarchical. Prabhu explains:
“In India, for example you have entrenched economical and social hierarchies and everything is very culturally loaded. There is a lot of context that you need to understand and navigate. You need to be able to both read and send subtle social signals.”
The upside to doing business in these messy, dynamic environments is that they offer huge potential – especially to the entrepreneur:
“You can get in on the ground floor of creating the kinds of markets and institutions that have evolved in the west. These economies offer a chance to leapfrog to 21st century technology without going through the slow evolution that the west has had to navigate. Emerging markets are younger and very tech savvy. Recent generations have gone straight to mobile, so there is huge potential there in offering them the products and services they want.”
And the growth opportunities don’t just exist in the big emerging players such as China (which has the world’s largest middle class) and India. Consultants can be in great demand in smaller markets such as Vietnam, Kenya and South Africa, says Prabhu.
Using local knowledge
“Western companies don’t have the know-how to manage these environments and they need help. An MBA consultant who has that local knowledge and networks can be invaluable. They can assist with selecting the right local partner, but they can also advise companies on going it alone in these markets. Emerging markets are very bureaucratic – the state and government are front and centre in a way that they no longer are in the west – and local knowledge is crucial in negotiating this landscape.”
Many of these countries are complex, combining both extreme poverty with an affluent middle and upper class. They have made such dramatic progress in some sectors that they offer opportunities in the formal economy that are not so different from doing business in the west. Prabhu comments: “Working for McKinsey in Mumbai won’t be that different from working for them in London”.
Varied customer base
“However, you will have a wider variety of customer types – conglomerates like Tata, family-run businesses, state-owned entities, so you will have to learn to deal with them all differently. And the way your recommendations will be received will be very different – you have to be able to read the signals going on in the room. For instance, a family-owned business may be concerned about a dilution of power or may have internal power struggles going on. A state-run business may be concerned with the political consequences of business decisions.”
The great news is that you will end up with a very broad and extremely flexible set of skills. You will learn to deal with complexity, develop great people skills and excellent lateral thinking. You will learn how to cope with volatility and uncertainty – all skills you may never learn in a more predictable and safe environment. Prabhu uses the analogy of crossing the road in India versus the UK:
“If you cross the road in the UK you know you will most likely be safe – the drivers will obey the traffic signals and stop to let you cross, there won’t be cows on the street. In India, anything could happen, so you have to constantly scan what’s going on around you and keep your wits about you! It’s exactly the same in consulting in emerging markets.”
Cambridge MBA alumni
Cambridge MBA alumni work in some of the most interesting emerging markets around the world in sectors including oil and gas, transportation, government and health. Gustavo Amaral (MBA 2017) is currently working in Brazil in the field of advanced analytics, consulting for a mid-size steel company that is trying to improve the efficiency of its operations. His impressions so far?
“There is a lot more focus on primary and secondary industries (steel, mining, oil) and on operations. In addition, perhaps because markets in emerging economies are less stable, there seems to exist a culture of short-termism. Be prepared to spend lot of energy solving problems in settings where hierarchy is much stronger and infrastructure can be lacking. An operations background is especially valuable in these contexts.”
Abhinav Charan, (MBA 2014)**, is currently consulting for McKinsey’s oil and gas practice in Kuala Lumpur, Malaysia. Having worked all over the world in consulting roles in both developed and developing economies, Abhinav is confident that the gap is fast narrowing, mainly due to two factors – the drive to digital and the fast growth being experienced by developing economies – six to seven per cent as opposed to one to two per cent in developed economies:
“As the key driver for global GDP growth, emerging economies are witnessing greater investments and urbanisation. And digital advances mean modern business models can be perfectly at home in both – the way you use Uber in the UK is no different from the way you use it in India.”
His advice for anyone looking to move into consulting in developing economies is to spend time ‘building your story’:
“Really spend time solidifying your connections and your network and creating a compelling story and vision for why you are choosing to work there and what you are trying to achieve. This is very important in those types of economies where relationships and building trust are crucial, so it’s time well spent.”
* Source: Bain and Co
** Abhinav’s views are his own and do not represent McKinsey.